SPECIAL SERVICING AGREEMENT
THIS SPECIAL SERVICING AGREEMENT (this "Agreement"), entered into as
of the 1st day of July, 1998, by and between XXXXXX CAPITAL, A DIVISION OF
XXXXXX BROTHERS HOLDINGS INC., a Delaware corporation ("Xxxxxx Capital"), and
OCWEN FEDERAL BANK FSB, a federal savings bank (the "Special Servicer"):
RECITALS
WHEREAS, Xxxxxx Capital has conveyed certain Mortgage Loans
identified on Schedule I hereto (the "Serviced Mortgage Loans") to Structured
Asset Securities Corporation ("SASCO"), which in turn has conveyed the
Serviced Mortgage Loans to The Chase Manhattan Bank, as trustee (the
"Trustee") under a trust agreement dated as of July 1, 1998 (the "Trust
Agreement"), among the Trustee, Norwest Bank Minnesota, National Association,
as master servicer ("Norwest," and, together with any successor Master
Servicer appointed pursuant to the provisions of the Trust Agreement, the
"Master Servicer") and SASCO.
WHEREAS, multiple classes of Certificates, including the Class X-1,
Class X-2, Class X-3 and Class X-4 Certificates (collectively, the "Class X
Certificates"), will be issued on the Closing Date pursuant to the Trust
Agreement, and Xxxxxx Brothers Inc. or a nominee thereof (together with any
successor in interest thereto and any permitted assignee or transferee
thereof, the "Directing Holder" with respect to each related Mortgage Pool) is
expected to be the initial registered Holder of each of the Class X
Certificates.
WHEREAS, Xxxxxx Capital desires that the Special Servicer perform the
services with respect to the Serviced Mortgage Loans as provided in this
Agreement (including those provisions that are incorporated by reference
herein), and the Special Servicer has agreed to do so, subject to the
conditions set forth herein.
WHEREAS, Norwest and any successor Master Servicer shall be
obligated, among other things, to supervise the servicing of the Serviced
Mortgage Loans on behalf of the Trustee, and shall have the right, under
certain circumstances, to terminate the rights and obligations of the Special
Servicer under this Special Servicing Agreement.
NOW, THEREFORE, in consideration of the mutual agreements hereinafter
set forth and for other good and valuable consideration, the receipt and
adequacy of which are hereby acknowledged, Xxxxxx Capital and the Special
Servicer hereby agree as follows:
AGREEMENT
1. Definitions. Capitalized terms used and not defined in this
Agreement, including Exhibit A hereto and any provisions of the Servicing
Agreement dated as of December 1, 1997, between Xxxxxx Capital and the Special
Servicer (the "Servicing Agreement") incorporated by reference herein, shall
have the meanings ascribed to such terms in the Trust Agreement.
2. Special Servicing. The Special Servicer agrees, with respect to
the Serviced Mortgage Loans (as to the related Mortgage Pool), to perform and
observe the duties, responsibilities and obligations that are to be performed
and observed under the provisions of the Servicing Agreement, except as
otherwise provided herein and on Exhibit A hereto, and that the provisions of
the Servicing Agreement, as so modified, are and shall be a part of this
Agreement to the same extent as if set forth herein in full.
3. Master Servicing; Termination of Special Servicer. The Special
Servicer, including any successor special servicer hereunder, shall be subject
to the supervision of the Master Servicer, which Master Servicer shall be
obligated to ensure that the Special Servicer services the Serviced Mortgage
Loans (as to the related Mortgage Pool) in accordance with the provisions of
this Agreement. The Master Servicer, acting on behalf of the Trustee pursuant
to the Trust Agreement, shall have the same rights as the "Owner" (as defined
in the Servicing Agreement) to enforce the obligations of the Special Servicer
under the Servicing Agreement. The Master Servicer shall be entitled to
terminate the rights and obligations of the Special Servicer under this
Agreement upon the failure of the Special Servicer to perform any of its
obligations under this Agreement, after the expiration of any notice and cure
periods, if any, as provided in Section 9.01 of the Servicing Agreement. If
the Special Servicer is in default under this Agreement, after the expiration
of any notice and cure periods, if any, the Master Servicer shall, upon the
written direction of any Directing Holder, terminate the rights and
obligations of the Special Servicer as to the related Mortgage Pool under this
Agreement.
