Document:

EX-10126

		
			 
		

		
			Exhibit 10.126
		

		
			FLOW COMMERCIAL MORTGAGE LOAN PURCHASE AGREEMENT
		

		
			This Purchase Agreement (the “Agreement”) is made and entered into as of December 1, 2015 by and between PennyMac Loan Services, LLC (the “Seller”) and PennyMac Corp. (the “Purchaser”).
		

		
			WHEREAS, the Seller desires to sell, from time to time, to the Purchaser, and the Purchaser desires to purchase, from time to time, from the Seller, certain first-lien commercial mortgage loans (the “Mortgage Loans”) on a servicing released basis as described herein, and which shall be delivered individually on various dates as provided herein (each, a “Closing Date”);
		

		
			WHEREAS, each Mortgage Loan is secured by a mortgage, deed of trust or other security instrument creating a first lien on a commercial property; and
		

		
			WHEREAS, the Purchaser and the Seller wish to prescribe the manner of the conveyance, transfer of servicing and control of the Mortgage Loans.
		

		
			NOW, THEREFORE, in consideration of the premises and mutual agreements set forth herein, and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the Purchaser and the Seller agree as follows:
		

		
			ARTICLE I
		

		
			DEFINITIONS
		

		
			Section 1.01Defined Terms.
		

		
			Whenever used in this Agreement, the following words and phrases shall have the following meaning specified in this Article:
		

		
			“Advances”:  All recoverable Escrow Advances and Servicing Advances.
		

		
			“Anticipated Repayment Date”:  With respect to any Mortgage Loan that is identified in Schedule 1 to the Purchase Price and Terms Agreement as having a Revised Rate, the date upon which such Mortgage Loan commences accruing interest at such Revised Rate.
		

		
			“ARD Loan”:  Any Mortgage Loan the terms of which provide that if, after an Anticipated Repayment Date, the related Borrower has not prepaid such Mortgage Loan in full, any principal outstanding on that date will accrue interest at the Revised Rate rather than the Initial Rate.
		

		
			“Assignment”:  An assignment of an individual Mortgage, notice of transfer or equivalent instrument in recordable form, sufficient under the laws of the jurisdiction wherein the related Mortgaged Property is located to reflect of record the assignment of the Mortgage and the sale or transfer of the Mortgage Loan from the Seller to the Purchaser, in substantially the form of Exhibit A.
		

		
			“Assignment of Leases, Rents and Profits”:  With respect to any Mortgaged Property, any assignment of leases, rents and profits or similar agreement executed by the Mortgagor, assigning to the mortgagee all of the income, rents and profits derived from the ownership, 
		

		
			
		

		
			

		 

 

operation, leasing or disposition of all or a portion of such Mortgaged Property, in the form which was duly executed, acknowledged and delivered, as amended, modified, renewed or extended through the date hereof and from time to time hereafter.
		

		
			“Business Day”:  Any day other than (i) a Saturday or Sunday, or (ii) a day on which banking or savings and loan institutions in the State of California are authorized or obligated by law or executed order to be closed.
		

		
			“Closing Date”:  The date or dates on which the Purchaser from time to time shall purchase, and the Seller from time to time shall sell, Mortgage Loans and the Servicing Rights related to such Mortgage Loans.  The Closing Date shall be the date designated as such in the related Purchase Price and Terms Agreement.
		

		
			“Code”:  The Internal Revenue Code of 1986, as amended from time to time, any successor statute thereto, and any temporary or final regulations of the United States Department of the Treasury promulgated pursuant thereto.
		

		
			“Collateral”:  With respect to a Mortgage Loan, the Mortgaged Property and any other collateral security for the obligation of the Mortgagor to repay such Mortgage Loan.
		

		
			“Cut-off Date”:  The date designated as such in the related Purchase Price and Terms Agreement.
		

		
			“Defect”:  Defined in Section 2.04.
		

		
			“Endorsement”:  Endorsement of a Mortgage Note, without recourse, by the Seller.
		

		
			“Escrow Advances”:  Any amounts advanced by Seller, Purchaser or the third party servicer for either Seller or Purchaser for the purpose of effecting the payment of taxes, assessments and any insurance premiums relating to a Mortgaged Property.
		

		
			“Escrowed Funds”:  (i) Funds that are escrowed with Seller by a Mortgagor under the Mortgage Loan Documents on account of real estate taxes, insurance premiums, insurance proceeds, repairs, improvements, tenant security deposits, reserves or other purpose relating to the Mortgage Loan, (ii) funds that are advanced by Seller into an escrow or other account established pursuant to a Mortgage Loan Document for any of the foregoing purposes, and (iii) funds that are held by Seller in a suspense account or in any other account which funds have not been applied to the Mortgage Loan, including, without limitation, adequate protection payments and cash collateral held by Seller.
		

		
			“Hazard Insurance Policy”:   Defined in Section 3.02(xv).
		

		
			“Initial Rate”:  The stated Mortgage Rate with respect to an ARD Loan as of the Cut-off Date.
		

		
			“Liability Insurance Policy”:  Defined in Section 3.02(xvi).
		

		
			“Loan Amount”: The principal balance of the Mortgage Loan on the Cut-off Date.
		

		
			
		

		
			

		 

 

  “Mortgage”:  The mortgage, deed of trust or other instrument securing a Mortgage Note, which creates an unsubordinated first lien on the fee simple estate in the real property securing the Mortgage Note.
		

		
			“Mortgage Loan”:  An individual mortgage loan, including but not limited to the Mortgage Loan Documents and all documents included in the Submitted Mortgage File, and any and all rights, benefits, proceeds and obligations arising therefrom or in connection therewith, and which is the subject of this Agreement.  
		

		
			“Mortgage Loan Documents:”    All instruments and documents executed in connection with a Mortgage Loan, including the Mortgage Note and the Mortgage and any environmental indemnities and guaranties.
		

		
			“Mortgage Loan Information”:  The Mortgage Loan information set forth on Schedule 1 to each Purchase Price and Terms Agreement with respect to each Mortgage Loan.
		

		
			“Mortgage Note”:  The promissory note or other evidence of the indebtedness of a Mortgagor secured by a Mortgage.
		

		
			“Mortgaged Property”:  With respect to a Mortgage Loan, the underlying real property securing repayment of a Mortgage Note, consisting of a fee simple estate.
		

		
			“Mortgage Rate”:  With respect to each Mortgage Loan, the annual rate at which interest accrues on such Mortgage Loan (in the absence of a default), as set forth in the related Note from time to time.
		

		
			“Mortgagor”:  The obligor on a Mortgage Note.
		

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

		
			“Purchase Price”:  Defined in Section 2.01(b).
		

		
			“Purchase Premium”:  The amount by which the Purchase Price for a Mortgage Loan or pool of Mortgage Loans exceeds the Loan Amount of such Mortgage Loan as of the applicable Cut-off Date.  A Purchase Premium will exist for any Mortgage Loan for which the Purchase Price Percentage exceeds one hundred percent (100%).
		

		
			“Purchase Price and Terms Agreement”:  With respect to each Mortgage Loan, an agreement, in the form attached hereto as Exhibit B, by and between the Seller and the Purchaser.
		

		
			“Purchase Price Percentage”:  As defined in Section 2.01(d) hereof.
		

		
			“REMIC Provisions”:  Provisions of the federal income tax law relating to real estate mortgage investment conduits, which appear at Section 860A through 860G of subchapter M of chapter 1 of the Code, and related provisions, and regulations (including any applicable proposed regulations) and rulings promulgated thereunder, as the foregoing may be in effect from time to time.
		

		
			
		

		
			

		 

 

“Revised Rate”:  With respect to those Mortgage Loans identified on Schedule 1 to the Purchase Priece and Terms Agreement as having a revised rate, the increased interest rate after the Anticipated Repayment Date (in the absence of a default) for each applicable Mortgage Loan, as calculated and as set forth in the related Mortgage Loan.
		

		
			“Servicing Advances”:  All customary, reasonable and necessary out-of-pocket costs and expenses incurred in the performance by Seller, Purchaser or a third party servicer for either Seller or Purchaser that do not constitute Escrow Advances incurred in the performance by Seller, Purchaser or a third party servicer for either Seller or Purchaser of its servicing obligations, including but not limited to, the cost (including reasonable attorneys’ fees and disbursements), related to (i) the preservation, restoration and protection of the Mortgaged Property, (ii) any enforcement or judicial proceedings, and (iii) the management and liquidation of the Mortgaged Property if the Mortgaged Property is acquired in satisfaction of the Mortgage (including default management and similar services, appraisal services and real estate broker services).
		

		
			“Servicing Rights”:  Any and all of the following:  (a) any and all rights to service the Mortgage Loans; (b) any payments or other monies received for servicing the Mortgage Loans; (c) any late fees, penalties or similar payments with respect to the Mortgage Loans; (d) all agreements or documents creating, defining or evidencing any such servicing rights to the extent they relate to such servicing rights and all rights thereunder; (e) Escrowed Funds or other similar payments with respect to the Mortgage Loans and any amounts actually collected with respect thereto; (f) all accounts and other rights to payment related to any of the property described in this paragraph; and (g) any and all documents, files, records, servicing files, servicing documents, servicing records, data tapes, computer records, or other information pertaining to the Mortgage Loans or pertaining to the past, present or prospective servicing of the Mortgage Loans.
		

		
			“Submitted Mortgage File”:  The Mortgage Loan Documents and any other documents, instruments and agreements required by the Purchaser and pertaining to a particular Mortgage Loan as specified on Schedule 2 to the applicable Purchase Price and Terms Agreement.
		

		
			 
		

		
			ARTICLE II

SALE AND CONVEYANCE OF MORTGAGE LOANS;
POSSESSION OF SUBMITTED MORTGAGE FILES;
BOOKS AND RECORDS;
DELIVERY OF MORTGAGE LOAN DOCUMENTS
		

		
			Section 2.01Sale and Conveyance of Mortgage Loans; Delivery of Mortgage Loan Documents.
		

		
			(a)Subject to the terms and conditions of this Agreement, the Seller agrees from time to time to sell, transfer, assign, set over and convey to the Purchaser, without recourse (except as provided for herein), but subject to the terms of this Agreement, and the Purchaser agrees to purchase from time to time, for the Purchase Price, the Mortgage Loans identified in the related Purchase Price and 
		

		
			
		

		
			

		 

 

Terms Agreement, together with the related Submitted Mortgage Files, the Servicing Rights and all rights and obligations arising under the documents contained therein.  
		

		
			(b)Seller shall provide to Purchaser access to the Submitted Mortgage Files and copies of all other information and materials in Seller’s or its agent’s possession or control relating to the Mortgage Loan Purchaser is contemplating purchasing. Purchaser shall conduct such due diligence concerning such Mortgage Loan as Purchaser shall deem to be appropriate, including, without limitation, conducting credit checks on obligors of such Mortgage Loan and reviewing title materials relating to the Mortgaged Property that secures such Mortgage Loan.  Purchaser may elect to purchase any such Mortgage Loan, in Purchaser’s sole discretion.  If Purchaser elects to purchase any such Mortgage Loan pursuant to this Agreement, Purchaser will provide to Seller a Purchase Price and Terms Agreement relating to any such Mortgage Loan Purchaser has elected to purchase, completed and executed by Purchaser.  Within two (2) Business Days following its receipt of such Purchase Price and Terms Agreement, Seller will return to Purchaser such Purchase Price and Terms Agreement, executed by Seller.  
		

		
			(c)The fact that the Purchaser has conducted or has failed to conduct any partial or complete examination of the Submitted Mortgage Files and other due diligence for the Mortgage Loans shall not affect the Purchaser’s rights to demand repurchase or other relief as provided herein or affect the Seller’s obligations with respect thereto. 
		

		
			(d)The Purchase Price for each Mortgage Loan shall be (a) the percentage (the “Purchase Price Percentage”) stated in the related Purchase Price and Terms Agreement, multiplied by the Loan Amount of such Mortgage Loan as of the related Cut-off Date, plus (b) such amount, if any, of accrued interest on such Mortgage Loan as is described and agreed to in the applicable Purchase Price and Terms Agreement, but in no event will Purchaser be obligated to pay for more than 60 days of accrued and unpaid interest on any Mortgage Loan, plus (c) all outstanding Advances with respect to such Mortgage Loan.  The Purchase Price for a Mortgage Loan shall be paid to the Seller by wire transfer of immediately available funds on the related Closing Date to the account of the Seller set forth in the related Purchase Price and Terms Agreement.
		

		
			(e)The Purchaser shall be entitled to (1) all payments of principal received in regard to the Mortgage Loan on and after the related Cut-off Date, and (2) all payments of interest and other payments on the Mortgage Loan (including, without limitation, reimbursement of Advances) received on and after the related Cut-off Date.
		

		
			(f)The following shall be conditions precedent to the obligation of the Purchaser to pay the Purchase Price to the Seller:
		

		
			(1)The Seller shall deliver to the Purchaser the Submitted Mortgage File, as well as such other documentation requested by the Purchaser; 
		

		
			
		

		
			

		 

 

(2)The Seller shall execute and deliver to the Purchaser an Endorsement without recourse with respect to each of the Mortgage Notes; and
		

		
			(3)The Seller shall execute, acknowledge and deliver to the Purchaser an Assignment with respect to each of the Mortgages; 
		

		
			(4) The Seller shall prepare and deliver to the Purchaser a UCC‐3 assignment statement with respect to each of the UCC-1 financing statements (if any) previously filed with respect to the Mortgage Loans, naming the Purchaser as assignee of secured party; and
		

		
			(5) The Seller shall have notified each Mortgagor under each Mortgage Loan that all rights under such Mortgage Loan have been transferred to the Purchaser, and that all future payments with respect to such Mortgage Loan are to be made directly to the Purchaser, and the address to which such payments are to be made at the Purchaser, pursuant to a written notice in form and substance satisfactory to Purchaser (and Seller shall provide Purchaser with copies of each such written notice sent to each such Mortgagor, which written notice shall have been sent to each Mortgagor via both regular mail, and certified mail return receipt requested).
		

		
			(g)If the Seller cannot deliver an original Mortgage with evidence of recording thereon, or an original Assignment with evidence of recording thereon by the applicable Closing Date, the Seller shall promptly deliver the same to the Purchaser upon receipt thereof from the public recording official, except in cases where the original Mortgage or Assignment is retained permanently by the recording office, in which case the Seller shall deliver an original copy of such Mortgage or Assignment, certified by the public recording office to be a true and complete copy of the recorded original thereof, as the case may be. 
		

		
			(h)In the event that (i) the original recorded Mortgage was not delivered pursuant to Section 2.01(f) above, or (ii) any original recorded Assignment was not delivered pursuant to Section 2.01(f) above, the Seller shall use best efforts to promptly secure the delivery of such originals and shall cause such originals to be delivered to the Purchaser promptly upon receipt thereof.  Notwithstanding the foregoing, in the event that the original Mortgage or original Assignment is not so delivered to the Purchaser within forty-five (45) days following the applicable Closing Date, the Seller shall, upon the request of the Purchaser, repurchase the Mortgage Loan in the manner specified in Sections 3.03(d),  (e) and (f).  
		

		
			Section 2.02Possession of Submitted Mortgage Files.  
		

		
			Upon each Closing Date, the ownership of each Mortgage Loan, including the Mortgage Loan Documents and the contents of the related Submitted Mortgage File and all rights, benefits, payments, proceeds and obligations arising therefrom or in connection therewith, shall be vested in the Purchaser, and the ownership of all records and documents with respect to the related Mortgage Loan prepared by or which come into the possession of the Seller shall immediately vest in the Purchaser.  
		

		
			
		

		
			

		 

 

Section 2.03Examination of Submitted Mortgage Files.  
		

		
			As provided in Section 2.01(b) above, the Seller shall make the related Submitted Mortgage File with respect to each Mortgage Loan available for examination by the Purchaser via secure electronic transmission.  Such examination of the Submitted Mortgage Files may be made by the Purchaser or its designee at any reasonable time before the related Closing Date.    The fact that the Purchaser or its designee has conducted or has failed to conduct any partial or complete examination of the Submitted Mortgage Files shall not impair in any way the Purchaser’s (or any of its successor’s) rights to demand repurchase, substitution or other relief as provided in this Agreement, provided, however, that the Purchaser (or any of its successors) may not, following the related Closing Date, demand repurchase, substitution or other relief with respect to a Mortgage Loan based on a breach of a representation or warranty set forth in Section 3.02 that is disclosed as to such Mortgage Loan in the applicable Purchase Price and Terms Agreement.
		

		
			Section 2.04Defective Documents.  
		

		
			If the Purchaser finds any document or documents constituting a part of a Submitted Mortgage File which was delivered or which was to be delivered by the Seller to the Purchaser (including documents in the Submitted Mortgage File which were received by the Seller from its borrower) to be defective or missing in any material respect (a “Defect”), the Purchaser shall so notify the Seller within sixty (60) days of discovery by the Purchaser of the Defect.  If the Seller finds a Defect, the Seller shall promptly so notify the Purchaser.  The Seller shall have a period of forty (40) days following receipt of written demand for correction or cure from the Purchaser within which to correct or cure any such Defect after the Seller is notified of same.  If the Defect is capable of cure, but is not reasonably expected to be cured within such forty (40) day period, the Seller may, by written notice to the Purchaser, request additional time within which to effect correction or cure.  The Purchaser shall have no obligation to grant any such extension of time for correction or cure.  If the Purchaser does grant such an extension of time, the Seller shall have such additional time for correction or cure as is expressly granted in writing by the Purchaser.  The Seller hereby covenants and agrees that, if the Defect is not corrected or cured within the applicable cure period described above, the Seller will, upon the expiration of such cure period, repurchase the related Mortgage Loan in the manner set forth in Section 3.03.    Discovery by the Purchaser or the Seller of the possible existence of fraud in connection with a Mortgage Loan shall not constitute a Defect, but shall be governed by the provisions of Sections 3.02(iv) and 3.03.
		

		
			Section 2.05Payments Received by Seller Following the Closing Date.  
		

		
			Without limiting Sections 2.02 or 2.04 above, should the Seller receive any monthly payments of principal and interest or payments of any other sums in connection with or owing with respect to any of the Mortgage Loans following the applicable Closing Date, Seller shall promptly (and in any event within two (2) Business Days), remit all such payments and sums to Purchaser.
		

		
			Section 2.06Assignment of Non-Seller Originated Loans.  
		

		
			On the applicable Closing Date, Seller shall also be deemed to have assigned, conveyed and transferred to Purchaser all of Seller’s right, title and interest in all purchase agreements 
		

		
			
		

		
			

		 

 

under which Seller acquired any non-Seller originated Mortgage Loan sold on such Closing Date.  If requested by Purchaser, Seller shall execute and deliver to Purchaser such additional assignments of the loan purchase agreements with respect to the non-Seller originated Mortgage Loans as Purchaser shall reasonably request.
		

		
			Section 2.07Refinance of Mortgage Loans.
		

		
			Seller shall not, without the prior written consent of Purchaser, refinance any Mortgage Loan prior to the date that is sixty (60) days prior to the maturity date of such Mortgage Loan.  In connection with the refinance of any such Mortgage Loan, Seller shall give to Purchaser a right to participate in or purchase such Mortgage Loan on terms that are reasonably acceptable to both Seller and Purchaser (it being understood that Purchaser is not, hereby, committing to any such participation or purchase of any such refinanced Mortgage Loan).
		

		
			Section 2.08Substitution of Trustees.
		

		
			Seller shall cooperate fully with Purchaser, and take all actions reasonably requested by Purchaser, in causing and effectuating the substitution of new trustees designated by Purchaser for the existing trustees under any or all of the Mortgages, as required by Purchaser in its sole discretion; which actions shall include, without limitation, completing and obtaining the necessary information and signatures on substitution of trustee forms acceptable to Purchaser, and to otherwise cooperate fully in the transfer of the trustee position under each Mortgage designated by Purchaser to the new trustee designated by Purchaser.
		

		
			Section 2.09Repayment of Purchase Premium.
		

		
			  Seller agrees that as to any Mortgage Loan that is repaid in full within one year of the Closing Date, Seller shall repay to Purchaser the Purchase Premium paid by Purchaser with respect to each such Mortgage Loan.
		

		
			ARTICLE III

REPRESENTATIONS, WARRANTIES AND COVENANTS OF THE SELLER;
REPURCHASE; REVIEW OF MORTGAGE LOANS
		

		
			Section 3.01Representations and Warranties of the Seller.
		

		
			The Seller represents, warrants and covenants to the Purchaser that as of each Closing Date:
		

		
			(i)Due Organization.  The Seller is, and as of the date of the origination of each Mortgage Loan that Seller originated was, an entity duly organized, validly existing and in good standing under the laws of its jurisdiction of organization, and has all licenses necessary to carry on its business now being conducted and is licensed, qualified and in good standing under the laws of each state where a Mortgaged Property is located or is otherwise exempt under applicable law from such qualification or is otherwise not required under applicable law to effect such qualification; no demand for such qualification has been made upon the Seller by any state having jurisdiction and in any event the Seller is or will be in compliance with the
		

		
			
		

		
			

		 

 

laws of any such state to the extent necessary to insure the enforceability of each Mortgage Loan;
		

		
			(ii)Due Authority, Execution and Enforceability.  The Seller had the full power and authority and legal right to originate the Mortgage Loans that it originated.  The Seller has the full power and authority to hold each Mortgage Loan, to sell each Mortgage Loan and to execute, deliver and perform, and to enter into and consummate, all transactions contemplated by this Agreement.  The Seller has duly authorized the execution, delivery and performance of this Agreement, and has duly executed and delivered this Agreement, the Assignments and the Endorsements.  This Agreement (assuming due authorization, execution and delivery of this Agreement by the Purchaser), the Assignments and the Endorsements constitute legal, valid and binding obligations of the Seller, enforceable against the Seller in accordance with their respective terms, subject to applicable bankruptcy, reorganization, receivership, conservatorship, insolvency, moratorium and other laws relating to or affecting creditors’ rights generally or the rights of creditors of banks and to the general principles of equity (whether such enforceability is considered in a proceeding in equity or at law);
		

		
			(iii)No Conflict.  None of the execution and delivery of this Agreement, the origination of the Mortgage Loans by the Seller, the sale of the Mortgage Loans, the consummation of the transactions contemplated hereby, or the fulfillment of or compliance with the terms and conditions of this Agreement, will conflict with or result in a breach of any of the terms, conditions or provisions of the Seller’s charter or bylaws or any legal restriction or any agreement or instrument to which the Seller is now a party or by which it is bound, or constitute a default or result in an acceleration under any of the foregoing, or result in the violation of any law, rule, regulation, order, judgment or decree to which the Seller or its property is subject;
		

		
			(iv)Ability to Perform.  The Seller does not believe, nor does it have any reason or cause to believe, that it cannot perform each and every covenant contained in this Agreement;
		

		
			(v)No Material Default.  The Seller is not in material default under any agreement, contract, instrument or indenture of any nature whatsoever to which the Seller is a party or by which it is bound, which default would have a material effect on the ability of the Seller to perform under this Agreement, nor to the best of Seller’s knowledge, has any event occurred which with notice would constitute a default under any such agreement, contract, instrument or indenture and have a material adverse effect on the ability of the Seller to perform its obligations under this Agreement;
		

		
			(vi)No Consent Required.  No consent, approval, authorization or order of any court or governmental agency or body is required for the execution, delivery and performance by the Seller of or compliance by the Seller with
		

		
			
		

		
			

		 

 

this Agreement, the delivery of the Submitted Mortgage Files to the Purchaser, the sale of the Mortgage Loans to the Purchaser or the consummation of the transactions contemplated by this Agreement or, if required, such approval has been obtained prior to the Closing Date;
		

		
			(vii)Origination/Collection Practices.  The origination and collection practices used by the Seller with respect to each Mortgage Note and Mortgage Loan have been in all respects legal, proper and prudent in the mortgage origination and servicing business; 
		

		
			(viii)Genuineness of Documents.  All documents prepared by the Seller or the Mortgagor and submitted to the Purchaser are genuine, and the Seller certifies that any and all copies of documents concerning Mortgage Loans purchased by the Purchaser are accurate and complete copies of those documents within the Seller’s files;
		

		
			(ix)Fidelity Bond and Errors and Omissions Insurance.  The Seller maintains a fidelity bond and errors and omissions insurance coverage each in an amount of at least one million dollars ($1,000,000), and has provided the Purchaser with evidence thereof;
		

		
			(x)Enforcement Actions.  The Seller is not subject to any enforcement action relating to commercial real estate lending issued by a federal or state regulatory agency.  Except as disclosed by the Seller to the Purchaser, the Seller is not subject to any enforcement actions not relating to commercial real estate lending issued by a federal or state regulatory agency.
		

		
			Section 3.02Representations and Warranties as to Individual Mortgage Loans.
		

		
			With respect to each Mortgage Loan, the Seller hereby makes the representations and warranties set forth on Exhibit C to the Purchaser as of the related Closing Date.
		

		
			Section 3.03Repurchase.
		

		
			(a)It is understood and agreed that the representations and warranties set forth in Sections 3.01 and 3.02 shall survive the sale of the Mortgage Loans to the Purchaser and shall inure to the benefit of the Purchaser, notwithstanding any restrictive or qualified endorsement on any Mortgage Note or Assignment or the examination of any Submitted Mortgage File by the Purchaser or its agents.
		

		
			 
		

		
			(b)Upon discovery by the Purchaser of a failure or breach of any of the foregoing representations and warranties set forth in Sections 3.01 or 3.02 as to or that affect any Mortgage Loan, the Purchaser may give written notice of such failure or breach to the Seller.  Unless permitted a greater period of time to cure as set forth in Section 2.04 and except as to a breach of Section 3.02(iv), for which there shall be no cure period, the Seller shall have a period of thirty (30) days from the earlier of discovery by Seller or receipt of written notice from the Purchaser to the Seller of any such failure or breach of representation or warranty within which to correct or cure such failure or breach of representation or warranty at the Seller’s sole expense.
		

		
			
		

		
			

		 

 

(c)The Seller hereby covenants and agrees that if any such failure or breach of representation or warranty is not corrected or cured within the applicable cure period, the Seller will, within five (5) days after demand to do so by the Purchaser, repurchase the affected Mortgage Loan in the manner specified in Sections 3.03(d), (e) and (f).
		

		
			 
		

		
			(d)The repurchase price will be equal to the sum of:
		

		
			(i)the original purchase price of the affected Mortgage Loan less any amounts received by Purchaser with respect to such Mortgage Loan on or prior to the date of repurchase; plus
		

		
			(ii)all accrued interest on such Mortgage Loan from the date to which interest was last paid through and including the date of repurchase; plus
		

		
			(iii)all other amounts payable under the Mortgage Loan Documents for such Mortgage Loan through the time of repurchase; plus
		

		
			(iv)Purchaser’s reasonable and customary out-of-pocket expenses incurred by Purchaser in transferring such Mortgage Loan back to Seller (as reasonably approved by Seller); plus
		

		
			(v)all unreimbursed Advances made by Purchaser or any servicer of the related Mortgage Loan for the Purchaser, other than Seller.
		

		
			(e)Any repurchase shall be accomplished by delivery to the Purchaser, in immediately available funds, of the amount of the repurchase price.
		

		
			(f)Upon delivery to the Purchaser of the repurchase price, the Purchaser shall take each of the actions described in Section 2.01(e) to assign the Mortgage Loan Documents back to the Seller without recourse, representation or warranty.
		

		
			Section 3.04Non-Solicitation.
		

		
			The Purchaser agrees that it shall not solicit any Mortgagors (in writing or otherwise) to refinance any of the Mortgage Loans or for any other loan products, or for any financial services; provided, however, that (1) mass advertising or mailings (such as placing advertisements on television, on radio, in magazines or in newspapers or including messages in billing statements) that is not exclusively directed towards the Mortgagors, or (2) a solicitation for business from the Purchaser, its parent or affiliated companies to a Mortgagor that does not derive from a full or partial list of the Mortgagors shall not constitute “solicitation” and shall not violate this covenant.
		

		
			
		

		
			

		 

 

 
		

		
			ARTICLE IV

THE SELLER
		

		
			Section 4.01Indemnification; Third Party Claims.
		

		
			Without limiting Section 3.03 hereof, but subject to the limitations set forth below, the Seller agrees to indemnify and hold harmless the Purchaser against any and all claims, losses, penalties, fines, forfeitures, legal fees and related costs, judgments, and any other costs, fees and expenses that the Purchaser may incur or sustain in any way related to any acts or omissions by Seller occurring with respect to any of the Mortgage Loans prior to the related  Closing Date, including without limitation any lender liability claims and other claims based on the alleged wrongful actions of Seller (collectively, “Claims”). The Seller shall immediately assume the defense of any such Claim and pay all expenses in connection therewith, including counsel fees, and promptly pay, discharge and satisfy any judgment or decree which may be entered against it or the Purchaser in respect of such Claim.  Nothing contained herein shall prohibit the Purchaser, at Seller’s expense, from retaining its own counsel to assist in such proceedings or to observe such proceedings.
		

		
			Section 4.02Merger or Consolidation of the Seller.
		

		
			The Seller will keep in full effect its existence, rights and franchises as a corporation under the laws of the state of its incorporation, and will obtain and preserve its qualification to do business as a foreign corporation in each jurisdiction in which such qualification is or shall be necessary to protect the validity and enforceability of this Agreement or any of the Mortgage Loans and to perform its duties under this Agreement.
		

		
			Any person into which the Seller may be merged or consolidated, or any corporation resulting from any merger, conversion or consolidation (including, without limitation, by means of the sale of all or substantially all of the Seller’s assets to such Person) to which the Seller shall be a party, or any Person succeeding to the business of the Seller, shall be obligated to perform Seller’s obligations under this Agreement, anything herein to the contrary notwithstanding.
		

		
			ARTICLE V

MISCELLANEOUS PROVISIONS
		

		
			Section 5.01Governing Law.
		

		
			This Agreement shall be governed by and construed in accordance with the laws of the State of California.
		

		
			Section 5.02Notices.
		

		
			Any notices or other communications permitted or required hereunder shall be in writing and shall be deemed conclusively to have been given if personally delivered, sent by courier with delivery against signature therefor, mailed by registered mail, postage prepaid, and return receipt requested or transmitted by telecopier and confirmed by a similar writing mailed or sent by 
		

		
			
		

		
			

		 

 

courier as provided above, to (i) in the case of the Seller, PennyMac Loan Services, LLC, 36 Discovery, Suite 220, Irvine, CA 92618, Attention: Steve Skolnik or such other address as may hereafter be furnished to the Seller in writing by the Purchaser, and (ii) in the case of the Purchaser, PennyMac Corp., 6101 Condor Drive, Moorpark, CA 93021, Attention: Andrew Chang, or such other address as may hereafter be furnished to the Purchaser in writing by the Seller.
		

		
			Section 5.03Severability of Provisions.
		

		
			If any one or more of the covenants, agreements, provisions or terms of this Agreement shall be for any reason whatsoever held invalid, the invalidity of any such covenant, agreement, provision or term of this Agreement shall in no way affect the validity or enforceability of the other provisions of this Agreement.
		

		
			Section 5.04Exhibits.
		

		
			The exhibits to this Agreement are hereby incorporated and made a part hereof and are an integral part of this Agreement.
		

		
			Section 5.05General Interpretive Principles.
		

		
			For purposes of this Agreement, except as otherwise expressly provided or unless the context otherwise requires:
		

		
			(i)the terms defined in this Agreement have the meanings assigned to them in this Agreement and include the plural as well as the singular, and the use of any gender herein shall be deemed to include the other gender;
		

		
			(ii)accounting terms not otherwise defined herein have the meanings assigned to them in accordance with generally accepted accounting principles;
		

		
			(iii)references herein to “Articles”, “Sections”, “Subsections”, “Paragraphs”, and other subdivisions without reference to a document are to designated Articles, Sections, Subsections, Paragraphs and other subdivisions of this Agreement, unless the context shall otherwise require;
		

		
			(iv)a reference to a Subsection without further reference to a Section is a reference to such Subsection as contained in the same Section in which the reference appears, and this rule shall also apply to Paragraphs and other subdivisions;
		

		
			(v)the words “herein”, “hereof”, “hereunder” and other words of similar import refer to this Agreement as a whole and not to any particular provision; and
		

		
			(vi)the term “include” or “including” shall mean without limitation by reason of enumeration.
		

