Defeasance Account
Agreement
THIS DEFEASANCE
ACCOUNT AGREEMENT (this “ Agreement ”) is entered
into as of November 18, 2005 by and among CASA MUNRAS HOTEL
PARTNERS, L.P. , a California limited partnership (“
Pledgor
”), WELLS FARGO BANK, N.A., as Securities Intermediary
and Custodian (“ Intermediary ”),
U.S. BANK NATIONAL ASSOCIATION, successor-in-interest to
State Street Bank and Trust Company, as Trustee under the Pooling
and Servicing Agreement, dated as of October 1, 1998 (the “
Pooling and Servicing
Agreement ”), for the Registered Holders of Credit
Suisse First Boston Mortgage Securities Corp., Commercial Mortgage
Pass-Through Certificates, Series 1998-PS2 and as secured
party (together with its successors and assigns, “
Pledgee
”), and GMAC COMMERCIAL MORTGAGE CORPORATION ,
successor-in-interest to AMRESCO Services, L.P., as servicer, as
servicer on behalf of said trustee under the Pooling and Servicing
Agreement (“ Servicer ”) upon the
following terms and conditions:
A. On or
about June 12, 1998, AMRESCO Capital, L.P., a Delaware limited
partnership (“ Original Lender ”)
advanced to Pledgor the original principal amount of $7,000,000.00
(the “ Loan ”). The Loan is
evidenced by that certain Fixed Rate Note [With Defeasance and
Lockbox Provisions] dated as of June 12, 1998 from Pledgor to
Original Lender (the “ Note ”). The Note and
other documents evidencing the Loan shall be referred to herein as
“ Loan
Documents ”).
B. Pledgor,
Pledgee and Intermediary have entered into that certain Defeasance
Pledge and Security Agreement of even date herewith (as from time
to time amended, supplemented or modified, the “
Security
Agreement ”) with respect to the securities listed
in Exhibit A attached hereto (the “
Securities
”) and other assets that, together with the Securities,
constitute the Pledged Collateral (as defined in the Security
Agreement).
C. Pledgor
desires that Intermediary hold the Pledged Collateral and perform
certain services as a “Securities Intermediary” and
“Custodian” (both as defined in the Security
Agreement).
D. Intermediary
is willing to hold the Pledged Collateral and to perform such
services, subject to the terms and conditions of this Agreement and
the Security Agreement.
E. The
parties intend that immediately upon the execution of this
Agreement, Pledgor, Pledgee and NEWCSFBMSC 98-PS2, LLC, a Delaware
liability company (“ Successor Borrower ”)
will enter into a Defeasance Assignment, Assumption and Release
Agreement pursuant to which, among other things, Pledgor will
transfer its rights and obligations under the Note and the Security
Agreement, as well as the Pledged Collateral to Successor
Borrower.
NOW, THEREFORE,
for valuable consideration, the receipt and sufficiency of which is
hereby acknowledged, the parties hereto agree as
follows:
Each capitalized
term used herein and not defined herein shall have the meaning
assigned to such term in the Security Agreement. In addition, the
following terms shall have the following meanings when used
herein.
“
Accountant’s Letter ” means that certain math
verification report of even date from Causey, Demgen & Moore,
Inc. regarding the defeasance of the Loan, including all schedules
thereto, a copy of which is attached hereto as
Exhibit B .
“
Business Day ” means any day other than (i) a
Saturday or a Sunday and (ii) a day on which federally insured
depository institutions in the State or the state in which
Intermediary maintains the Pledged Collateral Account are
authorized or obligated by law, regulation, governmental decree or
executive order to be closed.
“
Certificates ” means Credit Suisse First Boston
Mortgage Securities Corp., Commercial Mortgage Pass-Through
Certificates, Series 1998-PS2.
“
Collection Account ” means the account maintained and
designated by Servicer for deposit of payments due under the Note,
and shall be the account described in Exhibit F
attached hereto.
“
Default Permitted Investment ” means the institutional
shares of the Federated Prime Obligations Fund #10 CUSIP 60934N203,
or any money market fund, but only for so long as such fund is
rated not less than “AAAm” or “AAAm-G” by
S&P and the equivalent by each other Rating Agency or is
otherwise acceptable to each Rating Agency, as confirmed in writing
that such account would not, in and of itself, result in a
downgrade, qualification or withdrawal of the then current ratings
assigned to the Certificates.
