Morgan Stanley Bank of America Merrill Lynch Trust 2012-C5 - FORM 8-K - EX-99.1 CHARTER - MSBAM 2012-C5 SUBSERVICING AGREEMENT AS OF JUNE 24, 2013 - June 28, 2013

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8-K - MSBAM 2012-C5 FORM 8-K - Morgan Stanley Bank of America Merrill Lynch Trust 2012-C5msbam2012c5_8k.htm


Affiliates, subcontractors, vendors or other third parties for the performance of inspections, monitoring
insurance and/or taxes, financial statement collection calls, UCC Financing Statements, appraisals, flood
certifications, imaging, defeasance, satisfactions and legal; provided that the Subservicer may engage
third parties for the underwriting of assumptions and modifications on a case-by-case basis, upon
approval of KRECM. Subservicer shall remain obligated and liable to KRECM for performing all such
delegated duties in accordance with this Agreement without diminution of such obligation or liability by
virtue of such delegation. The Subservicer shall be obligated to pay all fees and expenses of any
Affiliates, subcontractors, vendors or other third parties out of its subservicing fee amounts.
Street Journal, as such "prime rate" may change from time to time, commencing from the date on
which such T&I Advance was made to the Business Day on which the Subservicer is reimbursed
for such T&I Advance pursuant to this Agreement. In the event that Subservicer is unable to
reimburse itself for a T&I Advance with Advance Interest by the fifth (5th) business day of the
following month, Subservicer will send an invoice for advances and Advance Interest to KRECM
for reimbursement. Within two (2) business days after KRECM's receipt of a written request
from Subservicer, KRECM will remit advance funds and Advance Interest to Subservicer. As
Subservicer receives funds from the borrower to repay the advance, Subservicer will, upon
monthly investor reporting remittance, remit collected advance funds to KRECM. All T&I
Advance reimbursement notices delivered by Subservicer to KRECM or delivered by KRECM to
Subservicer shall state the applicable loan servicing number, applicable escrow bucket and T&I
Advance amounts due and owing;
Accepted Subservicing Practices and the Task List, monitor the related Borrower's insurance
obligations in accordance with PSA and the related Mortgage Loan documents, and in the event a
Borrower fails to maintain such insurance, the Subservicer shall promptly (A) notify KRECM in
writing of such Borrower's failure to maintain such insurance and whether or not such insurance
is required by the terms of the related Mortgage Loan documents, and (B) deliver to KRECM all
documents and other information in Subservicer's possession, and any additional information
reasonably requested by KRECM, to assist KRECM in determining, among other things, whether
or not such insurance is available at commercially reasonable rates; provided that the Subservicer
shall not be required to maintain insurance coverage on any Mortgaged Property and KRECM
shall notify the Subservicer of such determination within ten (10) Business Days after KRECM's
receipt of such request, notice or other requested information or KRECM shall be deemed to have
approved force placed insurance coverage unless such action requires third party approval, in
which case, the consent of KRECM and the third party is required; and (C) with the consent (or
deemed consent) of KRECM and consistent with the Task List administer for forced place
insurance as required by the applicable PSA;
certifications, consents, and other documentation that are required under any PSA to be provided
by KRECM to, or obtained by KRECM from, the Trustee, custodian, the Depositor, the
certificate administrator, any mortgage loan seller, the initial purchasers, the guarantor, the 17g-5
Information Provider if applicable, any Rating Agency, the applicable Certificateholders, the
Special Servicer, any other party to the applicable PSA or any other Person shall be provided by
the Subservicer to KRECM only (or as otherwise directed by KRECM) within the time set forth
in this Agreement (or if no such time is set forth, within one (1) Business Day prior to the date on
which KRECM is required to deliver such item to the applicable Person); provided, however, to
the extent the Subservicer is required to provide any of the foregoing directly to any such third
party, including the document custodian, pursuant to this Agreement, the Subservicer shall
forward original documents/closing binders to the document custodian and electronic copies to
any other third party. Additionally, Subservicer shall provide KRECM with electronic copies
through the web services feed. KRECM and Subservicer hereby agree that Subservicer may
directly request, and receive, from the document custodian electronic copies of any pertinent loan
or transaction level documents.
The Subservicer shall, (i) not later than five (5) Business Days after its receipt of any such request or
notice, deliver to KRECM a payoff statement calculated by the Subservicer with respect to such principal
prepayment setting forth the amount of the principal prepayment, the aggregate interest accrued thereon,
the rates used, the date of such rates, and the other fees or expenses to be paid by the Borrower; and (ii)
deliver to KRECM and a copy to AMS Real Estate Services for any loan with a calculated yield
maintenance charge, all documents and other information in Subservicer's possession, and any other
information reasonably requested by KRECM, or AMS Real Estate Services, to verify the Subservicer's
calculations. KRECM shall respond within five (5) Business Days after receipt of such requests, notices
or other requested information or KRECM shall be deemed to have approved the Subservicer's
calculations unless such action requires third party approval, in which case, the consent of KRECM and
the third party is required. If the Subservicer accepts any principal prepayment, then it shall (pursuant to
wiring instructions from KRECM) remit such principal prepayment to KRECM on the Subservicer
Remittance Date.