		
			
		

		
			

		 

 

Section 5.06Waivers and Amendments, Non-contractual Remedies; Preservation of Remedies.
		

		
			This Agreement may be amended, superseded, canceled, renewed or extended and the terms hereof may be waived, only by a written instrument signed by authorized representatives of the parties or, in the case of a waiver, by an authorized representative of the party waiving compliance.  No such written instrument shall be effective unless it expressly recites that it is intended to amend, supersede, cancel, renew or extend this Agreement or to waive compliance with one or more of the terms hereof, as the case may be.  No delay on the part of any party in exercising any right, power or privilege hereunder shall operate as a waiver thereof, nor shall any waiver on the part of any party of any such right, power or privilege, or any single or partial exercise of any such right, power or privilege, preclude any further exercise thereof or the exercise of any other such right, power or privilege.  Except as otherwise provided for herein, the rights and remedies herein provided are cumulative and are not exclusive of any rights or remedies that any party may otherwise have at law or in equity.
		

		
			Section 5.07Captions.
		

		
			All section titles or captions contained in this Agreement or in any Schedule or Exhibit annexed hereto or referred to herein are for convenience only, shall not be deemed a part of this Agreement and shall not affect the meaning or interpretation of this Agreement.
		

		
			Section 5.08Counterparts.
		

		
			This Agreement may be executed by the parties hereto in separate counterparts, each of which when so executed and delivered shall be an original, but all such counterparts shall together constitute one and the same instrument.
		

		
			Section 5.09Entire Agreement.
		

		
			This Agreement (including the Schedules and Exhibits annexed hereto or referred to herein) between the parties hereto contain the entire agreement between the parties with respect to the transactions contemplated hereby and supersede all prior agreements, written or oral, with respect thereto.
		

		
			Section 5.10Further Assurances.
		

		
			Each party hereto shall take such additional action as may be reasonably necessary to effectuate this Agreement and the transactions contemplated hereby.  The Seller will promptly and duly execute and deliver to the Purchaser such documents and assurances and take such further action as the Purchaser may from time to time reasonably request in order to carry out more effectively the intent and purpose of this Agreement and to establish and protect the rights and remedies created or intended to be created in favor of the Purchaser.
		

		
			Section 5.11Jurisdiction; Venue.  
		

		
			The parties hereby agree that any controversy arising under or in relation to this Agreement shall be shall be tried and litigated only in the state and federal courts located in the Counties of Los Angeles or Orange, State of California.  The parties hereby irrevocably consent 
		

		
			
		

		
			

		 

 

to jurisdiction, and venue of such courts for any such litigation and waive any other venue to which they might be entitled.
		

		
			Section 5.12Mutual Drafters; Interpretation.  
		

		
			This Agreement is the product of negotiation between the Purchaser and the Seller.  Accordingly, this Agreement shall be construed without regard to any presumption or rule requiring that it be construed against the party causing this Agreement or any part hereof to be drafted.  Whenever the context requires, all words used in the singular will be construed to have been used in the plural, and vice versa, and each gender will include any other gender.
		

		
			Section 5.13Attorneys’ Fees.  
		

		
			In the event any party to this Agreement shall be required to commence any proceeding against any other party pursuant to this Agreement, the party prevailing in such action or proceeding shall be entitled to recover from the other party, or parties, the prevailing party’s reasonable attorneys’ fees and costs including, without limitation, all witness fees and associated expenses, including matters on appeal, whether or not the proceeding or action proceeds to judgment.  Except as may be otherwise provided herein, each of the parties to this Agreement will bear their own attorneys’ fees incurred in the negotiation and preparation of this Agreement.
		

		
			[signature page follows]
		

		
			
		

		
			

		 

 

IN WITNESS WHEREOF, the Seller and the Purchaser have caused their names to be signed hereto by their respective officers thereunto duly authorized as of December 15, 2015.
		

		
			“Seller:”
		

		
			PENNYMAC LOAN SERVICES, LLC
		

			
					
						By:

					
					
						/s/ Vandad Fartaj

					
					
						    

					
					
						 

				
	
					
						 

					
					
						Vandad Fartaj

					
					
						 

					
					
						 

				
	
					
						 

					
					
						Chief Capital Markets Officer

					
					
						 

					
					
						 

				

		
			“Purchaser:”
		

		
			PENNYMAC CORP.
		

			
					
						By:

					
					
						/s/ Steven F. Skolnik

					
					
						    

					
					
						 

				
	
					
						 

					
					
						Steven F. Skolnik

					
					
						 

					
					
						 

				
	
					
						 

					
					
						Chief Commercial Lending Officer

					
					
						 

					
					
						 

				

		
			 
		

		
			 
		

		
			
		

		
			

		 

 

List of Exhibits and Schedules:
		

		
			Exhibit AForm of Assignment
		

		
			Exhibit BForm of Purchase Price and Terms Agreement
		

		
			Exhibit CRepresentations and Warranties
		

		
			 
		

		
			
		

		
			

		 

 

EXHIBIT A
		

		
			FORM OF ASSIGNMENT
		

		
			WHEN RECORDED MAIL TO:
		

		
			 
		

		
			PennyMac Corp.
		

		
			6101 Condor Drive
		

		
			Moorpark, CA 93021
		

		
			Attention:  _____________
		

		
			 
		

		
			Loan no.: 
		

		
			 
		

		
			Escrow no.: 
		

		
			 
		

		
			======================================================================================
		

		
			CORPORATION ASSIGNMENT OF DEED OF TRUST
		

		
			 
		

		
			FOR VALUE RECEIVED, the undersigned hereby grants, assigns and transfers to 
		

		
			                                                  all beneficial interest under that certain Deed of Trust dated                                     , executed by _______________________________________ Trustors, to                                                  , Trustee as per  Deed of Trust  and recorded on                                                as Instrument No. _____________ in book                                         , page                               , of Official Records in the County Recorder’s office                             County, describing land therein as: 
		

		
			“AS DESCRIBED ON SAID RECORDED DEED OF TRUST REFERRED TO HEREIN”
		

		
			TOGETHER with the note or notes therein described or referred to, the money due and to become due thereon with interest, and all rights accrued or to accrue under said Deed of Trust.
		

		
			 
		

			
					
						 

					
					
						 

					
					
						 

				
	
					
						 

					
					
						 

				
	
					
						 

					
					
						 

					
					
						 

				
	
					
						 

					
					
						By:

					
					
						 

				
	
					
						 

					
					
						Name:

					
					
						 

				
	
					
						 

					
					
						Title:

					
					
						 

				

		
			 
		

		
			======================================================================================
		

		
			ACKNOWLEDGMENT
		

		
			STATE OF CALIFORNIA)
)  
COUNTY OF _____________)
		

		
			On _____________________, before me, ____________________, a Notary Public, personally appeared ____________________ who proved to me on the basis of satisfactory evidence to be the person(s) whose name(s) is/are subscribed to the within instrument and acknowledged to me that he/she/they executed the same in his/her/their authorized capacity(ies), and that by his/her/their signature(s) on the instrument the person(s), or the entity upon behalf of which the person(s) acted, executed the instrument.
		

		
			I certify under PENALTY OF PERJURY under the laws of the State of California that the foregoing paragraph is true and correct.
		

		
			WITNESS my hand and official seal.
		

		
			Signature _______________________________
		

		
			
		

		
			

		 

 

EXHIBIT  B
		

		
			FORM OF PURCHASE PRICE AND TERMS AGREEMENT
		

		
			 
		

		
			THIS PURCHASE PRICE AND TERMS AGREEMENT, dated as of ______________, 20__ (this “Purchase Price and Terms Agreement”), is hereby executed by and between PennyMac Loan Services, LLC, as seller and interim servicer (the “Seller”), and PennyMac Corp., as purchaser (the “Purchaser”) under this Purchase Price and Terms Agreement and the  Flow Commercial Mortgage Loan Purchase Agreement, dated as of December 1, 2015 (the “MLPA”), all the provisions of which are incorporated herein and shall be a part of this Purchase Price and Terms Agreement as if set forth herein in full (this Purchase Price and Terms Agreement together with the MLPA so incorporated, the “Agreement”).
		

		
			PRELIMINARY STATEMENT
		

		
			The Purchaser has agreed to purchase from the Seller and the Seller has agreed to sell to the Purchaser, on a servicing released basis and without recourse, a Mortgage Loan, as described in, and having a Loan Amount as described in, the Schedule attached hereto as Schedule 1.  
		

		
			In consideration of the premises and the mutual agreements hereinafter set forth, and intending to be legally bound, the Purchaser and the Seller agree hereby as follows:
		

		
			1.MLPA; Designation.
		

		
			The Seller and the Purchaser acknowledge that the MLPA prescribes certain obligations of the Seller and the Purchaser with respect to the Mortgage Loan.  The Seller and the Purchaser each agree to observe and perform such prescribed duties, responsibilities and obligations, and acknowledge that the MLPA is and shall be a part of this Agreement to the same extent as if set forth herein in full.
		

		
			2.Defined Terms.
		

		
			In addition to the definitions set forth in Article I of the MLPA, the following words and phrases, unless the context otherwise requires, shall have the meanings specified in this Article in regard to the Mortgage Loans being sold pursuant to this Purchase Price and Terms Agreement.
		

		
			Mortgage Loan: ____________________________
		

		
			Cut-off Date:  ____, 20__.
		

		
			Closing Date:  ____, 20__.
		

		
			Purchase Price Percentage:  _____%
		

		
			Loan Amount:  $________
		

		
			Purchase Price (Purchase Price Percentage x Loan Amount): $________ 
		

		
			Accrued Interest:  $_______
		

		
			3.Conveyance of Mortgage Loan; Possession of Submitted Mortgage Files.
		

		
			The Seller, simultaneously with the execution and delivery of this Purchase Price and Terms Agreement, does hereby agree, as provided in the MLPA, to absolutely sell, transfer and assign, without recourse, except as set forth in the MLPA, to the Purchaser the ownership interest comprising all of the right, title and interest of the Seller in and to the Mortgage Loan identified on Schedule 1 hereto on a servicing released basis and all principal, interest and other proceeds of any kind received with respect to such Mortgage Loan, including but not limited to proceeds 
		

		
			
		

		
			

		 

 

derived from the conversion, voluntary or involuntary, of any of such assets into cash or other liquidated property.
		

		
			4.Wire Instructions.
		

		
			A.  Distributions that may be made to Purchaser by wire transfer pursuant to the MLPA shall be made in accordance with the following wire instructions:
		

		
			Bank:  _____________________
		

		
			ABA Number:  ________________
		

		
			Account Name:  ________________
		

		
			Account Number:  ________________
		

		
			Reference:  ________________
		

		
			Attn:  ________________
		

		
			or in accordance with such other instructions as may hereafter be furnished to the Seller in writing by the Purchaser, provided that such instructions have been received by the Seller prior to the date the distribution in question is made.
		

		
			B.  The Purchase Price for the Mortgage Loans will be wire transferred by Purchaser to the Seller in accordance with the following wire transfer instructions:
		

		
			Bank:  _____________________
		

		
			ABA Number:  ________________
		

		
			Account Name:  ________________
		

		
			Account Number:  ________________
		

		
			Reference:  ________________
		

		
			Attn:  ________________
		

		
			or in accordance with such other instructions as may hereafter be furnished to the Purchaser in writing by the Seller, provided that such instructions have been received by the Purchaser prior to the related Closing Date.
		

		
			5.Counterparts.
		

		
			This Purchase Price and Terms Agreement may be executed simultaneously in any number of counterparts, each of which counterparts shall be deemed to be an original, and such counterparts shall constitute but one and the same instrument.
		

		
			6.Governing Law.
		

		
			This Purchase Price and Terms Agreement shall be governed by and construed in accordance with the laws of the State of California and the obligations, rights and remedies of the parties hereunder shall be determined in accordance with such laws.
		

		
			7.Amendment.
		

		
			This Purchase Price and Terms Agreement may be amended from time to time by the Seller and the Purchaser by written agreement signed by the Seller and the Purchaser.
		

		
			[Signature Page Follows] 
		

		
			 
		

		
			
		

		
			

		 

 

IN WITNESS WHEREOF, the Seller and the Purchaser have caused their names to be signed to this Purchase Price and Terms Agreement by their respective officers thereunto duly authorized as of the day and year first above written.
		

		
			 
		

			
					
						 

					
					
						 

					
					
						 

				
	
					
						 

					
					
						SELLER:

				
	
					
						 

					
					
						 

				
	
					
						 

					
					
						PENNYMAC LOAN SERVICES, LLC

				
	
					
						 

					
					
						 

				
	
					
						 

					
					
						By:

					
					
						 

				
	
					
						 

					
					
						Name:

					
					
						 

				
	
					
						 

					
					
						Title:

					
					
						 

				

		
			 
		

		
			 
		

		
			 
		

		
			 
		

		
			 
		

		
			 
		

		
			 
		

			
					
						 

					
					
						 

					
					
						 

				
	
					
						 

					
					
						PURCHASER:

				
	
					
						 

					
					
						 

				
	
					
						 

					
					
						PENNYMAC CORP.

				
	
					
						 

					
					
						 

				
	
					
						 

					
					
						By:

					
					
						 

				
	
					
						 

					
					
						Name:

					
					
						 

				
	
					
						 

					
					
						Title:

					
					
						 

				

		
			 
		

		
			 
		

		
			
		

		
			

		 

 

SCHEDULE 1
		

		
			 
		

		
			TO THE PURCHASE PRICE AND TERMS AGREEMENT
		

		
			 
		

		
			 
		

		
			MORTGAGE LOAN INFORMATION
		

		
			 
		

		
			 
		

		
			 
		

		
			
		

		
			

		 

 

SCHEDULE 2
		

		
			 
		

		
			TO THE PURCHASE PRICE AND TERMS AGREEMENT
		

		
			 
		

		
			 
		

		
			CONTENTS OF SUBMITTED MORTGAGE LOAN FILE
		

		
			 
		

		
			
		

		
			

		 

 

SCHEDULE 3
		

		
			 
		

		
			TO THE PURCHASE PRICE AND TERMS AGREEMENT
		

		
			 
		

		
			 
		

		
			EXCEPTIONS
		

		
			 
		

		
			 
		

		
			 
		

		
			 
		

		
			 
		

		
			 
		

		
			 
		

		
			TITLE EXCEPTIONS
		

		
			 
		

		
			 
		

		
			
		

		
			

		 

 

EXHIBIT C
		

		
			REPRESENTATIONS AND WARRANTIES
		

		
			 
		

		
			1.Whole Loan; Ownership of Mortgage Loans. Except with respect to a Mortgage Loan that is part of a loan combination identified as such on Schedule 3 to the applicable Purchase Price and Terms Agreement, each Mortgage Loan is a whole loan and not a participation interest in a Mortgage Loan. At the time of the sale, transfer and assignment to Purchaser, no Mortgage Note or Mortgage was subject to any assignment (other than assignments to the Seller), participation or pledge, and the Seller had good title to, and was the sole owner of, each Mortgage Loan free and clear of any and all liens, charges, pledges, encumbrances, participations, any other ownership interests on, in or to such Mortgage Loan other than any servicing rights appointment or similar agreement. Seller has full right and authority to sell, assign and transfer each Mortgage Loan, and the assignment to Purchaser constitutes a legal, valid and binding assignment of such Mortgage Loan free and clear of any and all liens, pledges, charges or security interests of any nature encumbering such Mortgage Loan.
		

		
			2.Loan Document Status. Each related Mortgage Note, Mortgage, Assignment of Leases, Rents and Profits (if a separate instrument), guaranty and other agreement executed by or on behalf of the related Mortgagor, guarantor or other obligor in connection with such Mortgage Loan is the legal, valid and binding obligation of the related Mortgagor, guarantor or other obligor (subject to any non-recourse provisions contained in any of the foregoing agreements and any applicable state anti-deficiency or market value limit deficiency legislation), as applicable, and is enforceable in accordance with its terms, except (i) as such enforcement may be limited by (a) bankruptcy, insolvency, fraudulent transfer, reorganization, moratorium or other similar laws affecting the enforcement of creditors' rights generally and (b) general principles of equity (regardless of whether such enforcement is considered in a proceeding in equity or at law) and (ii) that certain provisions in such Mortgage Loan Documents (including, without limitation, provisions requiring the payment of default interest, late fees or prepayment/yield maintenance fees, charges and/or premiums) are, or may be, further limited or rendered unenforceable by or under applicable law, but (subject to the limitations set forth in clause (i) above) such limitations or unenforceability will not render such Mortgage Loan Documents invalid as a whole or materially interfere with the mortgagee's realization of the principal benefits and/or security provided thereby (clauses (i) and (ii) collectively, the “Standard Qualifications”).
		

		
			Except as set forth in the immediately preceding sentences, there is no valid offset, defense, counterclaim or right of rescission available to the related Mortgagor with respect to any of the related Mortgage Notes, Mortgages or other Mortgage Loan Documents, including, without limitation, any such valid offset, defense, counterclaim or right based on intentional fraud by Seller in connection with the origination of the Mortgage Loan, that would deny the mortgagee the principal benefits intended to be provided by the Mortgage Note, Mortgage or other Mortgage Loan Documents.
		

		
			
		

		
			

		 

 

3.Mortgage Provisions. The Mortgage Loan Documents for each Mortgage Loan contain provisions that render the rights and remedies of the holder thereof adequate for the practical realization against the Mortgaged Property of the principal benefits of the security intended to be provided thereby, including realization by judicial or, if applicable, non-judicial foreclosure subject to the limitations set forth in the Standard Qualifications.
		

		
			 
		

		
			4.Mortgage Status; Waivers and Modifications. Since origination and except by written instruments set forth in the related Submitted Mortgage File or as otherwise provided in the related Mortgage Loan documents (a) the material terms of such Mortgage, Mortgage Note, Mortgage Loan guaranty, and related Mortgage Loan Documents have not been waived, impaired, modified, altered, satisfied, canceled, subordinated or rescinded in any respect; (b) no related Mortgaged Property or any portion thereof has been released from the lien of the related Mortgage in any manner which materially interferes with the security intended to be provided by such Mortgage or the use or operation of the remaining portion of such Mortgaged Property; and (c) neither the related Mortgagor nor the related guarantor has been released from its material obligations under the Mortgage Loan. With respect to each Mortgage Loan, except as contained in a written document included in the Submitted Mortgage File, there have been no modifications, amendments or waivers, that could be reasonably expected to have a material adverse effect on such Mortgage Loan.
		

		
			5.Lien; Valid Assignment. Subject to the Standard Qualifications, each Assignment and assignment of Assignment of Leases, Rents and Profits to the Purchaser constitutes a legal, valid and binding assignment to the Purchaser. Each related Mortgage and Assignment of Leases, Rents and Profits is freely assignable without the consent of the related Mortgagor. Each related Mortgage is a legal, valid and enforceable first lien on the related Mortgagor's fee or leasehold interest in the Mortgaged Property in the principal amount of such Mortgage Loan or allocated loan amount (subject only to Permitted Encumbrances (as defined below) and the title exceptions to paragraph (6) set forth on Schedule 3 to the applicable Purchase Price and Terms Agreement (each such title exception, a “Title Exception”)), except as the enforcement thereof may be limited by the Standard Qualifications. Such Mortgaged Property (subject to and excepting Permitted Encumbrances and the Title Exceptions) as of origination was, and as of the Cut-off Date, to the Seller's knowledge, is free and clear of any recorded mechanics' liens, recorded materialmen's liens and other recorded encumbrances which are prior to or equal with the lien of the related Mortgage, except those which are bonded over, escrowed for or insured against by a lender's title insurance policy (as described below), and, to the Seller's knowledge and subject to the rights of tenants (as tenants only) (subject to and excepting Permitted Encumbrances and the Title Exceptions), no rights exist which under law could give rise to any such lien or encumbrance that would be prior to or equal with the lien of the related Mortgage, except those which are bonded over, escrowed for or insured against by a lender's title insurance policy (as described below). Notwithstanding anything herein to the contrary, no representation is made as to the perfection of any security interest in rents or other personal property to the extent that possession or control of such items or actions other than the filing of Uniform 
		

		
			
		

		
			

		 

 

Commercial Code (“UCC”) financing statements is required in order to effect such perfection.
		

		
			6.Permitted Liens; Title Insurance. Each Mortgaged Property securing a Mortgage Loan is covered by an American Land Title Association loan title insurance policy or a comparable form of loan title insurance policy approved for use in the applicable jurisdiction (or, if such policy is yet to be issued, by a pro forma policy, a preliminary title policy with escrow instructions or a “marked up” commitment, in each case binding on the title insurer) (the “Title Policy”) in the original principal amount of such Mortgage Loan (or with respect to a Mortgage Loan secured by multiple properties, an amount equal to at least the allocated loan amount with respect to the Title Policy for each such property) after all advances of principal (including any advances held in escrow or reserves), that insures for the benefit of the owner of the indebtedness secured by the Mortgage, the first priority lien of the Mortgage, which lien is subject only to (a) the lien of current real property taxes, water charges, sewer rents and assessments not yet due and payable; (b) covenants, conditions and restrictions, rights of way, easements and other matters of public record; (c) the exceptions (general and specific) and exclusions set forth in such Title Policy; (d) other matters to which like properties are commonly subject; (e) the rights of tenants (as tenants only) under leases (including subleases) pertaining to the related Mortgaged Property and condominium declarations; and (f) if the related Mortgage Loan is cross-collateralized and cross-defaulted with another Mortgage Loan (each a “Crossed Mortgage Loan”), the lien of the Mortgage for another Mortgage Loan that is cross-collateralized and cross-defaulted with such Crossed Mortgage Loan, provided that none of which items (a) through (f), individually or in the aggregate, materially and adversely interferes with the value or current use of the Mortgaged Property or the security intended to be provided by such Mortgage or the Mortgagor's ability to pay its obligations when they become due (collectively, the “Permitted Encumbrances”). Except as contemplated by clause (f) of the preceding sentence, none of the Permitted Encumbrances are mortgage liens that are senior to or coordinate and co-equal with the lien of the related Mortgage. Such Title Policy (or, if it has yet to be issued, the coverage to be provided thereby) is in full force and effect, all premiums thereon have been paid and no claims have been made by the Seller thereunder and no claims have been paid thereunder. Neither the Seller, nor to the Seller's knowledge, any other holder of the Mortgage Loan, has done, by act or omission, anything that would materially impair the coverage under such Title Policy.
		

		
			7.Junior Liens. It being understood that B notes secured by the same Mortgage as a Mortgage Loan are not subordinate mortgages or junior liens, except for any Crossed Mortgage Loan, there are, as of origination, and to the Seller's knowledge, as of the Cut-off Date, no subordinate mortgages or junior liens securing the payment of money encumbering the related Mortgaged Property (other than Permitted Encumbrances and the Title Exceptions, taxes and assessments, mechanics and materialmen's liens (which are the subject of the representation in paragraph (5) above), and equipment and other personal property financing). Except as set forth on Schedule 3 to the applicable Purchase Price and Terms Agreement, the Seller has no knowledge of any mezzanine debt secured directly by interests in the related Mortgagor.
		

		
			
		

		
			

		 

 

8.Assignment of Leases, Rents and Profits. There exists as part of the related Submitted Mortgage File an Assignment of Leases, Rents and Profits (either as a separate instrument or incorporated into the related Mortgage). Subject to the Permitted Encumbrances and the Title Exceptions, each related Assignment of Leases, Rents and Profits creates a valid first-priority collateral assignment of, or a valid first-priority lien or security interest in, rents and certain rights under the related lease or leases, subject only to a license granted to the related Mortgagor to exercise certain rights and to perform certain obligations of the lessor under such lease or leases, including the right to operate the related leased property, except as the enforcement thereof may be limited by the Standard Qualifications. The related Mortgage or related Assignment of Leases, Rents and Profits, subject to applicable law, provides that, upon an event of default under the Mortgage Loan, a receiver is permitted to be appointed for the collection of rents or for the related mortgagee to enter into possession to collect the rents or for rents to be paid directly to the mortgagee.
		

		
			9.UCC Filings. If the related Mortgaged Property is operated as a hospitality property, the Seller has filed and/or recorded or caused to be filed and/or recorded (or, if not filed and/or recorded, have been submitted in proper form for filing and/or recording), UCC financing statements in the appropriate public filing and/or recording offices necessary at the time of the origination of the Mortgage Loan to perfect a valid security interest in all items of physical personal property reasonably necessary to operate such Mortgaged Property owned by such Mortgagor and located on the related Mortgaged Property (other than any non-material personal property, any personal property subject to a purchase money security interest, a sale and leaseback financing arrangement as permitted under the terms of the related Mortgage Loan documents or any other personal property leases applicable to such personal property), to the extent perfection may be effected pursuant to applicable law by recording or filing, as the case may be. Subject to the Standard Qualifications, each related Mortgage (or equivalent document) creates a valid and enforceable lien and security interest on the items of personalty described above. No representation is made as to the perfection of any security interest in rents or other personal property to the extent that possession or control of such items or actions other than the filing of UCC financing statements are required in order to effect such perfection.
		

		
			10.Condition of Property. Seller or the originator of the Mortgage Loan inspected or caused to be inspected each related Mortgaged Property within six months of origination of the Mortgage Loan and within twelve months of the Cut-off Date. 
		

		
			An engineering report or property condition assessment was prepared in connection with the origination of each Mortgage Loan no more than twelve months prior to the Cut-off Date. To the Seller's knowledge, based solely upon due diligence customarily performed in connection with the origination of comparable mortgage loans, as of the Closing Date, each related Mortgaged Property was free and clear of any material damage (other than (i) any damage or deficiency that is estimated to cost less than $50,000 to repair, (ii) any deferred maintenance for which escrows were established at origination and (iii) any damage fully covered by insurance) that would affect materially and adversely the use or value of such Mortgaged Property as security for the Mortgage Loan.
		

		
			
		

		
			

		 

 

11.Taxes and Assessments. All taxes, governmental assessments and other outstanding governmental charges (including, without limitation, water and sewage charges), or installments thereof, that could be a lien on the related Mortgaged Property that would be of equal or superior priority to the lien of the Mortgage and that prior to the Cut-off Date have become delinquent in respect of each related Mortgaged Property have been paid, or an escrow of funds has been established in an amount sufficient to cover such payments and reasonably estimated interest and penalties, if any, thereon. For purposes of this representation and warranty, real estate taxes and governmental assessments and other outstanding governmental charges and installments thereof shall not be considered delinquent until the earlier of (a) the date on which interest and/or penalties would first be payable thereon and (b) the date on which enforcement action is entitled to be taken by the related taxing authority.
		

		
			12.Condemnation. As of the date of origination and to the Seller's knowledge as of the Cut-off Date, there is no proceeding pending, and, to the Seller's knowledge as of the date of origination and as of the Cut-off Date, there is no proceeding threatened, for the total or partial condemnation of such Mortgaged Property that would have a material adverse effect on the value, use or operation of the Mortgaged Property.
		

		
			13.Actions Concerning Mortgage Loan. As of the date of origination and to the Seller's knowledge as of the Cut-off Date, there was no pending or filed action, suit or proceeding, arbitration or governmental investigation involving any Mortgagor, guarantor, or Mortgagor's interest in the Mortgaged Property, an adverse outcome of which would reasonably be expected to materially and adversely affect (a) such Mortgagor's title to the Mortgaged Property, (b) the validity or enforceability of the Mortgage, (c) such Mortgagor's ability to perform under the related Mortgage Loan, (d) such guarantor's ability to perform under the related guaranty, (e) the principal benefit of the security intended to be provided by the Mortgage Loan documents or (f) the current principal use of the Mortgaged Property.
		

		
			14.Escrow Deposits. All escrow deposits and payments required to be escrowed with lender pursuant to each Mortgage Loan are in the possession, or under the control, of the Seller or its servicer, and there are no deficiencies (subject to any applicable grace or cure periods) in connection therewith, and all such escrows and deposits (or the right thereto) that are required to be escrowed with lender under the related Mortgage Loan Documents are being conveyed by the Seller to Purchaser or its servicer.
		

		
			15.No Holdbacks. The Loan Amount as of the Cut-off Date of the Mortgage Loan set forth on Exhibit A to the Applicable Purchase Price and Terms Agreement has been fully disbursed as of the Closing Date and there is no requirement for future advances thereunder (except in those cases where the full amount of the Mortgage Loan has been disbursed but a portion thereof is being held in escrow or reserve accounts pending the satisfaction of certain conditions relating to leasing, repairs or other matters with respect to the related Mortgaged Property, the Mortgagor or other considerations determined by Seller to merit such holdback).
		

		
			
		

		
			

		 

 

16.Insurance. Each related Mortgaged Property is, and is required pursuant to the related Mortgage to be, insured by a property insurance policy providing coverage for loss in accordance with coverage found under a “special cause of loss form” or “all risk form” that includes replacement cost valuation issued by an insurer meeting the requirements of the related Mortgage Loan Documents and having a claims-paying or financial strength rating of any one of the following: (i) at least “A-:VIII” from A.M. Best Company, (ii) at least “A3” (or the equivalent) from Moody's Investors Service, Inc. or (iii) at least “A-” from Standard & Poor's Ratings Services (collectively the “Insurance  Rating Requirements”), in an amount (subject to a customary deductible) not less than the lesser of (1) the original principal balance of the Mortgage Loan and (2) the full insurable value on a replacement cost basis of the improvements, furniture, furnishings, fixtures and equipment owned by the borrower and included in the Mortgaged Property (with no deduction for physical depreciation), but, in any event, not less than the amount necessary or containing such endorsements as are necessary to avoid the operation of any coinsurance provisions with respect to the related Mortgaged Property.
		

		
			Each related Mortgaged Property is also covered, and required to be covered pursuant to the related Mortgage Loan Documents, by business interruption or rental loss insurance which (subject to a customary deductible) covers a period of not less than 12 months (or with respect to each Mortgage Loan on a single asset with a principal balance of $50 million or more, 18 months).
		

		
			If any material part of the improvements, exclusive of a parking lot, located on a Mortgaged Property is in an area identified in the Federal Register by the Federal Emergency Management Agency as having special flood hazards, the related Mortgagor is required to maintain insurance in the maximum amount available under the National Flood Insurance Program.
		

		
			If the Mortgaged Property is located within 25 miles of the coast of the Gulf of Mexico or the Atlantic coast of Florida, Georgia, South Carolina or North Carolina, the related Mortgagor is required to maintain coverage for windstorm and/or windstorm related perils and/or “named storms” issued by an insurer meeting the Insurance Rating Requirements or endorsement covering damage from windstorm and/or windstorm related perils and/or named storms.
		

		
			The Mortgaged Property is covered, and required to be covered pursuant to the related Mortgage Loan Documents, by a commercial general liability insurance policy issued by an insurer meeting the Insurance Rating Requirements including coverage for property damage, contractual damage and personal injury (including bodily injury and death) in amounts as are generally required by the Seller for loans originated for securitization, and in any event not less than $1 million per occurrence and $2 million in the aggregate.
		

		
			An architectural or engineering consultant has performed an analysis of each of the Mortgaged Properties located in seismic zones 3 or 4 in order to evaluate the structural and seismic condition of such property, for the sole purpose of assessing either the scenario expected limit (“SEL”) or the probable maximum loss (“PML”) for the Mortgaged Property in the event of an earthquake. In such instance, the SEL or PML, 
		

		
			
		

		
			

		 

 

as applicable, was based on a 475-year return period, an exposure period of 50 years and a 10% probability of exceedance. If the resulting report concluded that the SEL or PML, as applicable, would exceed 20% of the amount of the replacement costs of the improvements, earthquake insurance on such Mortgaged Property was obtained by an insurer rated at least “A:VIII” by A.M. Best Company or “A3” (or the equivalent) from Moody's Investors Service, Inc. or “A-” by Standard & Poor's Ratings Services in an amount not less than 100% of the SEL or PML, as applicable.
		

		
			The Mortgage Loan Documents require insurance proceeds in respect of a property loss to be applied either (a) to the repair or restoration of all or part of the related Mortgaged Property, with respect to all property losses in excess of 5% of the then outstanding principal amount of the related Mortgage Loan (or Loan Combination, if applicable), the lender (or a trustee appointed by it) having the right to hold and disburse such proceeds as the repair or restoration progresses, or (b) to the payment of the outstanding principal balance of such Mortgage Loan (or Loan Combination, if applicable) together with any accrued interest thereon.
		