Upon prior written notice, each Directing Holder shall have the
exclusive right to terminate the rights and obligations of the Special
Servicer under this Agreement, as to the related Mortgage Pool, without cause
and without payment of any termination fee in connection with such
termination; provided, that (i) any successor special servicer as to the
related Mortgage Pool shall be appointed in the manner provided below and (ii)
a letter is provided to the Trustee from each Rating Agency to the effect that
such termination and appointment will not result in the qualification,
reduction, or withdrawal of the ratings applicable to the Certificates.
Notwithstanding anything to the contrary in Sections 9.01, 9.02 and
10.01 of the Servicing Agreement, the applicable Directing Holder shall,
within 30 days of the receipt by the Special Servicer of a copy of any
termination notice delivered by the Master Servicer to the Special Servicer or
upon delivery by the applicable Directing Holder of any such notice pursuant
Section 9.02 or upon receipt by the Directing Holders of any resignation
notice given by the Special Servicer, notify the Master Servicer in writing of
each Directing Holder's nominee as successor special servicer, which nominee
shall be appointed as special servicer (as to the related Mortgage Pool) by
the Master Servicer unless the Master Servicer reasonably objects to such
nominee within 10 days following receipt of such notice. If the Master
Servicer objects to such nominee, then the Master Servicer shall, within such
10-day period, appoint a successor special servicer (as to the related
Mortgage Pool), which successor shall be reasonably acceptable to such
Directing Holder.
4. No Representations. Neither the Special Servicer nor the Master
Servicer shall be obligated or required to make any representations and
warranties regarding the Serviced Mortgage Loans in connection with the
transactions contemplated by the Trust Agreement and issuance of the
certificates issued pursuant thereto.
5. Notices. All notices and communications between or among the
parties hereto shall be in writing and shall be deemed received or given when
mailed first-class mail, postage prepaid, addressed to each other party at its
address specified below. Each party may designate to the other parties in
writing, from time to time, other addresses to which notices and
communications hereunder shall be sent.
6. Governing Law. THIS SPECIAL SERVICING AGREEMENT SHALL BE GOVERNED
BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK,
NOTWITHSTANDING NEW YORK OR OTHER CHOICE OF LAW RULES TO THE CONTRARY.
7. Counterparts. This Agreement may be executed in any number of
counterparts, each of which when so executed shall be deemed to be an
original, but all of which counterparts shall together constitute but one and
the same instrument.
8. Reconstitution. Xxxxxx Capital and the Special Servicer agree that
this Agreement is a Reconstitution Agreement, and that the date hereof is the
Reconstitution Date, each as defined in the Servicing Agreement. This
Agreement amends the terms and provisions of the Servicing Agreement only with
respect to the Serviced Mortgage Loans identified on Schedule I hereto and
does not purport to amend or modify the Servicing Agreement with respect to
any other loans that are or may become subject to the Servicing Agreement.
9. Notices and Remittances to the Master Servicer. All notices
required to be delivered to the Owner or the Master Servicer under this
Agreement shall be delivered to the Master Servicer at the following address:
Norwest Bank Minnesota, National Association
00000 Xxxxxx Xxxx Xxxxxxx
Xxxxxxxx, Xxxxxxxx 00000
Attn: Master Servicing Department, SASCO 1998-8
Copies of all such notices, and all notices to be delivered to the
initial Directing Holder under this Agreement, shall be delivered to the
Directing Holder at the following address:
Xxxxxx Brothers Inc.
Three World Financial Center
000 Xxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attn: Mortgage-Backed Securities
All remittances required to be made to the Master Servicer under this
Agreement shall be made to the following wire account:
Norwest Bank Minnesota, National Association
Minneapolis, Minnesota
ABA#: 000-000-000
Account Name: Corporate Trust Clearing
Account Number: 0000000000
For further credit to: #13451700, SASCO 1998-8
10. Termination of Rights of Directing Holders. The parties hereto
intend that the Directing Holders be third party beneficiaries of this
Agreement. All rights of any Directing Holder hereunder and under the Trust
Agreement and all obligations of the other parties hereto with respect to any
Directing Holder shall terminate immediately upon the transfer of the
respective Class X Certificate to any other Person, unless (i) the Special
Servicer consents in writing to the transfer of such rights and (ii) the
Trustee is provided with a letter from each Rating Agency to the effect that
the transfer of the rights of the related Directing Holder to such transferee
will not result in the qualification, withdrawal or downgrade of the ratings
then assigned to any Class of Certificates.