Determination Date, beginning in the month following the Effective Date, the Subservicer shall prepare
and deliver or cause to be delivered to KRECM, in an electronic form, (i) the CREFC Loan Periodic
Update File, the CREFC Property File, the CREFC Financial File, the CREFC Delinquent Loan Status
Report, the CREFC Historical Loan Modification and Corrected Mortgage Loan Report, the CREFC
Loan Level Reserve/LOC Report, the CREFC Comparative Financial Status Report, the CREFC Servicer
Watch List and, (ii) to the extent required to be delivered by KRECM under the PSA, any other file or
report that may from time to time be recommended by the CREFC for commercial mortgage-backed
securities transactions generally (substantially in the form of, and containing the information called for in,
the downloadable form of such file or report then-available on the CREFC Website) and requested in
writing by KRECM, in each case providing the most recent information with respect to the Mortgage
Loans as of the close of business on the related Determination Date (and which, in each case, if
applicable, will identify each Mortgage Loan by loan number and property name). Delivery of any of the
foregoing shall be deemed satisfied at the time such file or report is posted to Subservicer's website
InvestorView, or such other website as the Subservicer may notify KRECM in writing; provided that the
Subservicer shall notify KRECM in writing or electronically immediately upon the posting of any such
file or report to the Subservicer's website.
Borrower, which efforts shall include sending a letter to such Borrower each quarter (followed up with
telephone calls) requesting such quarterly and annual operating statements, budgets, rent rolls and
financial statements by no later than the timeframe set forth in the applicable PSA for KRECM to deliver
such information, whether or not delivery of such items is required pursuant to the terms of the related
Mortgage Loan documents, but to the extent such action is consistent with applicable law, the terms of
such Mortgage Loans and Accepted Subservicing Practices. Upon KRECM's written request, the
Subservicer shall deliver copies of all of the foregoing items so collected in an imaged PDF format, Excel
format, or such other format reasonably acceptable to KRECM and the Subservicer within twenty-five
(25) days after the Subservicer's receipt of such items together with the CREFC Operating Statement
Analysis Report and CREFC NOI Adjustment Worksheet.
PSA and the related PSA does not require that servicing under this Agreement be terminated with respect
to such Mortgage Loan upon such Mortgage Loan becoming a specially serviced Mortgage Loan, the
Subservicer shall continue to receive payments (and apply such funds as directed by KRECM or the
related special servicer), update payment records, file UCC Financing Statements, monitor tax amounts
due, and monitor insurance coverage with respect to each such specially serviced Mortgage Loan and
shall provide KRECM or the special servicer with any information reasonably required by KRECM or the
special servicer to perform its duties under the related PSA, but the Subservicer shall take no other actions
with respect to such specially serviced Mortgage Loan unless expressly directed in writing by KRECM or
the special servicer. Subservicer will be responsible for all communications with any special servicer
under the related PSA. If an inquiry on a specially serviced Mortgage Loan requires the review or consent
of KRECM, Subservicer shall forward such request to KRECM for review/consent/denial/modification
and will coordinate the delivery of such consent/denial/modification to the special servicer, if applicable.
If permitted or not prohibited by the related PSA, upon a specially serviced Mortgage Loan becoming a
"corrected" or "performing" Mortgage Loan, KRECM shall promptly notify the Subservicer of such
change and the Subservicer shall resume its servicing obligations and duties required pursuant to this
Agreement. If any amounts payable to the Subservicer are not paid because there are not sufficient
amounts received with respect to such Mortgage Loan at any time, all such amounts shall accrue and
remain payable to the Subservicer from any amounts, if any, that are subsequently received with respect
to such Mortgage Loan.
in full force and effect throughout the term of this Agreement, a blanket fidelity bond and an errors and
omissions insurance policy covering all of the Subservicer's officers, employees and agents acting on
behalf of the Subservicer in connection with its activities under this Agreement and that satisfies the
fidelity bond and errors and omissions insurance policy requirements under the PSAs. The Subservicer
shall deliver or cause to be delivered to KRECM a certificate of insurance or other evidence of such
fidelity bond and insurance within thirty (30) days of the Effective Date and thereafter (i) within ten (10)
Business Days after each renewal thereof, (ii) if not delivered in any calendar year pursuant to clause (i),
then upon each anniversary of the Effective Date, and (iii) from time to time upon KRECM's reasonable
request. Such fidelity bond and errors and omissions policy shall provide that it may not be canceled
without twenty (20) days' prior written notice to the KRECM. The Subservicer shall (i) furnish to
KRECM copies of all binders and policies or certificates evidencing that such fidelity bond and errors and
omissions insurance policy are each in full force and effect, and (ii) promptly report or cause its insurer(s)
to report in writing to KRECM any termination of or any material changes to the Subservicer's fidelity
bond or errors and omissions insurance policy.
Subservicing Files. KRECM shall on the Effective Date, transfer to the Subservicer electronically each of
the servicing files relating to the Mortgage Loans in accordance with the Transfer Instructions. Upon
receipt, the Subservicer shall acknowledge possession of the Subservicing Files. The contents of each
Subservicing File are and shall be held in trust by the Subservicer for the benefit of the Trust as the owner
thereof; the Subservicer's possession of the contents of each Subservicing File is for the sole purpose of
servicing the related Mortgage Loan; and such possession by the Subservicer shall be in a custodial
capacity only. The Subservicer shall release its custody of the contents of any Subservicing File only in
accordance with written instructions from KRECM, and upon request of KRECM, the Subservicer shall
deliver to KRECM the requested Subservicing File or an electronic copy (in a format reasonably
acceptable to KRECM) of any document contained therein. In addition, KRECM shall also complete the
Subservicer's standard electronic data transfer template for each Mortgage Loan and provide such
electronic data transfer template to Subservicer on the Effective Date to enable the Subservicer to board
the Mortgage Loans to its servicing system.