		
			All premiums on all insurance policies referred to in this section required to be paid as of the Cutoff Date have been paid, and such insurance policies name the lender under the Mortgage Loan and its successors and assigns as a loss payee under a mortgagee endorsement clause or, in the case of the general liability insurance policy, as named or additional insured. Such insurance policies will inure to the benefit of the Trustee (or, in the case of a Mortgage Loan that is a Non-Serviced Mortgage Loan, the applicable Other Trustee). Each related Mortgage Loan obligates the related Mortgagor to maintain all such insurance and, at such Mortgagor's failure to do so, authorizes the lender to maintain such insurance at the Mortgagor's cost and expense and to charge such Mortgagor for related premiums. All such insurance policies (other than commercial liability policies) require at least 10 days' prior notice to the lender of termination or cancellation arising because of nonpayment of a premium and at least 30 days' prior notice to the lender of termination or cancellation (or such lesser period, not less than 10 days, as may be required by applicable law) arising for any reason other than non-payment of a premium and no such notice has been received by Seller.
		

		
			17.Access; Utilities; Separate Tax Lots. Each Mortgaged Property (a) is located on or adjacent to a public road and has direct legal access to such road, or has access via an irrevocable easement or irrevocable right of way permitting ingress and egress to/from a public road, (b) is served by or has uninhibited access rights to public or private water and sewer (or well and septic) and all required utilities, all of which are appropriate for the current use of the Mortgaged Property, and (c) constitutes one or more separate tax parcels which do not include any property which is not part of the Mortgaged Property or is subject to an endorsement under the related Title Policy insuring the Mortgaged Property, or in certain cases, an application has been, or will be, made to the applicable governing authority for creation of separate tax lots, in which case the Mortgage Loan requires the Mortgagor to escrow an amount sufficient to pay taxes for the existing tax parcel of which the Mortgaged Property is a part until the separate tax lots are created.
		

		
			
		

		
			

		 

 

18.No Encroachments. To Seller's knowledge based solely on surveys obtained in connection with origination and the lender's Title Policy (or, if such policy is not yet issued, a pro forma title policy, a preliminary title policy with escrow instructions or a “marked up” commitment) obtained in connection with the origination of each Mortgage Loan, all material improvements that were included for the purpose of determining the appraised value of the related Mortgaged Property at the time of the origination of such Mortgage Loan are within the boundaries of the related Mortgaged Property, except encroachments that do not materially and adversely affect the value or current use of such Mortgaged Property or for which insurance or endorsements were obtained under the Title Policy. No improvements on adjoining parcels encroach onto the related Mortgaged Property except for encroachments that do not materially and adversely affect the value or current use of such Mortgaged Property or for which insurance or endorsements were obtained under the Title Policy. No improvements encroach upon any easements except for encroachments the removal of which would not materially and adversely affect the value or current use of such Mortgaged Property or for which insurance or endorsements obtained with respect to the Title Policy.
		

		
			19.No Contingent Interest or Equity Participation. No Mortgage Loan has a shared appreciation feature, any other contingent interest feature or a negative amortization feature (except that an ARD Loan may provide for the accrual of the portion of interest in excess of the rate in effect prior to the Anticipated Repayment Date) or an equity participation by Seller.
		

		
			20.REMIC. The Mortgage Loan is a “qualified mortgage” within the meaning of Code Section 860G(a)(3) (but determined without regard to the rule in the U.S. Department of Treasury Regulations (the “Treasury Regulations”) Section 1.860G-2(f)(2) that treats certain defective mortgage loans as qualified mortgages), and, accordingly, (A) the issue price of the Mortgage Loan to the related Mortgagor at origination did not exceed the non-contingent principal amount of the Mortgage Loan and (B) either: (a) such Mortgage Loan is secured by an interest in real property (including buildings and structural components thereof, but excluding personal property) having a fair market value (i) at the date the Mortgage Loan was originated at least equal to 80% of the adjusted issue price of the Mortgage Loan (or Loan Combination, as applicable) on such date or (ii) at the Closing Date at least equal to 80% of the adjusted issue price of the Mortgage Loan (or Loan Combination, as applicable) on such date, provided that for purposes hereof, the fair market value of the real property interest must first be reduced by (A) the amount of any lien on the real property interest that is senior to the Mortgage Loan and (B) a proportionate amount of any lien that is in parity with the Mortgage Loan; or (b) substantially all of the proceeds of such Mortgage Loan were used to acquire, improve or protect the real property which served as the only security for such Mortgage Loan (other than a recourse feature or other third-party credit enhancement within the meaning of Section 1.860G-2(a)(1)(ii) of the Treasury Regulations). If the Mortgage Loan was “significantly modified” prior to the Closing Date so as to result in a taxable exchange under Section 1001 of the Code, it either (x) was modified as a result of the default or reasonably foreseeable default of such Mortgage Loan or (y) satisfies the provisions of either sub-clause (B)(a)(i) above (substituting the date of the last such modification for the date the Mortgage Loan was originated) or sub-clause (B)(a)(ii), 
		

		
			
		

		
			

		 

 

including the proviso thereto. Any prepayment premium and yield maintenance charges applicable to the Mortgage Loan constitute “customary prepayment penalties” within the meaning of Section 1.860G-1(b)(2) of the Treasury Regulations. All terms used in this paragraph shall have the same meanings as set forth in the related Treasury Regulations.
		

		
			21.Compliance with Usury Laws. The Mortgage Rate (exclusive of any default interest, late charges, yield maintenance charge, or prepayment premiums) of such Mortgage Loan complied as of the date of origination with, or was exempt from, applicable state or federal laws, regulations and other requirements pertaining to usury.
		

		
			22.Authorized to do Business. To the extent required under applicable law, as of the Cut-off Date or as of the date that such entity held the Mortgage Note, each holder of the Mortgage Note was authorized to transact and do business in the jurisdiction in which each related Mortgaged Property is located, or the failure to be so authorized does not materially and adversely affect the enforceability of such Mortgage Loan by the Purchaser.
		

		
			23.Trustee under Deed of Trust. With respect to each Mortgage which is a deed of trust, as of the date of origination and, to the Seller's knowledge, as of the Closing Date, a trustee, duly qualified under applicable law to serve as such, currently so serves and is named in the deed of trust or has been substituted in accordance with the Mortgage and applicable law or may be substituted in accordance with the Mortgage and applicable law by the related mortgagee.
		

		
			24.Local Law Compliance. To the Seller's knowledge, based upon any of a letter from any governmental authorities, a legal opinion, an architect's letter, a zoning consultant's report, an endorsement to the related Title Policy, or other affirmative investigation of local law compliance consistent with the investigation conducted by the Seller for similar commercial, multifamily or, if applicable, manufactured housing community mortgage loans intended for securitization, with respect to the improvements located on or forming part of each Mortgaged Property securing a Mortgage Loan as of the date of origination of such Mortgage Loan and as of the Cut-off Date, there are no material violations of applicable zoning ordinances, building codes and land laws (collectively “Zoning Regulations”) other than those which (i) constitute a legal non-conforming use or structure, as to which as the Mortgaged Property may be restored or repaired to the full extent necessary to maintain the use of the structure immediately prior to a casualty or the inability to restore or repair to the full extent necessary to maintain the use or structure immediately prior to the casualty would not materially and adversely affect the use or operation of the Mortgaged Property, (ii) are insured by the Title Policy or other insurance policy, (iii) are insured by law and ordinance insurance coverage in amounts customarily required by the Seller for loans originated for securitization that provides coverage for additional costs to rebuild and/or repair the property to current Zoning Regulations or (iv) would not have a material adverse effect on the Mortgage Loan. The terms of the Mortgage Loan Documents require the Mortgagor to comply in all material respects with all applicable governmental regulations, zoning and building laws.
		

		
			
		

		
			

		 

 

25.Licenses and Permits. Each Mortgagor covenants in the Mortgage Loan Documents that it shall keep all material licenses, permits and applicable governmental authorizations necessary for its operation of the Mortgaged Property in full force and effect, and to the Seller's knowledge based upon a letter from any government authorities or other affirmative investigation of local law compliance consistent with the investigation conducted by the Seller for similar commercial, multifamily or, if applicable, manufactured housing community mortgage loans intended for securitization, all such material licenses, permits and applicable governmental authorizations are in effect. The Mortgage Loan requires the related Mortgagor to be qualified to do business in the jurisdiction in which the related Mortgaged Property is located.
		

		
			26.Recourse Obligations. The Mortgage Loan Documents for each Mortgage Loan provide that (a) the related Mortgagor and at least one individual or entity shall be fully liable for actual losses, liabilities, costs and damages arising from certain acts of the related Mortgagor and/or its principals specified in the related Mortgage Loan Documents, which acts generally include the following: (i) acts of fraud or intentional material misrepresentation, (ii) misapplication or misappropriation of rents, insurance proceeds or condemnation awards, (iii) intentional material physical waste of the Mortgaged Property, and (iv) any breach of the environmental covenants contained in the related Mortgage Loan Documents, and (b) the Mortgage Loan shall become full recourse to the related Mortgagor and at least one individual or entity, if the related Mortgagor files a voluntary petition under federal or state bankruptcy or insolvency law.
		

		
			27.Mortgage Releases. The terms of the related Mortgage or related Mortgage Loan Documents do not provide for release of any material portion of the Mortgaged Property from the lien of the Mortgage except (a) a partial release, accompanied by principal repayment, or partial Defeasance (as defined in paragraph (32)), of not less than a specified percentage at least equal to the lesser of (i) 110% of the related allocated loan amount of such portion of the Mortgaged Property and (ii) the outstanding principal balance of the Mortgage Loan, (b) upon payment in full of such Mortgage Loan, (c) upon a Defeasance (as defined in paragraph (32)), (d) releases of out-parcels that are unimproved or other portions of the Mortgaged Property which will not have a material adverse effect on the underwritten value of the Mortgaged Property and which were not afforded any value in the appraisal obtained at the origination of the Mortgage Loan and are not necessary for physical access to the Mortgaged Property or compliance with zoning requirements, or (e) as required pursuant to an order of condemnation. With respect to any partial release under the preceding clauses (a) or (d), either: (x) such release of collateral (i) would not constitute a “significant modification” of the subject Mortgage Loan within the meaning of Section 1.8600-2(b)(2) of the Treasury Regulations and (ii) would not cause the subject Mortgage Loan to fail to be a “qualified mortgage” within the meaning of Code Section 860G(a)(3)(A); or (y) the mortgagee or servicer can, in accordance with the related Mortgage Loan Documents, condition such release of collateral on the related Mortgagor's delivery of an opinion of tax counsel to the effect specified in the immediately preceding clause (x). For purposes of the preceding clause (x), if the fair market value of the real property constituting such Mortgaged Property after the release is not equal to at least 80% of the principal balance of the Mortgage Loan (or Loan Combination, as applicable) outstanding after the release, 
		

		
			
		

		
			

		 

 

the Mortgagor is required to make a payment of principal in an amount not less than the amount required by the REMIC Provisions.
		

		
			In the case of any Mortgage Loan, in the event of a taking of any portion of a Mortgaged Property by a State or any political subdivision or authority thereof, whether by legal proceeding or by agreement, the Mortgagor can be required to pay down the principal balance of the Mortgage Loan in an amount not less than the amount required by the REMIC Provisions and, to such extent, condemnation proceeds may not be required to be applied to the restoration of the Mortgaged Property or released to the Mortgagor, if, immediately after the release of such portion of the Mortgaged Property from the lien of the Mortgage (but taking into account the planned restoration) the fair market value of the real property constituting the remaining Mortgaged Property is not equal to at least 80% of the remaining principal balance of the Mortgage Loan (or Loan Combination, as applicable).
		

		
			No Mortgage Loan that is secured by more than one Mortgaged Property or that is a Crossed Mortgage Loan permits the release of cross-collateralization of the related Mortgaged Properties or a portion thereof, including due to a partial condemnation, other than in compliance with the loan-to-value ratio and other requirements of the REMIC Provisions.
		

		
			28.Financial Reporting and Rent Rolls. Each Mortgage requires the Mortgagor to provide the owner or holder of the Mortgage with quarterly (other than for single-tenant properties) and annual operating statements, and quarterly (other than for single-tenant properties) rent rolls for properties that have leases contributing more than 5% of the in-place base rent and annual financial statements, which annual financial statements with respect to each Mortgage Loan with more than one Mortgagor are in the form of an annual combined balance sheet of the Mortgagor entities (and no other entities), together with the related combined statements of operations, members' capital and cash flows, including a combining balance sheet and statement of income for the Mortgaged Properties on a combined basis.
		

		
			29.Acts of Terrorism Exclusion. With respect to each Mortgage Loan over $20 million, the related special-form all-risk insurance policy and business interruption policy (issued by an insurer meeting the Insurance Rating Requirements) do not specifically exclude Acts of Terrorism, as defined in the Terrorism Risk Insurance Act of 2002, as amended by the Terrorism Risk Insurance Program Reauthorization Act of 2007 and the Terrorism Risk Insurance Program Reauthorization Act of 2015 (collectively referred to as “TRIA”), from coverage, or if such coverage is excluded, it is covered by a separate terrorism insurance policy. With respect to each other Mortgage Loan, the related special-form all-risk insurance policy and business interruption policy (issued by an insurer meeting the Insurance Rating Requirements) did not, as of the date of origination of the Mortgage Loan, and, to Seller's knowledge, do not, as of the Cutoff Date, specifically exclude Acts of Terrorism, as defined in TRIA, from coverage, or if such coverage is excluded, it is covered by a separate terrorism insurance policy. With respect to each Mortgage Loan, the related Mortgage Loan Documents do not expressly waive or prohibit the mortgagee from requiring coverage for Acts of Terrorism, as defined in TRIA, or damages related 
		

		
			
		

		
			

		 

 

thereto except to the extent that any right to require such coverage may be limited by commercial availability on commercially reasonable terms, or as otherwise indicated on Schedule 3 to the applicable Purchase Price and Terms Agreement;  provided, however, that if TRIA or a similar or subsequent statute is not in effect, then, provided that terrorism insurance is commercially available, the Mortgagor under each Mortgage Loan is required to carry terrorism insurance, but in such event the Mortgagor shall not be required to spend on terrorism insurance coverage more than two times the amount of the insurance premium that is payable in respect of the property and business interruption/rental loss insurance required under the related Mortgage Loan Documents (without giving effect to the cost of terrorism and earthquake components of such casualty and business interruption/rental loss insurance) at such time, and if the cost of terrorism insurance exceeds such amount, the Mortgagor is required to purchase the maximum amount of terrorism insurance available with funds equal to such amount.
		

		
			30.Due on Sale or Encumbrance. Subject to specific exceptions set forth below, each Mortgage Loan contains a “due on sale” or other such provision for the acceleration of the payment of the unpaid principal balance of such Mortgage Loan if, without the consent of the holder of the Mortgage (which consent, in some cases, may not be unreasonably withheld) and/or complying with the requirements of the related Mortgage Loan Documents (which provide for transfers without the consent of the lender which are customarily acceptable to the Seller lending on the security of property comparable to the related Mortgaged Property, including, without limitation, transfers of worn-out or obsolete furnishings, fixtures, or equipment promptly replaced with property of equivalent value and functionality and transfers by leases entered into in accordance with the Mortgage Loan Documents), (a) the related Mortgaged Property, or any equity interest of greater than 50% in the related Mortgagor, is directly or indirectly pledged, transferred or sold, other than as related to (i) family and estate planning transfers or transfers upon death or legal incapacity, (ii) transfers to certain affiliates as defined in the related Mortgage Loan Documents, (iii) transfers of less than, or other than, a controlling interest in the related Mortgagor, (iv) transfers to another holder of direct or indirect equity in the Mortgagor, a specific Person designated in the related Mortgage Loan Documents or a Person satisfying specific criteria identified in the related Mortgage Loan Documents, such as a qualified equityholder, (v) transfers of stock or similar equity units in publicly traded companies or (vi) a substitution or release of collateral within the parameters of paragraphs (27) and (32) herein or the exceptions thereto set forth on Schedule 3 to the applicable Purchase Price and Terms Agreement, or (vii) by reason of any mezzanine debt that existed at the origination of the related Mortgage Loan as set forth on Schedule 3 to the applicable Purchase Price and Terms Agreement, or future permitted mezzanine debt in each case as set forth on Schedule 3 to the applicable Purchase Price and Terms Agreement or (b) the related Mortgaged Property is encumbered with a subordinate lien or security interest against the related Mortgaged Property, other than (i) any Companion Loan or any subordinate debt that existed at origination and is permitted under the related Mortgage Loan Documents, (ii) purchase money security interests, (iii) any Crossed Mortgage Loan as set forth on Schedule 3 to the applicable Purchase Price and Terms Agreement, or (iv) Permitted Encumbrances. The Mortgage or other Mortgage Loan Documents provide that to the extent any Rating Agency fees are incurred in connection with the review of and consent to any transfer or 
		

		
			
		

		
			

		 

 

encumbrance, the Mortgagor is responsible for such payment along with all other reasonable fees and expenses incurred by the Mortgagee relative to such transfer or encumbrance.
		

		
			31.Single-Purpose Entity. Each Mortgage Loan requires the Mortgagor to be a Single-Purpose Entity for at least as long as the Mortgage Loan is outstanding. Both the Mortgage Loan Documents and the organizational documents of the Mortgagor with respect to each Mortgage Loan with a Cut-off Date Loan Amount in excess of $5 million provide that the Mortgagor is a Single-Purpose Entity, and each Mortgage Loan with a Cut-off Date Loan Amount of $20 million or more has a counsel's opinion regarding non-consolidation of the Mortgagor. For this purpose, a “Single-Purpose Entity” shall mean an entity, other than an individual, whose organizational documents (or if the Mortgage Loan has a Cut-off Date Loan Amount equal to $5 million or less, its organizational documents or the related Mortgage Loan Documents) provide substantially to the effect that it was formed or organized solely for the purpose of owning and operating one or more of the Mortgaged Properties and prohibit it from engaging in any business unrelated to such Mortgaged Property or Properties, and whose organizational documents further provide, or which entity represented in the related Mortgage Loan Documents, substantially to the effect that it does not have any assets other than those related to its interest in and operation of such Mortgaged Property or Properties, or any indebtedness other than as permitted by the related Mortgage(s) or the other related Mortgage Loan Documents, that it has its own books and records and accounts separate and apart from those of any other person (other than a Mortgagor for a Crossed Mortgage Loan), and that it holds itself out as a legal entity, separate and apart from any other person or entity.
		

		
			32.Defeasance. With respect to any Mortgage Loan that, pursuant to the Mortgage Loan Documents, can be defeased (a “Defeasance”), (i) the Mortgage Loan Documents provide for Defeasance as a unilateral right of the Mortgagor, subject to satisfaction of conditions specified in the Mortgage Loan Documents; (ii) the Mortgage Loan cannot be defeased within two years after the Closing Date; (iii) the Mortgagor is permitted to pledge only United States “government securities” within the meaning of Section 1.860G-2(a)(8)(ii) of the Treasury Regulations, the revenues from which will, in the case of a full Defeasance, be sufficient to make all scheduled payments under the Mortgage Loan when due, including the entire remaining principal balance on the maturity date (or on or after the first date on which payment may be made without payment of a yield maintenance charge or prepayment penalty) or, if the Mortgage Loan is an ARD Loan, the entire principal balance outstanding on the Anticipated Repayment Date, and if the Mortgage Loan permits partial releases of real property in connection with partial Defeasance, the revenues from the collateral will be sufficient to pay all such scheduled payments calculated on a principal amount equal to a specified percentage at least equal to the lesser of (a) 110% of the allocated loan amount for the real property to be released and (b) the outstanding principal balance of the Mortgage Loan; (iv) the Mortgagor is required to provide a certification from an independent certified public accountant that the collateral is sufficient to make all scheduled payments under the Mortgage Note as set forth in clause (iii) above; (v) if the Mortgagor would continue to own assets in addition to the Defeasance collateral, the portion of the Mortgage Loan secured by 
		

		
			
		

		
			

		 

 

defeasance collateral is required to be assumed (or the mortgagee may require such assumption) by a Single-Purpose Entity; (vi) the Mortgagor is required to provide an opinion of counsel that the mortgagee has a perfected security interest in such collateral prior to any other claim or interest; and (vii) the Mortgagor is required to pay all rating agency fees associated with Defeasance (if rating confirmation is a specific condition precedent thereto) and all other reasonable expenses associated with Defeasance, including, but not limited to, accountant's fees and opinions of counsel.
		

		
			33.Fixed Interest Rates. Each Mortgage Loan bears interest at a rate that remains fixed throughout the remaining term of such Mortgage Loan, except in the case of ARD Loans and situations where default interest is imposed.
		

		
			34.Ground Leases. For purposes of the Agreement, a “Ground Lease” shall mean a lease creating a leasehold estate in real property where the fee owner as the ground lessor conveys for a term or terms of years its entire interest in the land, or with respect to air rights leases, the air, and buildings and other improvements, if any, comprising the premises demised under such lease to the ground lessee (who may, in certain circumstances, own the building and improvements on the land), subject to the reversionary interest of the ground lessor as fee owner and does not include industrial development agency (IDA) or similar leases for purposes of conferring a tax abatement or other benefit.
		

		
			With respect to any Mortgage Loan where the Mortgage Loan is secured by a leasehold estate under a Ground Lease in whole or in part, and the related Mortgage does not also encumber the related lessor's fee interest in such Mortgaged Property, based upon the terms of the Ground Lease and any estoppel or other agreement received from the ground lessor in favor of Seller, its successors and assigns, Seller represents and warrants that:
		

		
			a.The Ground Lease or a memorandum regarding such Ground Lease has been duly recorded or submitted for recordation in a form that is acceptable for recording in the applicable jurisdiction. The Ground Lease or an estoppel or other agreement received from the ground lessor permits the interest of the lessee to be encumbered by the related Mortgage and does not restrict the use of the related Mortgaged Property by such lessee, its successors or assigns in a manner that would materially adversely affect the security provided by the related Mortgage;
		

		
			b.The lessor under such Ground Lease has agreed in a writing included in the related Submitted Mortgage File (or in such Ground Lease) that the Ground Lease may not be amended or modified, or canceled or terminated by agreement of lessor and lessee, without the prior written consent of the lender, and no such consent has been granted by the Seller since the origination of the Mortgage Loan except as reflected in any written instruments which are included in the related Submitted Mortgage File;
		

		
			c.The Ground Lease has an original term (or an original term plus one or more optional renewal terms, which, under all circumstances, may be exercised, and will be enforceable, by either Mortgagor or the mortgagee) that extends not less than 20 years beyond the stated maturity of the related Mortgage Loan, or 10 
		

		
			
		

		
			

		 

 

years past the stated maturity if such Mortgage Loan fully amortizes by the stated maturity (or with respect to a Mortgage Loan that accrues on an actual 360 basis, substantially amortizes);
		

		
			d.The Ground Lease either (i) is not subject to any liens or encumbrances superior to, or of equal priority with, the Mortgage, except for the related fee interest of the ground lessor and the Permitted Encumbrances, or (ii) is subject to a subordination, non-disturbance and attornment agreement to which the mortgagee on the lessor's fee interest in the Mortgaged Property is subject;
		

		
			e.The Ground Lease does not place commercially unreasonable restrictions on the identity of the Mortgagee and the Ground Lease is assignable to the holder of the Mortgage Loan and its successors and assigns without the consent of the lessor thereunder, and in the event it is so assigned, it is further assignable by the holder of the Mortgage Loan and its successors and assigns without the consent of the lessor;
		

		
			f.The Seller has not received any written notice of material default under or notice of termination of such Ground Lease. To the Seller's knowledge, there is no material default under such Ground Lease and no condition that, but for the passage of time or giving of notice, would result in a material default under the terms of such Ground Lease and to the Seller's knowledge, such Ground Lease is in full force and effect as of the Closing Date;
		

		
			g.The Ground Lease or ancillary agreement between the lessor and the lessee requires the lessor to give to the lender written notice of any default, and provides that no notice of default or termination is effective against the lender unless such notice is given to the lender;
		

		
			h.A lender is permitted a reasonable opportunity (including, where necessary, sufficient time to gain possession of the interest of the lessee under the Ground Lease through legal proceedings) to cure any default under the Ground Lease which is curable after the lender's receipt of notice of any default before the lessor may terminate the Ground Lease;
		

		
			i.The Ground Lease does not impose any restrictions on subletting that would be viewed as commercially unreasonable by the Seller in connection with loans originated for securitization;
		

		
			j.Under the terms of the Ground Lease, an estoppel or other agreement received from the ground lessor and the related Mortgage (taken together), any related insurance proceeds or the portion of the condemnation award allocable to the ground lessee's interest (other than (i) de minimis amounts for minor casualties or (ii) in respect of a total or substantially total loss or taking as addressed in clause (k) below) will be applied either to the repair or to restoration of all or part of the related Mortgaged Property with (so long as such proceeds are in excess of the threshold amount specified in the related Mortgage Loan Documents) the lender 
		

		
			
		

		
			

		 

 

or a trustee appointed by it having the right to hold and disburse such proceeds as repair or restoration progresses, or to the payment of the outstanding principal balance of the Mortgage Loan, together with any accrued interest;
		

		
			k.In the case of a total or substantially total taking or loss, under the terms of the Ground Lease, an estoppel or other agreement and the related Mortgage (taken together), any related insurance proceeds, or portion of the condemnation award allocable to ground lessee's interest in respect of a total or substantially total loss or taking of the related Mortgaged Property to the extent not applied to restoration, will be applied first to the payment of the outstanding principal balance of the Mortgage Loan, together with any accrued interest; and
		

		
			l.Provided that the lender cures any defaults which are susceptible to being cured, the ground lessor has agreed to enter into a new lease with lender upon termination of the Ground Lease for any reason, including rejection of the Ground Lease in a bankruptcy proceeding.
		

		
			35.Servicing. The servicing and collection practices used by the Seller with respect to the Mortgage Loan have been, in all respects, legal and have met customary industry standards for servicing of commercial loans for conduit loan programs.
		

		
			36.Origination and Underwriting. The origination practices of the Seller (or the related originator if the Seller was not the originator) with respect to each Mortgage Loan have been, in all material respects, legal and as of the date of its origination, such Mortgage Loan and the origination thereof complied in all material respects with, or was exempt from, all requirements of federal, state or local law relating to the origination of such Mortgage Loan; provided that such representation and warranty does not address or otherwise cover any matters with respect to federal, state or local law otherwise covered in this Exhibit C.
		

		
			37.No Material Default; Payment Record. No Mortgage Loan has been more than 30 days delinquent, without giving effect to any grace or cure period, in making required payments since origination, and as of the date hereof, no Mortgage Loan is more than 30 days delinquent (beyond any applicable grace or cure period) in making required payments as of the Closing Date. To the Seller's knowledge, there is (a) no material default, breach, violation or event of acceleration existing under the related Mortgage Loan, or (b) no event (other than payments due but not yet delinquent) which, with the passage of time or with notice and the expiration of any grace or cure period, would constitute a material default, breach, violation or event of acceleration, which default, breach, violation or event of acceleration, in the case of either clause (a) or clause (b), materially and adversely affects the value of the Mortgage Loan or the value, use or operation of the related Mortgaged Property, provided, however, that this representation and warranty does not cover any default, breach, violation or event of acceleration that specifically pertains to or arises out of an exception scheduled to any other representation and warranty made by the Seller in this Exhibit C. No person other than the holder of such Mortgage Loan may declare any event of default under the Mortgage Loan or accelerate any indebtedness under the Mortgage Loan Documents.
		

		
			
		

		
			

		 

 

38.Bankruptcy. As of the date of origination of the related Mortgage Loan and to the Seller's knowledge as of the Cut-off Date, no Mortgagor, guarantor or tenant occupying a single-tenant property is a debtor in state or federal bankruptcy, insolvency or similar proceeding.
		

		
			39.Organization of Mortgagor. With respect to each Mortgage Loan, in reliance on certified copies of the organizational documents of the Mortgagor delivered by the Mortgagor in connection with the origination of such Mortgage Loan, the Mortgagor is an entity organized under the laws of a state of the United States of America, the District of Columbia or the Commonwealth of Puerto Rico. Except with respect to any Crossed Mortgage Loan, no Mortgage Loan has a Mortgagor that is an Affiliate of another Mortgagor. (An “Affiliate” for purposes of this paragraph (39) means, a Mortgagor that is under direct or indirect common ownership and control with another Mortgagor.)
		

		
			40.Environmental Conditions. A Phase I environmental site assessment (or update of a previous Phase I and or Phase II site assessment) and, with respect to certain Mortgage Loans, a Phase II environmental site assessment (collectively, an “ESA”) meeting ASTM requirements conducted by a reputable environmental consultant in connection with such Mortgage Loan within 12 months prior to its origination date (or an update of a previous ESA was prepared), and such ESA either (i) did not identify the existence of recognized environmental conditions (as such term is defined in ASTM E1527-05 or its successor, hereinafter “Environmental Condition”) at the related Mortgaged Property or the need for further investigation with respect to any Environmental Condition that was identified, or (ii) if the existence of an Environmental Condition or need for further investigation was indicated in any such ESA, then at least one of the following statements is true: (A) an amount reasonably estimated by a reputable environmental consultant to be sufficient to cover the estimated cost to cure any material noncompliance with applicable environmental laws or the Environmental Condition has been escrowed by the related Mortgagor and is held or controlled by the related lender; (B) if the only Environmental Condition relates to the presence of asbestos-containing materials, radon in indoor air, lead based paint or lead in drinking water, and the only recommended action in the ESA is the institution of such a plan, an operations or maintenance plan has been required to be instituted by the related Mortgagor that can reasonably be expected to mitigate the identified risk; (C) the Environmental Condition identified in the related environmental report was remediated or abated in all material respects prior to the date hereof, and, if and as appropriate, a no further action or closure letter was obtained from the applicable governmental regulatory authority (or the Environmental Condition affecting the related Mortgaged Property was otherwise listed by such governmental authority as “closed” or a reputable environmental consultant has concluded that no further action is required); (D) a secured creditor environmental policy or a pollution legal liability insurance policy that covers liability for the Environmental Condition was obtained from an insurer rated no less than A-(or the equivalent) by Moody's, S&P and/or Fitch; (E) a party not related to the Mortgagor was identified as the responsible party for such Environmental Condition and such responsible party has financial resources reasonably estimated to be adequate to address the situation; or (F) a party related to the Mortgagor having financial resources reasonably estimated to be adequate to address the situation is required to take action. To Seller's knowledge, except as set forth in the ESA, there is no Environmental 
		

		
			
		

		
			

		 

 

Condition (as such term is defined in ASTM E1527-05 or its successor) at the related Mortgaged Property.
		

		
			41.Appraisal. The Servicing File contains an appraisal of the related Mortgaged Property with an appraisal date within 6 months of the Mortgage Loan origination date, and within 12 months of the Closing Date. The appraisal is signed by an appraiser who is either a Member of the Appraisal Institute (“MAI”) and/or has been licensed and certified to prepare appraisals in the state where the Mortgaged Property is located. Each appraiser has represented in such appraisal or in a supplemental letter that the appraisal satisfies the requirements of the “Uniform Standards of Professional Appraisal Practice” as adopted by the Appraisal Standards Board of the Appraisal Foundation and has certified that such appraiser had no interest, direct or indirect, in the Mortgaged Property or the Mortgagor or in any loan made on the security thereof, and its compensation is not affected by the approval or disapproval of the Mortgage Loan.
		

		
			42.Mortgage Loan Information. The Mortgage Loan Information pertaining to each Mortgage Loan which is set forth on Schedule 1 to the applicable Purchase Price and Terms Agreement is true and correct in all material respects as of the Cut-off Date and contains all information required by the Agreement to be contained therein.
		

		
			43.Cross-Collateralization. No Mortgage Loan is cross-collateralized or cross-defaulted with any other mortgage loan, except as set forth on Schedule 3 to the applicable Purchase Price and Terms Agreement.
		

		
			44.Advance of Funds by the Seller. After origination, no advance of funds has been made by Seller to the related Mortgagor other than in accordance with the Mortgage Loan Documents, and, to Seller's knowledge, no funds have been received from any person other than the related Mortgagor or an affiliate for, or on account of, payments due on the Mortgage Loan (other than as contemplated by the Mortgage Loan Documents, such as, by way of example and not in limitation of the foregoing, amounts paid by the tenant(s) into a lender-controlled lockbox if required or contemplated under the related lease or Mortgage Loan Documents). Neither Seller nor any affiliate thereof has any obligation to make any capital contribution to any Mortgagor under a Mortgage Loan, other than contributions made on or prior to the date hereof.
		