“
Eligible Account ” means (i) a segregated account
maintained with an Eligible Institution, or (ii) an account
otherwise acceptable to each Rating Agency, as confirmed in writing
that such account would not, in and of itself, result in a
downgrade, qualification or withdrawal of the then current ratings
assigned to the Certificates.
“
Eligible Institution ” means (i) a federal or
state chartered depository institution or trust company whose
commercial paper, short-term debt obligations or other short-term
deposits are rated at least “A-1” by S&P, at least
P1 by Moody’s and at least F-1+ by Fitch if the deposits in
the Pledged Collateral Account are to be held for thirty
(30) days or less, or (ii) a federal or state-chartered
depository institution or trust company whose long-term unsecured
debt obligations are rated at least “A-” by S&P, at
least Aa3 by Moody’s and at least AA by Fitch if the deposits
in the Pledged Collateral Account are to be held for more than
thirty (30) days, or (iii) the trust department of a
federal or state chartered depository institution or trust company
acting in its fiduciary capacity which institution or trust company
is subject to regulations regarding fiduciary funds on deposit
substantially similar to 12 C.F.R.§ 9.10(b), or (iv) an
institution otherwise acceptable to each Rating Agency, as
confirmed in writing that the holding by such institution of the
Pledged Collateral Account would not, in and of itself, result in a
downgrade, qualification or withdrawal of the then current ratings
assigned to the Certificates.
“
Fitch ” means Fitch, Inc.
“
Moody’s ” means Moody’s Investors Service,
Inc.
“
Permitted Investment ” shall have the meaning set
forth in Exhibit C hereto.
“
Rating Agency ” means each of S&P, Moody’s
and/or Fitch which rates any or all of the Certificates.
“
S&P ” means Standard & Poor’s Ratings
Services, a division of The McGraw Hill Companies, Inc.
“
Scheduled Payment Date ” means the first (1
st ) day of each calendar month, or if such a day
is not a Business Day, the next succeeding Business Day.
“
Servicer ” means any duly authorized loan servicer
acting as agent of Pledgee. As of the date hereof, Servicer shall
mean GMAC Commercial Mortgage Corporation, successor-in-interest to
AMRESCO Services, L.P., together with its successors and assigns
under the Pooling and Servicing Agreement.
Section 2. Establishment and Custody of Pledged
Collateral Account .
Intermediary has
established Account No. 33655700 titled “NEWCSFBMSC
98-PS2 LLC (Casa Munras Hotel Partners) Defeasance” at
Intermediary, which is, or is associated with, a Securities Account
maintained by Intermediary in the name of Pledgee (together, the
“ Pledged
Collateral Account ”). Pledgor hereby authorizes,
appoints and directs Intermediary to act as Securities Intermediary
with respect to the Pledged Collateral and as Custodian of the
Pledged Collateral Account, subject to the Security Agreement, and
to hold the Pledged Collateral Account subject to the sole dominion
and control (as defined in Section 8-106 of the Code) of
Pledgee. Intermediary agrees to at all times maintain the Pledged
Collateral Account and all of the Pledged Collateral at its office
currently located in Minneapolis, Minnesota, and to serve as
Securities Intermediary with respect to the Securities and the
other Pledged Collateral and as Custodian with respect to the
Pledged Collateral Account, in accordance with this Agreement and
the Security Agreement, provided however, in the event the
Intermediary intends to move the Pledged Collateral Account to
another location, it shall provide the Pledgee with thirty
(30) days prior written notice and the Intermediary shall
cooperate with Pledgee in ensuring the Pledgee’s perfected
security interest in the Pledged Collateral Account as required
under the Code, including without limitation, the execution of any
and all documents required to continue the Pledgee’s
perfected security interest in the Pledged Collateral Account.
Notwithstanding anything to the contrary contained herein, Pledgor
and Intermediary agree that New York is the Intermediary’s
jurisdiction for purposes of the Code.