Section 3.06 is, among other things, to facilitate compliance with the provisions of Regulation AB and
related rules and regulations of the Commission and the applicable PSA requirements related thereto. The
Subservicer acknowledges that interpretations of the requirements of Regulation AB may change over
time, whether due to interpretive guidance provided by the Commission or its staff, consensus among
participants in the asset-backed securities markets, advice of counsel, or otherwise, and agrees to comply
with requests made by KRECM for delivery of information under these provisions on the basis of
evolving interpretations of Regulation AB. In connection with the Trust, the Subservicer shall cooperate
fully with KRECM, the Depositor and the party designated in the applicable PSA to file the
Commission's reports (which may be the Trustee or the Certificate Administrator) to deliver or make
available to them (and any of their respective assignees or designees) any and all statements, reports,
certifications, records and any other information in its possession and (as determined by KRECM, the
Depositor or the party designated in the applicable PSA to file the Commission's reports, as applicable)
necessary to permit KRECM, the Depositor and the party designated in the applicable PSA to file the
Commission's reports to comply with the provisions of Regulation AB and the applicable PSA, together
with such disclosures relating to the Subservicer or the servicing of the Mortgage Loans reasonably
believed by KRECM or the Depositor, as applicable, to be necessary in order to effect such compliance.
On or after the Effective date, but no longer than thirty (30) days after the Effective Date, KRECM shall
provide all notices and documentation required under the related PSA to inform the PSA parties that the
Subservicer has been appointed and shall provide Regulation AB reports, as provided herein. KRECM
shall inform the Subservicer as to whether the Trust has filed the requisite documentation to suspend its
reporting obligations under the Exchange Act.









































March 5 (or if such day is not a Business Day, then the immediately succeeding Business Day, with no
cure period) of each year (commencing in 2013) in which any Trust is subject to the reporting
requirements of the Exchange Act for the preceding fiscal year (and otherwise within a reasonable period
of time upon request), a certification in the form attached hereto as Exhibit F (a "Performance
Certification"), on which KRECM and KRECM's officers, directors, members, managers, employees,
agents and Affiliates (collectively, the "Certification Parties") can reasonably rely. The Subservicer
shall, if it is terminated or resigns pursuant to the terms of this Agreement, provide a Performance
Certification to KRECM with respect to the period of time it was subject to this Agreement. Pursuant to
the provisions in the applicable PSA, each Performance Certification shall include (x) a reasonable
reliance statement by the Subservicer enabling the Certification Parties to rely upon each (i) annual
compliance statement, (ii) annual report on assessment of compliance with the Servicing Criteria and
(iii) registered public accounting firm attestation report and (y) a certification that each such annual
report on assessment of compliance discloses any material instances of noncompliance described to the
Subservicer's registered public accounting firm to enable such accountants to render the attestation.
March 5 (or if such day is not a Business Day, then the immediately succeeding Business Day, with no
cure period) of each year (commencing in 2013), an Officer's Certificate (in Microsoft Word, Microsoft
Excel or in such other reasonably requested format) stating, as to the signer thereof, that (i) a review of
the Subservicer's activities during the preceding annual year or portion thereof and of the Subservicer's
performance under this Agreement, has been made under such officer's supervision and (ii) to the best of
such officer's knowledge, based on such review, the Subservicer has fulfilled all its obligations under this
Agreement, in all material respects throughout such year or portion thereof, or, if there has been a failure
to fulfill any such obligation in any material respect, specifying each such failure known to such officer
and the nature and status thereof. KRECM and the Depositor shall have the right to review the Officer's
Certificate and consult with the Subservicer as to the nature of any failures by the Subservicer.
not a Business Day, then the immediately succeeding Business Day, with no cure period) of each
year (commencing in 2013), a report (in Microsoft Word, Microsoft Excel or in such other
reasonably requested format) on an assessment of compliance with the Relevant Servicing
Criteria for the Trust's preceding fiscal year that contains (A) a statement by the Subservicer of
its responsibility for assessing compliance with the Relevant Servicing Criteria, (B) a statement
that the Subservicer used the Servicing Criteria to assess its compliance with the Relevant
Servicing Criteria, (C) the Subservicer's assessment of compliance with the Relevant Servicing
Criteria as of and for the period ending the end of the fiscal year of the Trust covered by the Form
10-K required to be filed pursuant to the applicable PSA (including, if there has been any material
instance of noncompliance with the Relevant Servicing Criteria, a discussion of each such failure
and the nature and status thereof), and (D) a statement that a registered public accounting firm has
issued an attestation report on the Subservicer's assessment of compliance with the Relevant
Servicing Criteria as of and for such period. Each Regulation AB assessment of compliance and
related attestation contemplated by Section 3.06(h) must be available for general use and may not



registered public accounting firm that is a member of the American Institute of Certified Public
Accountant to, no later than March 5 (or if such day is not a Business Day, then the immediately
succeeding Business Day, with no cure period) of each year (commencing in 2013), furnish a report to
KRECM for the preceding fiscal year to the effect that (i) it has obtained a representation regarding
certain matters from the management of the Subservicer that includes an assessment from the Subservicer
of its compliance with the Relevant Servicing Criteria and (ii) on the basis of an examination conducted
by such firm in accordance with standards for attestation engagements issued or adopted by the Public
Company Accounting Oversight Board, it is expressing an opinion as to whether the Subservicer's
compliance with the Relevant Servicing Criteria was fairly stated in all material respects, or it cannot
express an overall opinion regarding the Subservicer's assessment of compliance with the Relevant
Servicing Criteria. If an overall opinion cannot be expressed, such registered public accounting firm shall
state in such report why it was unable to express such an opinion. Such Regulation AB report must (i) be
available for general use and not contain restricted use language and (ii) if required to be filed with the
Commission under applicable law, include the consent and authorization of such accounting firm for the
filing of such report with the Commission. KRECM and the Depositor shall have the right to review the
report and consult with the Subservicer as to the nature of any material instance of noncompliance by the
Subservicer with the Relevant Servicing Criteria in the fulfillment of any of the Subservicer's obligations
under this Agreement.