		
			45.Compliance with Anti-Money Laundering Laws. Seller has complied in all material respects with all applicable anti-money laundering laws and regulations, including without limitation the USA Patriot Act of 2001 with respect to the origination of the Mortgage Loan, the failure to comply with which would have a material adverse effect on the Mortgage Loan.EX-10127

		
			Exhibit 10.127
		

		
			Execution Version 
		

		
			 
		

		
			 
		

		
			 
		

		
			SERVICING AGREEMENT
		

		
			Dated as of July 13, 2015
		

		
			Between
		

		
			PENNYMAC CORP., 
		

		
			PENNYMAC HOLDINGS, LLC,
		

		
			and
		

		
			 
		

		
			New Owner
		

		
			 
		

		
			collectively, as the “Owner,”
		

		
			 
		

		
			PENNYMAC LOAN SERVICES, LLC
		

		
			in certain cases, a “Special Servicer”
		

		
			and
		

		
			MIDLAND LOAN SERVICES, A DIVISION OF PNC BANK, NATIONAL ASSOCIATION,
		

		
			“Master Servicer” and in certain cases, a “Special Servicer”
		

		
			 
		

		
			 
		

		
			 
		

		
			 
		

		
			 
		

		
			 
		

		
			 
		

		
			 
		

		
			

		 

 

TABLE OF CONTENTS
		

		
			 
		

			
					
						 

					
					
						 

					
					
						 

				
	
					
						 

					
					
						Page

				
	
					
						 

					
					
						 

				
	
					
						ARTICLE I. Definitions

					
2 
				
	
					
						 

					
					
						 

				
	
					
						Section 1.01.

					
					
						Defined Terms

					
2 
				
	
					
						 

					
					
						 

					
					
						 

				
	
					
						ARTICLE II. RETENTION AND AUTHORITY OF MASTER SERVICER & SPECIAL SERVICERS

					
12 
				
	
					
						 

					
					
						 

				
	
					
						Section 2.01.

					
					
						Engagement; Servicing Standard

					
12 
				
	
					
						Section 2.02.

					
					
						Subservicing

					
13 
				
	
					
						Section 2.03.

					
					
						Authority of the Master Servicer

					
13 
				
	
					
						 

					
					
						 

					
					
						 

				
	
					
						ARTICLE III. SERVICES TO BE PERFORMED

					
14 
				
	
					
						 

					
					
						 

				
	
					
						Section 3.01.

					
					
						Services as Loan Servicer

					
14 
				
	
					
						Section 3.02.

					
					
						Escrow Accounts; Collection of Taxes, Assessments and Similar Items

					
17 
				
	
					
						Section 3.03.

					
					
						Collection Accounts

					
17 
				
	
					
						Section 3.04.

					
					
						Permitted Investments

					
18 
				
	
					
						Section 3.05.

					
					
						Maintenance of Insurance Policies

					
19 
				
	
					
						Section 3.06.

					
					
						Delivery and Possession of Servicing Files

					
20 
				
	
					
						Section 3.07.

					
					
						Inspections

					
21 
				
	
					
						Section 3.08.

					
					
						“Due-on-Sale” Clauses; Assumption Agreements

					
21 
				
	
					
						Section 3.09.

					
					
						Realization Upon Mortgaged Properties

					
21 
				
	
					
						Section 3.10.

					
					
						Sale of Specially Serviced Mortgage Loans and REO Properties

					
24 
				
	
					
						Section 3.11.

					
					
						Management of REO Property

					
24 
				
	
					
						Section 3.12.

					
					
						Modifications, Waivers, Amendments and Consents

					
25 
				
	
					
						Section 3.13.

					
					
						Transfers of Servicing Between Master Servicer and the Special Servicer

					
25 
				
	
					
						Section 3.14.

					
					
						Preparation of Asset Status Reports

					
26 
				
	
					
						 

					
					
						 

					
					
						 

				
	
					
						ARTICLE IV. STATEMENTS AND REPORTS

					
27 
				
	
					
						 

					
					
						 

				
	
					
						Section 4.01.

					
					
						Reporting by the Master Servicer

					
27 
				
	
					
						 

					
					
						 

					
					
						 

				
	
					
						ARTICLE V. SERVICER’S COMPENSATION AND EXPENSES

					
28 
				
	
					
						 

					
					
						 

				
	
					
						Section 5.01.

					
					
						Servicing Compensation

					
28 
				
	
					
						Section 5.02.

					
					
						Servicing Expenses

					
29 
				
	
					
						 

					
					
						 

					
					
						 

				
	
					
						ARTICLE VI. THE MASTER SERVICER AND THE OWNER

					
30 
				
	
					
						 

					
					
						 

				
	
					
						Section 6.01.

					
					
						Master Servicer Not to Assign; Merger or Consolidation of the Master Servicer

					
30 
				
	
					
						Section 6.02.

					
					
						Liability and Indemnification of the Master Servicer and the Owner

					
30 
				
	
					
						 

					
					
						 

					
					
						 

				

		
			 
		

		
			
		

		
			

		 

		

			i

		

 

TABLE OF CONTENTS (continued)
		

		
			 
		

			
					
						 

					
					
						 

					
					
						 

				
	
					
						 

					
					
						Page

				
	
					
						 

					
					
						 

				
	
					
						ARTICLE VII. REPRESENTATIONS AND WARRANTIES; DEFAULT

					
32 
				
	
					
						 

					
					
						 

				
	
					
						Section 7.01.

					
					
						Representations and Warranties

					
32 
				
	
					
						Section 7.02.

					
					
						Events of Default

					
35 
				
	
					
						Section 7.03.

					
					
						Closing Conditions; Owner Covenants

					
39 
				
	
					
						Section 7.04.

					
					
						Post Closing Performance Conditions

					
41 
				
	
					
						 

					
					
						 

					
					
						 

				
	
					
						ARTICLE VIII. TERMINATION; TRANSFER OF MORTGAGE LOANS

					
41 
				
	
					
						 

					
					
						 

				
	
					
						Section 8.01.

					
					
						Termination of Agreement

					
41 
				
	
					
						Section 8.02.

					
					
						Transfer of Mortgage Loans

					
42 
				
	
					
						Section 8.03.

					
					
						Cooperation of Master Servicer with a Reconstitution

					
42 
				
	
					
						 

					
					
						 

					
					
						 

				
	
					
						ARTICLE IX. MISCELLANEOUS PROVISIONS

					
44 
				
	
					
						 

					
					
						 

				
	
					
						Section 9.01.

					
					
						Amendment; Waiver

					
44 
				
	
					
						Section 9.02.

					
					
						Governing Law

					
44 
				
	
					
						Section 9.03.

					
					
						Notices

					
45 
				
	
					
						Section 9.04.

					
					
						Severability of Provisions

					
46 
				
	
					
						Section 9.05.

					
					
						Inspection and Audit Rights

					
46 
				
	
					
						Section 9.06.

					
					
						Binding Effect; No Partnership; Counterparts

					
47 
				
	
					
						Section 9.07.

					
					
						Protection of Confidential Information

					
47 
				
	
					
						Section 9.08.

					
					
						WAIVER OF JURY TRIALS

					
48 
				
	
					
						Section 9.09.

					
					
						General Interpretive Principles

					
48 
				
	
					
						Section 9.10.

					
					
						Further Agreements

					
48 
				
	
					
						Section 9.11.

					
					
						Addition or Removal of an Owner

					
49 
				
	
					
						 

					
					
						 

					
					
						 

				
	
					
						EXHIBIT “A”  (Initial Mortgage Loan Schedule)

					
					
						 

				
	
					
						 

					
					
						 

					
					
						 

				
	
					
						EXHIBIT “B”  (Statements, Reports and/or Information)

					
					
						 

				
	
					
						 

					
					
						 

					
					
						 

				
	
					
						EXHIBIT “C”  (Servicing Fee Schedule)

					
					
						 

				
	
					
						 

					
					
						 

					
					
						 

				
	
					
						EXHIBIT “D”  (Asset Management Fee Schedule)

					
					
						 

				
	
					
						 

					
					
						 

					
					
						 

				
	
					
						EXHIBIT “E”  (Loan Servicing Responsibilities Matrix)

					
					
						 

				
	
					
						 

					
					
						 

					
					
						 

				
	
					
						EXHIBIT “F-1”  Form of Notice to Servicer Adding New Owner

					
					
						 

				
	
					
						 

					
					
						 

					
					
						 

				
	
					
						EXHIBIT “F-2”  Form of Notice to Servicer Deleting Owner

					
					
						 

				
	
					
						 

					
					
						 

					
					
						 

				

		
			 
		

		
			 
		

		
			 
		

		
			

		 

		

			ii

		

 

THIS SERVICING AGREEMENT dated as of July 13, 2015, is between PennyMac Corp., a Delaware corporation, PennyMac Holdings, LLC, a Delaware limited liability company, any other parties signing this Agreement as an owner of Mortgage Loans as listed in Schedule I and any New Owners (collectively as the "Owner"), PennyMac Loan Services, LLC, a Delaware limited liability company ("PennyMac Loan Servicer" and in certain cases, a "Special Servicer"), and Midland Loan Services, a Division of PNC Bank, National Association, a national banking association ("Master Servicer" and in certain cases, a "Special Servicer").
		

		
			PRELIMINARY STATEMENT
		

		
			The Owner desires to engage Midland as Master Servicer, and Midland desires to accept the Owner’s engagement as Master Servicer, to service the Mortgage Loans that the Owner acquires from time to time in accordance with the provisions of this Agreement. 
		

		
			With respect to Freddie Mac multifamily Mortgage Loans ("Freddie Mortgage Loans"), Owner desires to engage Midland as the Special Servicer, and Midland desires to accept the Owner’s engagement as the Special Servicer, to service the Freddie Mortgage Loans that the Owner acquires from time to time in accordance with the provisions of this Agreement. 
		

		
			With respect to certain Mortgage Loans which are not Freddie Mortgage Loans as identified by Owner ("PMSS Mortgage Loans"), Owner has appointed PennyMac Loan Servicer, as the Special Servicer. 
		

		
			With respect to certain other Mortgage Loans which are not Freddie Mortgage Loans as identified by Owner ("MSS Mortgage Loans"), Owner desires to engage Midland as the Special Servicer, and Midland desires to accept the Owner’s engagement as the Special Servicer, to service the MSS Mortgage Loans that the Owner acquires from time to time in accordance with the provisions of this Agreement. 
		

		
			In the future, Owner may elect to enter Public Securitization Transactions or Private Securitization Transactions with respect to certain Mortgage Loans, for which Master Servicer may act as the master servicer or primary servicer and enter a separate pooling and servicing agreement with a trust and other parties respecting such Mortgage Loans.  
		

		
			The Master Servicer is an independent contractor in the business of servicing mortgage loans, and is not an Affiliate of the Owner.
		

		
			This Agreement shall become effective with respect to each Mortgage Loan, or appropriate group or portfolio of Mortgage Loans, upon the related Servicing Transfer Date.
		

		
			NOW, THEREFORE, in consideration of the recitals in this Preliminary Statement which are made a contractual part hereof, and of the mutual promises contained herein and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties hereto agree as follows:
		

		
			
		

		 

		

			1

		

 

		
			ARTICLE I.
		

		
			 
		

		
			Definitions
		

		
			Section 1.01.    Defined Terms.
		

		
			Whenever used in this Agreement, the following words and phrases, unless the context otherwise requires, shall have the following meanings:
		

		
			“Accepted Servicing Practices”:  As defined in Section 2.01.
		

		
			“Accounts”:  The Escrow Accounts, REO Accounts, and the Collection Accounts.
		

		
			“Additional Collateral”: Any non-real property collateral (including any letters of credit or reserve funds) pledged and/or delivered by or on behalf of the Borrower and held by the Mortgagee to secure payment on any Mortgage Loan.
		

		
			“Additional Servicing Compensation”:  (a) amounts collected for checks or other items returned for insufficient funds, (b) late payment charges (but not default interest) with respect to the Mortgage Loans, (c) reserve or escrow administration fees with respect to the Mortgage Loans, (d) subject to Section 3.04 of the Agreement, all income and gain realized from the investment of funds deposited in the Accounts, (e) Asset Management Fee; (f) any Deconversion Fee; (g) in exchange of processing Borrower's draw request and subject to Section 5.01, Reserve Administration Fee; (h) Program Set-Up Fee; (i) Loan Set-Up Fee; and (j) Property Inspection Fee. 
		

		
			“Affiliate”:  With respect to any specified Person, any other Person controlling or controlled by or under common control with such specified Person; provided, however, that in respect of Owner, the term “Affiliate” shall include only PennyMac Mortgage Investment Trust and its wholly owned subsidiaries and, in respect of PennyMac Loan Servicer, as Special Servicer, the term “Affiliate” shall include only Private National Mortgage Acceptance Company, LLC and its wholly owned subsidiaries.  For the purposes of this definition, “control” when used with respect to any specified Person means the power to direct the management and policies of such Person, directly or indirectly, whether through the ownership of voting securities, by contract or otherwise and the terms “controlling” and “controlled” have meanings correlative to the foregoing.
		

		
			“Agreement”:  This Servicing Agreement, as the same may be modified, supplemented or amended from time to time.
		

		
			“Anti-Terrorism Laws”: shall mean any Laws relating to terrorism, trade sanctions programs and embargoes, import/export licensing, money laundering or bribery, and any regulation, order, or directive promulgated, issued or enforced pursuant to such Laws, all as amended, supplemented or replaced from time to time.
		

		
			“Asset Management Fee”:  shall mean defeasance fees, modification, waiver, amendment, extension or forbearance fees, assumption fees, assumption application fees, consent fees, loan process fees and other similar fees related to Borrower requests or other transactions 
		

		
			
		

		
			

		 

		

			2

		

 

listed on the Asset Management Fee Schedule attached hereto as Exhibit "D". Such fees shall be paid by the relevant Borrower to the Master Servicer or the Special Servicer, as applicable, at the inception of the related transaction. If such fees are not paid by the Borrower, the Owner shall pay such mutually agreed fees determined from time to time by the Master Servicer or the Special Servicer, as applicable, and the Owner.  
		

		
			“Borrower”:  The obligor on a Note.
		

		
			“Business Day”:  Any day other than (a) a Saturday or Sunday, or (b) a day in which depository institutions or trust companies in the States of Kansas or Pennsylvania or in any of the States in which the Accounts or any accounts used by the Owner for remittance purposes are located, are authorized or obligated by law, regulation or executive order to remain closed.
		

		
			“Collection Account”:  As defined in Section 3.03.
		

		
			“Corrected Mortgage Loan”:  Any Mortgage Loan which is no longer a Specially Serviced Mortgage Loan pursuant to the second sentence of the definition of “Specially Serviced Mortgage Loan”.
		

		
			“Covered Entity”: shall mean (a) Owner and its subsidiaries and (b) each Person that, directly or indirectly, is in control of a Person described in clause (a) above. For purposes of this definition, control of a Person shall mean the direct or indirect (x) ownership of, or power to vote, 25% or more of the issued and outstanding equity interests having ordinary voting power for the election of directors of such Person or other Persons performing similar functions for such Person, or (y) power to direct or cause the direction of the management and policies of such Person whether by ownership of equity interests, contract or otherwise.
		

		
			“Deconversion Fee”:  Subject to Section 8.01(c), an amount equal to $250 per Mortgage Loan if such Mortgage Loan is not serviced by the Master Servicer or the Special Servicer, as applicable, for at least twelve (12) months. 
		

		
			"Deleted Owner":  As defined in Section 9.11(b).
		

		
			  “Determination Date”:  The 5th day (or if such day is not a Business Day, the Business Day immediately preceding such day) of the month, beginning in August, 2015.
		

		
			“Disposition Fee”:  The fee payable to the Special Servicer in connection with the transfer, sale, foreclosure, deed in lieu of foreclosure or other liquidation of a Specially Serviced Mortgage Loan or REO Property pursuant to Section 3.10 of this Agreement (if such sale is effected by the Special Servicer).   The fee payable to the Special Servicer shall be in an amount equal to the product of (x) the net sales price or proceeds received or collected (or the appraised value of the Mortgage Property recovered by deed in lieu) and (y) (i) 1.00% for any Mortgage Loan with an outstanding principal balance greater than $5 million dollars as of the date such payment is received or (ii) 2.00% for any Mortgage Loan with an outstanding principal balance equal to or less than $5 million dollars as of the date such payment is received. 
		

		
			“Eligible Account”:  An account maintained with PNC Bank, National Association.
		

		
			
		

		
			

		 

		

			3

		

 

“Environmental Laws”:  Any environmental law, ordinance, rule, regulation or order of a federal, state or local governmental authority, including, without limitation, the Comprehensive Environmental Response, Compensation and Liability Act of 1980, as amended (42 U.S.C. §§ 9601 et seq.), the Hazardous Material Transportation Act, as amended (49 U.S.C. §§ 1801 et seq.), the Resource Conservation and Recovery Act, as amended (42 U.S.C. §§ 6901 et seq.), the Federal Water Pollution Control Act, as amended (33 U.S.C. §§ 1251 et seq.), the Clean Air Act, as amended (42 U.S.C. §§ 7401 et seq.) and the regulations, whether currently in existence or hereafter enacted.
		

		
			“Escrow Account”:  As defined in Section 3.02.
		

		
			“Escrow Payment”:  Any amount received by the Master Servicer or the Special Servicer for the account of the Borrowers for application toward the payment of taxes, insurance premiums, assessments, ground rents, deferred maintenance, environmental remediation, rehabilitation costs, capital expenditures, and similar items in respect of the related Mortgaged Property.
		

		
			“Freddie Mac”: The Federal Home Loan Mortgage Corporation or any successor thereto.
		

		
			“Freddie Mac Guide”: The Freddie Mac Multifamily Seller/Servicer Guide, as amended or supplemented from time to time.  To the extent the Freddie Mac Multifamily Seller/Servicer Guide is no longer published by Freddie Mac, either directly or indirectly, “Freddie Mac Guide” shall refer to any successor guide as prescribed by Freddie Mac; provided, however, that in the event that no successor guide is prescribed by Freddie Mac within 30 days of the date on which the Freddie Mac Multifamily Seller/Servicer Guide is no longer published by Freddie Mac, all references to the “Freddie Mac Guide” in this Agreement shall be disregarded and the Freddie Mac Guide shall no longer be applicable.  
		

		
			“Freddie Mortgage Loans”: The Mortgage Loans identified as such on Exhibit A hereto.
		

		
			“Governmental Body”:  shall mean any nation or government, any state or other political subdivision thereof or any entity, authority, agency, division or department exercising the executive, legislative, judicial, taxing, regulatory or administrative powers or functions of or pertaining to a government (including any supra-national bodies such as the European Union or the European Central Bank) and any group or body charged with setting financial accounting or regulatory capital rules or standards (including, without limitation, the Financial Accounting Standards Board, the Bank for International Settlements or the Basel Committee on Banking Supervision or any successor or similar authority to any of the foregoing).
		

		
			“Law”:  shall mean any law(s) (including common law), constitution, statute, treaty, regulation, rule, ordinance, opinion, issued guidance, release, ruling, order, executive order, injunction, writ, decree, bond, judgment, authorization or approval, lien or award of or any settlement arrangement, by agreement, consent or otherwise, with any Governmental Body, foreign or domestic.
		

		
			“Loan Servicing”:  As defined in Section 3.01.
		

		
			
		

		
			

		 

		

			4

		

 

“Loan Set-Up Fee”:  shall mean a one-time, up-front payment of $250.00 per each  Mortgage Loan. 
		

		
			 “Master Servicer”:  Midland Loan Services, a Division of PNC Bank, National Association, or any successor servicer as herein provided, including when it also acts as a Special Servicer.
		

		
			“Midland”:  Midland Loan Services, a Division of PNC Bank, National Association, or any successor Servicer as herein provided, including when it also acts as the Special Servicer of the MSS Mortgage Loans and Freddie Mortgage Loans. 
		

		
			“Monthly Payment”:  With respect to any Mortgage Loan, the scheduled monthly payment of interest or the scheduled monthly payment of principal and interest, as the case may be, on such Mortgage Loan which is payable by a Borrower on the due date under the related Note. 
		

		
			“Mortgage”:  With respect to each Mortgage Loan, the mortgage, deed of trust or other instrument securing the related Note, which creates a lien on the real property securing such Note.
		

		
			“Mortgage Loan”:  Each of the Freddie Mortgage Loans, MSS Mortgage Loans and PMSS Mortgage Loans identified on the Mortgage Loan Schedule.
		

		
			“Mortgage Loan Documents”: With respect to each Mortgage Loan, the related Note, the related Mortgage and any and all other documents executed and delivered in connection with the origination or subsequent modification of such Mortgage Loan.
		

		
			“Mortgage Loan Schedule”:  A schedule of certain mortgage loans owned and held by the Owner which sets forth information with respect to such mortgage loans, as amended from time to time by the parties pursuant to Section 4.01(a).  An initial Mortgage Loan Schedule shall be attached hereto as Exhibit “A”.
		

		
			“Mortgaged Property”:  The real property and improvements thereon securing repayment of the debt evidenced by the related Note. Such term shall also include any REO Property.
		

		
			“MSS Mortgage Loans”: The Mortgage Loans identified as such on Exhibit A hereto.
		

		
			“Net Liquidation Proceeds”:  The amount of proceeds received in connection with the liquidation or sale of any Specially Serviced Mortgage Loan or REO Property net of the amount of any liquidation expenses (including, without limitation, legal fees and expenses, brokerage commissions and conveyance taxes) incurred with respect to such liquidation or sale.
		

		
			"New Owner":  As defined in Section 9.11(a).
		

		
			“Non-Exempt Person”: shall mean any Person other than a Person who is either (a) a U.S. Person or (b) has provided to Midland for the relevant year such duly-executed form(s) or statement(s) which may, from time to time, be prescribed by law and which, pursuant to applicable provisions of (1) any income tax treaty between the United States and the country of 
		

		
			
		

		
			

		 

		

			5

		

 

residence of such Person, (2) the Internal Revenue Code of 1986, as amended from time to time and any successor statute, or (3) any applicable rules or regulations in effect under clauses (1) or (2) above, permit Midland to make such payments free of any obligation or liability for withholding; provided, that duly executed form(s) provided to the Master Servicer pursuant to Section 7.01(b)(ii) hereof, shall be sufficient to qualify the Owner as not a Non-Exempt Person.
		

		
			 “Note”:  With respect to any Mortgage Loan, the promissory note or other evidence of indebtedness or agreements evidencing the indebtedness of a Borrower under such Mortgage Loan.
		

		
			“Owner”:  As defined in the first paragraph of this Agreement. 
		

		
			“Owner Event of Default”:  As defined in Section 7.02(b).
		

		
			“Permitted Investments”:  Any one or more of the following obligations or securities having at the time of purchase, or at such other time as may be specified, the required ratings, if any, provided for in this definition:
		

		
			(a)direct obligations of, or guaranteed as to timely payment of principal and interest by, the United States of America or any agency or instrumentality thereof provided that such obligations are backed by the full faith and credit of the United States of America;
		

		
			(b)direct obligations of, or guaranteed as to timely payment of principal and interest by, the Federal Home Loan Mortgage Corporation, the Federal Home Loan Bank, the Federal National Mortgage Association or the Federal Farm Credit System, provided that any such obligation, at the time of purchase or contractual commitment providing for the purchase thereof, is qualified by any Rating Agency as an investment of funds backing securities rated “AAA” (or such comparable rating);
		

		
			(c)demand and time deposits in or certificates of deposit of, or bankers’ acceptances issued by, any bank or trust company, savings and loan association or savings bank, provided that, in the case of obligations that are not fully insured by the Federal Deposit Insurance Corporation, the commercial paper and/or long- or short-term unsecured debt obligations of such depository institution or trust company (or in the case of the principal depository institution in a holding company system, the commercial paper or long- or short-term unsecured debt obligations of such holding company) have the highest rating available for such securities by any Rating Agency;
		

		
			(d)general obligations of or obligations guaranteed by any state of the United States or the District of Columbia receiving the highest long-term debt rating available for such securities by any Rating Agency;
		

		
			(e)commercial or finance company paper (including both non-interest-bearing discount obligations and interest-bearing obligations payable on demand or on a specified date not more than one year after the date of acquisition thereof) that is rated by any Rating Agency in its highest short-term unsecured debt rating category at the time of such investment or contractual commitment providing for such investment, and is issued 
		

		
			
		

		
			

		 

		

			6

		

 

by a corporation the outstanding senior long-term debt obligations of which are then rated by any such Rating Agency in its highest long-term unsecured debt rating category;
		

		
			(f)guaranteed reinvestment agreements issued by any bank, insurance company or other corporation rated in one of the two highest long-term unsecured debt rating levels available to such issuers by any Rating Agency at the time of such investment, provided that any such agreement must by its terms provide that it is terminable by the purchaser without penalty in the event any such rating is at any time lower than such level;
		

		
			(g)repurchase obligations with respect to any security described in clause (a) or (b) above entered into with a depository institution or trust company (acting as principal) described in clause (c) above;
		

		
			(h)securities bearing interest or sold at a  discount that are issued by any corporation incorporated under the laws of the United States of America or any state thereof and rated by any Rating Agency in its highest long-term unsecured rating category at the time of such investment or contractual commitment providing for such investment;
		

		
			(i)units of taxable money market funds which funds are regulated investment companies, seek to maintain a constant net asset value per share and invest solely in obligations backed by the full faith and credit of the United States, and have been approved in writing by the Owner as Permitted Investments with respect to this definition; and
		

		
			(j)such other obligations as are acceptable as Permitted Investments to the Owner.
		

		
			“PennyMac Loan Servicer”: means PennyMac Loan Services, LLC, a Delaware limited liability company, the Special Servicer of the PMSS Mortgage Loans.
		

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

		
			“PMSS Mortgage Loans”: The Mortgage Loans identified as such on Exhibit A hereto.
		

		
			“Private Securitization Transaction”:  Any transaction involving either (1) a sale of some or all of the Mortgage Loans directly or indirectly to an entity that issues privately offered, rated mortgage-backed securities or (2) an issuance of privately offered, rated securities, the payments of which are determined primarily by reference to one or more portfolios of mortgage loans consisting, in whole or in part, of some or all of the Mortgage Loans, in each case, in a transaction exempt from registration under federal, state and local securities laws. 
		

		
			“Program Set-Up Fee”:  A one-time, up-front fee of $7,500.00 to be paid to the Master Servicer prior to the date hereof which includes 15.00 hours of the Master Servicer's outside legal counsel time in negotiation and execution of this Agreement; provided,  however, that if 
		

		
			
		

		
			

		 

		

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legal negotiations exceed 15.00 hours, the Owner shall be responsible for any additional legal fees and expenses in accordance with Section 6.03. 
		

		
			“Property Inspection Fee”:  To the extent the Master Servicer or the Special Servicer, as applicable, is engaged by the Owner to perform site inspections under Section 3.07 hereof, the Master Servicer or the Special Servicer, as applicable, will bill all inspection costs back to the Owner under a separate billing statement on a “cost plus 30% basis.”
		

		
			“Public Securitization Transaction”:  Any transaction subject to Regulation AB involving either (1) a sale or other transfer of some or all of the Mortgage Loans directly or indirectly to an issuing entity in connection with an issuance of publicly offered, rated mortgage-backed securities or (2) an issuance of publicly offered, rated securities, the payments on which are determined primarily by reference to one or more portfolios of residential mortgage loans consisting, in whole or in part, of some or all of the Mortgage Loans.
		

		
			“Qualified Affiliate”:  Any Person (a) that is organized and doing business under the laws of any state of the United States or the District of Columbia, (b) that is in the business of performing the duties of a servicer of mortgage loans, and (c) as to which 50% or greater of its outstanding voting stock or equity ownership interest are directly or indirectly owned by the Master Servicer or by any Person or Persons who directly or indirectly own equity ownership interests in the Master Servicer.
		

		
			“Rating Agency”:  Each of Standard & Poor’s Ratings Services, a division of McGraw-Hill, Inc., Moody’s Investors Service, Inc., Fitch, Inc., Duff and Phelps Credit Rating Co., or any other nationally recognized statistical rating agency.
		

		
			“Reasonable Efforts”:  As determined by the Owner, the Master Servicer or the Special Servicer, as applicable, commercially reasonable efforts by the Owner or the Master Servicer or the Special Servicer, as the case may be, in light of Accepted Servicing Practices, which efforts do not require the Owner or the Master Servicer or the Special Servicer, as the case may be, to enter into any litigation, arbitration or other legal or quasi-legal proceeding.
		

		
			“Remittance Date”:  With respect to each Determination Date, the date which is two (2) Business Days after such Determination Date.
		

		
			“REO Account”:  As defined in Section 3.11(a).
		

		
			“REO Mortgage Loan”:  A Mortgage Loan deemed for the purposes hereof to be outstanding with respect to each REO Property, as more particularly described in Section 3.09(b).
		

		
			“REO Property”:  A Mortgaged Property acquired by the Owner through acquisition or the Special Servicer on behalf of the Owner through foreclosure or by deed in lieu of foreclosure.
		

		
			“Reportable Compliance Event”: shall mean that any Covered Entity becomes a Sanctioned Person, or is charged by indictment, criminal complaint or similar charging instrument, arraigned, or custodially detained in connection with any Anti-Terrorism Law or any predicate crime to any Anti-Terrorism Law, or has knowledge of facts or circumstances to the 
		

		
			
		

		
			

		 

		

			8

		

 

effect that it is reasonably likely that any aspect of its operations is in actual or probable violation of any Anti-Terrorism Law.
		

		
			“Responsible Officer”:  Any officer or employee of the Owner or the Master Servicer or the Special Servicer, as the case may be, involved in or responsible for the administration, supervision or management of this Agreement and whose name and specimen signature appear on a list prepared by each party and delivered to the other party, as such list may be amended from time to time by either party.
		

		
			“Reserve Administration Fee”:  shall mean $250.00 per draw paid by the relevant Borrower to the Master Servicer or the Special Servicer, as applicable. 
		

		
			 “Sanctioned Country”: shall mean a country subject to a sanctions program maintained under any Anti-Terrorism Law.
		

		
			“Sanctioned Person”: shall mean any individual person, group, regime, entity or thing listed or otherwise recognized as a specially designated, prohibited, sanctioned or debarred person, group, regime, entity or thing, or subject to any limitations or prohibitions (including but not limited to the blocking of property or rejection of transactions), under any Anti-Terrorism Law.
		

		
			“Servicer Event of Default”:  As defined in Section 7.02(a).
		

		
			“Servicing Expenses”:  All customary, reasonable and necessary out-of-pocket costs and expenses paid or incurred in connection with the Master Servicer’s and the Special Servicer’s obligations hereunder, including without limitation:
		

		
			(a)real estate taxes, assessments and similar charges;
		

		
			(b)insurance premiums;
		

		
			(c)any expense necessary in order to prevent or cure any violation of applicable laws, regulations, codes, ordinances, rules, orders, judgments, decrees, injunctions or restrictive covenants;
		

		
			(d)any cost or expense necessary in order to maintain  or release the lien on each Mortgaged Property and related collateral, including any mortgage registration taxes, release fees, or recording or filing fees;
		

		
			(e)customary expenses for the collection, enforcement or foreclosure of the Mortgage Loans and the collection of deficiency judgments against Borrowers and guarantors (including but not limited to the fees and expenses of any trustee under a deed of trust, foreclosure title searches and other lien searches);
		

		
			(f)subject to Section 3.07, costs and expenses of any appraisals, valuations, inspections, environmental assessments (including but not limited to the fees and expenses of environmental consultants), audits or consultations, engineers, architects, 
		

		
			
		

		
			

		 

		

			9

		

 

accountants, on-site property managers, market studies, title and survey work and financial investigating services;
		

		
			(g)customary expenses for liquidation, restructuring, modification or loan workouts, such as sales brokerage expenses and other costs of conveyance;
		

		
			(h)costs and expenses related to travel and lodging, subject to Section 3.07 with respect to property inspections; and
		

		
			(i)any other reasonable costs and expenses, including without limitation, legal fees and expenses, incurred by the Master Servicer or the Special Servicer, as applicable, under this Agreement in connection with the enforcement, collection, foreclosure, disposition, condemnation or destruction of the Mortgage Loans or related Mortgaged Properties, the maintenance, leasing, operation, management and sale of the REO 
		

		
			Properties, and the performance of Loan Servicing by the Master Servicer or the Special Servicer under this Agreement;
		

		
			provided, however, any and all "Servicing Expenses" listed in this definition shall be paid by the Master Servicer or the Special Servicer, as applicable, in accordance with Sections 3.03 and 5.02.
		