Section 3. Title to Pledged Collateral
.
Title to the
Pledged Collateral shall be held in accordance with the Security
Agreement and the Federal Book-Entry Regulations.
Section 4. Intermediary’s Duties Regarding Pledged
Collateral .
(a)
Administration . Intermediary shall have no responsibility
for supervision or management of the Pledged Collateral except as
provided in this Agreement, the Security Agreement or as otherwise
provided by applicable law. The Pledged Collateral Account shall at
all times be maintained as a segregated Eligible Account. Each item
of property at any time credited to the Pledged Collateral Account
shall be treated by Intermediary as a Financial Asset. Proceeds of
the Pledged Collateral, and interest and earnings thereon, shall be
credited to and held in the Pledged Collateral Account, and shall
be re-invested only in accordance with this Agreement.
Intermediary’s responsibility with regard to the sale,
purchase, exchange or other matters relating to any assets at any
time in the Pledged Collateral Account shall be limited to
following, immediately upon receipt thereof, all written orders,
including Entitlement Orders (as defined in the Security
Agreement), of Servicer (acting on behalf of Pledgee), without the
need for consent by Pledgor or any other Person. Upon the
assumption of this Agreement by Successor Borrower pursuant to the
Assignment and Assumption Agreement, the Pledged Collateral Account
shall be assigned the federal tax identification number of
Successor Borrower which number is 42-1590559, and all taxable
income earned or gain realized with respect to the Pledged
Collateral shall be taxable as income or gain, as applicable, of
Successor Borrower.
(b)
Eligible Institution . Intermediary shall at all times
(subject to permitted transfers as provided in the Security
Agreement) serve as both Securities Intermediary and Custodian
hereunder. Intermediary is and shall at all times (subject to
permitted transfers as provided in the Security Agreement) continue
to be, and the Pledged Collateral Account shall at all times be
maintained with, an Eligible Institution. Upon any downgrade,
withdrawal, qualification or suspension by any Rating Agency of the
rating of Intermediary (or any successor to Intermediary permitted
or required under this Agreement) or any other circumstances
resulting in a failure to qualify as an Eligible Institution,
(i) the Securities Account, the Pledged Collateral Account and
all of the Pledged Collateral, and all rights and obligations of
Intermediary (or such successor to Intermediary) under this
Agreement, shall promptly, and in any case within thirty
(30) calendar days, be moved to an Eligible Institution that
is a Securities Intermediary and maintains a Participant’s
Securities Account with the Federal Reserve Bank; (ii) such
Eligible Institution shall assume in writing all obligations of
Intermediary (or such successor Intermediary) under this Agreement;
and (iii) Intermediary shall promptly reimburse Pledgee for
all expenses incurred in connection with the appointment of such
Eligible Institution as successor Intermediary including all future
fees of such successor Intermediary in connection with the Pledged
Collateral Account and the services to be provided by such
successor Intermediary (or such successor Intermediary).