Attestation Program for Mortgage Bankers ("USAP"), the Subservicer may elect, in its sole discretion, to
provide a USAP report in lieu of a Regulation AB attestation. The Subservicer shall cause, a registered
public accounting firm and that is a member of the American Institute of Certified Public Accountants to,
no later than March 5 (or if such day is not a Business Day, then the immediately succeeding Business
Day, with no cure period) of each year (commencing in 2013), furnish a certificate to KRECM, to the
effect that such firm has examined the servicing operations of the Subservicer for the previous calendar
year and that, on the basis of such examination conducted substantially in compliance with the USAP,
such firm confirms that the Subservicer complied with the minimum servicing standards identified in
USAP, in all material respects, except for such exceptions or errors in records that, in the opinion of such
firm, the USAP does not require it to report.
by certain regulatory agencies as may have regulatory authority over KRECM, including the OCC,
Federal Deposit Insurance Corporation, the Federal Reserve, and the Securities and Exchange
Commission. The Subservicer further understands and acknowledges that KRECM has informed
Subservicer that pursuant to OCC Bulletin 2001-47 (November 1, 2001), KRECM is required to and will
engage in ongoing oversight of its relationship with Subservicer, including reviewing Subservicer's
financial condition, compliance with privacy and laws and regulations, insurance coverage, and
performance under this Agreement. Accordingly, the Subservicer agrees to permit, participate in, submit
to, and reasonably cooperate with any examination or inquiry of the Subservicer or KRECM by KRECM
or any such regulatory body or agency of KRECM and the Subservicer as KRECM's subservicer under
this Agreement. Subject to the introductory paragraph to this Section 3.07, in connection with any
examination or audit performed pursuant to this Section 3.07(a), Subservicer shall reasonably cooperate
with KRECM to fix, mitigate or otherwise address any problems, findings, or concerns raised in any such
examination or audit.
materially comply with the regulations administered by OFAC and shall provide KRECM with
documentation of such policies, procedures and controls ("OFAC Program"). Upon KRECM's written
request, Subservicer agrees to provide KRECM with periodic updates regarding the functionality and
effectiveness of the OFAC Program, including but not limited to the most current OFAC testing results,
regarding Subservicer's OFAC Program. Subservicer shall not knowingly perform any subservicing in
material violation of the OFAC regulations. Subject to the introductory paragraph to this Section 3.07, in
the event that the Subservicer's OFAC Program are deemed by KRECM to be insufficient or not in
compliance with the minimum standards established by KRECM's AML Compliance Program, the
Subservicer shall promptly adopt any changes, enhancements, or modifications to its OFAC Program that
KRECM deems necessary.
supporting Subservicer activities under this Agreement, regardless of their location, shall be validated
when hired by Subservicer to not be: (a) a Person that is listed in the annex to, or is otherwise subject to
the prohibitions contained in, Executive Order No. 13224 on Terrorist Financing, effective September 24,
2001 (the "Executive Order") or OFAC regulations; and (b) on any list published and maintained by the
government of the United States of America of Persons with whom any U.S. Person is prohibited from
conducting business. Currently, the lists of such Persons or entities can be found on the following web
site: The Specially Designated Nationals and Blocked Persons List of the Office of Foreign Assets
Control - Department of Treasury at http://www.ustreas.gov/offices/enforcement/ofac/sdn/. Subservicer
shall conduct a review at least semi-annually of the lists mentioned above. Subservicer shall report to
KRECM immediately if the name of any Subservicer employee or sub-contracting entity matches the
name of any person listed on any such lists and Subservicer does not otherwise reasonably determine that
such employee or sub-contracting entity is not the same Person listed on any such list and shall take
direction from KRECM with respect to the appropriate steps regarding blocking or freezing of funds and
reporting to OFAC.
critical data files, software, documentation, forms and supplies as well as alternative means of
transmitting and processing information. The business continuity plan will include the annual testing of
such plan, to recover and provide for the recovery of critical services provided under this Agreement
within twenty four (24) hours of Subservicer's declaration of a disaster or business interruption event.