		
			“Servicing Fee”:  With respect to each Mortgage Loan, an amount equal to the applicable fees set forth on and calculated in accordance with the attached Exhibit “C.”.
		

		
			“Servicing File”:  With respect to each Mortgage Loan or REO Mortgage Loan, all documents, information and records relating to the Mortgage Loan and Additional Collateral that are necessary to enable the Master Servicer or the Special Servicer to perform its duties and service the Mortgage Loan in compliance with the terms of this Agreement, and any additional documents or information related thereto maintained or created by the Master Servicer or the Special Servicer. Documents or information in the Servicing File may be maintained by the Master Servicer or the Special Servicer in any commonly used electronic format in lieu of paper.  For the avoidance of doubt, Original Mortgage Loan Documents held by Owner's designated document custodian shall not be considered part of the Servicing File but the copies of such originals shall be considered part of the Servicing File. 
		

		
			“Servicing Transfer Date”:  With respect to each Mortgage Loan or REO Mortgage Loan, the first Business Day of the month following delivery by Owner to the Master Servicer of a Mortgage Loan Schedule and the related Servicing File or such other date as agreed in writing between the parties.  
		

		
			“Specially Serviced Mortgage Loan”:  Any Mortgage Loan with respect to which:
		

		
			(a)the related Borrower is at least two months delinquent in the payment of a Monthly Payment;
		

		
			(b)the related Borrower has expressed to the Master Servicer an inability to pay or a hardship in paying the Mortgage Loan in accordance with its terms;
		

		
			
		

		
			

		 

		

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(c)the Master Servicer has received notice that the related Borrower has become the subject of any bankruptcy, insolvency or similar proceeding, or has admitted in writing the inability to pay its debts as they come due or made an assignment for the benefit of creditors;
		

		
			(d)the Master Servicer has received notice of a foreclosure or threatened foreclosure of any lien (other than the Mortgage Loan) on the related Mortgaged Property;
		

		
			(e)a default of which the Master Servicer has notice (other than a failure by the related Borrower to pay principal or interest) and which materially and adversely affects the interests of the Owner has occurred and remains unremedied for the applicable grace period specified in the Mortgage Loan; or
		

		
			(f)the related Borrower has failed to make a balloon payment as and when due and such default has not been cured within 30 days after such due date and the Borrower has not delivered to Master Servicer or the Special Servicer, on or before the due date of such balloon payment, a written and fully executed  refinancing commitment from an acceptable lender (subject only to customary final closing conditions) and reasonably satisfactory in form and substance to Master Servicer or the Special Servicer, which provides that such refinancing will occur within 120 days after the date on which such balloon payment is due;
		

		
			provided,  however, that with respect to the circumstances described in clauses (b), (d) and (e), the Master Servicer has received written confirmation from the Owner that such Mortgage Loan shall be a Specially Serviced Mortgage Loan, and in the event such confirmation is not received, the Master Servicer shall not be obligated or required to perform any foreclosure, workout, restructuring, liquidation or disposition of such Mortgage Loan, or management or disposition of the related Mortgaged Property, pursuant to Sections 3.09, 3.10, 3.11 or 3.12, notwithstanding anything herein to the contrary.  To the extent no other circumstances identified in clauses (a) through (f) above exist that would cause the Mortgage Loan to continue to be characterized as a Specially Serviced Mortgage Loan, a Mortgage Loan will cease to be a Specially Serviced Mortgage Loan:
		

		
			(g)with respect to the circumstances described in clauses (a) or (f) above, when the related Borrower has brought the Mortgage Loan current (or, with respect to the circumstances described in clause (f), pursuant to any work-out of the Mortgage Loan) and thereafter made three consecutive full and timely Monthly Payments (including pursuant to such workout); or
		

		
			(h)with respect to the circumstances described in clauses (b), (c), (d) and (e) above, when such circumstances cease to exist or such default is cured, as applicable, in the good faith judgment of the Master Servicer (as confirmed in writing by the Owner).
		

		
			“Special Servicer”:  With respect to Freddie Mortgage Loans and MSS Mortgage Loans, Midland or any successor special servicer as herein provided.  With respect to PMSS Mortgage Loans, PennyMac Loan Servicer or any successor special servicer as herein provided.
		

		
			
		

		
			

		 

		

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“Special Servicing Fee”:  With respect to each Specially Serviced Mortgage Loan or REO Mortgage Loan, an amount equal to the greater of (a) $2,250 per month per Specially Serviced Mortgage Loan or REO Mortgage Loan and (b) the product of (i) the Special Servicing Fee Rate and (ii) the outstanding principal balance of such Specially Serviced Mortgage Loan or REO Mortgage Loan, as calculated in accordance with Section 5.01.
		

		
			“Special Servicing Fee Rate”:  A rate equal to 0.35% (35.0 basis points).
		

		
			“Taxes” shall mean any income or other taxes (including withholding taxes), levies, imposts, duties, fees, assessments or other charges of whatever nature, now or hereafter imposed by any jurisdiction or by any department, agency, state or other political subdivision thereof or therein.
		

		
			“U.S. Person”:  A citizen or resident of the United States, a corporation, partnership (except to the extent provided in applicable Treasury Regulations), or other entity created or organized in or under the laws of the United States, any state thereof or the District of Columbia, including any entity treated as a corporation or partnership for federal income tax purposes, an estate whose income is subject to United States federal income tax regardless of its source, or a trust if a court within the United States is able to exercise primary supervision over the administration of such trust, and one or more such U.S. Persons have the authority to control all substantial decisions of such trust (or, to the extent provided in applicable Treasury Regulations, certain trusts in existence on August 20, 1996 which have elected to be treated as U.S. Persons).
		

		
			“Whole Loan Transfer”:  The sale or transfer by Owner of some or all of the Mortgage Loans in a whole loan or participation format other than a Private Securitization Transaction or a Public Securitization Transaction.
		

		
			“Workout Fee”:    In connection with the curing of any event of default under any Specially Serviced Mortgage Loan through a modification, restructuring or work-out of such Mortgage Loan effected by the Special Servicer and evidenced by a writing executed by the related Borrower, the fee payable to the Special Servicer in an amount equal to the product of (x) the amount of any payments received by the Special Servicer on account of principal or interest on such Mortgage Loan (including any prepayment premiums) and (y) (i) 1.00% for any Mortgage Loan with an outstanding principal balance greater than $5 million dollars as of the date such payment is received or (ii) 2.00% for any Mortgage Loan with an outstanding principal balance equal to or less than $5 million dollars as of the date such payment is received. 
		

		
			ARTICLE II.
		

		
			 
		

		
			RETENTION AND AUTHORITY OF MASTER SERVICER & SPECIAL SERVICERS
		

		
			Section 2.01.    Engagement; Servicing Standard.
		

		
			The Owner hereby engages the Master Servicer and each of the Special Servicers to perform, and the Master Servicer and each of the Special Servicers hereby agree to perform, Loan Servicing with respect to each of the Mortgage Loans throughout the term of this Agreement, upon and subject to the terms, covenants and provisions hereof.
		

		
			
		

		
			

		 

		

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The Master Servicer  and each Special Servicer shall perform its services hereunder (a) in accordance with (i) applicable federal, state, and local laws, regulations, and ordinances, and investor requirements (ii) the terms and provisions of the Mortgage Loan Documents, (iii) the express terms hereof, and (iv) the customary and usual standards of practice of prudent institutional commercial mortgage loan servicers, and (b) to the extent consistent with the foregoing requirements, in the same manner in which the Master Servicer or each Special Servicer services commercial mortgage loans for itself, its Affiliates, or other third party portfolios of mortgage loans similar to the Mortgage Loans, but without regard to any relationship which the Master Servicer or each Special Servicer or any Affiliate of the Master Servicer or the Special Servicer may have with the related Borrower or any Affiliate of such Borrower or to the Master Servicer’s or each Special Servicer’s right to receive compensation for its services hereunder.  The servicing standards described in the preceding sentence are herein referred to as “Accepted Servicing Practices”.
		

		
			Section 2.02.    Subservicing.
		

		
			To the extent necessary for the Master Servicer to comply with any applicable laws, regulations, codes or ordinances relating to the Master Servicer’s Loan Servicing obligations hereunder, the Master Servicer may subservice to any Person any of its Loan Servicing obligations hereunder; provided,  however, that the Master Servicer shall provide oversight and supervision with regard to the performance of all subcontracted services and any subservicing agreement shall be consistent with and subject to the provisions of this Agreement.  Neither the existence of any subservicing agreement nor any of the provisions of this Agreement relating to subservicing shall relieve the Master Servicer of its obligations to the Owner hereunder.  Notwithstanding any such subservicing agreement, the Master Servicer shall be obligated to the same extent and under the same terms and conditions as if the Master Servicer alone was servicing the related Mortgage Loans in accordance with the terms of this Agreement.  The Master Servicer shall be solely liable for all fees owed by it to any subservicer, regardless of whether the Master Servicer’s compensation hereunder is sufficient to pay such fees. Master Servicer shall each deliver to the Owner copies of all subservicing agreements, and any amendments or modifications, promptly upon execution and delivery of such documents.
		

		
			Section 2.03.    Authority of the Master Servicer.
		

		
			(a)In performing its Loan Servicing obligations hereunder, the Master Servicer shall, except as otherwise provided herein and subject to the terms of this Agreement, have full power and authority, acting alone or through others, to take any and all actions in connection with such Loan Servicing that it deems necessary or appropriate.  Without limiting the generality of the foregoing, the Master Servicer is hereby authorized and empowered by the Owner when the Master Servicer deems it appropriate in its reasonable judgment, to execute and deliver, on behalf of the Owner, (i) any and all financing statements, continuation statements and other documents or instruments necessary to maintain the lien of each Mortgage on the related Mortgaged Property and any other Additional Collateral; and (ii) any and all instruments of satisfaction or cancellation, or of partial or full release or discharge and all other comparable instruments with respect to each of the Mortgage Loans; provided,  however, that the Master Servicer shall notify the Owner in writing in the event that the Master Servicer intends to execute and deliver any such instrument referred to in clause (i) above, and, except in connection with 
		

		
			
		

		 

		

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			any payment in full of any Mortgage Loan, shall proceed with such course of action only upon receipt of the Owner’s written approval thereof.  The Owner agrees to cooperate with the Master Servicer by either executing and delivering to the Master Servicer from time to time (i) powers of attorney evidencing the Master Servicer’s authority and power under this Section, or (ii) such documents or instruments deemed necessary or appropriate by the Master Servicer to enable the Master Servicer to carry out its Loan Servicing obligations hereunder.  
		

		
			(b)In the performance of its Loan Servicing obligations hereunder, the Master Servicer shall take any action that is directed by the Owner which relates to the Master Servicer’s or Special Servicer’s Loan Servicing obligations under this Agreement; provided,  however, that the Master Servicer shall not be obligated to take, or to refrain from taking, any action which the Owner requests that the Master Servicer take or refrain from taking to the extent that the Master Servicer determines in its reasonable and good faith judgment that such action or inaction (i) may cause a violation of applicable laws, regulations, codes, ordinances, court orders or restrictive covenants with respect to any Mortgage Loan, Borrower, Mortgaged Property or REO Property; (ii) may cause a violation of any provision of a Mortgage Loan Document; or (iii) may be a violation of the Accepted Servicing Practices.
		

		
			ARTICLE III.
		

		
			 
		

		
			SERVICES TO BE PERFORMED
		

		
			Section 3.01.    Services as Loan Servicer.
		

		
			The Master Servicer and each of the Special Servicers hereby agree to serve as the loan servicers with respect to each of the Mortgage Loans and to perform Loan Servicing as described below and as otherwise provided herein, upon and subject to the terms of this Agreement.  Subject to any limitation of authority under Section 2.03, “Loan Servicing” shall mean those services pertaining to the Mortgage Loans which, applying Accepted Servicing Practices, are required hereunder to be performed by the Master Servicer or the Special Servicer, and which shall include but not be limited to:
		

		
			(i)as the Master Servicer, reviewing all available documents pertaining to the Mortgage Loans, organizing, administering and maintaining the Servicing Files, forwarding any originals of Mortgage Loan Documents received to the document custodian of Owner, as designed by Owner from time to time, and inputting all relevant information into the Master Servicer’s loan servicing computer system;
		

		
			(ii)as the Master Servicer, preparing and filing or recording all financing statements, continuation statements and other documents or instruments and taking such other action necessary to maintain or, when appropriate, release the lien of any Mortgage on the related Mortgaged Property and security interest in the Additional Collateral;
		

		
			(iii)as the Master Servicer, monitoring each Borrower’s maintenance of insurance coverage on each Mortgaged Property as required by the related Mortgage Loan Documents and causing to be maintained adequate insurance coverage on each Mortgaged Property in accordance with Section 3.05;
		

		
			
		

		 

		

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			(iv)as the Master Servicer or a Special Servicer, as applicable, collecting, analyzing, and spreading promptly from each Borrower quarterly and annual operating statements, budgets and rent rolls (if applicable) and annual financial statements of such Borrower as may be required under the Mortgage Loan Documents;
		

		
			(v)as the Master Servicer or a Special Servicer, as applicable, monitoring the status of real estate taxes, assessments and other similar items and verifying the payment of such items for each Mortgaged Property in accordance with Section 3.02;
		

		
			(vi)as the Master Servicer or a Special Servicer, as applicable, preparing and delivering all reports and information required hereunder;
		

		
			 (vii)as the Master Servicer or a Special Servicer, as applicable, procuring and supervising the services of third parties (other than subservicers pursuant to Section 2.02) necessary or appropriate in connection with the servicing of the Mortgage Loans;
		

		
			(viii)as the Master Servicer, performing payment processing, record keeping, administration of escrow and other accounts, interest rate adjustment, and other routine customer service functions;
		

		
			(ix)as the Master Servicer, monitoring any casualty losses or condemnation proceedings and administering any proceeds related thereto in accordance with the related Mortgage Loan Documents;
		

		
			(x)as the Master Servicer, notifying all Borrowers of the appropriate place for communications and payments, and collecting and monitoring all payments made with respect to the Mortgage Loans;
		

		
			(xi)as requested by Owner in writing from time to time, as the Master Servicer or a Special Servicer, as applicable, performing a physical inspection of each Mortgaged Property or REO Property in accordance with Section 3.07;
		

		
			(xii)as the Master Servicer or a Special Servicer, as applicable, administering any requests for assumptions of a Mortgage Loan or transfers of ownership of or placement of subordinate financing on a Mortgaged Property in accordance with Section 3.08;
		

		
			(xiii)as a Special Servicer, commencing on behalf of the Owner any litigation or proceeding relating to the restructuring, assumptions or substitutions, foreclosure or other realization upon the collateral under any of the Mortgage Loans, including seeking deficiency judgments if deemed advisable and permitted by applicable law and the Mortgage Loan Documents, defending any action brought against any party to this Agreement with respect to the servicing of any Mortgage Loan while subject to this Agreement, and retaining legal counsel in connection therewith, all in accordance with Section 3.09;
		

		
			(xiv)as a Special Servicer, accepting deeds-in-lieu of foreclosure or performing asset management, with respect to any Mortgage Loan or Mortgage Property;
		

		
			
		

		 

		

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			(xv)as a Special Servicer, selling or disposing of each Specially Serviced Mortgage Loan or REO Property in accordance with Section 3.10; 
		

		
			(xvi)as a Special Servicer, managing and operating each REO Property in accordance with Section 3.11;
		

		
			(xvii)as the Master Servicer or a Special Servicer, as applicable, administering any proposals for modifications, waivers, amendments or consents with respect to any term of a Mortgage Loan in accordance with Section 3.12; 
		

		
			(xviii)as the Master Servicer, to the extent required by the related Mortgage Loan Documents, determining and notifying each Borrower of the amount of each payment of principal and interest due under the terms of the related Mortgage Loan, including determining and, if applicable, notifying the related Borrower of the interest rate for any floating or adjustable rate Mortgage Loan;
		

		
			(xix)as the Master Servicer or a Special Servicer, as applicable, with respect to each Mortgage Loan requiring the Borrower to establish and maintain one or more lockbox, cash management or similar accounts, establishing, maintaining and applying the funds deposited in such accounts in accordance with terms of the Mortgage Loan Documents, any lock-box, cash management or similar agreement, and Accepted Servicing Practices;
		

		
			(xx)as the Master Servicer or a Special Servicer, as applicable, maintaining and drawing on any letter of credit, if any, provided as Additional Collateral for the Mortgage Loan, and making Reasonable Efforts to recover any expenses incurred to enable such draw from the Borrower to the extent Borrower is required to pay such expenses under the terms of the Mortgage Loan;
		

		
			(xxi)as the Master Servicer, at least ninety (90) days prior to the due date of any balloon payment, sending a notice to the Borrower of such due date (with a copy to Special Servicer) and requesting confirmation that the balloon payment will be paid by such maturity date; 
		

		
			(xxii)as the Master Servicer or a Special Servicer, as applicable, establishing and maintaining an effective OFAC compliance and anti-money laundering program respecting the Borrowers and the Mortgage Loans and coordinating with Owner regarding the filing of suspicious activity reports; 
		

		
			(xxiii)as a Special Servicer, preparing Asset Status Reports and timely delivering such reports to Owner in accordance with Section 3.13; and
		

		
			(xxiv)as the Master Servicer or a Special Servicer, as applicable, any services that are set forth on Exhibit “E” attached to this Agreement (other than those identified with an “x” as to be performed by Owner) and made a part hereof by reference. 
		

		
			
		

		
			

		 

		

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Section 3.02.    Escrow Accounts; Collection of Taxes, Assessments and Similar Items.
		

		
			(a)With respect to the Mortgage Loans described in the Mortgage Loan Schedule, and subject to and as required by the terms of the related Mortgage Loan Documents, the Master Servicer shall establish and maintain one or more Eligible Accounts (each, an “Escrow Account”) into which any or all Escrow Payments shall be deposited promptly after receipt and identification. Escrow Accounts shall be denominated “Escrow Account, Midland Loan Services, a Division of PNC Bank, National Association for the benefit of PennyMac Corp. and Various Borrowers” or in such other manner as the Owner prescribes.  The Master Servicer shall notify the Owner in writing of the location and account number of each Escrow Account it establishes and shall notify the Owner prior to any change thereof.  Withdrawals of amounts from an Escrow Account may be made, subject to any express provisions to the contrary herein, applicable laws, and to the terms of the related Mortgage Loan Documents governing the use of the Escrow Payments, only:  (i) to effect payment of taxes, assessments, insurance premiums, ground rents and other items required or permitted to be paid from escrow; (ii) to refund to the Borrowers any sums determined to be in excess of the amounts required to be deposited therein; (iii) to pay interest, if required under the Mortgage Loan Documents, to the Borrowers on balances in the Escrow Accounts; (iv) to pay to the Master Servicer from time to time any interest or investment income earned on funds deposited therein pursuant to Section 3.04; (v) to apply funds to the indebtedness of the Mortgage Loan in accordance with the terms thereof; (vi) to reimburse the Owner for any Servicing Expense for which Escrow Payments should have been made by the Borrowers, but only from amounts received on the Mortgage Loan which represent late collections of Escrow Payments thereunder; (vii) to withdraw any amount deposited in the Escrow Accounts which was not required to be deposited therein; or (viii) to clear and terminate the Escrow Accounts at the termination of this Agreement.
		

		
			(b)The Master Servicer shall maintain accurate records with respect to each Mortgaged Property reflecting the status of taxes, assessments and other similar items that are or may become a lien thereon and the status of insurance premiums payable with respect thereto as well as the payment of ground rents with respect to each ground lease (to the extent such information is reasonably available).  To the extent that the related Mortgage Loan Documents require Escrow Payments to be made by a Borrower, the Master Servicer shall use Reasonable Efforts to obtain, from time to time, all bills for the payment of such items, and shall effect payment prior to the applicable penalty or termination date, employing for such purpose Escrow Payments paid by the Borrower pursuant to the terms of the Mortgage Loan and deposited in the related Escrow Account by the Master Servicer.  Subject to Section 3.05 with respect to the payment of insurance premiums, if a Borrower fails to make any such payment on a timely basis or collections from the Borrower are insufficient to pay any such item when due, the amount of any shortfall shall be paid by the Master Servicer as a Servicing Expense in accordance with Sections 3.03 and 5.02, provided that the Master Servicer has consulted with the Owner regarding the timing for payment of taxes, assessments and other similar items.
		

		
			Section 3.03.    Collection Accounts.
		

		
			(a)With respect to the Mortgage Loans, the Master Servicer shall establish and maintain one or more Eligible Accounts (each, a “Collection Account”) for the benefit of the Owner for the purposes set forth herein.  Collection Accounts shall be denominated “Collection 
		

		
			
		

		 

		

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			Account, Midland Loan Services, a Division of PNC Bank, National Association for the benefit of PennyMac Corp.” or in such other manner as the Owner prescribes.  The Master Servicer shall deposit into the Collection Accounts within one (1) Business Day after receipt all payments and collections received by it on or after the date hereof with respect to the Mortgage Loans, other than payments and collections with respect to any REO Property (which shall be deposited into the REO Account from amounts withdrawn from the related REO Account pursuant to Section 3.11(a)), Escrow Payments or payments in the nature of Additional Servicing Compensation.
		

		
			(b)The Master Servicer shall make withdrawals from the Collection Accounts only as follows (the order set forth below not constituting an order of priority for such withdrawals):
		

		
			(i)to withdraw any amount deposited in the Collection Accounts which was not required to be deposited therein;
		

		
			(ii)pursuant to Section 5.01, to pay to the Master Servicer or the Special Servicer the Servicing Fee, Special Servicing Fee, Additional Servicing Compensation, Workout Fee and Disposition Fee on each Remittance Date;
		

		
			(iii)pursuant to Section 5.02, to pay any Servicing Expenses;
		

		
			(iv)to pay to the Master Servicer from time to time any interest or investment income earned on funds deposited in the Collection Accounts pursuant to Section 3.04; 
		

		
			(v)to remit to the Owner on each Remittance Date, pursuant to wiring instructions from the Owner, all amounts on deposit in the Collection Accounts (that represent good funds) as of the close of business on the Determination Date, net of any withdrawals from the Collection Account pursuant to this Section; and
		

		
			(vi)to clear and terminate the Collection Accounts upon the termination of this Agreement.
		

		
			Section 3.04.    Permitted Investments.
		

		
			The Master Servicer may direct any depository institution or trust company in which the Accounts are maintained to invest the funds held therein in one or more Permitted Investments; provided,  however, that such funds shall be either (a) immediately available or (b) available in accordance with a schedule which will permit the Master Servicer to meet its payment obligations hereunder.  The Master Servicer shall be entitled to all income and gain realized from the investment of funds deposited in the Accounts.  The Master Servicer shall deposit from its own funds in the applicable Account the amount of any loss incurred in respect of any such investment of funds immediately upon the realization of such loss.  Notwithstanding the foregoing, the Master Servicer shall not direct the investment of funds held in any Escrow Account and retain the income and gain realized therefrom if the related Mortgage Loan Documents or applicable law permits the Borrower to be entitled to the income and gain realized from the investment of funds deposited therein. In such event, the Master Servicer shall direct the depository institution or trust company in which such Escrow Accounts are maintained to invest the funds held therein (1) in accordance with the Borrower’s written investment instructions, if the Mortgage Loan Documents or applicable law require such funds to be 
		

		
			
		

		
			

		 

		

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invested in accordance with the Borrower’s direction; and (2) in accordance with the Owner’s written investment instructions, if the Mortgage Loan Documents and applicable law do not permit the Borrower to direct the investment of such funds; provided,  however, that in either event (i) such funds shall be either (y) immediately available or (z) available in accordance with a schedule which will permit the Master Servicer to meet the payment obligations for which the Escrow Account was established; (ii) the Master Servicer shall have no liability for any loss in investments of such funds that are invested pursuant to such written instructions; and (iii) Master Servicer will not be responsible for paying interest to any Borrower at a rate in excess of a reasonable and customary rate earned on similar accounts. The Master Servicer may maintain the funds in an interest-bearing Eligible Account. 
		

		
			Section 3.05.    Maintenance of Insurance Policies.
		

		
			(a)The Master Servicer shall use Reasonable Efforts to cause the Borrower of each Mortgage Loan to maintain for each Mortgage Loan such insurance as is required to be maintained pursuant to the related Mortgage Loan Documents.  If the Borrower fails to maintain such insurance, then the Master Servicer shall notify the Owner of such breach and, to the extent available at commercially reasonable rates and the Owner, as mortgagee, has an insurable interest, cause to be maintained (i) fire and hazard insurance with extended coverage in an amount which is at least equal to the lesser of the current principal balance of such Mortgage Loan and the replacement cost of the improvements which are a part of the related Mortgaged Property and (ii) to the extent that the Mortgaged Property is located in a federally designated special flood hazard area, flood insurance in respect thereof.  Such flood insurance shall be in an amount equal to the lesser of (y) the unpaid principal balance of the related Mortgage Loan or (z) the maximum amount of such insurance as is available for the related Mortgaged Property under the National Flood Insurance Act.  After notifying the Owner pursuant to the second preceding sentence, the Master Servicer shall take such action as the Owner reasonably requests with respect to the maintenance of any other forms of insurance which are required to be maintained pursuant to the related Mortgage Loan Documents, except to the extent that such insurance is not available at commercially reasonable rates or the Owner, as mortgagee, does not have an insurable interest.  The Master Servicer shall, to the extent available at commercially reasonable rates and the Owner, as mortgagee, has an insurable interest, maintain for each REO Property no less insurance coverage than was previously required with respect to the related Mortgaged Property or as may be required at any time by the Owner in writing.  All such policies shall be endorsed with standard mortgagee clauses with loss payable to the Owner, and shall be in an amount sufficient to avoid the application of any co-insurance clause.  The costs of maintaining the insurance policies which the Master Servicer is required to maintain pursuant to this Section shall be paid by the Master Servicer as a Servicing Expense in accordance with Sections 3.03 and 5.02, provided, that the cost of maintaining insurance with respect to each REO Property shall be paid pursuant to Section 3.11.
		

		
			(b)The Master Servicer may fulfill its obligation to maintain insurance, as provided in Section 3.05(a), through a master force placed insurance policy, the cost of which shall be paid by the Master Servicer as a Servicing Expense in accordance with Sections 3.03 and 5.02, provided that such cost is limited to the incremental cost of such policy allocable to such Mortgaged Property or REO Property (i.e., other than any minimum or standby premium payable for such policy whether or not any Mortgaged Property is then covered thereby, which shall be 
		

		
			
		

		 

		

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			paid by the Master Servicer).  Such master force placed insurance policy may contain a deductible clause, in which case the Master Servicer shall, in the event that there shall not have been maintained on the related Mortgaged Property or REO Property a policy otherwise complying with the provisions of Section 3.05(a), and there shall have been one or more losses which would have been covered by such a policy had it been maintained, immediately deposit into the related Collection Account from its own funds the amount not otherwise payable under the master force placed insurance policy because of such deductible to the extent that such deductible exceeds the deductible limitation required under the related Mortgage Loan Documents, or, in the absence of such deductible limitation, the deductible limitation which is consistent with Accepted Servicing Practices. 
		

		
			(c)The Master Servicer shall maintain at its own expense a fidelity bond in form and amount that is consistent with Accepted Servicing Practices.  In addition, the Master Servicer shall keep in force, at its own expense during the term of this Agreement, a policy or policies of insurance in form and amounts that are consistent with Accepted Servicing Practices, covering loss occasioned by the errors and omissions of the Master Servicer’s officers and employees in connection with its obligations hereunder.
		

		
			 (d)As long as Master Servicer has a corporate rating of “A-” (or such comparable rating), Master Servicer may comply with this Section of the Agreement by purchasing such bond or insurance, by self-insuring for these items or a combination of the above.
		

		
			Section 3.06.    Delivery and Possession of Servicing Files.
		

		
			On or before the related Servicing Transfer Date, the Owner shall deliver or cause to be delivered to the Master Servicer (a) a Servicing File with respect to each Mortgage Loan; and (b) the amounts, if any, received by the Owner representing Escrow Payments previously made by the Borrowers.  The Master Servicer shall promptly acknowledge receipt of the Servicing File and Escrow Payments for the Mortgage Loans and shall promptly deposit such Escrow Payments in the Escrow Accounts established pursuant to this Agreement.  The contents of each Servicing File delivered to the Master Servicer shall be held by the Master Servicer for the benefit of the Owner as the owner thereof; the Master Servicer’s possession of the contents of each Servicing File so delivered is for the sole purpose of servicing the related Mortgage Loan; and such possession by the Master Servicer shall be in a custodial capacity only.  The Master Servicer shall release its custody of the contents of any Servicing File only in accordance with written instructions from the Owner, and upon request of the Owner, the Master Servicer shall deliver to the Owner the Servicing File or a copy of any document contained therein; provided,  however, that if the Master Servicer is unable to perform its Loan Servicing obligations with respect to the related Mortgage Loan after any such release or delivery of the Servicing File, then the Master Servicer shall not be liable to the Owner or any third party while the related Servicing File is not in the Master Servicer’s possession for any inability of the Master Servicer to perform any such obligation hereunder and Master Servicer may terminate this Agreement with respect to such Mortgage Loan immediately upon written notice to the Owner.  
		

		
			
		

		
			

		 

		

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Section 3.07.    Inspections.
		

		
			For a Property Inspection Fee, the Master Servicer or the Special Servicer, as applicable, shall perform a physical inspection in accordance with Accepted Servicing Practices of each Mortgaged Property or REO Property if the Owner requests such an inspection in writing. The Master Servicer shall prepare a written report of each such inspection and shall promptly deliver a copy of such report to the Owner. Property Inspection Fee shall be paid as a Servicing Expense in accordance with Sections 3.03 and 5.02.
		

		
			Section 3.08.    “Due-on-Sale” Clauses; Assumption Agreements.
		

		
			When any Borrower proposes to convey or encumber all or any portion of its interests in a Mortgaged Property, or if such conveyance or encumbrance has actually occurred, to the extent that the Master Servicer has actual knowledge of such conveyance or encumbrance, the Master Servicer shall immediately give notice thereof to the Owner and take such related actions as the Owner reasonably directs, including (a) waiving or enforcing any due-on-sale clause or due-on-encumbrance clause contained in the related Mortgage Loan Documents, to the extent permitted under the terms of the related Mortgage Loan Documents, Freddie Mac Guide, and applicable law, (b) taking or entering into an assumption or substitution agreement from or with the Person to whom such Mortgaged Property has been or shall be conveyed, and (c) releasing the original Borrower from liability upon the related Mortgage Loan and substituting the new Borrower as the obligor thereon.
		

		
			To the extent the Master Servicer is engaged by the Owner to perform analysis, processing and administrative functions in connection with any request by a Borrower to waive any such due-on-sale clause or due-on-encumbrance clause and/or to enter into any such assumption or substitution agreement, the Master Servicer may, as a condition to granting any such request require (to the extent permitted by applicable law) that such Borrower pay to it, as Additional Servicing Compensation, a reasonable and customary fee consistent with Accepted Servicing Practices in connection with such request, together with any related costs and expenses incurred by the Master Servicer; provided,  however, that in the event that the Borrower fails or is unable to pay any such costs and expenses, or the Owner directs the Master Servicer to waive any requirement that the Borrower pay any such fees, costs or expenses, the same shall be paid by the Master Servicer as a Servicing Expense in accordance with Sections 3.03 and 5.02.
		

		
			Section 3.09.    Realization Upon Mortgaged Properties.
		