11. Annual Audit Report. On or before April 30 of each year,
beginning with April 30, 1999, Special Servicer shall cause a firm of
independent public accountants (who may also render other services to Special
Servicer), which is a member of the American Institute of Certified Public
Accountants, to furnish a statement to the Owner, each Directing Holder and
Master Servicer, to the effect that such firm has examined certain documents
and records for the preceding calendar year (or during the period from the
date of commencement of such servicer's duties hereunder until the end of such
preceding calendar year in the case of the first such certificate) and that,
on the basis of such examination conducted substantially in compliance with
the Uniform Single Attestation Program for Mortgage Bankers, such firm is of
the opinion that Special Servicer's overall servicing operations have been
conducted in compliance with the Uniform Single Attestation Program for
Mortgage Bankers except for such exceptions that, in the opinion of such firm,
the Uniform Single Attestation Program for Mortgage Bankers requires it to
report, in which case such exceptions shall be set forth in such statement.
12. Annual Officer's Certificate. On or before April 30 of each year,
beginning with April 30, 1999, the Special Servicer, at its own expense, will
deliver to the Owner, each Directing Holder and Master Servicer a Servicing
Officer's certificate stating, as to each signer thereof, that (i) a review of
the activities of the Special Servicer during such preceding fiscal year and
of performance under this Agreement has been made under such officers'
supervision, and (ii) to the best of such officers' knowledge, based on such
review, the Special Servicer has fulfilled all its obligations under this
Agreement for such year, or, if there has been a default in the fulfillment of
all such obligations, specifying each such default known to such officers and
the nature and status thereof including the steps being taken by the Special
Servicer to remedy such default.
Executed as of the day and year first above written.
XXXXXX CAPITAL, A DIVISION OF
XXXXXX BROTHERS HOLDINGS INC.
By: /s/ Xxxxxx Xxxxx
Name: Xxxxxx X. Xxxxx
Title: Vice President
OCWEN FEDERAL BANK FSB
By: /s/ Xxx X. Xxxxxxx
Name: Xxx X. Xxxxxxx
Title: Vice President
EXHIBIT A
Modifications to the Servicing Agreement
1. The following is hereby added immediately following the words
"incidental fees and charges" in the definition of "Ancillary Income"
in Article I: ", but not including any premium or penalty associated
with a prepayment of principal of a Mortgage Loan."
2. The definition of "Base Servicing Fee" is hereby amended by deleting
the last sentence therefrom.
3. The definition of "Custodial Agreement" in Article I is hereby deleted
and replaced with the following:
"The custodial agreements relating to custody of the Serviced Mortgage
Loans among: (i) U.S. Bank Trust National Association, as Custodian,
The Chase Manhattan Bank, as Trustee, and Structured Asset Securities
Corporation and (ii) Chase Bank of Texas, N.A., as Custodian, The Chase
Manhattan Bank, as Trustee, and Structured Asset Securities
Corporation, each dated as of July 1, 1998."
4. The following is hereby added immediately following the words "Special
Servicer" in the definition of "Opinion of Counsel" in Article I:
"(except that such counsel must be Independent (as defined in the Trust
Agreement) outside counsel with respect to any such opinion relating to
the REMIC Provisions)."
5. The definition of "Primary Servicer" in Article I is hereby deleted and
replaced with the following:
"Aurora Loan Services Inc. or any of its successors."
6. The following definitions are hereby added to Article I:
"Monthly Advance: With respect to each Remittance Date and each
Mortgage, an amount equal to the Monthly Payment (with the interest
portion of such Monthly Payment adjusted to the Mortgage Loan
Remittance Rate) which was due on the Mortgage Loan, and (i) which was
delinquent at the close of business on the immediately preceding
Determination Date and (ii) which was not the subject of a previous
Monthly Advance, unless such Advance would constitute a Nonrecoverable
Advance.
"REMIC Provisions: The provisions of the federal income tax law
relating to a REMIC, which appear at Section 860A through 860G of
Subchapter M of Chapter 1, Subtitle A of the Code, and related
provisions, and regulations, rulings or pronouncements promulgated
thereunder, as the foregoing may be in effect from time to time."
7. The definition of "First Remittance Date" in Article I is hereby
deleted and replaced with the following:
"The 18th day (or if such 18th day is not a Business Day, the
first Business Day immediately following) of the month, following the
month in which the related Transfer Date occurs."