Such testing plans will be formulated by the Subservicer business continuity team annually based on risk,
application or function criticality and coverage, and shall be communicated to KRECM on a requested
basis. Subservicer will provide to KRECM (so that KRECM may provide to any regulatory agencies),
upon written request, a written test summary report of the test results. Subservicer will report to KRECM
within a reasonable period of time after a disaster or business interruption event and related
implementation of Subservicer's recovery plan, where such event may reasonably be expected to
materially impact Subservicer's performance of its obligations under this Agreement.
regulatory agencies, protecting the confidential information and privacy rights of KRECM, its customers
and consumers, including, without limitation, Title V of the federal Gramm-Leach-Bliley Act and the
federal Economic Espionage Act (18 U.S.C. Section 1831 et seq). The Subservicer will not directly or
indirectly reuse or redisclose to any affiliate, or any unaffiliated entity or person, any confidential
information, including but not limited to, any personally identifiable consumer information, provided by
KRECM under this Agreement for any purpose other than to perform the activities contemplated by this
Agreement. The obligations of this Section relative to maintaining the confidentiality and privacy of
KRECM's customers' confidential information shall survive indefinitely the termination of this
Agreement.
retain interest or other investment earnings on the deposit amounts in the Moody's CMBS Accounts (but
only to the extent of net investment earnings and to the extent not required to be paid to the Borrower
under applicable law or the related loan documents). Subject to KeyBank National Association being an
eligible depository institution under the related PSA, KRECM, or its affiliate KeyBank National
Association, shall be entitled to retain interest or other investment earnings on the deposit amounts in the
Non-Moody's CMBS Accounts (but only to the extent of net investment earnings and to the extent not
required to be paid to the Borrower under applicable law or the related loan documents). Notwithstanding
anything to the contrary in this Agreement or otherwise, the Subservicer shall not be entitled to collect or
retain any consideration in connection with the performance of its duties and obligations under this
Agreement other than any interest or other investment earnings on the deposit amounts in the Moody's
CMBS Accounts as described in this Section 4.01.
consolidation does not result in a Change of Control of the Subservicer and no further consents or
documentation shall be required by the Subservicer. Without the prior written consent of the KRECM,
which consent may be withheld or conditioned (but shall not be unreasonably delayed) in KRECM's sole
and absolute discretion, the Subservicer shall not (i) assign this Agreement for any reason or the servicing
under this Agreement or delegate its rights or duties under this Agreement, or any portion thereof, (ii)
transfer all or substantially all of its assets to any Person, or (iii) be merged or consolidated with or into
any Person if the merger or consolidation results in a Change of Control of the Subservicer. For the
purposes of this Section 5.01, "Change of Control" means a merger or consolidation in which Subservicer
is a constituent entity, the result of which is that Berkshire Hathaway Inc. and/or Leucadia National
Corporation ultimately no longer directly or indirectly own greater than 50% of the voting and other
equity interests of Subservicer or no longer has the right to control the day-to-day management, or
appoint the manager, of Subservicer. In connection with any assignment, merger or consolidation to
which KRECM consents, the assignee, the Person into which the Subservicer is merged or consolidated,
or the entity resulting from the merger or consolidation, as applicable, shall be the successor of the
Subservicer under this Agreement and shall be deemed to have assumed all of the liabilities of the
Subservicer under this Agreement. In addition, in connection with any proposed transaction under this
Section 5.01(a) to which KRECM is willing to provide its consent, KRECM may condition its consent
on: (i) KRECM's receipt of written confirmation that such assignee, successor or surviving Person is
rated by at least one rating agency; (ii) KRECM's receipt of an agreement executed by such assignee,
successor or surviving Person pursuant to which, among other things, it makes the applicable
representations and warranties set forth in Section 5.03 and assumes the due and punctual performance
and observance of each covenant and condition to be performed and observed by the Subservicer under
this Agreement from and after the date of such agreement; (iii) KRECM's receipt of all information and
reports (in writing and in form and substance reasonably satisfactory to KRECM, the Trustee and the
Depositor) deemed necessary in order to comply with the reporting obligations under the PSAs; and (iv)
the satisfaction of all other requirements pursuant to the PSAs.
"Subservicer Parties") shall (subject to Section 6.01(a)) be under any liability to KRECM for any action
taken, or for refraining from the taking of any action, in good faith pursuant to this Agreement, or for
errors in judgment; provided, however, that this provision shall not protect the Subservicer or any such
Person against any breach of a representation or warranty made in this Agreement, or against any expense
or liability specifically required to be borne thereby without right of reimbursement pursuant to the terms
of this Agreement or imposed on the Subservicer pursuant to Section 2.01 for a breach of the Accepted
Subservicing Practices, or against any liability which would otherwise be imposed by Section 5.02(c),
including by reason of willful misfeasance, bad faith, fraud, negligence or willful violation of applicable
law in the performance of its obligations or duties under this Agreement or by reason of the negligent
disregard of its obligations or duties under this Agreement. The Subservicer and any director, officer,
agent or employee of the Subservicer may rely in good faith on any document of any kind that, prima
facie, is properly executed and submitted by any appropriate Person respecting any matters arising under
this Agreement.
willful violation of applicable law in the performance of any of its obligations or duties under this
Agreement, or (D) breach of a representation or warranty made by KRECM in this Agreement, or (iii) by
reason of the taking, or the refraining from the taking, of any action, by the Subservicer, pursuant to the
express written direction of KRECM (knowledge or approval by KRECM not being "direction" for this
purpose). Subservicer shall not have any direct rights of indemnification that may be satisfied out of
assets of the related Trust Fund. KRECM agrees to use reasonable efforts to pursue the Trust for
indemnification against any loss, liability or expense incurred by the Subservicer in connection with the
performance of the Subservicer's duties and obligations under this Agreement as to which the PSA grants
to KRECM's agents a right to indemnification from the Trust Fund.
effort by KRECM to pursue the Trust for indemnification at any time, including by providing copies or
originals from any applicable Subservicing Files and making employees and agents with knowledge
related to the applicable matter available to KRECM, including by providing affidavits and testimony in
connection with any litigation or similar proceeding. To the extent allowed by the related PSA, KRECM
agrees to use reasonable efforts to pursue the Trust for any indemnification costs due to the Subservicer.
