Draft No. 2
SPECIAL SERVICING AGREEMENT
THIS SPECIAL SERVICING AGREEMENT (this "Agreement"), entered into as of
the 1st day of June, 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 First Union National Bank, as trustee (the "Trustee") under a
trust agreement dated as of June 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 B6
Certificates, will be issued on the Closing Date pursuant to the Trust
Agreement, and Xxxxxx Pass-Through Securities Inc. or a nominee thereof
(together with any successor in interest thereto and any permitted assignee or
transferee thereof, the "Directing Holder") is expected to be the initial
registered Holder of the Class B6 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, 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 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 the Directing Holder,
terminate the rights and obligations of the Special Servicer under this
Agreement.
Upon prior written notice, the Directing Holder shall have the exclusive
right to terminate the rights and obligations of the Special Servicer under
this Agreement without cause and without payment of any termination fee in
connection with such termination; provided, that (i) any successor special
servicer shall be appointed in the manner provided below and (ii) a letter is
provided to the Trustee from the 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 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
Directing Holder of any such notice pursuant Section 9.02 or upon receipt by
the Directing Holder of any resignation notice given by the Special Servicer,
notify the Master Servicer in writing of the Directing Holder's nominee as
successor special servicer, which nominee shall be appointed as special
servicer 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, which successor shall be
reasonably acceptable to the 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 1998-6
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: #13445400, SASCO 1998-6
10. Termination of Rights of Directing Holder. The parties hereto intend
that the Directing Holder be a third party beneficiary of this Agreement. All
rights of the Directing Holder hereunder and under the Trust Agreement and all
obligations of the other parties hereto with respect to the Directing Holder
shall terminate immediately upon any transfer of the then outstanding Class of
Subordinate Certificates having the highest numerical Class designation 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
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 Owner, 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, 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:
Name: Xxxxxx X. Xxxxx
Title: Vice President
OCWEN FEDERAL BANK FSB
By:
Name:
Title:
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 agreement relating to custody of the Serviced Mortgage
Loans among U.S. Bank Trust National Association, as Custodian, First
Union National Bank, as Trustee, and Structured Asset Securities
Corporation, dated as of June 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:
"Any of Option One Mortgage Corporation, Aurora Loan Services Inc. or
any successor to either of them."
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 1998-6."
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 1998-6."
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, the Directing Holder may request that the Special
Servicer take a particular action with respect to a particular Mortgage
Loan, 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 the
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 the Directing Holder of its decision within the two
Business Day period), then the 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, the Directing
Holder may purchase any Severely Delinquent Mortgage Loan 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 advising the Directing Holder that the Special
Servicer intends to purchase a Severely Delinquent Loan. The 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 the Directing Holder intends to purchase such Severely
Delinquent Loan, in which case the Directing Holder shall have the sole
right and option to purchase the Severely Delinquent Loan at the Purchase
Price; provided, however, that if the 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 the Directing
Holder the Initial Notice, then the 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 July 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."