(c)
Reinvestment of Proceeds; Permitted Investments . Provided
no Event of Default has occurred, upon the written request of
Successor Borrower which request may be made once per month,
Servicer shall direct Intermediary to invest and reinvest any funds
in the Pledged Collateral Account from time to time in Permitted
Investments as instructed by Successor Borrower; provided ,
however , that if Successor Borrower fails to so instruct
Servicer, or if an Event of Default shall have occurred, Servicer
may direct Intermediary to invest and reinvest such funds in such
Permitted Investments as Servicer shall determine in
Servicer’s discretion; provided, further, to the extent any
funds in the Pledged Collateral Account will be
necessary to
make payments to the Collection Account more than three
(3) months after the related Securities were converted to
cash, such funds shall be invested only in obligations of, or
obligations guaranteed as to principal and interest by, the United
States or an agency or instrumentality thereof, backed by the full
faith and credit of the United States. Intermediary shall have no
obligation to invest funds in the Pledged Collateral Account absent
its receipt of written instructions from Servicer in accordance
herewith. Pledgor hereby instructs Servicer, and Servicer hereby
instructs Intermediary, to invest funds in the Pledged Collateral
Account in the Default Permitted Investment unless and until
different instructions are received in accordance with this
subsection (c). To the extent that any funds in the Pledged
Collateral Account are to be paid out pursuant to
Section 4(e), Permitted Investments shall be selected that
will mature, unless payable on demand, no later than one
(1) Business Day before the date such funds are required to be
paid out pursuant to Section 4(e) If a requested
investment is determined to be, in the reasonable judgment of
Servicer, an investment for which confirmation from one or more of
the Rating Agencies is required, Servicer shall, within three
(3) Business Days of receipt of the required confirmation from
the Rating Agencies, provide instructions to Intermediary as
provided for herein; provided that Servicer shall not be required
to request confirmation from any Rating Agency without a written
instruction to do so, and reasonable assurance of reimbursement for
its costs associated therewith from Pledgor. Pledgor shall be
responsible for paying all costs associated with obtaining such
Rating Agency confirmation, including, but not limited to, Servicer
fees and Rating Agency fees. With respect to all investments made
on instructions of Successor Borrower, Successor Borrower shall be
liable for (i) ordinary and customary transaction fees
associated with the investment of funds in the Pledged Collateral
Account except as provided in Section 9 and
(ii) losses that result from such investment, and shall pay
such fees or reimburse Pledgee for such investment losses within
five (5) days after receipt of written request or invoice
therefor Intermediary shall have three (3) Business Days
following receipt of such instructions to effectuate such
investment direction. Intermediary may conclusively rely upon the
investment instructions received from Servicer. All Permitted
Investments shall be under the sole dominion and control of
Pledgee. No Permitted Investment shall be made unless Pledgee holds
a first priority perfected lien in such Permitted Investment and
all filings and other actions necessary to ensure the validity,
perfection, and priority of such lien have been taken. Servicer
shall only be required to follow the written investment
instructions that were most recently received by Servicer, and
Successor Borrower shall be bound by such last received investment
instructions. Any request from Successor Borrower containing
investment instructions shall contain an officer’s
certificate from Successor Borrower (which may be conclusively
relied upon by Servicer, Intermediary and their agents) that any
such investments constitute Permitted Investments. Intermediary
hereby certifies that the Default Permitted Investment constitutes
a Permitted Investment. All such Permitted Investments shall be
held to maturity unless payable on demand in which case
Intermediary shall demand payment as necessary to meet the payment
requirements of Section 4(e) All earnings and
payments received with respect to Permitted Investments shall be
credited to and held in the Pledged Collateral Account in
accordance with this Agreement. In all actions taken, and all
instructions given by Servicer pursuant to this
Section 4(c) , Servicer shall be deemed to act
on behalf of no person other than Pledgee.
(d)
Collection of Interest, Principal and Earnings .
Intermediary shall collect all interest and principal when due from
any Obligor with respect to the Pledged Collateral, and shall
collect all amounts due with respect to Permitted Investments, and
shall
deposit all
amounts so collected to the Pledged Collateral Account, but shall
be under no responsibility or duty to undertake collection efforts
or to instigate or participate in any legal proceedings or to
retain counsel in an effort to accomplish such collection. All
revenues received in any such collection action shall be deposited
to the Pledged Collateral Account and disposed of as set forth
herein.
(e)
Distributions . Pledgee, acting by Servicer as herein
provided, shall have the sole right to control distributions from
the Pledged Collateral Account. Except as otherwise specifically
provided in written instructions given by Servicer to Intermediary
in accordance with Section 5 below, Intermediary
shall, to the extent of funds on deposit in the Pledged Collateral
Account, make payments to the Collection Account by wire or
internal transfer in an amount equal to $52,643.44 beginning on
December 1, 2005 and continuing thereafter on each Scheduled
Payment Date until July 1, 2008 on which date Intermediary
shall pay by wire or internal transfer an amount equal to
$5,662,474.51, all such amounts as provided for in the Note and
shown in the Accountant’s Letter. Pledgor (and following the
contemplated assignment of this Agreement by Pledgor, Successor
Borrower) hereby directs Intermediary to make payments in
accordance with the foregoing instructions. Notwithstanding any
contrary provisions in the Note, any amounts remaining in the
Pledged Collateral Account after payments are made to
the
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