		
			(a)Upon the failure of any Borrower to make any required payment of principal, interest or other amounts due under a Mortgage Loan, or otherwise to perform fully any material obligations under any of the related Mortgage Loan Documents, in either case within any applicable grace period, the Master Servicer shall, upon discovery of such failure, promptly notify the Owner in writing.  As directed in writing by the Owner in each instance, the Master Servicer or the Special Servicer shall issue notices of default, declare events of default, declare due the entire outstanding principal balance, and otherwise take all reasonable actions under the related Mortgage Loan in preparation for the Owner to realize upon the underlying collateral, including the Mortgage Property and the Additional Collateral.  With respect to any Specially Serviced Mortgage Loan, the Special Servicer shall, as permitted under the provisions of the 
		

		
			
		

		 

		

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			related Mortgage Loan Documents, and subject to the Owner’s prior written consent, foreclose upon or otherwise comparably convert the ownership of the related Mortgaged Property.  In connection with such foreclosure or other conversion, the Special Servicer shall, subject to the consent or direction of the Owner, follow such practices and procedures as it shall deem necessary or advisable and as shall be consistent with Accepted Servicing Practices.  All costs and expenses incurred by the Special Servicer in any such proceedings shall be paid by the Master Servicer as a Servicing Expense in accordance with Sections 3.03 and 5.02. Master Servicer or the Special Servicer, as applicable, shall consult with Owner regarding the selection and retention of legal counsel.
		

		
			(b)If title to any Mortgaged Property is acquired in foreclosure or by deed in lieu of foreclosure, the deed or certificate of sale shall be taken in the name of the Owner or its nominee, but in no event shall such deed or certificate be taken in the name of the Master Servicer or the Special Servicer.  Notwithstanding any such acquisition of title and cancellation of the related Mortgage Loan, such Mortgage Loan shall be considered to be an REO Mortgage Loan held by the Owner until such time as the related REO Property shall be sold, transferred or conveyed by the Owner.  Consistent with the foregoing, for purposes of all calculations hereunder, so long as such REO Mortgage Loan shall be considered to be an outstanding Mortgage Loan, payments and collections with respect to the related REO Property received in any month (net of related  
		

		
			expenses) shall be applied to amounts which would have been payable under the related Note in accordance with the terms of such Note.
		

		
			(c)Except as otherwise provided in written instructions delivered to the Master Servicer or the Special Servicer by the Owner, the Master Servicer or the Special Servicer shall not obtain title to any Mortgaged Property as a result or in lieu of foreclosure or otherwise, and shall not otherwise acquire possession of, or take other action with respect to, any Mortgaged Property, if, as a result of any such action, the Owner would be considered to hold title to, to be a “mortgagee-in-possession” of, or to be an “owner” or “operator” of such Mortgaged Property within the meaning of any Environmental Law, or a “discharger” or “responsible party” thereunder, unless the Master Servicer or the Special Servicer has also previously determined, based on a report prepared by a Person who regularly conducts environmental site assessments, that:
		

		
			(i)such Mortgaged Property is in compliance with applicable Environmental Laws or, if not, that taking such actions as are necessary to bring such Mortgaged Property into compliance therewith is reasonably likely to produce a greater recovery on a present value basis than not taking such actions; and
		

		
			(ii)there are no circumstances present on such Mortgaged Property relating to the use, management or disposal of any hazardous materials for which investigation, testing, monitoring, containment, clean-up or remediation could be required under any applicable Environmental Law, or that, if any such hazardous materials are present for which such action could be required, taking such actions with respect to the affected Mortgaged Property is reasonably likely to produce a greater recovery on a present value basis than not taking such actions.
		

		
			
		

		
			

		 

		

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If the Master Servicer or the Special Servicer, as applicable, has so determined based on satisfaction of the criteria in clauses (i) and (ii) above that it would be in the best economic interest of the Owner to take any such actions, the Master Servicer or the Special Servicer, as applicable, shall notify the Owner of such proposed action.  The Master Servicer or the Special Servicer, as applicable, shall take such action only if authorized by the Owner in writing.  The costs of any such compliance, containment, clean-up or remediation shall be paid by the Master Servicer as a Servicing Expense in accordance with Sections 3.03 and 5.02.
		

		
			If the environmental assessment first obtained by the Master Servicer or the Special Servicer with respect to a Mortgaged Property indicates that such Mortgaged Property may not be in compliance with applicable Environmental Laws but does not definitively establish such fact, the Master Servicer or the Special Servicer, subject to the Owner’s prior written consent, shall cause such further environmental assessments to be conducted.
		

		
			(d)The environmental site assessments contemplated by Section 3.09(c) shall be prepared by any Person who is recommended by the Master Servicer or the Special Servicer and approved in writing by the Owner or such other Person as directed in writing by the Owner, which Person shall be a qualified independent person (the precise scope and timing to be mutually agreed upon by the Owner and the Master Servicer or the Special Servicer). The report of the environmental assessment shall be delivered to the Owner, with a copy to the Master Servicer or the Special Servicer, and shall include an estimate of the cost to investigate and remediate the Mortgage Property and environmental hazard, or to otherwise address any noncompliance with applicable Environmental Laws or health and safety law and regulations or environmental condition (such as the presence of asbestos-containing materials).  The Master Servicer, the Special Servicer or its agent shall provide a separate recommendation to the Owner as to whether it is advisable for the Owner or any REO Subsidiary to take title or otherwise become in possession of, assume the operation of (including appointment of a receiver) or take any other action with respect to the Mortgaged Property given the conclusions and information set forth in such environmental assessment report taking into account unique property features or characteristics.  Such recommendations should identify the factual and legal basis for the recommendations and the applicable provisions of the Environmental Laws, the health and safety laws and regulations and other authorities relevant thereto, including a description of any reasonable steps required to avoid or minimize the potential of environmental liability regarding the environmental conditions on the Mortgaged Property in the event the Owner comes into possession, ownership or operation of the Mortgaged Property. The cost of preparation of any environmental assessment shall be paid by the Master Servicer as a Servicing Expense in accordance with Sections 3.03 and 5.02. If the Master Servicer or the Special Servicer determines, pursuant to Section 3.09(c), that taking such actions as are necessary to bring any Mortgaged Property into compliance with applicable Environmental Laws, or taking such actions with respect to the containment, clean-up, removal or remediation of hazardous substances, hazardous materials, hazardous wastes, or petroleum-based materials affecting any such Mortgaged Property, is not reasonably likely to produce a greater recovery on a present value basis than not taking such actions, then the Master Servicer or the Special Servicer shall take such action as directed in writing by the Owner, including, without limitation, releasing the lien of the related Mortgage with respect to the affected Mortgaged Property.
		

		
			
		

		
			

		 

		

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Section 3.10.    Sale of Specially Serviced Mortgage Loans and REO Properties.
		

		
			(a)With respect to any Specially Serviced Mortgage Loan or REO Property, when and if directed in writing by the Owner, the Special Servicer shall use Reasonable Efforts to sell to any Person such Specially Serviced Mortgage Loan, REO Property or Additional Collateral on commercially reasonable terms which are consistent with Accepted Servicing Practices; provided,  however, that any such sale must be approved in writing by the Owner. 
		

		
			(b)Subject to Sections 3.10(a), the Special Servicer shall act on behalf of the Owner in negotiating and taking any such action necessary or appropriate in connection with the sale of any Specially Serviced Mortgage Loan, REO Property or Additional Collateral, including the collection of all amounts payable in connection therewith.  The Net Liquidation Proceeds (after deduction of the Disposition Fee) shall be promptly remitted within one (1) Business Day after receipt by the Special Servicer to the Master Servicer for deposit by the Master Servicer in the related Collection Account.
		

		
			Section 3.11.    Management of REO Property.
		

		
			(a)Upon the acquisition by the Owner of any REO Property, the Special Servicer shall have full power and authority, subject to the specific requirements and prohibitions of this Agreement, to do or authorize to be done any and all things in connection therewith as are consistent with Accepted Servicing Practices, all on terms and for such period as the Special 
		

		
			Servicer deems to be in the best economic interest of the Owner.  The Special Servicer shall segregate and hold all revenues received by it with respect to any REO Property separate and apart from its own funds and general assets and shall establish and maintain with respect to any REO Property one or more Eligible Accounts (each, an “REO Account”) for the purposes set forth herein.  REO Accounts shall be denominated “REO Account, Midland Loan Services, a Division of PNC Bank, National Association for the benefit of PennyMac Corp.” or in such other manner as the Owner prescribes.  Pursuant to Section 3.04, the Special Servicer may invest the funds in the REO Account and shall be entitled to any interest or investment income earned on such funds.  In connection therewith, the Special Servicer shall deposit or cause to be deposited in the REO Account on a daily basis within one (1) Business Day after receipt all revenues received by it with respect to any REO Property (except for any Net Liquidation Proceeds), and shall withdraw therefrom funds necessary for the proper maintenance, leasing, operation, management and sale of any REO Property, including:
		

		
			(i)all insurance premiums due and payable in respect of such REO Property;
		

		
			(ii)all taxes and assessments in respect of such REO Property that could result or have resulted in the imposition of a lien thereon;
		

		
			(iii)all ground rental payments, if applicable, with respect to such REO Property; and 
		

		
			(iv)all costs and expenses necessary to maintain, lease, operate, manage and sell such REO Property, including the management fee payable to the property manager engaged by Master Servicer pursuant to Section 3.11(b).
		

		
			
		

		
			

		 

		

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To the extent that amounts on deposit in any REO Account are insufficient for the purposes set forth above, the Master Servicer shall pay the amount of such shortfall as a Servicing Expense in accordance with Sections 3.03 and 5.02. The Master Servicer shall withdraw from each REO Account and deposit into the related Collection Account on a monthly basis on or prior to the related Remittance Date the income, net of expenses, received or collected from each REO Property; provided,  however, that the Special Servicer may retain in each REO Account funds sufficient for the payment of the items set forth in clauses (i) through (iv) above, including, without limitation, the creation of reasonable reserves for repairs, replacements, and necessary capital improvements and other related expenses.
		

		
			(b)The Special Servicer may contract with any Person as a property manager for the operation and management of any REO Property; provided,  however, that:
		

		
			(i)the terms and conditions of any such contract shall not be inconsistent herewith and the Owner has provided its written consent (which shall not be unreasonably withheld) with respect to such property manager; and
		

		
			(ii)none of the provisions of this Section relating to any such contract or to actions taken through any such Person shall be deemed to relieve the Special Servicer of any of its duties and obligations to the Owner with respect to the operation and management of such REO Property.
		

		
			Section 3.12.    Modifications, Waivers, Amendments and Consents.
		

		
			(a)When any Borrower proposes any modification, waiver or amendment of any term of any Mortgage Loan or requests any consents related thereto, the Master Servicer or the Special Servicer shall immediately give notice thereof to the Owner and take such related actions as the Owner reasonably directs, except with respect to any Borrower proposal or request which involves any required payment from the Borrower in the nature of Additional Servicing Compensation to which the Master Servicer is properly entitled.  All modifications, waivers or amendments of any Mortgage Loan or consents related thereto shall be in writing.
		

		
			(b)To the extent the Master Servicer or the Special Servicer is engaged by the Owner to perform analysis, processing and administrative functions in connection with any request by a Borrower for any consent, modification, waiver or amendment, the Master Servicer or the Special Servicer may, as a condition to granting any such request require (to the extent permitted by applicable law) that such Borrower pay to it, as Additional Servicing Compensation, a reasonable and customary fee consistent with Accepted Servicing Practices in connection with such request, together with any related costs and expenses incurred by the Master Servicer or the Special Servicer; provided,  however, that in the event that the Borrower fails or is unable to pay any such costs and expenses, or the Owner directs the Master Servicer or the Special Servicer to waive any requirement that the Borrower pay any such fees, costs or expenses, the same shall be paid by the Master Servicer as a Servicing Expense in accordance with Sections 3.03 and 5.02.
		

		
			Section 3.13.    Transfers of Servicing Between Master Servicer and the Special Servicer.  
		

		
			(a)Upon determining that a Mortgage Loan has become a Specially Serviced Mortgage Loan, the Master Servicer shall promptly give notice thereof to the Owner, and if the 
		

		
			
		

		 

		

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			Master Servicer is not also the Special Servicer, the Master Servicer shall (i) also promptly give notice to the Special Servicer; (ii) deliver the Servicing File to the Special Servicer and use its Reasonable Efforts to provide the Special Servicer with all information, documents (or copies thereof) and records (including records stored electronically on computer tapes, magnetic discs and the like) relating to such Mortgage Loan and reasonably requested by the Special Servicer to enable the Special Servicer to assume its functions. The Master Servicer shall use its best reasonable efforts to comply with this Section 3.13(a) within five (5) Business Days of the Mortgage Loan becoming a Specially Serviced Mortgage Loan.
		

		
			(b)Upon determining that a Specially Serviced Mortgage Loan has become a Corrected Mortgage Loan, and if the Master Servicer is not also the Special Servicer, the Special Servicer shall immediately give notice thereof to the Master Servicer and the Owner and shall return the Servicing File within five (5) Business Days to the Master Servicer. Upon giving such notice and returning such Servicing File to the Master Servicer, Special Servicer’s obligation to service such Mortgage Loan and Special Servicer’s right to receive the Special Servicing Fee with respect to such Mortgage Loan, shall terminate (provided, however, that such termination shall be without prejudice to any rights to the payment of Special Servicing Fees or other compensation due under the terms of this Agreement through and including the date of such termination) and the obligations of the Master Servicer to service and administer such Mortgage Loan shall resume.
		

		
			(c)In servicing any Specially Serviced Mortgage Loan, if the Special Servicer is not also the Master Servicer, the Special Servicer shall provide to the Master Servicer for inclusion in the Servicing File copies of any additional Mortgage Loan Documents and Mortgage Loan information, including but not limited to correspondence with the Borrower, complaints and responses, loss mitigation applications, modification agreements, assumption applications and agreements, appraisals, brokers’ opinions of value, and litigation files generated while the Mortgage Loan is a Specially Serviced Mortgage Loan.
		

		
			Section 3.14.    Preparation of Asset Status Reports.
		

		
			(a)No later than sixty (60) days after a Mortgage Loan becomes a Specially Serviced Mortgage Loan or a borrower seeks approval of a material action requiring Owner approval, the Special Servicer shall deliver in electronic format a report (the “Asset Status Report”) with respect to such Mortgage Loan and the related Mortgaged Property to the Owner with a copy to the Master Servicer if the Special Servicer is not also the Master Servicer. Such Asset Status Report shall set forth the following information to the extent reasonably determinable based on the information in the Special Servicer's possession:
		

		
			(i)A summary of the borrower request with respect to a non-Specially Serviced Loan and the Special Servicer's recommendations with respect to such request;
		

		
			(ii)A summary of the status of the applicable Specially Serviced Mortgage Loan and any negotiations with the related Borrower, including:
		

		
			(A)a discussion of the legal and environmental considerations reasonably known to the Special Servicer that are applicable to the exercise of 
		

		
			
		

		 

		

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			Owner's remedies and to the enforcement of any related guaranties or other collateral for the related Mortgage Loan and whether outside legal counsel needs to be or has been retained;
		

		
			(B)the most current rent roll and income or operating statement available for the related Mortgaged Property;
		

		
			(C)the Special Servicer's recommendations on how such Specially Serviced Mortgage Loan might be returned to performing status and returned to the Master Servicer for regular servicing or otherwise realized upon;
		

		
			(D)a copy of the last obtained appraisal of the Mortgaged Property and the most recent brokers’ opinion of value; and
		

		
			(E)such other information as the Special Servicer deems relevant in light of Accepted Servicing Practices.
		

		
			 
		

		
			(b)Prior to taking any action with respect to a Specially Serviced Mortgage Loan, Special Servicer shall obtain the Owner's approval of the related Asset Status Report.  No direction or disapproval of the Owner hereunder or failure of the Owner to consent to or approve (including any deemed consents or approvals) any request of the Special Servicer, shall (i) require or cause the Special Servicer to violate the terms of a Specially Serviced Mortgage Loan, applicable law or any provision of this Agreement, including the Special Servicer's obligation to act in accordance with the Accepted Servicing Practices, or (ii)  expose the Special Servicer or their respective officers, directors, members, employees or agents to any claim, suit or liability or (iii) materially expand the scope of the Special Servicer's responsibilities under this Agreement.  Notwithstanding the foregoing, if Special Servicer has made commercially reasonable efforts to contact the Owner for such approval and determines in accordance with Accepted Servicing Practices that emergency action is necessary to protect the Mortgaged Property or the interests of the Owner, or that a failure to take any such action at such time would be inconsistent with Accepted Servicing Practices, Special Servicer shall take the recommended actions with respect to the Mortgaged Property before Owner provides such approval; provided; however, that the Master Servicer or the Special Servicer shall not be obligated to make any advance.
		

		
			ARTICLE IV.
		

		
			 
		

		
			STATEMENTS AND REPORTS
		

		
			Section 4.01.    Reporting by the Master Servicer.
		

		
			(a)Master Servicer shall prepare and/or provide the statements, reports and/or information listed on Exhibit “B” hereto to Owner or such other Person designated by Owner and on such date as indicated thereon. On the Remittance Date, the Master Servicer shall also prepare and/or provide a remittance report in a form reasonably agreed upon by the parties hereto. The delivery by the Master Servicer to the Owner of such remittance report shall be deemed to be an acknowledgment by the parties hereto that, as of the related Determination 
		

		
			
		

		 

		

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			Date, the Mortgage Loans listed on such report are the Mortgage Loans being serviced by the Master Servicer pursuant to this Agreement.
		

		
			(b)Midland will provide the Owner with immediate online Internet website access to Portfolio Investor Insight®, subject to such reasonable policies, procedures and limitations as the parties may agree upon from time to time.
		

		
			(c)Unless otherwise specifically stated herein, if the Master Servicer is required to deliver any statement, report or information under any provisions of this Agreement, the Master Servicer may satisfy such obligation by (x) physically delivering a paper copy of such statement, report or information, (y) delivering such statement, report or information in a commonly used electronic format, or (z) making such statement, report or information available on the Master Servicer’s Internet website, unless this Agreement expressly specifies a particular method of delivery.
		

		
			ARTICLE V.
		

		
			 
		

		
			SERVICER’S COMPENSATION AND EXPENSES
		

		
			Section 5.01.    Servicing Compensation.
		

		
			As consideration for servicing the Mortgage Loans subject to this Agreement, the Master Servicer shall be entitled to a Servicing Fee for each Mortgage Loan remaining subject to this Agreement during any calendar month or part thereof.  Such Servicing Fee shall be payable monthly on the Remittance Date and shall be computed on the basis of the number of Mortgage Loans serviced during the calendar month as more specifically set forth in Exhibit “C.” The Master Servicer may pay itself the Servicing Fee on each Remittance Date from amounts on deposit in the related Collection Account.
		

		
			As further compensation for its activities hereunder, the Master Servicer, or the Special Servicer, as applicable, shall be entitled to retain any interest or investment income earned on funds deposited in the Accounts to the extent permitted hereunder and by the Mortgage Documents, subject to any loss payable by the Master Servicer or the Special Servicer, as applicable, pursuant to Section 3.04 and to any other amount or collections received by it which are in the nature of Additional Servicing Compensation. For Reserve Administration Fee, the relevant Borrower shall pay such fees to the Master Servicer or Special Servicer, as applicable, at the time of the draw. If the relevant Borrower fails to pay such fees, Owner shall pay such fees to the Master Servicer or the Special Servicer, as applicable. 
		

		
			As compensation for its special servicing activities hereunder, the Special Servicer shall be entitled to the Special Servicing Fee for each Specially Serviced Mortgage Loan or REO Property remaining subject to this Agreement during any calendar month or part thereof.  Such Special Servicing Fee shall be payable monthly on the Remittance Date and shall be computed on the basis of the same outstanding principal balance and for the period with respect to which any related interest payment on the related Mortgage Loan is computed.  The Master Servicer may pay itself or such other Special Servicer the Special Servicing Fee on each Remittance Date from amounts on deposit in the related Collection Account.  
		

		
			
		

		
			

		 

		

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In addition to the other servicing compensation provided for in this Agreement, and not in lieu thereof, the Special Servicer shall be entitled to (a) the Disposition Fee, which shall be payable out of Net Proceeds prior to the deposit of Net Proceeds into the Collection Account in the event of a transfer, sale, foreclosure, a deed in lieu of foreclosure or other liquidation of a Specially Serviced Mortgage Loan or REO Property and (b) the Workout Fee, which shall be payable from amounts on deposit in the related Collection Account in the event of the curing of any monetary event of default under any Mortgage Loan through modification, assumption, restructure or work-out of such Mortgage Loan (if such modification, assumption, restructure or work-out is effected by the Special Servicer). If the Master Servicer is terminated, it shall retain the right to receive any and all Disposition Fees otherwise payable to it with respect to any Mortgage Loan or REO Property, as applicable, that (A) became a Corrected Mortgage Loan during the period that Master Servicer acted as such and that was a Corrected Mortgage Loan at the time of such termination, (B) becomes a Corrected Mortgage Loan subsequent to the time of such termination if Master Servicer resolved the circumstances and/or conditions (including by way of a modification of such Mortgage Loan) which caused such Mortgage Loan to become a Specially Serviced Mortgage Loan but such Mortgage Loan had not, when the Master Servicer was terminated, become a Corrected Mortgage Loan because the related Borrower had not then made three (3) consecutive monthly debt service payments (but the related Borrower then makes those three (3) monthly debt service payments, and such Mortgage Loan subsequently becomes a Corrected Mortgage Loan as a result of the Borrower making those three (3) monthly debt service payments); (C) the Master Servicer has identified a buyer or transferee of a Mortgage Loan or REO Property and a sale of such Mortgage Loan or REO Property to such buyer or transferee, an Affiliate or related party is closed within six (6) months of termination or resignation of the Master Servicer; or (D) notice of a judicial or non-judicial sale has been provided to the Borrower and the Mortgaged Property is sold to a third-party purchaser at a judicial or non-judicial sale.
		

		
			To the extent that amounts on deposit in the Collection Account are insufficient for the payment of the Servicing Fee, Special Servicing Fee or Workout Fee, the Owner shall pay any such shortfall to the Master Servicer or the Special Servicer, as applicable, within ten (10) Business Days after the Owner’s receipt of an itemized invoice therefor.
		

		
			The Master Servicer or the Special Servicer shall be required to pay all expenses incurred by it in connection with its servicing activities hereunder, such as costs for office space, office equipment, supplies and related expenses, employee salaries and related expenses and similar internal costs, overhead and expenses, and shall not be entitled to reimbursement thereof except as specifically provided for herein. Owner shall not be obligated to pay any Servicing Fee, Additional Servicing Compensation, or Special Servicing Fee, unless the amount of such fee or basis for calculation of such fee is specifically set forth in this Agreement as amended from time to time.  
		

		
			Section 5.02.    Servicing Expenses.
		

		
			Notwithstanding any other provision hereof, the Master Servicer or the Special Servicer shall obtain the written approval of the Owner prior to incurring any Servicing Expense that is over $5,000.00 per item, except for any Servicing Expense which is (a) incurred by the Master Servicer or the Special Servicer pursuant to Sections 3.02(b) or 3.05 or (b) made for any 
		

		
			
		

		
			

		 

		

			29

		

 

purposes other than those described in item (a) above, and is not over $25,000.00 and is made in an emergency situation to preserve and protect the Mortgaged Property or the safety of the public in connection with such Mortgaged Property.
		

		
			The Master Servicer or the Special Servicer shall not advance its own funds for the payment of any Servicing Expenses. The Master Servicer may cause any Servicing Expenses to be paid directly from the related Collection Account.  In the event that there are insufficient funds in the related Collection Account to permit the payment of Servicing Expenses, the Owner shall deposit the necessary funds in the related Collection Account or promptly and directly pay for all such Servicing Expenses.  If the Master Servicer has provided written notice of such Servicing Expenses to the Owner, and funds are subsequently deposited into the related Collection Account from sources other than the Owner, the Master Servicer may pay such expenses from the related Collection Account, in which event the Master Servicer shall promptly notify the Owner of such payment. If there are insufficient funds on deposit in the related Collection Account and Owner does not deposit the necessary funds into the related Collection Account or promptly and directly pay for such Servicing Expense, Master Servicer shall have no obligation to pay such Servicing Expense.
		

		
			ARTICLE VI.
		

		
			 
		

		
			THE MASTER SERVICER AND THE OWNER
		

		
			Section 6.01.    Master Servicer Not to Assign; Merger or Consolidation of the Master Servicer.
		

		
			(a)Except as otherwise provided for in this Section or in Section 2.02, the Master Servicer may not assign this Agreement or any of its rights, powers, duties or obligations hereunder without the written consent of the Owner; provided,  however, that the Master Servicer may assign this Agreement to a Qualified Affiliate without the written consent of the Owner.
		

		
			(b)The Master Servicer may be merged or consolidated with or into any Person, or transfer all or substantially all of its assets to any Person, in which case any Person resulting from any merger or consolidation to which it shall be a party, or any Person succeeding to its business, shall be the successor of the Master Servicer hereunder, and shall be deemed to have assumed all of the liabilities of the Master Servicer hereunder.   Following notice of such merger or consolidation, Owner may terminate this Agreement without cause upon thirty (30) days’ written notice to the Master Servicer and without the payment of any Deconversion Fee if such notice is given within sixty (60) days of receiving such notice of merger or consolidation; provided,  however, that Master Servicer shall be entitled to the pro rata share of minimum annual Servicing Fee set forth on Exhibit "C" for the period during which it services the Mortgage Loans under this Agreement. For the avoidance of doubt, to the extent the Owner has paid a portion of minimum annual Servicing Fee before such termination, the Owner would only owe the remaining amount to reach the pro rata share of the minimum annual Servicing Fee. 
		

		
			Section 6.02.    Liability and Indemnification of the Master Servicer and the Owner.
		

		
			(a)Neither the Master Servicer nor its Affiliates nor any of the directors, officers, employees or agents thereof shall be under any liability to the Owner or any third party for 
		

		
			
		

		 

		

			30

		

 

		
			taking or refraining from taking any action, using its reasonable judgment pursuant to or in connection with this Agreement, or for errors in judgment; provided,  however, that this provision shall not protect the Master Servicer or any such Person against any liability which would otherwise be imposed on the Master Servicer or any such Person by reason of the Master Servicer’s willful misfeasance, bad faith or negligence (except to the extent such liability is related to the Master Servicer’s performance of Special Services, in which event a gross negligence standard shall apply) in the performance of its duties hereunder.  The Master Servicer and any director, officer, employee or agent thereof may rely in good faith on any document of any kind which, prima facie, is properly executed and submitted by any appropriate Person respecting any matters arising hereunder.  
		

		
			(b)The Master Servicer and any director, officer, employee or agent thereof shall be indemnified and held harmless by the Owner against any loss, liability or expense incurred, including reasonable attorneys’ fees, in connection with any claim, legal action, investigation or proceeding relating to this Agreement, the Master Servicer’s performance hereunder, or any specific action which the Owner authorized or requested the Master Servicer to perform pursuant to this Agreement, as such are incurred, except for any loss, liability or expense incurred by reason of the Master Servicer’s willful misfeasance, bad faith, negligence (except to the extent such loss, liability or expense is related to the Master Servicer’s performance of Special Services, in which event a gross negligence standard shall apply) or breach of the Master Servicer’s representations and warranties set forth in Section 7.01.  Notwithstanding the exception set forth in the preceding sentence, in the event that the Master Servicer sustains any loss, liability or expense by reason of such exception and which results from any overcharges to Borrowers under the Mortgage Loans, to the extent that such overcharges were collected by the Master Servicer and remitted to the Owner, the Owner shall promptly remit such overcharge to the related Borrower after the Owner’s receipt of written notice from the Master Servicer regarding such overcharge.
		

		
			(c)The Owner and any director, officer, employee or agent thereof shall be indemnified and held harmless by the Master Servicer or the Special Servicer, as applicable, against any loss, liability or expense incurred, including reasonable attorneys’ fees, by reason of (i) the Master Servicer’s or Special Servicer’s willful misfeasance, bad faith or negligence (except to the extent such loss, liability or expense is related to the Master Servicer’s or Special Servicer’s  performance of Special Services, in which event a gross negligence standard shall apply) in the performance of its duties hereunder or (ii) a breach of the Master Servicer’s representations and warranties set forth in Section 7.01.
		

		
			(d)IN NO EVENT SHALL EITHER PARTY BE LIABLE FOR INDIRECT, EXEMPLARY, INCIDENTAL, SPECIAL OR CONSEQUENTIAL DAMAGES TO THE OTHER PARTY ARISING FROM THIS AGREEMENT, INCLUDING DAMAGES OR COSTS INCURRED AS A RESULT OF LOSSES OF DATA, TIME, SAVINGS, PROPERTY, PROFITS OR GOODWILL, EVEN IF IT HAS BEEN ADVISED OF THE POSSIBILITY OR LIKELIHOOD OF SUCH DAMAGES, REGARDLESS OF WHETHER SUCH CLAIMS ARE BASED OR REMEDIES ARE SOUGHT IN CONTRACT, NEGLIGENCE, EQUITY, STRICT LIABILITY, TORT, PRODUCTS LIABILITY OR OTHERWISE. NOTWITHSTANDING ANY OTHER PROVISION HEREIN TO THE CONTRARY, THE LIABILITY OF MIDLAND UNDER THIS AGREEMENT SHALL BE LIMITED TO THE AGGREGATE AMOUNT OF 
		

		
			
		

		 

		

			31

		

 

		
			THE SERVICING FEES RECEIVED BY MIDLAND HEREUNDER DURING THE TWELVE (12) MONTH PERIOD PRECEDING THE ACTION GIVING RISE TO ANY CLAIM.
		

		
			The provisions of this Section shall survive any termination of the rights and obligations of the Master Servicer hereunder.
		

		
			ARTICLE VII.
		

		
			 
		

		
			REPRESENTATIONS AND WARRANTIES; DEFAULT
		

		
			Section 7.01.    Representations and Warranties.
		

		
			(a)Midland, as the Master Servicer and a Special Servicer, hereby makes the following representations and warranties to the Owner:
		

		
			(i)Due Organization, Qualification and Authority.  Midland is a division of a national bank association duly organized, validly existing and in good standing under the laws of the United States of America, and has and shall maintain all requisite licenses to the extent necessary to ensure the enforceability of each Mortgage Loan and to perform its duties and obligations under this Agreement in accordance with the terms of this Agreement; Midland has the full power, authority and legal right to execute and deliver this Agreement and to perform in accordance herewith; Midland has duly authorized the execution, delivery and performance of this Agreement and has duly executed and delivered this Agreement; this Agreement constitutes the valid, legal, binding obligation of Midland, except as enforceability may be limited by bankruptcy, insolvency, reorganization, receivership, moratorium or other laws relating to or affecting the rights of creditors generally and by general principles of equity (regardless of whether such enforcement is considered in a proceeding in equity or at law);
		

		
			(ii)No Conflicts.  Neither the execution and delivery of this Agreement, nor the fulfillment of or compliance with the terms and conditions of this Agreement by Midland (1) conflicts with or results in a breach of any of the terms, conditions or provisions of Midland's organizational documents; (2) conflicts with or results in a breach of any agreement or instrument to which Midland is now a party or by which it (or any of its properties) is bound, or constitutes a default or results in an acceleration under any of the foregoing if compliance therewith is necessary (A) to ensure the enforceability of any Mortgage Loan, or (B) for Midland to perform its obligations under this Agreement in accordance with the terms hereof; (3) conflicts with or results in a breach of any legal restriction if compliance therewith is necessary (A) to ensure the enforceability of any Mortgage Loan, or (B) for Midland to perform its obligations under this Agreement in accordance with the terms hereof; (4) results in the violation of any law, rule, regulation, order, judgment or decree to which Midland is subject if compliance therewith is necessary (A) to ensure the enforceability of any Mortgage Loan, or (B) for Midland to perform its obligations under this Agreement in accordance with the terms hereof; or (5) results in the creation or imposition of any lien, charge or encumbrance that would have a material adverse effect upon any of its properties pursuant to the terms of any mortgage, contract, deed of trust or other instrument, or materially impairs the ability 
		

		
			
		

		 

		

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			of (A) the Owner to realize on the Mortgage Loans, or (B) Midland to perform its obligations hereunder;
		

		
			(iii)No Litigation Pending.  There is no action, suit, or proceeding pending or to Midland's knowledge threatened against Midland, which, either in any one instance or in the aggregate, would draw into question the validity of this Agreement or the Mortgage Loans, or would be likely to impair materially the ability of Midland to perform its duties and obligations under the terms of this Agreement;
		

		
			(iv)No Consent Required.  No consent, approval, authorization or order of, or registration or filing with, or notice to, any court or governmental agency or body having jurisdiction or regulatory authority over Midland is required for (A) Midland's execution and delivery of, this Agreement, or (B) the consummation of the transactions contemplated by this Agreement, or, to the extent required, such consent, approval, authorization, order, registration, filing or notice has been obtained, made or given (as applicable), except that Midland may not be duly qualified to transact business or licensed in one or more states if such qualification or licensing is not necessary (1) to ensure the enforceability of any Mortgage Loan, or (2) for Midland to perform its obligations under this Agreement in accordance with the terms hereof.
		