KRECM shall cooperate with the Subservicer and its agents in connection with any effort by Subservicer
to pursue the Trust for indemnification (if and only to the extent permitted to pursue the Trust pursuant to
the related PSA) at any time. KRECM shall also assist Subservicer with respect to any indemnification at
any time, including by providing copies or originals from any applicable KRECM Files and making
employees and agents with knowledge related to the applicable matter available to Subservicer, including
by providing affidavits and testimony in connection with any litigation or similar proceeding.
agents or employees of KRECM (the "KRECM Parties") from and against any loss, damage, liability,
penalty, fine, forfeiture, cost or expense (including reasonable legal fees and expenses) incurred in
connection with any claim or legal action incurred by reason of the Subservicer's (i) breach of any
representation or warranty made by it in this Agreement, (ii) breach of its obligations under Section 3.06,
(iii) certification required under Section 3.06 containing any material inaccuracy, (iv) willful misconduct,
misfeasance, bad faith, or negligence in the performance of any of its obligations or duties under this
Agreement, (v) material breach of any of its covenants, obligations or duties under this Agreement, (vi)
willful violation of applicable law in the performance of any of its obligations or duties under this
Agreement, or (vii) breach of Accepted Subservicing Practices; provided that the Subservicer shall not be
required to indemnify or hold harmless KRECM for taking any action or refraining from taking any
action at the express direction of KRECM or with the specific consent of KRECM.
Party, as applicable, seeking indemnification under this Agreement (each an "Indemnified Party"), of
notice of the commencement of any action, such Indemnified Party will notify KRECM or the
Subservicer, as applicable (the "Indemnifying Party"), in writing of the commencement thereof; but the
omission to so notify the Indemnifying Party will not relieve the Indemnifying Party from any liability
that it may have to any Indemnified Party under this Section 5.02, except to the extent that such omission
has prejudiced the Indemnifying Party in any material respect, or from any other liability the
Indemnifying Party may otherwise have under this Agreement. In case any such action is brought
against any Indemnified Party and it notifies the Indemnifying Party of the commencement thereof, the
Indemnifying Party will be entitled to participate therein, and to the extent that it may elect by written
notice delivered to the Indemnified Party promptly after receiving the aforesaid notice from such
Indemnified Party, to assume the defense thereof, with counsel selected by the Indemnifying Party and
reasonably satisfactory to such Indemnified Party; provided, however, if the defendants in any such action
include both the Indemnified Party and the Indemnifying Party, and the Indemnified Party shall have
reasonably concluded that there may be legal defenses available to it or them or other Indemnified Parties
assume the defense of such action and approval of counsel by the Indemnified Party (which approval may
not be unreasonably withheld, conditioned or delayed), the Indemnifying Party will not be liable for any
legal or other expenses subsequently incurred by such Indemnified Party in connection with the defense
thereof, unless (i) the Indemnified Party shall have employed separate counsel reasonably satisfactory to
the Indemnifying Party in connection with the assertion of legal defenses in accordance with the proviso
to the preceding sentence (it being understood, however, that the Indemnifying Party shall not be liable
for the expenses of more than one separate counsel (in addition to local counsel) representing all the
Indemnified Parties under this Section 5.02 who are parties to such action), (ii) the Indemnifying Party
shall not have employed counsel reasonably satisfactory to the Indemnified Party to represent the
Indemnified Party within a reasonable time after notice of commencement of the action, or (iii) the
Indemnifying Party has authorized the employment of counsel for the Indemnified Party reasonably
acceptable to the Indemnifying Party and at the expense of the Indemnifying Party; and except that, if
clause (i) or (iii) is applicable, such liability shall only be in respect of the counsel referred to in such
clause (i) or (iii).
its written consent (which consent may not be unreasonably withheld, conditioned or delayed) but, if
settled with such consent or if there is a final judgment for the plaintiff, the Indemnifying Party shall
indemnify the Indemnified Party from and against any loss or liability by reason of such settlement or
judgment to the extent required by this Section 5.02. Notwithstanding the foregoing sentence, if at any
time an Indemnified Party shall have requested the Indemnifying Party, in writing, to reimburse the
Indemnified Party for reasonable fees and expenses of counsel incurred in good faith or any other
reasonable expenses incurred in good faith for which the Indemnifying Party is obligated hereunder, the
Indemnifying Party shall be liable for any settlement of any proceeding effected without its written
consent if (i) such settlement is entered into more than sixty (60) days after receipt by the Indemnifying
Party of the aforesaid request, (ii) the Indemnifying Party shall not have reimbursed the Indemnified Party
in accordance with such request prior to the date of such settlement, and (iii) such settlement or
compromise or consent does not include an express statement as to, or an express admission of, fault,
culpability, negligence or a failure to act by or on behalf of the Indemnifying Party or an agent thereof. If
the Indemnifying Party assumes the defense of any proceeding, it shall be entitled to settle such
proceeding (x) with the consent of the Indemnified Party or (y) if such settlement provides for an
unconditional release of the Indemnified Party in connection with all matters relating to the proceeding
that have been asserted against the Indemnified Party in such proceeding by the other parties to such
settlement, which release does not include a statement as to or an admission of fault, culpability or a
failure to act by or on behalf of any Indemnified Party, without the consent of the Indemnified Party.