8. The definition of "Remittance Date" in Article I is hereby deleted and
replaced with the following:
"The 18th day (or if such 18th day is not a Business Day, the
first Business Day immediately following) of any month, following the
First Remittance Date."
9. Section 2.03 is hereby amended by deleting the first, second and third
paragraphs thereof in their entirety and, in the fourth paragraph
thereof, deleting the following: "(and any applicable Acknowledgement
Agreement)".
10. Section 2.05(a)(i) is deleted in its entirety and replaced with the
following:
"(a)(i) Within five business days following a Transfer Date, the
Special Servicer shall reimburse the Primary Servicer for all principal
and interest and Servicing Advances made by such Primary Servicer and
all accrued and unpaid Servicing Fees due to the Primary Servicer with
respect to any Transferred Mortgage Loan identified on such Notice of
Transfer for which the Primary Servicer has not been reimbursed.
Thereafter, such amounts paid by the Special Servicer, if any, shall be
reimbursed to the Special Servicer in accordance with Section 3.04
hereof."
11. Section 3.01 is hereby amended by deleting clause (a) of the third
paragraph of subsection (B) thereof and by adding the following at the
end of such Section:
"(C) In connection with the transfer of any Distressed Mortgage
Loan, (i) the Special Servicer will be responsible for servicing the
Distressed Mortgage Loan from and after the effective date of transfer
of servicing to the Special Servicer, but shall have no obligation to
service such Distressed Mortgage Loan on or prior to such effective
date of the transfer of servicing, (ii) notwithstanding clause (i)
above, the Special Servicer shall not include the Distressed Mortgage
Loan in its monthly remittance report pursuant to Section 4.02 for the
month in which such transfer is effected and shall not be obligated to
make the Monthly Advance with respect to such Distressed Mortgage Loan
on the Remittance Date in the month in which such transfer is effected,
in each case, regardless of whether the Remittance Date occurs before
or after the effective date of such transfer, (iii) the amount of
Monthly Advances to be reimbursed to the Servicer by the Special
Servicer hereunder shall include the Monthly Advance made by the
Servicer on such Remittance Date, regardless of whether the Servicer
makes such Monthly Advance before or after the effective date of such
transfer, and (iv) the Special Servicer shall be entitled to the Base
Servicing Fee with respect to each such Distressed Mortgage Loan for
the entire month in which such transfer occurs.
Promptly after the transfer of any Distressed Mortgage Loan, the
Special Servicer shall use its best reasonable efforts to determine
whether any seller's representation or warranty applicable to such
Mortgage Loan has been breached, and shall notify the Trustee and the
Master Servicer in writing of any possible breach so identified. The
Special Servicer may conclusively rely upon information provided by
Xxxxxx Capital, and its successors and assigns, including copies of
any related agreements of sale, in determining which representations
and warranties are applicable to such Mortgage Loan."
12. The words "Special Servicer, in trust for Xxxxxx Capital, A Division of
Xxxxxx Brothers Holdings, Inc., owner of Residential Mortgage Loans,
Group No. ______, and various Mortgagors" in the first paragraph of
Section 3.03 are hereby deleted and replaced with the following: "Ocwen
Federal Bank FSB, in trust for Norwest Bank Minnesota, National
Association, as master servicer for SASCO 1998-8."