		
			(b)PennyMac Loan Servicer, as a Special Servicer, hereby makes the following representations and warranties to the Owner:
		

		
			(i)Due Organization, Qualification and Authority.  PennyMac Loan Servicer is a Delaware limited liability company duly organized, validly existing and in good standing under the laws of the United States of America, and has and shall maintain all requisite licenses to the extent necessary to ensure the enforceability of each Mortgage Loan and to perform its duties and obligations under this Agreement in accordance with the terms of this Agreement; PennyMac Loan Servicer has the full power, authority and legal right to execute and deliver this Agreement and to perform in accordance herewith; PennyMac Loan Servicer has duly authorized the execution, delivery and performance of this Agreement and has duly executed and delivered this Agreement; this Agreement constitutes the valid, legal, binding obligation of PennyMac Loan Servicer, except as enforceability may be limited by bankruptcy, insolvency, reorganization, receivership, moratorium or other laws relating to or affecting the rights of creditors generally and by general principles of equity (regardless of whether such enforcement is considered in a proceeding in equity or at law);
		

		
			(ii)No Conflicts.  Neither the execution and delivery of this Agreement, nor the    fulfillment of or compliance with the terms and conditions of this Agreement by PennyMac Loan Servicer (1) conflicts with or results in a breach of any of the terms, conditions or provisions of PennyMac Loan Servicer's organizational documents; (2) conflicts with or results in a breach of any agreement or instrument to which PennyMac Loan Servicer is now a party or by which it (or any of its properties) is bound, or constitutes a default or results in an acceleration under any of the foregoing if compliance therewith is necessary (A) to ensure the enforceability of any Mortgage Loan, or (B) for PennyMac Loan Servicer to perform its obligations under this Agreement in accordance 
		

		
			 
		

		
			
		

		 

		

			33

		

 

		
			with the terms hereof; (3) conflicts with or results in a breach of any legal restriction if compliance therewith is necessary (A) to ensure the enforceability of any Mortgage Loan, or (B) for PennyMac Loan Servicer to perform its obligations under this Agreement in accordance with the terms hereof; (4) results in the violation of any law, rule, regulation, order, judgment or decree to which PennyMac Loan Servicer is subject if compliance therewith is necessary (A) to ensure the enforceability of any Mortgage Loan, or (B) for PennyMac Loan Servicer to perform its obligations under this Agreement in accordance with the terms hereof; or (5) results in the creation or imposition of any lien, charge or encumbrance that would have a material adverse effect upon any of its properties pursuant to the terms of any mortgage, contract, deed of trust or other instrument, or materially impairs the ability of (A) the Owner to realize on the Mortgage Loans, or (B) PennyMac Loan Servicer to perform its obligations hereunder;
		

		
			(iii)No Litigation Pending.  There is no action, suit, or proceeding pending or to PennyMac Loan Servicer's knowledge threatened against PennyMac Loan Servicer, which, either in any one instance or in the aggregate, would draw into question the validity of this Agreement or the Mortgage Loans, or would be likely to impair materially the ability of Midland to perform its duties and obligations under the terms of this Agreement; (iv)No Consent Required. No consent, approval, authorization or order of, or registration or filing with, or notice to, any court or governmental agency or body having jurisdiction or regulatory authority over PennyMac Loan Servicer is required for (A) PennyMac Loan Servicer's execution and delivery of, this Agreement, or (B) the consummation of the transactions contemplated by this Agreement, or, to the extent required, such consent, approval, authorization, order, registration, filing or notice has been obtained, made or given (as applicable), except that PennyMac Loan Servicer may not be duly qualified to transact business or licensed in one or more states if such qualification or licensing is not necessary (1) to ensure the enforceability of any Mortgage Loan, or (2) for PennyMac Loan Servicer to perform its obligations under this Agreement in accordance with the terms hereof.
		

		
			(v)Non-Exempt Person.  PennyMac Loan Servicer is not a Non-Exempt Person.
		

		
			(vi)Anti-Money Laundering/International Trade Law Compliance. As of the date of this Agreement, each Remittance Date or payment date under Section 3.02 or Section 3.03, and at all times until the Agreement has been terminated and all amounts hereunder have been paid in full, that: (A) no Covered Entity (1) is a Sanctioned Person; (2) has any of its assets in a Sanctioned Country or in the possession, custody or control of a Sanctioned Person in violation of any Anti-Terrorism Law; (3) does business in or with, or derives any of its income from investments in or transactions with, any Sanctioned Country or Sanctioned Person in violation of any Anti-Terrorism Law; or (4) engages in any dealings or transactions prohibited by any Anti-Terrorism Law; (B) the proceeds of this Agreement will not be used to fund any operations in, finance any investments or activities in, or, make any payments to, a Sanctioned Country or Sanctioned Person in violation of any Law; (C) the funds used to pay the Master Servicer 
		

		
			
		

		 

		

			34

		

 

		
			are not derived from any unlawful activity; and (D) each Covered Entity is in compliance with, and no Covered Entity engages in any dealings or transactions prohibited by, any Laws, including but not limited to any Anti-Terrorism Laws.  PennyMac Loan Servicer covenants and agrees that it shall immediately notify the Master Servicer in writing upon the occurrence of a Reportable Compliance Event.
		

		
			(c)The Owner hereby makes the following representations and warranties to the Master Servicer and each of the Special Servicers:
		

		
			(i)Due Authority.  The Owner has the full power, authority and legal right to execute and deliver this Agreement and to perform in accordance herewith; the Owner has duly authorized the execution, delivery and performance of this Agreement and has duly executed and delivered this Agreement; the Owner is the owner and the holder of the Mortgage Loans and has the right to authorize the Master Servicer to perform the actions contemplated herein; this Agreement constitutes the valid, legal, binding obligation of the Owner, except as enforceability may be limited by bankruptcy, insolvency, reorganization, receivership, moratorium or other laws relating to or affecting the rights of creditors generally and by general principles of equity (regardless of whether such enforcement is considered in a proceeding in equity or at law).
		

		
			(ii)Non-Exempt Person.  The Owner is not a Non-Exempt Person.
		

		
			(iii)Anti-Money Laundering/International Trade Law Compliance. As of the date of this Agreement, each Remittance Date or payment date under Section 3.02 or Section 3.03, and at all times until the Agreement has been terminated and all amounts hereunder have been paid in full, that: (A) no Covered Entity (1) is a Sanctioned Person; (2) has any of its assets in a Sanctioned Country or in the possession, custody or control of a Sanctioned Person in violation of any Anti-Terrorism Law; (3) does business in or with, or derives any of its income from investments in or transactions with, any Sanctioned Country or Sanctioned Person in violation of any Anti-Terrorism Law; or (4) engages in any dealings or transactions prohibited by any Anti-Terrorism Law; (B) the proceeds of this Agreement will not be used to fund any operations in, finance any investments or activities in, or, make any payments to, a Sanctioned Country or Sanctioned Person in violation of any Law; (C) the funds used to pay the Master Servicer are not derived from any unlawful activity; and (D) each Covered Entity is in compliance with, and no Covered Entity engages in any dealings or transactions prohibited by, any Laws, including but not limited to any Anti-Terrorism Laws.  Owner covenants and agrees that it shall immediately notify the Master Servicer in writing upon the occurrence of a Reportable Compliance Event.
		

		
			Section 7.02.    Events of Default.
		

		
			(a)“Master Servicer Event of Default”, wherever used herein, means any one of the following events:
		

		
			
		

		 

		

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			(i)any failure by the Master Servicer to remit to the Owner any payment required to be so remitted by the Master Servicer under the terms of this Agreement when and as due which continues unremedied by the Master Servicer for a period of one (1) Business Day after the date on which Master Servicer receives written notice of such failure; or
		

		
			(ii)any failure by the Master Servicer to timely pay Servicing Expenses from the related Collection Account when sufficient funds are on deposit and Owner has approved such payments in writing, which Servicing Expenses remain unpaid for a period of five (5) Business Days following the date on which written notice of such failure is given to the Master Servicer; or
		

		
			(iii)any failure on the part of the Master Servicer duly to observe or perform in any material respect any other of the covenants or agreements on the part of the Master Servicer contained in this Agreement, or any representation or warranty set forth by the Master Servicer in Section 7.01 shall be untrue or incorrect in any material respect, and, in either case, such failure or breach materially and adversely affects the value of any Mortgage Loan or Mortgaged Property or the priority of the lien on any Mortgaged Property or the interest of the Owner therein, which in either case continues unremedied for a period of thirty (30) days after the date on which written notice of such failure or breach, requiring the same to be  remedied, shall have been given to the Master Servicer by the Owner (or such extended period of time reasonably approved by the Owner provided that the Master Servicer is diligently proceeding in good faith to cure such failure or breach); or
		

		
			(iv)a decree or order of a court or agency or supervisory authority having jurisdiction in respect of the Master Servicer for the commencement of an involuntary case under any present or future federal or state bankruptcy, insolvency or similar law, for the appointment of a conservator or receiver or liquidator in any insolvency, readjustment of debt, marshalling of assets and liabilities or similar proceedings, or for the winding‐up or liquidation of its affairs shall have been entered against the Master Servicer, and such decree or order shall remain in force undischarged or unstayed for a period of 90 days; or
		

		
			(v)the Master Servicer shall consent to the appointment of a conservator or receiver or liquidator in any insolvency, readjustment of debt, marshalling of assets and liabilities or similar proceedings of or relating to the Master Servicer or of or relating to all or substantially all of its property; or
		

		
			(vi)the Master Servicer shall admit in writing its inability to pay its debts generally as they become due, file a petition to take advantage of any applicable federal or state bankruptcy, insolvency or similar law, make an assignment for the benefit of its creditors or voluntarily suspend payment of its obligations;
		

		
			then, and in each and every case, so long as a Master Servicer Event of Default shall not have been remedied, the Owner may, by notice in writing to the Master Servicer, in addition to whatever rights the Owner may have at law or in equity, including injunctive relief and specific 
		

		
			
		

		
			

		 

		

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performance, terminate all of the rights and obligations of the Master Servicer under this Agreement and in and to the Mortgage Loans and the proceeds thereof, without the Owner incurring any penalty or fee of any kind whatsoever in connection therewith; provided,  however, that such termination shall be without prejudice to any rights of the Master Servicer relating to the payment of any earned and unpaid Servicing Fees along with the pro rata share of minimum annual Servicing Fee set forth on Exhibit “C” (for the avoidance of doubt, to the extent the Owner has paid a portion of minimum annual Servicing Fee before such termination, the Owner would only owe the remaining amount to reach the pro rata share of the minimum annual Servicing Fee), any earned and unpaid Special Servicing Fees, any earned and unpaid Disposition Fees, Workout Fees and any earned and unpaid Additional Servicing Compensation under the terms of this Agreement through and including the date of such termination. Except as otherwise expressly provided in this Agreement, no remedy provided for by this Agreement shall be exclusive of any other remedy, and each and every remedy shall be cumulative and in addition to any other remedy, and no delay or omission to exercise any right or remedy shall impair any such right or remedy or shall be deemed to be a waiver of any Master Servicer Event of Default.  On or after the receipt by the Master Servicer of such written notice of termination from the Owner, all authority and power of the Master Servicer under this Agreement, whether with respect to the Mortgage Loans or otherwise, shall pass to and be vested in the Owner, and the Master Servicer agrees to cooperate with the Owner in effecting the termination of the Master Servicer’s responsibilities and rights hereunder, including, without 
		

		
			limitation, the transfer of the Servicing Files and the funds held in the Accounts as set forth in Section 8.01.
		

		
			The Owner may waive, which waiver shall be in writing, any default by the Master Servicer in the performance of its obligations hereunder and its consequences.  Upon any such waiver of a past default, such default shall cease to exist, and any Master Servicer Event of Default arising therefrom shall be deemed to have been remedied for every purpose of this Agreement.  No such waiver shall extend to any subsequent or other default or impair any right consequent thereon except to the extent expressly so waived.
		

		
			(b)"Special Servicer Event of Default", wherever used herein with respect to each Special Servicer, means any one of the following events:
		

		
			(i)any failure by the Special Servicer to remit to the Master Servicer any payment required to be so remitted by the Special Servicer under the terms of this Agreement when and as due which continues unremedied by the Special Servicer for a period of one (1) Business Day after the date on which Special Servicer receives written notice of such failure; or
		

		
			(ii)any failure by the Special Servicer to timely pay Servicing Expenses from the related Collection Account when sufficient funds are on deposit and Owner approved such payments in writing, which Servicing Expenses remain unpaid for a period of five (5) Business Days following the date on which written notice of such failure is given to the Special Servicer; or
		

		
			(iii)any failure on the part of the Special Servicer duly to observe or perform in any material respect any other of the covenants or agreements on the part of the Special Servicer contained in this Agreement, or any representation or warranty set forth by the Special Servicer in Section 7.01 shall be untrue or incorrect in any material 
		

		
			
		

		 

		

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			respect, and, in either case, such failure or breach materially and adversely affects the value of any Mortgage Loan or Mortgaged Property or the priority of the lien on any Mortgaged Property or the interest of the Owner therein, which in either case continues unremedied for a period of thirty (30) days after the date on which written notice of such failure or breach, requiring the same to be  remedied, shall have been given to the Special Servicer by the Owner (or such extended period of time reasonably approved by the Owner provided that the Special Servicer is diligently proceeding in good faith to cure such failure or breach); or
		

		
			(iv)a decree or order of a court or agency or supervisory authority having jurisdiction in respect of the Special Servicer for the commencement of an involuntary case under any present or future federal or state bankruptcy, insolvency or similar law, for the appointment of a conservator or receiver or liquidator in any insolvency, readjustment of debt, marshalling of assets and liabilities or similar proceedings, or for the winding up or liquidation of its affairs shall have been entered against the Special Servicer, and such decree or order shall remain in force undischarged or unstayed for a period of 90 days; or
		

		
			(v)the Special Servicer shall consent to the appointment of a conservator or receiver or liquidator in any insolvency, readjustment of debt, marshalling of assets and liabilities or similar proceedings of or relating to the Special Servicer or of or relating to all or substantially all of its property; or
		

		
			(vi)the Special Servicer shall admit in writing its inability to pay its debts generally as they become due, file a petition to take advantage of any applicable federal or state bankruptcy, insolvency or similar law, make an assignment for the benefit of its creditors or voluntarily suspend payment of its obligations;
		

		
			then, and in each and every case, so long as a Special Servicer Event of Default shall not have been remedied, the Owner may, by notice in writing to the Special Servicer, in addition to whatever rights the Owner may have at law or in equity, including injunctive relief and specific performance, terminate all of the rights and obligations of the Special Servicer under this Agreement and in and to the Mortgage Loans and the proceeds thereof, without the Owner incurring any penalty or fee of any kind whatsoever in connection therewith; provided, however, that such termination shall be without prejudice to any rights of the Special Servicer relating to the payment of any earned and unpaid Special Servicing Fees, Disposition Fees, Workout Fees and Additional Servicing Compensation through and including the date of such termination. Except as otherwise expressly provided in this Agreement, no remedy provided for by this Agreement shall be exclusive of any other remedy, and each and every remedy shall be cumulative and in addition to any other remedy, and no delay or omission to exercise any right or remedy shall impair any such right or remedy or shall be deemed to be a waiver of any Special Servicer Event of Default.  On or after the receipt by the Special Servicer of such written notice of termination from the Owner, all authority and power of the Special Servicer under this Agreement, whether with respect to the Mortgage Loans or otherwise, shall pass to and be vested in the Owner, and the Special Servicer agrees to cooperate with the Owner in effecting the termination of the Special Servicer’s responsibilities and rights hereunder, including, without 
		

		
			
		

		
			

		 

		

			38

		

 

limitation, the transfer of the Servicing Files and the funds held in the Accounts as set forth in Section 8.01.
		

		
			The Owner may waive, which waiver shall be in writing, any default by the Special Servicer in the performance of its obligations hereunder and its consequences.  Upon any such waiver of a past default, such default shall cease to exist, and any Special Servicer Event of Default arising therefrom shall be deemed to have been remedied for every purpose of this Agreement.  No such waiver shall extend to any subsequent or other default or impair any right consequent thereon except to the extent expressly so waived.
		

		
			(c)"Owner Event of Default", wherever used herein with respect to the Owner, means any one of the following events:
		

		
			(i)Breach of AML Representations – Any representation or warranty contained in Section 7.01(b)(ii) or (iii) is or becomes false or misleading at any time; or
		

		
			(ii)Breach of AML Covenants – Owner fails to comply with the covenant contained in Section 7.03(b) at any time;
		

		
			then, and in each and every case of an Owner Event of Default, the Master Servicer may, by notice in writing to the Owner, in addition to whatever rights the Master Servicer may have at law or in equity, including injunctive relief and specific performance, terminate this Agreement, without the Master Servicer incurring any penalty or fee of any kind whatsoever in connection therewith. Except as otherwise expressly provided in this Agreement, no remedy provided for by this Agreement shall be exclusive of any other remedy, and each and every remedy shall be cumulative and in addition to any other remedy, and no delay or omission to exercise any right or remedy shall impair any such right or remedy or shall be deemed to be a waiver of any Owner Event of Default. On or after the receipt by the Owner of such written notice of termination from the Master Servicer, the Master Servicer's obligations under this Agreement, whether with respect to the Mortgage Loans or otherwise, shall terminate and immediately pass to and be vested in the Owner. Notwithstanding the foregoing, upon any such termination, the Master Servicer will be entitled to receive all accrued and unpaid Servicing Fees and Additional Servicing Compensation through the date of termination.
		

		
			 
		

		
			Upon discovery by the Owner of any Owner Event of Default (but regardless of whether any notice has been given as provided in this Agreement or any cure period provided herein has expired), the Owner shall give prompt written notice thereof to the Master Servicer.
		

		
			 
		

		
			Section 7.03.    Closing Conditions; Owner Covenants.
		

		
			(a)The obligations of the Owner and Master Servicer to effect the transactions contemplated hereby shall be subject to the following conditions:  
		

		
			(i)(A) Master Servicer shall have completed its due diligence with respect to the Owner in order to satisfy compliance with laws and regulations applicable to financial institutions in connection with this transaction (e.g., the USA PATRIOT Act, OFAC and 
		

		
			
		

		 

		

			39

		

 

		
			related regulations), and (B) the Master Servicer shall have been satisfied with the results of such due diligence in its sole discretion;
		

		
			(ii)Contemporaneously with the execution of this Agreement and from time to time as necessary during the term of the Agreement, the Owner shall deliver to the Master Servicer evidence satisfactory to the Master Servicer substantiating that it is not a Non-Exempt Person and that the Master Servicer is not obligated under applicable law to withhold Taxes on sums paid to it with respect to the Mortgage Loans or otherwise under this Agreement.  Without limiting the effect of the foregoing, (A) if the Owner is created or organized under the laws of the United States, any state thereof or the District of Columbia, it shall satisfy the requirements of the preceding sentence by furnishing to the Master Servicer an Internal Revenue Service Form W-9 and (B) if the Owner is not created or organized under the laws of the United States, any state thereof or the District of Columbia, and if the payment of interest or other amounts by the Mortgage Loan Borrowers is treated for United States income tax purposes as derived in whole or part from sources within the United States, the Owner shall satisfy the requirements of the preceding sentence by furnishing to the Master Servicer an Internal Revenue Service Form W-8ECI, Form W-8EXP, Form W-8IMY (with appropriate attachments) or Form W-8BEN, or successor forms, as may be required from time to time, duly executed by the Owner, as evidence of such Owner ‘s exemption from the withholding of United States tax with respect thereto.  The Master Servicer shall not be obligated to make any payment hereunder to the Owner until the Owner shall have furnished to the Master Servicer the requested forms, certificates, statements or documents. For the purposes of this Section 7.03(a)(ii), “Owner” shall include any loan participants and/or other recipients of payments on the Mortgage Loans as directed by the Owner to the Master Servicer; and
		

		
			(b)AML Covenants. The obligations of Master Servicer to effect any transaction contemplated hereby shall be subject to Owner's compliance with all Laws, including Anti- Terrorism Laws, and the continued truthfulness and completeness of Owner's representations and warranties found in Section 7.01(b)(ii) and (iii).
		

		
			(c)The obligations of the Master Servicer to effect the transactions contemplated hereby shall be subject to the following conditions:
		

		
			(i)Unless Owner has notified Master Servicer in writing prior to the Servicing Transfer Date that any tax is due within 30 days of the Servicing Transfer Date in connection with a Mortgage Loan (“30-Day Taxes”) and has provided the Master Servicer with specific information as to the amount of the 30-Day Taxes, to whom the payment is to be made, when the payment is due and any other reasonably requested information regarding such 30-Day Taxes, the Owner shall pay all 30-Day Taxes prior to the Servicing Transfer Date and shall be responsible for any penalty or interest due as a result of such 30-Day Taxes not being timely paid to the appropriate Person.
		

		
			(ii)Owner has paid Master Servicer a Set-up Fee per each Mortgage Loan.
		

		
			
		

		 

		

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			(iii)Owner shall pay all of Master Servicer's legal fees (in excess of 15.00 hours of legal fees) and expenses related to negotiation and execution of this Agreement within ten (10) days of receipt of invoice from Master Servicer or its legal counsel. 
		

		
			Section 7.04.    Post Closing Performance Conditions.
		

		
			The Master Servicer and Owner agree to cooperate with reasonable requests made by the Master Servicer or Owner, as applicable, after signing this Agreement to the extent reasonably necessary for the other to comply with laws and regulations applicable to financial institutions in connection with this transaction (e.g., the USA PATRIOT Act, OFAC and related regulations). 
		

		
			ARTICLE VIII.
		

		
			 
		

		
			TERMINATION; TRANSFER OF MORTGAGE LOANS
		

		
			Section 8.01.    Termination of Agreement.
		

		
			(a)The initial term of this Agreement shall be three (3) years.  This Agreement may be terminated by the Owner with respect to any Mortgage Loan without cause upon thirty (30) days’ written notice to the Master Servicer.  This Agreement may be terminated by the Master Servicer with respect to the Mortgage Loans without cause upon ninety (90) days written notice to the Owner; provided,  however, that if the minimum annual Servicing Fee set forth on Exhibit “C” is not reached at the end of the second year, the Master Servicer can terminate this Agreement immediately upon written notice to the Owner.
		

		
			(b)Termination pursuant to this Section or as otherwise provided herein shall be without prejudice to any rights of the Owner or the Master Servicer which may have accrued through the date of termination hereunder.  Upon such termination, the Master Servicer shall (i) remit all funds in the related Accounts to the Owner or such other Person designated by the Owner, net of accrued Servicing Fees, Special Servicing Fees, Disposition Fees, Workout Fees and Additional Servicing Compensation through the termination date to which the Master Servicer would be entitled to payment hereunder (but excluding the minimum annual Servicing Fee set forth on Exhibit “C”); (ii) deliver all related Servicing Files to the Owner or to Persons designated by the Owner; and (iii) fully cooperate with the Owner and any new servicer to effectuate an orderly transition of Loan Servicing of the related Mortgage Loans.  Upon such termination, any Servicing Fees and Additional Servicing Compensation which remain unpaid after the Master Servicer has netted out such amounts pursuant to the preceding sentence shall be remitted by the Owner to the Master Servicer within ten (10) Business Days after the Owner’s receipt of an itemized invoice therefor.
		

		
			(c)With respect to a termination of this Agreement by the Owner without cause as to any or all of the Mortgage Loans, the Owner shall pay the Deconversion Fee to the Master Servicer within ten (10) Business Days after the effective date of such termination.  If Owner enters into a contract with Master Servicer or its Affiliate for the license of its commercially available software system for use in servicing commercial mortgage loans for a minimum term of one (1) year or more, then no Deconversion Fee shall apply.
		

		
			
		

		
			

		 

		

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Section 8.02.    Transfer of Mortgage Loans.
		

		
			(a)The Master Servicer acknowledges that any or all of the Mortgage Loans may be sold, transferred, assigned or otherwise conveyed by the Owner to any third party without the consent or approval of the Master Servicer or the Special Servicer.  Except as provided in Section 8.03, any such transfer shall constitute a termination of this Agreement with respect to such Mortgage Loans, subject to the Owner’s notice requirements under Section 8.01(a).  The Owner acknowledges that the Master Servicer shall not be obligated to perform Loan Servicing with respect to such transferred Mortgage Loans for any third party unless and until the Master Servicer and such third party execute a servicing agreement having terms which are mutually agreeable to the Master Servicer and such third party.
		

		
			(b)Until the Master Servicer or the Special Servicer, as applicable, receives written notice from the Owner of the sale, transfer, assignment or conveyance of one or more Mortgage Loans, the Owner shall be presumed to be the owner and holder of such Mortgage Loans, the Master Servicer or the Special Servicer, as applicable, shall continue to earn Servicing Fees, Special Servicing Fees and Additional Servicing Compensation with respect to such Mortgage Loans and the Master Servicer or the Special Servicer, as applicable, shall continue to remit payments and other collections in respect of such Mortgage Loans to the Owner pursuant to the terms and provisions hereof.
		

		
			Section 8.03.    Cooperation of Master Servicer with a Reconstitution.
		

		
			(a)The Master Servicer and the Owner agree that with respect to some or all of the Mortgage Loans, on one or more dates (each a “Reconstitution Date”), at the Owner’s sole option, the Owner may effect a sale (each, a “Reconstitution”) of some or all of the Mortgage Loans then subject to this Servicing Agreement, without recourse, to:
		

		
			(i)Freddie Mac in one or more Whole Loan Transfers with respect to   multifamily Mortgage Loans;
		

		
			(ii)one or more other third-party purchasers in one or more Whole Loan Transfers;
		

		
			(iii)one or more trusts or other entities to be formed as part of one or more Private Securitization Transactions; or
		

		
			(iv)one or more trusts or other entities to be formed as part of one or more Public Securitization Transactions.
		

		
			 
		

		
			(b)With respect to each Whole Loan Transfer, Private Securitization Transaction or Public Securitization Transaction, as the case may be, entered into by the Owner, the Master Servicer shall:
		

		
			(i) upon a mutual agreement between the Owner and the Master Servicer, which agreement shall not be unreasonably withheld, service the Mortgage Loans included in such Reconstitution pursuant to the relevant pooling and servicing agreement 
		

		
			
		

		 

		

			42

		

 

		
			or other agreement with substantially similar or higher compensation and similar scope of services;
		

		
			(ii)if the Master Servicer or the Special Servicer will continue servicing the Mortgage Loans included in the Reconstitution, provide as applicable:
		

		
			(A)   information pertaining to the Master Servicer or the Special Servicer of the type and scope customarily included in offering documents for commercial mortgage-backed securities transactions involving single or multiple loan originators including information regarding financial condition and mortgage loan delinquency, foreclosure and loss experience or other information as is otherwise reasonably requested by the Owner, and to deliver to the Owner any non-public, unaudited financial information, in which case the Owner shall bear the cost of having such information audited by certified public accountants if the Owner desires such an audit, or as is otherwise reasonably requested by the Owner and which the Master Servicer or the Special Servicer  is capable of providing without unreasonable effort or expense (collectively “Servicer Information”), and to indemnify the Owner and its affiliates for material misstatements or omissions contained in the Servicer Information in any offering document; provided,  however, Owner shall indemnify and hold harmless the Master Servicer or the Special Servicer  and its Affiliates for material misstatements or omissions contained in all other information in any offering document, other than Servicer Information; and
		

		
			(B)  such opinions of counsel, letters from auditors, and certificates of public officials or officers of the Master Servicer or the Special Servicer  as are reasonably necessary by the depositor, the issuer, the trustee or any Rating Agency rating the securities or the Owner, as the case may be, in connection with such Private Securitization Transaction or Public Securitization Transaction.  The Owner shall pay all third party costs associated with the preparation of the information described in clause (ii)(A) above and the delivery of any opinions (other than opinions by in-house counsel), letters or certificates described in this clause (ii)(B).
		

		
			(c)if the Master Servicer or the Special Servicer will continue servicing the Mortgage Loans included in the Reconstitution, the Master Servicer or the Special Servicer shall (i) cooperate fully with the Owner, any prospective purchaser, any Rating Agency rating the securities or any party to any agreement to be executed in connection with such Whole Loan Transfer, Private Securitization Transaction or Public Securitization Transaction, with respect to all reasonable requests and due diligence procedures, including participating in meetings with the relevant Rating Agencies, bond insurers and such other parties as the Owner shall designate and participating in meetings with prospective purchasers of the Mortgage Loans or interests therein and providing information reasonably requested by such purchasers; (ii) to execute, deliver and perform all reconstitution agreements required by the Owner, and to use its Reasonable Efforts to facilitate such Whole Loan Transfer, Private Securitization Transaction or Public Securitization Transaction, as the case may be; (iii) (A) to restate the representations and warranties set forth in 
		

		
			
		

		 

		

			43

		

 

		
			this Agreement as of the Reconstitution Date which shall not be materially more onerous than those required under this Agreement or (B) make the representations and warranties with respect to the servicing of the Mortgage Loans stating that while servicing the Mortgage Loans, the Mortgage Loans were serviced in accordance with this Agreement.  The Master Servicer or the Special Servicer shall use its Reasonable Efforts to provide to such master servicer or issuer, as the case may be, and any other participants in such Reconstitution:  (x) any and all information and appropriate verification of information which may be reasonably available to the Master Servicer or the Special Servicer  or its affiliates, whether through letters of its auditors and counsel or otherwise, as the Owner or any such other participant shall reasonably request and (y) subject to the provisions of this Section 8.03, to execute, deliver and satisfy all conditions set forth in any indemnity agreement reasonably required by the Owner or any such participant related to information about the Master Servicer or the Special Servicer, as applicable, in the related offering documents; provided that Master Servicer or the Special Servicer is given an opportunity to review and reasonably negotiate in good faith provisions of such indemnity.
		

		
			(d)Any execution of a pooling and servicing agreement or reconstitution agreement by the Master Servicer or the Special Servicer shall be conditioned on the Master Servicer or the Special Servicer receiving the Master Servicing Fee, Additional Servicing Compensation, and the Special Servicing Fee, as applicable, or such other servicing fee acceptable to the Master Servicer or the Special Servicer.  All Mortgage Loans not sold or transferred pursuant to a Whole Loan Transfer, Private Securitization Transaction or Public Securitization Transaction shall be subject to this Agreement and shall continue to be serviced in accordance with the terms of this Agreement, which shall remain in full force and effect.  Notwithstanding any provision to the contrary in this Agreement, if the Master Servicer or the Special Servicer is the servicer with respect to a Reconstitution, the Owner agrees that in such Reconstitution any servicing performance termination triggers, servicing compensation and scope of services shall be substantially similar to those contained in this Agreement or otherwise subject to approval by the Master Servicer or the Special Servicer in its reasonable discretion. 
		

		
			ARTICLE IX.
		

		
			 
		

		
			MISCELLANEOUS PROVISIONS
		

		
			Section 9.01.    Amendment; Waiver.
		

		
			This Agreement contains the entire agreement between the parties relating to the subject matter hereof, and no term or provision hereof may be amended or waived unless such amendment or waiver is in writing and signed by the party against whom such amendment or waiver is sought to be enforced.
		

		
			Section 9.02.    Governing Law.
		

		
			This Agreement shall be construed in accordance with the laws of the State of Kansas, and the obligations, rights and remedies of the parties hereunder shall be determined in accordance with such laws, without giving effect to principles of conflicts of laws.
		

		
			
		

		
			

		 

		

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Section 9.03.    Notices.
		

		
			All demands, notices and communications hereunder shall be in writing and addressed in each case as follows:
		

		
			(i)if to the Owner, at:
		

		
			PennyMac Corp.
		