mitigate and minimize any actual losses, liabilities, claims, judgments, damages, deficiencies, penalties,
fines, interest, costs, and expenses of any sort, including reasonable attorneys' fees and expenses that are
not otherwise reimbursed under the terms and provisions of any PSA (collectively, "Losses"), incurred by
reason of or in any way associated with any investigation or defense of any Claim, including Losses
resulting or arising from, or caused by, any action or omission by any prior servicer under any PSA prior
to the Effective Date. The Subservicer to the extent possible, shall use efforts consistent with Accepted
Subservicing Practices to pursue any counterclaim, offset, insurance settlement, or other claims that could
result in a recovery from a Borrower or other third party or the receipt of insurance proceeds that would
performance under and compliance with the terms of this Agreement will not (A) violate the
Subservicer's organizational documents, (B) constitute a default (or an event which, with notice
or lapse of time, or both, would constitute a default) under, or result in a breach of, any material
contract, agreement or other instrument to which the Subservicer is a party or by which it is
bound or which may be applicable to it or any of its assets, or (C) result in the violation of any
law, rule, regulation, order, judgment or decree binding on the Subservicer, which, in the case of
(B) or (C), would likely affect materially and adversely (x) the financial condition or operation of
the Subservicer or its properties taken as a whole, (y) the ability of the Subservicer to perform its
obligations under this Agreement, or (z) the ability of the related Trust to realize on the Mortgage
Loans;
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 Subservicer Event of Default. On or
after the receipt by the Subservicer of such written notice of termination from KRECM (or the Depositor,
if applicable), all authority and power of the Subservicer in this Agreement, whether with respect to the
Mortgage Loans or otherwise, shall pass to and be vested in KRECM, and the Subservicer agrees to
cooperate with KRECM in effecting the termination of the Subservicer's responsibilities and rights under
this Agreement, including the remittance of funds and the transfers of the Subservicing Files as set forth
in Section 6.02.
been assumed by the Trustee, and in connection therewith the Trustee has not requested the termination of
this Agreement as permissible in the applicable PSA, the Trustee may, without act or deed on the part of
the Trustee, succeed to all of the rights and, except to the extent they arose prior to the date of such
succession, obligations of KRECM under this Agreement as provided in applicable PSA, and the
Subservicer shall be bound to the Trustee under all of the terms, covenants and conditions of this
Agreement with the same force and effect as if the Trustee was originally KRECM under this Agreement;
and the Subservicer does hereby attorn to the Trustee, as KRECM under this Agreement, said attornment
to be effective and self-operative without the execution of any further instruments on the part of any of
the parties hereto immediately upon the Trustee succeeding to the interest of KRECM under this
Agreement. The Subservicer agrees, however, upon written demand by the Trustee to promptly execute
and deliver to the Trustee an instrument in confirmation of the foregoing provisions, satisfactory to the
Trustee, in which the Subservicer shall acknowledge such attornment and shall confirm to the Trustee its
agreement to the terms and conditions of this Agreement. References to the Trustee under this Section
6.02 shall include any designee of the Trustee or any successor master servicer under the applicable PSA.
five (5) Business Days after the Subservicer's receipt of the notice of termination, remit all funds in the
related Accounts to KRECM or such other Person designated by KRECM (provided, however, that
nothing herein shall constitute or be deemed to constitute a waiver of any rights of offset or other
remedies, claims, or defenses KRECM may have to withhold any payments to be made to the Subservicer
hereunder); (ii) promptly (and in no event later than ten (10) Business Days after the Subservicer's receipt
of the notice of termination) deliver all related Subservicing Files to KRECM or its designee; and (iii)
fully cooperate with KRECM to effectuate an orderly transition of the servicing of the related Mortgage
Loans. All rights of the Subservicer and all liabilities of the Subservicer, which in any such case accrued
under the terms of this Agreement on or before the date of such termination, shall continue in full force
and effect until payment or other satisfaction in accordance with this Agreement, and nothing herein shall
constitute or be deemed to constitute a waiver of any rights of offset or other remedies, claims, or
defenses KRECM may have to withhold any payments to be made to the Subservicer hereunder.
guarantor, Freddie Mac may have the right under the related PSA to (i) direct KRECM to terminate this
Agreement with respect to the applicable Mortgage Loans if Freddie Mac determines (in accordance with
the provisions of the Guide) that the Subservicer should not subservice the applicable Mortgage Loans,
(ii) direct KRECM to terminate this Agreement if a Ratings Trigger Event occurs with respect to the
Subservicer, and (iii) direct KRECM to terminate this Agreement if the Subservicer becomes an Affiliate
of the related Trustee. Any termination in connection with clause (i), (ii) or (iii) shall be at the expense of
Freddie Mac. If the Subservicer is terminated pursuant to clause (i), (ii) or (iii), then for sixty (60) days
after such termination, the Subservicer shall have the right to sell its subservicing to either KRECM or
another subservicer acceptable to Freddie Mac.