13. Section 3.04(ii) is deleted in its entirety and replaced with the
following:
"(ii) to reimburse itself for unreimbursed advances of the
Special Servicer's funds made pursuant to Section 2.05 hereof,
including advances by the Special Servicer to reimburse the Primary
Servicer for principal and interest advances, Servicing Advances and
unpaid servicing fees due to them, if any, the Special Servicer's right
to reimburse itself pursuant to this subclause (ii) being limited to
either (x) amounts received on the related Transferred Mortgage Loan
which represent late payments of principal and/or interest respecting
which any such advance was made, and related Liquidation Proceeds,
condemnation proceeds, Insurance Proceeds, REO Disposition Proceeds and
other amounts received in respect of the related Mortgage Loan, it
being understood that, in the case of any such reimbursement, the
Special Servicer's right thereto shall be prior to the rights of the
Owner, the Master Servicer, any Primary Servicer and any
Certificateholder or (y) any other amounts in the Collection Account in
the event that such advances have been deemed to be Nonrecoverable
Advances or are not recovered from recoveries in respect of the related
Transferred Mortgage Loan or REO Property after a final determination
has been made as to what amounts have been or will be recovered, it
being understood that for those Transferred Mortgage Loans in
foreclosure, the Owner shall reimburse the Special Servicer for
Servicing Advances and advances made pursuant to Section 2.05 hereof
through the completion of the sale of the defaulted Mortgage Loan, or
the foreclosure and disposition of the REO Property;"
14. Section 3.04 is hereby amended by deleting clause (iii) in its entirety
and replacing such clause with the following clauses (iii) and (iv):
"(iii) to reimburse itself for Monthly Advances of the Special
Servicer's funds made pursuant to Section 7.03, the Special Servicer's
right to reimburse itself pursuant to this subclause (iii) being
limited to amounts received on the related Mortgage Loan which
represent late payments of principal and/or interest respecting which
any such advance was made, related Liquidation Proceeds, Insurance
Proceeds, condemnation proceeds, REO Disposition Proceeds and other
amounts received in respect of the related REO Property, and such other
amounts as may be collected by the Special Servicer from the Mortgagor
or otherwise relating to such Mortgage Loan, it being understood that,
in the case of any such reimbursement, the Special Servicer's right
thereto shall be prior to the rights of the Owner, the Master Servicer,
any Primary Servicer and any Certificateholder ; provided, that if the
Special Servicer reasonably determines that any unreimbursed Monthly
Advance is a Nonrecoverable Advance, the foregoing limitation shall not
apply thereto;
(iv) to reimburse itself for unreimbursed Servicing Advances,
and for any unpaid Base Servicing Fees, the Special Servicer's right to
reimburse itself pursuant to this subclause (iv) with respect to any
Mortgage Loan being limited to related late collections, Liquidation
Proceeds, condemnation proceeds, Insurance Proceeds, REO Disposition
Proceeds and other amounts received in respect of the related REO
Property, and such other amounts as may be collected by the Special
Servicer from the Mortgagor or otherwise relating to the Mortgage Loan,
it being understood that, in the case of any such reimbursement, the
Special Servicer's right thereto shall be prior to the rights of the
Owner; provided, that if the Special Servicer reasonably determines
that any unreimbursed Servicing Advance is a Nonrecoverable Advance,
the foregoing limitation shall not apply thereto;"
Clauses (iv) through (viii) in Section 3.04 are hereby redesignated
clauses (v) through (ix), as applicable.
15. The words "Special Servicer, in trust for Xxxxxx Capital, A Division of
Xxxxxx Brothers Holdings, Inc., owner of Residential Mortgage Loans,
Group No. ______, and various Mortgagors" in the first paragraph of
Section 3.05 are hereby deleted and replaced with the following: "Ocwen
Federal Bank FSB, in trust for Norwest Bank Minnesota, National
Association, as master servicer for SASCO 1998-8."
16. Section 3.10(a) is deleted in its entirety and replaced with the
following:
"(a) Default Management Responsibilities: Subject only to
Accepted Servicing Practices and Section 3.11 below, the Special
Servicer shall have full power and authority to do or cause to be done
any and all things in connection with such servicing and administration
which it may deem necessary or desirable. Without limiting the
generality of the foregoing, the Special Servicer is hereby authorized
and empowered by the Owner (if, in the Special Servicer's reasonable
judgment, such action with respect to the Transferred Mortgage Loans
and/or the Mortgaged Properties is in the best interests of Owner in
accordance with, or is required by, this Agreement, and subject to
Accepted Servicing Practices) to take the following actions (without
limitation): (i) prepare, execute and deliver, on behalf of the Owner
with expenses associated therewith being Servicing Advances hereunder,
any and all financing statements, continuation statements and other
documents or instruments necessary to maintain the lien on each
Mortgaged Property and related collateral; and, subject to the