		
			6101 Condor Drive
		

		
			Moorpark, CA 93021
		

		
			Attention:  Chief Legal Officer
		

		
			Facsimile No.:  (818) 224-7393
		

		
			(ii)if to the Master Servicer, by U.S. Mail at:
		

		
			Midland Loan Services, 
		

		
			a Division of PNC Bank, National Association
		

		
			P.O. Box 25965
		

		
			Shawnee Mission, KS  66225-5965
		

		
			Attention:  Executive Vice President - Division Head
		

		
			Facsimile No.:  (913) 253-9001
		

		
			 
		

		
			or by delivery to:
		

		
			 
		

		
			Midland Loan Services, 
		

		
			a Division of PNC Bank, National Association
		

		
			10851 Mastin, Suite 300
		

		
			Overland Park, KS  66210
		

		
			Attention:  Executive Vice President - Division Head
		

		
			 
		

		
			with a copy to:
		

		
			 
		

		
			Stinson Leonard Street LLP
		

		
			1201 Walnut Street
		

		
			Kansas City, Missouri 64106
		

		
			Attention:  Kenda K. Tomes
		

		
			Facsimile No.:  (816) 691-3495
		

		
			 
		

		
			Any of the above-referenced Persons may change its address for notices hereunder by giving notice of such change to the other Persons.  All notices and demands shall be deemed to have been given at the time of the delivery at the address of such Person for notices hereunder if personally delivered, mailed by certified or registered mail, postage prepaid, return receipt requested, or sent by overnight courier or telecopy; provided,  however, that any notice delivered after normal business hours of the recipient or on a day which is not a Business Day shall be deemed to have been given on the next succeeding Business Day.
		

		
			To the extent that any demand, notice or communication hereunder is given to the Master Servicer by a Responsible Officer of the Owner, such Responsible Officer shall be deemed to 
		

		
			
		

		
			

		 

		

			45

		

 

have the requisite power and authority to bind the Owner with respect to such communication, and the Master Servicer may conclusively rely upon and shall be protected in acting or refraining from acting upon any such communication.  To the extent that any demand, notice or communication hereunder is given to the Owner by a Responsible Officer of the Master Servicer, such Responsible Officer shall be deemed to have the requisite power and authority to bind the Master Servicer with respect to such communication, and the Owner may conclusively rely upon and shall be protected in acting or refraining from acting upon any such communication.
		

		
			Section 9.04.    Severability of Provisions.
		

		
			If one or more of the provisions of this Agreement shall be for any reason whatever held invalid or unenforceable, such provisions shall be deemed severable from the remaining covenants, agreements and provisions of this Agreement and such invalidity or unenforceability shall in no way affect the validity or enforceability of such remaining provisions or the rights of any parties thereunder.  To the extent permitted by law, the parties hereto hereby waive any provision of law that renders any provision of this Agreement invalid or unenforceable in any respect.
		

		
			Section 9.05.    Inspection and Audit Rights.
		

		
			(a)The Master Servicer shall at its expense deliver, or otherwise make available, to the Owner annually during the term of this Agreement a report, by an independent third party audit firm registered with the Public Company Accounting Oversight Board and of good repute in the financial services industry, that describes the Master Servicer’s security and control policies and procedures and is in the form as described in the then-current Statement on Standards for Attestation Engagements 16 Report (the “SSAE 16 Report”), which report shall be no more than one (1) year old.  The Master Servicer shall also provide to the Owner, upon request, a “roll forward” certification of Master Servicer’s management assertion (unattested by the Master Servicer’s auditor), relative to the SSAE 16 Report, for the recent reporting period covered by the SSAE 16 Report through and including December 31 of the most recent previous calendar year.  
		

		
			(b)The Master Servicer agrees that, on reasonable prior notice, it will permit any agent or representative of the Owner, during the Master Servicer’s normal business hours, to audit and examine all the books of account, records, reports and other documents of the Master Servicer specifically relating to the Mortgage Loans, to make copies and extracts therefrom, to cause such books to be audited by an audit firm selected by the Owner, and to discuss matters relating to the Mortgage Loans with the Master Servicer’s officers and employees.  All audits carried out in accordance with this paragraph shall be at the expense of the Owner, and any support from the Master Servicer required by the Owner relative to any such audit (including the completion of any required forms) shall be compensated by the Owner at the standard time and materials rates customarily charged by the Master Servicer; provided, however, that any remediation, or support required to demonstrate issue remediation, shall not be charged to the Owner, and shall be at the Master Servicer’s sole cost and expense.   The Owner understands and agrees that in conducting such audits, its agents and/or representatives shall be subject to all reasonable security policies and procedures relative to any facility of the Master Servicer.
		

		
			
		

		
			

		 

		

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Section 9.06.    Binding Effect; No Partnership; Counterparts.
		

		
			The provisions of this Agreement shall be binding upon and inure to the benefit of the respective successors and permitted assigns of the parties hereto.  Nothing herein contained shall be deemed or construed to create a partnership or joint venture between the parties hereto and the services of the Master Servicer and Special Servicer shall be rendered as an independent contractor for the Owner.  For the purpose of facilitating the execution of this Agreement as herein provided and for other purposes, this Agreement may be executed simultaneously in any number of counterparts, each of which counterparts shall be deemed to be an original, and such counterparts shall constitute but one and the same instrument.
		

		
			Section 9.07.    Protection of Confidential Information.
		

		
			(a)The Master Servicer or the Special Servicer, as applicable, shall keep confidential and shall not divulge to any party, without the Owner’s prior written consent, any information pertaining to the Mortgage Loans, the Mortgaged Properties, the Additional Collateral, or the Borrowers except to the extent that (i) it is appropriate for the Master Servicer or the Special Servicer, as applicable, to do so (1) in working with legal counsel, auditors, other advisors, investors, taxing authorities or other governmental agencies, (2) in accordance with Accepted Servicing Practices or (3) when required by any law, regulation, ordinance, court order or subpoena or (ii) the Master Servicer or the Special Servicer, as applicable, is disseminating general statistical information relating to the mortgage loans being serviced by the Master Servicer or the Special Servicer, as applicable (including the Mortgage Loans), so long as the Master Servicer does not identify the Owner or the Borrowers.
		

		
			(b)Subject to Section 9.07(a) above, each party hereto agrees that during the term of this Agreement and at all times thereafter it shall not disclose any information pertaining to the terms and provisions of this Agreement (“Confidential Information”), to any person or entity, except (i) to such party’s own employees, contractors, officers, directors, affiliates, agents and representatives (collectively, the “Representatives”) having a “need to know”, (ii) as it is appropriate for the Master Servicer or the Special Servicer, as applicable, to do so (A) in working with legal counsel, auditors, other advisors, taxing authorities or other governmental agencies, (B) in accordance with Accepted Servicing Practices or (C) when required by any law, regulation, ordinance, court order or subpoena.  Each party agrees that it will not use or permit its Representatives to use any Confidential Information for purposes other than in connection with performance of its duties under this Agreement.  Each party shall use at least the same degree of care in safeguarding Confidential Information as it uses in safeguarding the confidential information it has, but in no event shall such party use less than reasonable diligence and care.  Notwithstanding the foregoing, such party may disclose Confidential Information pursuant to a requirement or request of a governmental agency or pursuant to a court or administrative subpoena, order or other such legal process or requirement of law, or in defense of any claims or causes of action asserted against it.  Nothing herein shall require such party to fail to honor a subpoena, court or administrative order or requirement on a timely basis, provided, however, that such party shall promptly notify the other party of any such requirement to the extent such notification is not prohibited by law or court or administrative order.
		

		
			
		

		
			

		 

		

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Section 9.08.    WAIVER OF JURY TRIALS.
		

		
			THE PARTIES HERETO HEREBY WAIVE, TO THE FULLEST EXTENT PERMITTED BY LAW, THE RIGHT TO TRIAL BY JURY IN ANY ACTION, PROCEEDING OR COUNTERCLAIM, WHETHER IN CONTRACT, TORT OR OTHERWISE, RELATING DIRECTLY OR INDIRECTLY TO THIS AGREEMENT OF THE TRANSACTIONS CONTEMPLATED HEREBY. 
		

		
			Section 9.09.    General Interpretive Principles.
		

		
			For purposes of this Agreement, except as otherwise expressly provided or unless the context otherwise requires:
		

		
			(a)the terms defined in this Agreement have the meanings assigned to them in this Agreement and include the plural as well as the singular, and the use of any gender herein shall be deemed to include the other gender;
		

		
			(b)accounting terms not otherwise defined herein have the meanings assigned to them in accordance with generally accepted accounting principles in the United States;
		

		
			(c)references herein to an “Article,” “Section,” or other subdivision without reference to a document are to the designated Article, Section or other applicable subdivision of this Agreement;
		

		
			(d)reference to a Section, subsection, paragraph or other subdivision without further reference to a specific Section is a reference to such Section, subsection, paragraph or other subdivision, as the case may be, as contained in the same Section in which the reference appears; 
		

		
			(e)the words “herein,” “hereof,” “hereunder” and other words of similar import refer to this Agreement as a whole and not to any particular provision;
		

		
			(f)the term “include” or “including” shall mean without limitation by reason of enumeration; and
		

		
			(g)the Article, Section and subsection headings herein are for convenience of reference only, and shall not limit or otherwise affect the meaning of the provisions contained therein.
		

		
			Section 9.10.    Further Agreements.
		

		
			The Master Servicer, Special Servicer and the Owner each agree to execute and deliver to each other such additional documents, instruments or agreements as may be reasonably requested by the others and as may be necessary or appropriate to effectuate the purposes of this Agreement.
		

		
			 
		

		
			 
		

		
			
		

		
			

		 

		

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Section 9.11.    Addition or Removal of an Owner.
		

		
			(a)The parties hereto further acknowledge and agree that from time to time this Agreement may be amended to add as a new Owner hereunder certain affiliates of the Owner (“New Owner”) by prior written notice to the Master Servicer from such New Owner in the form of the attached Exhibit F-1.  Whereupon, without further action by any party hereto, upon receipt of such notice by the Master Servicer and the occurrence of the first Servicing Transfer Date after receipt of such notice: (i) this Agreement shall be deemed to be amended to add such New Owner to this Agreement as a party hereto, (ii) such New Owner shall have all rights and obligations of an “Owner” hereunder, and (iii) the Master Servicer shall  be bound to such New Owner under the terms of the Agreement, as if such New Owner executed this Agreement.
		

		
			(b)The parties hereto acknowledge and agree that from time to time this Agreement may be amended by the deletion of any Owner or Owners listed thereon by prior written notice to the Master Servicer from each such deleted Owner on behalf of each such deleted Owner in the form of the attached Exhibit F-2 (each a "Deleted Owner"). Whereupon, without further action by any party hereto, upon thirty (30) days after receipt of such notice by the Master Servicer if the Master Servicer at that time is providing Loan Servicing in connection with Mortgage Loans owned by such Deleted Owner, and immediately upon receipt of such notice by the Master Servicer if the Master Servicer is not then providing any Loan Servicing in connection with any Mortgage Loans owned by such Deleted Owner: (i) this Agreement shall be deemed to be amended to delete such Deleted Owner or Deleted Owners from this Agreement as a party hereto, and (ii) such Deleted Owner(s) shall have no further rights or obligations hereunder except for those that survive termination or accrued prior thereto.
		

		
			[Signature Page Follows]
		

		
			 
		

		
			 
		

		
			

		 

		

			49

		

 

IN WITNESS WHEREOF, the Owner and the Master Servicer have caused this Agreement to be duly executed by their respective officers thereunto duly authorized as of the date first above written.
		

		
			 
		

			
					
						 

					
					
						 

					
					
						PENNYMAC CORP., A DELAWARE CORPORATION

				
	
					
						 

					
					
						 

					
					
						 

					
					
						 

				
	
					
						 

					
					
						 

					
					
						By:

					
					
						/s/ Steven Skolnik

				
	
					
						 

					
					
						 

					
					
						Name:

					
					
						Steven Skolnik

				
	
					
						 

					
					
						 

					
					
						Title:

					
					
						Chief Commercial Lending Officer

				
	
					
						 

					
					
						 

					
					
						 

					
					
						 

				
	
					
						 

					
					
						 

					
					
						 

					
					
						(“Owner”)

				
	
					
						 

					
					
						 

					
					
						 

					
					
						 

				
	
					
						 

					
					
						 

					
					
						 

					
					
						 

				
	
					
						 

					
					
						 

					
					
						PENNYMAC HOLDINGS, LLC

				
	
					
						 

					
					
						 

					
					
						 

					
					
						 

				
	
					
						 

					
					
						 

					
					
						By:

					
					
						/s/ Steven Skolnik

				
	
					
						 

					
					
						 

					
					
						Name:

					
					
						Steven Skolnik

				
	
					
						 

					
					
						 

					
					
						Title:

					
					
						Chief Commercial Lending Officer

				
	
					
						 

					
					
						 

					
					
						 

					
					
						 

				
	
					
						 

					
					
						 

					
					
						 

					
					
						(“Owner”)

				
	
					
						 

					
					
						 

					
					
						 

					
					
						 

				
	
					
						 

					
					
						 

					
					
						 

					
					
						 

				
	
					
						 

					
					
						 

					
					
						PENNYMAC LOAN SERVICES, LLC, A DELAWARE LIMITED LIABILITY COMPANY

				
	
					
						 

					
					
						 

					
					
						 

					
					
						 

				
	
					
						 

					
					
						 

					
					
						By:

					
					
						/s/ Steven Skolnik

				
	
					
						 

					
					
						 

					
					
						Name:

					
					
						Steven Skolnik

				
	
					
						 

					
					
						 

					
					
						Title:

					
					
						Chief Commercial Lending Officer

				
	
					
						 

					
					
						 

					
					
						 

					
					
						 

				
	
					
						 

					
					
						 

					
					
						 

					
					
						(A “Special Servicer”)

				
	
					
						 

					
					
						 

					
					
						 

					
					
						 

				
	
					
						 

					
					
						 

					
					
						 

					
					
						 

				
	
					
						 

					
					
						 

					
					
						MIDLAND LOAN SERVICES, A DIVISION OF PNC BANK, NATIONAL ASSOCIATION

				
	
					
						 

					
					
						 

					
					
						 

					
					
						 

				
	
					
						 

					
					
						 

					
					
						By:

					
					
						/s/ Cynthia A. Bicknell

				
	
					
						 

					
					
						 

					
					
						Name:

					
					
						Cynthia A. Bicknell

				
	
					
						 

					
					
						 

					
					
						Title:

					
					
						Senior Vice President

				
	
					
						 

					
					
						 

					
					
						 

					
					
						 

				
	
					
						 

					
					
						 

					
					
						 

					
					
						(“Master Servicer” and a “Special Servicer”)

				

		
			 
		

		
			 
		

		
			 
		

		
			

		 

		

			50

		

		

			 

		

		

			[PennyMac – Midland Servicing Agreement – Signature Page]

		

 

EXHIBIT “A”
		

		
			 
		

		
			(Initial Mortgage Loan Schedule)
		

		
			 
		

			
					
						Loan Number

					
					
						Mortgaged Property

					
					
						Borrower

					
					
						Outstanding Principal Balance

					
					
						Names of Special Servicer

				
	
					
						Freddie Mortgage Loans 

					
					
						 

					
					
						Midland 

				
	
					
						 

					
					
						 

					
					
						 

					
					
						 

				
	
					
						 

					
					
						 

					
					
						 

					
					
						 

				
	
					
						 

					
					
						 

					
					
						 

					
					
						 

				
	
					
						 

					
					
						 

					
					
						 

					
					
						 

				
	
					
						 

					
					
						 

					
					
						 

					
					
						 

				
	
					
						 

					
					
						 

					
					
						 

					
					
						 

				
	
					
						 

					
					
						 

					
					
						 

					
					
						 

				
	
					
						PMSS Mortgage Loans 

					
					
						 

					
					
						PennyMac Loan Servicer 

				
	
					
						 

					
					
						 

					
					
						 

					
					
						 

				
	
					
						 

					
					
						 

					
					
						 

					
					
						 

				
	
					
						 

					
					
						 

					
					
						 

					
					
						 

				
	
					
						 

					
					
						 

					
					
						 

					
					
						 

				
	
					
						 

					
					
						 

					
					
						 

					
					
						 

				
	
					
						 

					
					
						 

					
					
						 

					
					
						 

				
	
					
						 

					
					
						 

					
					
						 

					
					
						 

				
	
					
						 

					
					
						 

					
					
						 

					
					
						 

				
	
					
						 

					
					
						 

					
					
						 

					
					
						 

				
	
					
						MSS

					
						Mortgage Loans 

					
					
						 

					
					
						Midland    

				
	
					
						 

					
					
						 

					
					
						 

					
					
						 

				
	
					
						 

					
					
						 

					
					
						 

					
					
						 

				
	
					
						 

					
					
						 

					
					
						 

					
					
						 

				
	
					
						 

					
					
						 

					
					
						 

					
					
						 

				
	
					
						 

					
					
						 

					
					
						 

					
					
						 

				
	
					
						 

					
					
						 

					
					
						 

					
					
						 

				
	
					
						 

					
					
						 

					
					
						 

					
					
						 

				
	
					
						 

					
					
						 

					
					
						 

					
					
						 

				
	
					
						 

					
					
						 

					
					
						 

					
					
						 

				

		
			 
		

		
			 
		

		
			

		 

		

			A-1

		

 

 
		

		
			EXHIBIT “B”
		

		
			 
		

		
			(Statements, Reports and/or Information)
		

		
			 
		

		
			 
		

		
			
		

		
			 
		

		
			 
		

		
			 
		

		
			 
		

		
			 
		

		
			 
		

		
			 
		

		
			 
		

		
			 
		

		
			 
		

		
			 
		

		
			 
		

		
			 
		

		
			 
		

		
			

		 

		

			B-1

		

 

EXHIBIT “C”
		

		
			 
		

		
			(Servicing Fee Schedule)
		

		
			 
		

			
					
						 

					
					
						 

					
					
						 

				
	
					
						Monthly Servicing Fee:

					
					
						Loans 1 to 250:

					
					
						$250 per loan

				
	
					
						 

					
					
						Loans 251 to 500:

					
					
						$225 per loan

				
	
					
						 

					
					
						Loans over 500:

					
					
						$200 per loan

				
	
					
						 

					
					
						 

					
					
						 

				
	
					
						Minimum Annual Servicing Fee:

					
					
						$150,000 (waived during 1st year of Agreement)

				
	
					
						 

					
					
						 

					
					
						 

				

		
			 
		

		
			 
		

		
			

		 

		

			C-1

		

 

EXHIBIT “D”
		

		
			 
		

		
			(Asset Management Fee Schedule)
		

		
			 
		

		
			ASSET MANAGEMENT FEES
		

		
			 
		

		
			 
		

		
			The following represents a schedule of asset management fees customarily charged.  The fees are guidelines and are assessed relative to each request, the relevant loan documents, and the negotiated Servicing Agreement.  Approximately 50% of any processing fee related to substantive borrower requests is collected at the inception of the borrower’s request to cover direct and indirect costs in the event the transaction does not consummate.  All requested actions are individually subject to appropriate delegated authority and if applicable, Midland’s Legal Department concurrence.
		

		
			 
		

		
			Transfer/Assumption fee:  
		

		
			1% of the principal balance or the fee specified by the relevant loan documents.  The 1% fee is negotiable for loans with a principal balance exceeding $10,000,000 but should not be less than .25%.  The minimum assumption fee regardless of principal balance is $2,500.  A $2,500-$5,000 non-refundable application fee should be collected at the time of receiving the assumption package.
		

		
			 
		

		
			Transfer of title or interest without change of beneficial ownership:
		

			
					
						 

					
					
						Loan balances under $500,000:

					
					
						 

					
					
						$1,500-$2,500

				
	
					
						 

					
					
						Loan balances between $500,000 and $1,000,000:

					
					
						 

					
					
						$2,500-$5,000

				
	
					
						 

					
					
						Loan balances between $1,000,000 and $10,000,000:

					
					
						 

					
					
						$5,000-$10,000

				
	
					
						 

					
					
						Loan balances of $10,000,000 or greater:

					
					
						 

					
					
						$10,000-$25,000

				

		
			 
		

		
			Secondary Financing:
		

			
					
						 

					
					
						Loan balances under $500,000:

					
					
						 

					
					
						 

					
					
						$2,000-$2,500

				
	
					
						 

					
					
						Loan balances between $500,000 and $1,000,000:

					
					
						 

					
					
						 

					
					
						$2,500-$5,000

				
	
					
						 

					
					
						Loan balances between $1,000,000 and $10,000,000:

					
					
						 

					
					
						 

					
					
						$5,000-$10,000

				
	
					
						 

					
					
						Loan balances of $10,000,000 or greater:

					
					
						 

					
					
						 

					
					
						$10,000-$25,000

				

		
			 
		

		
			Collateral Release without Substitution 
		

		
			(not identified in the loan documents):
		

			
					
						 

					
					
						Loan balances under $500,000:

					
					
						 

					
					
						 

					
					
						$1,500-$2,500

				
	
					
						 

					
					
						Loan balances under $1,000,000:

					
					
						 

					
					
						 

					
					
						$2,500-$5,000

				
	
					
						 

					
					
						Loan balances between $1,000,000 and $10,000,000:

					
					
						 

					
					
						 

					
					
						$5,000-$7,500

				
	
					
						 

					
					
						Loan balances of $10,000,000 or greater:

					
					
						 

					
					
						 

					
					
						$7,500-$20,000

				

		
			Collateral Release with Substitution
		

			
					
						(provided for in the loan documents):

					
					
						$7,500-$15,000/Property

				
	
					
						 

					
					
						 

				

		
			 
		

		
			
		

		
			

		 

		

			D-1

		

 

Conditional Collateral Release 
		

			
					
						(provided for in the loan document):

					
					
						$1,500-$5,000/Property

				

		
			 
		

		
			Defeasance:
		

			
					
						Loan $2,000,000 or less

					
					
						-

					
					
						$  7,500 + $15,000 legal retainer

				
	
					
						$  2,000,001 - $10,000,000

					
					
						-

					
					
						$10,000 + $15,000 legal retainer

				
	
					
						$10,000,001 - $20,000,000

					
					
						-

					
					
						$15,000 + $15,000 legal retainer

				
	
					
						$20,000,001 - $30,000,000

					
					
						-

					
					
						$20,000 + $15,000 legal retainer

				
	
					
						$30,000,001 - $40,000,000

					
					
						-

					
					
						$25,000 + $15,000 legal retainer

				
	
					
						$40,000,001 - $50,000,000

					
					
						-

					
					
						$30,000 + $15,000 legal retainer

				
	
					
						Loan $50,000,001 and up

					
					
						-

					
					
						Negotiable, but not less than 30,000 +

				
	
					
						 

					
					
						 

					
					
						$15,000 legal retainer

				

		
			 
		

		
			Property Management/Facility Operator Change:
		

			
					
						 

					
					
						Loan balances under $1,000,000:

					
					
						 

					
					
						 

					
					
						$500 - $1,500

				
	
					
						 

					
					
						Loan balances between $1,000,000 and $10,000,000:

					
					
						 

					
					
						 

					
					
						$1,500-$3,500

				
	
					
						 

					
					
						Loan balances of $10,000,000 or greater:

					
					
						 

					
					
						 

					
					
						$3,500-$5,000

				

		
			 
		

		
			Subordination of Mortgage:
		

			
					
						 

					
					
						Routine, under 4 hours work:

					
					
						 

					
					
						 

					
					
						$750

				
	
					
						 

					
					
						Complex:

					
					
						 

					
					
						 

					
					
						$1,500

				
	
					
						 

					
					
						Very Complex, over 8 hours:

					
					
						 

					
					
						 

					
					
						$3,000

				

		
			 
		

		
			Easement or Condemnation:
		

			
					
						 

					
					
						Routine, under 4 hours work:

					
					
						 

					
					
						 

					
					
						$500

				
	
					
						 

					
					
						Complex:

					
					
						 

					
					
						 

					
					
						$1,500

				
	
					
						 

					
					
						Very Complex, over 8 hours:

					
					
						 

					
					
						 

					
					
						$3,000

				

		
			 
		

		
			Lease approval/ratification
		

			
					
						 

					
					
						Routine, under 4 hours work:

					
					
						 

					
					
						 

					
					
						$250

				
	
					
						 

					
					
						Complex:

					
					
						 

					
					
						 

					
					
						$500

				
	
					
						 

					
					
						Very Complex, over 8 hours:

					
					
						 

					
					
						 

					
					
						$1,000

				

		
			 
		

		
			Subordination, non-disturbance, attornment, or quiet enjoyment provisions, (SNDA) related to a commercial lease:
		

			
					
						 

					
					
						Routine, under 4 hours work:

					
					
						 

					
					
						 

					
					
						$350

				
	
					
						 

					
					
						Complex:

					
					
						 

					
					
						 

					
					
						$600

				
	
					
						 

					
					
						Very Complex, over 8 hours:

					
					
						 

					
					
						 

					
					
						$1,000

				

		
			 
		

			
					
						Release of Liability:

					
					
						$3,000-$7,500

				
	
					
						 

					
					
						 

				
	
					
						Loan Extension provided for in the loan documents:

					
					
						$750-$1,500

				

		
			 
		

		
			
		

		

		 

		

			D-2

		

 

	
					
						Credit Report/Lexis Nexis:

					
					
						$100-Individual

				
	
					
						 

					
					
						$150-Corporate

				
	
					
						 

					
					
						 

				
	
					
						Architectural and/or Engineering Reports:

					
					
						Actual Costs Incurred

				
	
					
						Environmental Site Assessments:

					
					
						Actual Costs Incurred

				
	
					
						Appraisal Reports:

					
					
						Actual Costs Incurred

				
	
					
						Property Inspection Reports: 

					
					
						Actual Costs Incurred

				
	
					
						Travel Costs:

					
					
						Actual Costs Incurred

				
	
					
						Legal Fees:

					
					
						Actual Costs Incurred

				
	
					
						Title and Recording Charges:

					
					
						Actual Costs Incurred

				

		
			 
		

		
			 
		

		
			 
		

		
			

		 

		

			D-3

		

 

EXHIBIT “E”
		

		
			 
		

		
			(Loan Servicing Responsibilities Matrix)
		

		
			 
		

		
			See attached 
		

		
			 
		

		
			 
		

		
			 
		

		
			
		

		
			

		 

		

			E-1-1

		

 

 
		

		
			EXHIBIT “F-1”
		

		
			 
		

		
			Form of Notice to Servicer Adding New Owner
		

		
			 
		

		
			Midland Loan Services 
		

		
			P.O. Box 25965
		

		
			Shawnee Mission, KS 66225-5695
		

		
			Attention:  Executive Vice President - Division Head
		

		
			 
		

		
			Re:Addition of New Owner to the Servicing Agreement and as a Party to the Servicing Agreement
		

		
			 
		

		
			Please refer to that certain Servicing Agreement for Mortgage Loans, dated as of July 13, 2015 (the “Agreement”), between PennyMac Corp., a Delaware corporation, PennyMac Holdings, LLC, a Delaware limited liability company, any other parties signing this Agreement as an owner of Mortgage Loans as listed in Schedule I (collectively as the "Owner"), PennyMac Loan Services, LLC, a Delaware limited liability company ("PennyMac Loan Servicer" and in certain cases, a "Special Servicer"), and Midland Loan Services, a Division of PNC Bank, National Association, a national banking association ("Master Servicer" and in certain cases, a "Special Servicer") and any New Owners.  Capitalized terms used but not defined herein shall have the meanings ascribed to them under the Agreement.  
		

		
			 
		

		
			Pursuant to Section 9.11(a) of the Agreement, the following entity is hereby added as an Owner to the Agreement and as a party to the Agreement:
		

		
			 
		

		
			[INSERT NAME OF NEW OWNER] (“New Owner”)
		

		
			 
		

		
			New Owner hereby agrees to be bound by the terms of the Agreement and makes the representations contained in Section 7.01(b) therein with respect to the Agreement, as well as with respect to execution and delivery of this notice, as if fully set forth herein.  
		

		
			The parties to the Agreement have agreed that pursuant to Section 9.11(a) of the Agreement, upon the Effective Date (as herein defined), (i) the Agreement is hereby deemed to be amended to add New Owner as a party to the Agreement, (ii) New Owner hereby has all rights and obligations of an “Owner” under the Agreement, and (iii) Servicer is hereby bound to such New Owner under the terms of the Agreement, as if such New Owner executed the Agreement.  
		

		
			The “Effective Date” shall be the latter of the date of this Exhibit or the date upon which Servicer completed its due diligence with respect to each New Owner in order to satisfy compliance with laws and regulations applicable to financial institutions in connection with this transaction (e.g., the USA PATRIOT Act and related regulations) and satisfaction of any other closing conditions in the Agreement.
		

		
			
		

		
			

		 

		

			E-1-2

		

 

[THE REST OF THIS PAGE INTENTIONALLY LEFT BLANK]
		

		
			 
		

		
			 
		

			
					
						 

					
					
						 

					
					
						 

					
					
						 

				
	
					
						 

					
					
						 

					
					
						[INSERT NAME OF NEW OWNER]

				
	
					
						 

					
					
						 

					
					
						 

					
					
						 

				
	
					
						 

					
					
						 

					
					
						 

					
					
						 

				
	
					
						 

					
					
						 

					
					
						By:

					
					
						 

				
	
					
						 

					
					
						 

					
					
						Name:

					
					
						 

				
	
					
						 

					
					
						 

					
					
						Title:

					
					
						 

				
	
					
						 

					
					
						 

					
					
						Date:

					
					
						 

				

		
			 
		

		
			 
		

		
			 
		

		
			 
		

		
			 
		

		
			

		 

		

			E-1-3

		

 

EXHIBIT "F-2"
		

		
			 
		

		
			Form of Notice to Servicer Deleting Owner
		

		
			 
		

		
			 
		

		
			Midland Loan Services
		

		
			P.O. Box 25965
		

		
			Shawnee Mission, KS 66225-5695
		

		
			Attention:  Executive Vice President - Division Head
		

		
			 
		

		
			Re:Deletion of Owner from Servicing Agreement
		

		
			 
		

		
			Please refer to that certain Servicing Agreement for Mortgage Loans, dated as of July 13, 2015 (the “Agreement”), between PennyMac Corp., a Delaware corporation, PennyMac Holdings, LLC, a Delaware limited liability company, any other parties signing this Agreement as an owner of Mortgage Loans as listed in Schedule I and any New Owners (collectively as the "Owner"), PennyMac Loan Services, LLC, a Delaware limited liability company ("PennyMac Loan Servicer" and in certain cases, a "Special Servicer"), and Midland Loan Services, a Division of PNC Bank, National Association, a national banking association ("Master Servicer" and in certain cases, a "Special Servicer")..  Capitalized terms used but not defined herein shall have the meanings ascribed to them under the Agreement.  
		

		
			 
		

		
			Pursuant to Section 9.11(b) of the Agreement, the following entity is hereby deleted as an Owner to the Agreement and as a party to the Agreement:
		

		
			 
		

		
			[INSERT NAME OF DELETED OWNER] (“Deleted Owner”)
		

		
			 
		

		
			The parties to the Agreement have agreed that pursuant to Section 9.11(b) of the Agreement, upon thirty (30) days after receipt of this notice if Master Servicer is at that time providing Loan Servicing in connection with Mortgage Loans owned by such Deleted Owner and immediately upon receipt of such notice by Master Servicer if Master Servicer is not then providing any Loan Servicing in connection with any Mortgage Loans owned by such Deleted Owner, with no further action on the part of Deleted Owner or any other party to the Agreement, (i) the Agreement is hereby deemed to be amended to delete Deleted Owner, and (ii) Deleted Owner hereby has no further rights or obligations of an “Owner” under the Agreement except for those that survive termination or accrued prior thereto.
		

		
			 
		

			
					
						 

					
					
						 

					
					
						 

					
					
						 

				
	
					
						 

					
					
						 

					
					
						[INSERT NAME OF DELETED OWNER]

				
	
					
						 

					
					
						 

					
					
						 

					
					
						 

				
	
					
						 

					
					
						 

					
					
						 

					
					
						 

				
	
					
						 

					
					
						 

					
					
						By:

					
					
						 

				
	
					
						 

					
					
						 

					
					
						Name:

					
					
						 

				
	
					
						 

					
					
						 

					
					
						Title:

					
					
						 

				
	
					
						 

					
					
						 

					
					
						Date:

					
					
						 

				

		
			 
		

		 

		

			F-2-1

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