Subservicer (to the extent practicable under the circumstances and to the extent KRECM is legally
permitted to provide such notice), Subservicer agrees to allow a Qualified Auditor or KRECM to conduct
an audit of Subservicer's facilities and books related to Subservicer's OFAC Program and/or AML/BSA
Services, and limited to KRECM's business and the services provided by Subservicer under this
Agreement. Any such audit, by a Qualified Auditor, shall be conducted in a manner that does not
compromise the privacy or security of data relating to other Subservicer clients or systems not related to
the Servicing provided to KRECM by Subservicer and with a minimum disruption to Subservicer's
operations. All Qualified Auditors shall comply with all reasonable confidentiality, non-solicitation and
security requirements that Subservicer may reasonably impose, but any such Qualified Auditor may
nonetheless request and examine (but not copy) any books or records which KRECM itself could request
and/or examine under this Agreement. Before scheduling such audit, KRECM agrees to first utilize any
third-party assessments, reports and materials, such as the Subservicer's most current annual SSAE 16
engagement report, which will be made available to KRECM annually or upon written request by
KRECM; however, KRECM's review of these materials will not take the place of its audit rights under
this Section.
binding upon and inure to the benefit of the respective successors and assigns of the parties hereto. The
parties hereby acknowledge and agree that the Trustee, for the benefit of the Certificateholders, shall be a
third party beneficiary under this Agreement; but (except to the extent that the Trustee or its designee or a
successor master servicer assumes the obligations of KRECM under this Agreement pursuant to Section
6.02 of this Agreement) none of the Trust Fund, the Trustee, any successor master servicer, the Special
Servicer or any Certificateholder shall have any duties under or any liabilities arising from this
Agreement. Nothing contained in this Agreement shall be deemed or construed to create a partnership or
joint venture between the parties hereto and the services of the Subservicer shall be rendered as an
independent contractor for KRECM. For the purpose of facilitating the execution of this Agreement as
provided in this Agreement 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
prior written consent (which shall not be unreasonably withheld or delayed), any information pertaining
to the Mortgage Loans, the Mortgaged Properties or the Borrowers except to the extent that the
Subservicer provides prior written notice to KRECM and (a) it is appropriate for the Subservicer to do so
(i) in working with its legal counsel, auditors, other advisors or taxing authorities or other governmental
agencies, (ii) in accordance with Accepted Subservicing Practices, or (iii) when required by any law,
regulation, ordinance, court order or subpoena, or (b) the Subservicer is disseminating general statistical
information relating to the mortgage loans being serviced by the Subservicer (including the Mortgage
Loans) so long as the Subservicer does not identify the owner of the Mortgage Loans or the Borrowers.
shall not limit or otherwise affect the meaning thereof. This Agreement shall be construed without regard
to any presumption or rule requiring construction against the party causing such instrument or any portion
thereof to be drafted. Any pronoun used in this Agreement shall be deemed to cover all genders. The
terms "include", "including" and similar terms shall be construed as if followed by the phrase "without
being limited to." The term "or" has, except where otherwise indicated, the inclusive meaning represented
by the phrase "and/or." The words "hereof," "herein," "hereby," "hereunder," and similar terms in this
Agreement refer to this Agreement as a whole and not to any particular provision or section of this
Agreement. Words importing the singular number shall mean and include the plural number, and vice
versa.
be provided by, and all such communications, responses and requests will be made by, KRECM in
accordance with the procedures required by the applicable PSA. To the extent that KRECM is required to
provide any information to, or communicate with, a Rating Agency or a NRSRO in accordance with its
obligations under the applicable PSA and such information or communication is regarding the Mortgage
Loans or the subservicing by the Subservicer under this Agreement and is in the possession of (or can be
reasonably obtained by) the Subservicer, the Subservicer shall provide the information to KRECM
necessary for KRECM to fulfill such obligations. The Subservicer shall have no liability with regard to
KRECM's failure to provide to the Depositor or any other party (including any Rating Agency) any
information that the Subservicer timely delivered to KRECM in accordance with this Agreement.
Subservicer hereby expressly agrees to indemnify and hold harmless KRECM and its respective officers,
directors, shareholders, members, managers, employees, agents, Affiliates and controlling persons, and
the Trust Fund (each, an "Indemnified Party"), from and against any and all losses, liabilities, damages,
claims, judgments, costs, fees, penalties, fines, forfeitures or other expenses (including reasonable legal
fees and expenses), joint or several, to which any such Indemnified Party may become subject, under the
Act, the Exchange Act or otherwise, pursuant to a third-party claim, insofar as such losses, liabilities,
damages, claims, judgments, costs, fees, penalties, fines, forfeitures or other expenses (including
reasonable legal fees and expenses) arise out of or are based upon the Subservicer's breach of this Section
7.10, including, without limitation, to the extent caused by any breach referred to in this Section 7.10(b)
by the Subservicer, a determination by a Rating Agency that it cannot reasonably rely on representations
made by the Depositor or any Affiliate thereof pursuant to Exchange Act Rule 17g-5(a)(3), and will
reimburse such Indemnified Party for any legal or other expenses reasonably incurred by such
Indemnified Party in connection with investigating or defending any such action or claim, as such
expenses are incurred.
communications, or providing information, between the Subservicer and a Rating Agency or NRSRO
with regard to (i) such Rating Agency's or NRSRO's review of the ratings it assigns to the Subservicer,
(ii) such Rating Agency's or NRSRO's approval of the Subservicer as a commercial mortgage master,
special or primary servicer or (iii) such Rating Agency's or NRSRO's evaluation of the Subservicer's
servicing operations in general; provided, however, that the Subservicer shall not provide any information
relating to the Certificates or the Mortgage Loans to a Rating Agency or a NRSRO in connection with
such review and evaluation by such Rating Agency or NRSRO unless (x) borrower, property or deal
specific identifiers are redacted; or (y) KRECM confirms to the Subservicer in writing that such
information has already been provided to the Depositor and has been uploaded on to the 17g-5
Information Provider's Website.