remaining terms and provisions of this Section, modifications, waivers
(including, without limitation, waivers of any late payment charge in
connection with any delinquent payment on a Transferred Mortgage Loan),
consents, amendments, discounted payoff agreements, forbearance
agreements, cash management agreements or consents to or with respect
to any documents contained in the related servicing file; and any and
all instruments of satisfaction or cancellation, or of partial or full
release or discharge, and all other instruments comparable to any of
the types of instruments described in this subsection (i), and (ii)
institute and prosecute judicial and non-judicial foreclosures, suits
on promissory notes, indemnities, guaranties or other loan documents,
actions for equitable and/or extraordinary relief (including, without
limitation, actions for temporary restraining orders, injunctions, and
appointment of receivers), suits for waste, fraud and any and all other
tort, contractual and/or other claims of whatever nature, and to appear
in and file on behalf of the Owner such pleadings or documents as may
be necessary or advisable in any bankruptcy action, state or federal
suit or any other action. In the event that any Mortgage Loan is in
default or, in the judgment of the Special Servicer, such default is
reasonably foreseeable, the Special Servicer, consistent with Accepted
Servicing Practices, may waive, modify or vary any term of such
Mortgage Loan (including modifications that would change the Mortgage
Interest Rate, defer or forgive the payment of principal or interest or
extend the final maturity date of such Mortgage Loan), accept payment
from the related Mortgagor of an amount less than the full outstanding
and unpaid principal balance in final satisfaction of such Mortgage or
consent to the postponement of strict compliance with any such term or
otherwise grant indulgence to any Mortgagor if in the Special
Servicer's determination such waiver, modification, postponement or
indulgence is not materially adverse to the interests of the
Certificateholders (taking into account any estimated Realized Loss
that might result absent such action). In addition, if, with respect to
a Transferred Mortgage Loan, a default (or any condition resulting in a
default being reasonably foreseeable) is cured (such Mortgage Loan
being referred to herein as a "Performing Loan"), the Special Servicer
may thereafter waiver, modify or vary terms of such Performing Loan
provided that no such action will (A) decrease the Mortgage Rate on the
Performing Loan, (B) defer or forgive the payment of principal or
interest (except with respect to liquidation of such Performing Loan)
or (C) extend the final maturity date of such Performing Loan,
provided, however, that no such modification shall be permitted to the
extent that it would (a) affect adversely the status of the Trust Fund
as a REMIC or (b) cause the Trust Fund to be subject to a tax on
"prohibited transactions" or "contributions" pursuant to the REMIC
Provisions.
Notwithstanding anything to the contrary in this Agreement, the
Special Servicer shall not waive any premium or penalty in connection
with a prepayment of principal of any Mortgage Loan, and shall not
consent to the modification of any Mortgage Note to the extent that
such modification relates to payment of a prepayment premium or
penalty; provided, that the foregoing shall not (i) apply to any
Severely Delinquent Loan or (ii) prohibit the Special Servicer from
entering into any agreement for modification, waiver, forbearance,
amendment or discounted payoff of a Mortgage Loan in accordance with
this Agreement that does not have the effect of waiving any prepayment
premium or penalty or modifying any provision requiring payment
thereof.
Notwithstanding the foregoing, in the event of any conflict
between the provisions of this Section 3.10 and the provisions of
Section 3.11, the provisions of Section 3.11 shall control."
17. Section 3.10(e) is hereby deleted in its entirety and replaced with the
following:
"(e) At any time, a Directing Holder may request that the
Special Servicer take a particular action with respect to a particular
Mortgage Loan in the related Mortgage Pool, including without
limitation foreclosure, waivers or modifications. Any such request
shall be in writing, a copy of which shall be delivered to the Master
Servicer. If the Special Servicer determines that such requested action
is consistent with Accepted Servicing Practices, then the Special
Servicer shall comply with such request. Within two Business Days of
receipt of such a request, the Special Servicer shall notify such
Directing Holder whether the Special Servicer intends to comply with
such request. If the Special Servicer does not comply with such request
(or fails to notify such Directing Holder of its decision within the
two Business Day period), then such Directing Holder may, at its sole
option and upon written notice to the Special Servicer and the Master
Servicer, purchase the related Mortgage Loan from the Trust Fund at the
Purchase Price (as defined in the Trust Agreement). In addition, a
Directing Holder may purchase any Severely Delinquent Mortgage Loan
from the related Mortgage Pool upon written notice to the Master
Servicer and the Special Servicer within three Business Days of the day
on which such Mortgage Loan becomes a Severely Delinquent Loan.
The Special Servicer shall have the right to purchase any
Severely Delinquent Loan at the Purchase Price (as defined in the Trust
Agreement). The Special Servicer shall send a written notice (the
"Initial Notice") to the Directing Holder with respect to the related
Mortgage Pool advising such Directing Holder that the Special Servicer
intends to purchase a Severely Delinquent Loan in the related Mortgage
Pool. Such Directing Holder shall have the option to (i) direct the
Special Servicer not to purchase any such Severely Delinquent Loan but
to proceed with a particular default resolution strategy consistent
with Accepted Servicing Practices, (ii) direct the Special Servicer to
proceed with the purchase of such loan on the terms proposed by the
Special Servicer, or (iii) indicate that such Directing Holder intends
to purchase such Severely Delinquent Loan, in which case such Directing
Holder shall have the sole right and option to purchase the Severely
Delinquent Loan at the Purchase Price; provided, however, that if such
Directing Holder fails or refuses to deliver a written notice of its
election to the Special Servicer within two Business Days after the
Special Servicer has sent to such Directing Holder the Initial Notice,
then such Directing Holder shall be deemed to have consented to the
Special Servicer purchasing the Severely Delinquent Loan for its own
account."
18. The following Section 3.11 is hereby added immediately following
Section 3.10:
"Section 3.11 REMIC Provisions.
(a) Unless the Mortgagor is in default with respect to the
related Mortgage Loan or such default is, in the judgment of the
Special Servicer, reasonably foreseeable, the Special Servicer shall
not permit any modification of any material term of any Mortgage Loan,
including any modification that would change the Mortgage Interest
Rate, defer or forgive the payment of principal or interest, reduce or
increase the outstanding principal balance (except for actual payments
of principal), change the final maturity date on such Mortgage Loan, or
permit any alteration, substitution or release of any collateral for
such Mortgage Loan.
(b) The Special Servicer shall dispose of any REO Property as
soon as possible and shall sell such REO Property in any event within
three years after title has been taken to such REO Property, unless (i)
the Owner shall have been supplied with an Opinion of Counsel to the
effect that the holding by the Trust Fund of such Mortgaged Property
subsequent to such three-year period (and specifying the period beyond
such three-year period for which the Mortgaged Property may be held)
will not result in the imposition of taxes on "prohibited transactions"
of the Trust Fund as defined in section 860F of the Code, or cause the
related REMIC to fail to qualify as a REMIC, in which case the Trust
Fund may continue to hold such Mortgaged Property (subject to any
conditions contained in such Opinion of Counsel), or (ii) the Owner (at
the Special Servicer's expense) or the Special Servicer shall have
applied for, not later than 61 days prior to the expiration of such
three-year period, an extension of such three-year period in the manner
contemplated by section 856(e)(3) of the Code, in which case the
three-year period shall be extended by the applicable period. If a
period longer than three years is permitted under the foregoing
sentence and is necessary to sell any REO Property, (i) the Special
Servicer shall report monthly to the Owner as to the progress being
made in selling such REO Property and (ii) if, with the written consent
of the Owner, a purchase money mortgage is taken in connection with
such sale, such purchase money mortgage shall name the Special Servicer
as mortgagee, and such purchase money mortgage shall not be held
pursuant to this Agreement, but instead a separate participation
agreement between the Special Servicer and the Owner shall be entered
into with respect to such purchase money mortgage.
Notwithstanding any other provision of this Agreement, no
Mortgaged Property held by a REMIC shall be rented (or allowed to
continue to be rented) or otherwise used for the production of income
by or on behalf of the Trust Fund or sold in such a manner or pursuant
to any terms that would (i) cause such Mortgaged Property to fail to
qualify at any time as "foreclosure property" within the meaning of
section 860G(a)(8) of the Code, (ii) subject the Trust Fund to the
imposition of any federal or state income taxes on "net income from
foreclosure property" with respect to such Mortgaged Property within
the meaning of section 860G(c) of the Code, or (iii) cause the sale of
such Mortgaged Property to result in the receipt by the Trust Fund of
any income from non-permitted assets as described in section
860F(a)(2)(B) of the Code, unless the Special Servicer has agreed to
indemnify and hold harmless the Trust Fund with respect to the
imposition of any such taxes."
19. The first paragraph of Section 4.01 is hereby deleted and replaced with
the following:
"On each Remittance Date the Servicer shall remit by wire
transfer of immediately available funds to the Master Servicer (a) all
amounts deposited in the Custodial Account as of the close of business
on the last day of the related Due Period (net of charges against or
withdrawals from the Custodial Account pursuant to Section 3.04), plus
(b) all amounts, if any, which the Servicer is obligated to advance
pursuant to Section 7.03, minus (c) any amounts attributable to
Principal Prepayments, Liquidation Proceeds, Insurance Proceeds or REO
Disposition Proceeds received after the applicable Prepayment Period,
which amounts shall be remitted on the following Remittance Date,
together with any additional interest required to be deposited in the
Custodial Account in connection with such Principal Prepayment in
accordance with Section 7.03, and minus (d) any amounts attributable to
Monthly Payments collected but due on a due date or dates subsequent to
the first day of the month in which such Remittance Date occurs, which
amounts shall be remitted on the Remittance Date next succeeding the
Due Period for such amounts."
20. Section 4.02 is hereby amended by deleting the words "Remittance Date"
in the first line of such Section, and substituting the following:
"tenth day of each month, or if such tenth day is not a Business Day,
the immediately preceding Business Xxx"
00. Section 5.01 is hereby amended by deleting the last sentence of each of
subsections (a) and (b) thereof.
22. The following Sections 7.03 and 7.04 are hereby added immediately
following Section 7.02:
"Section 7.03 Monthly Advances and Compensating Interest.
(a) Notwithstanding anything to the contrary herein, the Special
Servicer shall make Monthly Advances (other than Balloon Payments as
defined in the Trust Agreement) on each Remittance Date through the
Remittance Date immediately preceding the distribution of all
Liquidation Proceeds and other payments or recoveries (including
Insurance Proceeds and condemnation proceeds) with respect to the
related Mortgage Loans, unless such advances would constitute
Nonrecoverable Advances.
(b) Notwithstanding anything to the contrary herein, with
respect to each Principal Prepayment of a Mortgage Loan the Special
Servicer shall deposit in the Custodial Account on a daily basis and
retain therein the Prepayment Interest Shortfall Amount, if any, for
the month of distribution. Such deposit shall be made from the Special
Servicer's own funds, without reimbursement therefor, up to a maximum
amount per month equal to the aggregate of the Base Servicing Fees
otherwise payable to the Special Servicer with respect to such month.
Section 7.04 Special Servicing Compensation. Notwithstanding
anything to the contrary herein, the Special Servicer shall not be
entitled to pay itself any compensation out of amounts collected on or
in respect of the Mortgage Loans other than the Base Servicing Fee and
any Ancillary Income, to the extent provided herein. Any other
compensation payable to the Special Servicer hereunder, including the
Special Servicing Fee, the Extended Special Servicing Fee and the
Incentive Fee, shall be payable to the Special Servicer on each
Distribution Date as provided in the Trust Agreement."
23. Section 9.02 is hereby deleted in its entirety.
24. The following paragraph is added at the end of Section 10.01:
"Neither the Master Servicer nor any successor special servicer
(including the Owner and the Master Servicer) shall be liable for any
acts or omissions of the Special Servicer or any predecessor servicer.
In particular, neither the Master Servicer nor any successor special
servicer (including the Owner and the Master Servicer) shall be liable
for any servicing errors or interruptions resulting from any failure of
the Special Servicer to maintain computer and other information systems
that are year-2000 compliant."
25. All references in the Servicing Agreement or in any schedules or
exhibits thereto, including, without limitation, Exhibit I, to the
"Decision Matrix" are hereby deleted in their entirety.
26. The following definition is hereby added:
"Prepayment Period: With respect to the first Remittance Date,
the period beginning on the Cut-off Date and ending on August 1. With
respect to each subsequent Remittance Date, the period commencing on
the second day of the month immediately preceding the month in which
such Remittance Date occurs and ending on the first day of the month in
which such Remittance Date occurs."
27. The definitions of "Extended Special Servicing Fee," "Incentive Fee,"
"Loss Severity Percentage" and "Special Servicing Fee" are hereby
deleted in their entirety.
28. Section 5.01is hereby deleted in its entirety and replaced with the
following:
"Section 5.01 Servicing Compensation. As consideration for
servicing the Transferred Mortgage Loans subject to this Agreement, the
Special Servicer shall be entitled to (i) retain the Base Servicing fee
equal to one-twelfth of (x) the Servicing Fee Rate and (y) the
outstanding principal balance of such Transferred Mortgage Loan (or an
assumed unpaid principal balance as of the date the related Transferred
Mortgage Loan was foreclosed or a deed-in-lieu of foreclosure was
delivered) during any month or part thereof (unless otherwise specified
herein) and (ii) receive such additional compensation as is specified
in a separate letter agreement dated the Closing Date."
