Execution
SPECIAL SERVICING AGREEMENT
THIS SPECIAL SERVICING AGREEMENT (this "Agreement"), entered into as of
the 1st day of April, 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 April 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
Certificate, 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 X Certificate;
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 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 any successor special
servicer shall be appointed in the manner provided below.
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 1998-4
Copies of all such notices, and all notices to be delivered to the
Directing Holder under this Agreement, shall be delivered to the Directing
Holder at the following address:
Ocwen Asset Investment Corp.
The Forum
Suite 1002
1675 Palm Beach Xxxxx Xxxxxxxxx
Xxxx Xxxx Xxxxx, Xxxxxxx 00000
Attn: Secretary
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: 13423000, SASCO 1998-4
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 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
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 agreements relating to custody of the Serviced
Mortgage Loans among: (i) First Trust National Association, as
Custodian, First Union National Bank, as Trustee, and Structured
Asset Securities Corporation, (ii) Chase Bank of Texas, N.A., as
Custodian, First Union National Bank, as Trustee, and Structured
Asset Securities Corporation, (iii) Norwest Bank, Minnesota,
National Association, as Custodian, First Union National Bank, as
Trustee, and Structured Asset Securities Corporation, each dated as
of April 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 "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."
8. 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)".
9. (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."
10. 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, including copies of any related agreements of
sale, in determining which representations and warranties are
applicable to such Mortgage Loan."
11. 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
1998-4."
12. (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;"
13. 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 Advance is a
Nonrecoverable Advance, the foregoing limitation shall not
apply thereto;
(i) 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 (viii) 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 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.
14. 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
1998-4."
15. (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."
16. (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 may, but is not required
to, 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 declines to
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). If the
Directing Holder does not indicate whether it wishes to
exercise this option within two Business Days of receipt of
such notice, then the Directing Holder shall not be entitled to
object to the action taken by the Special Servicer with respect
to such Mortgage Loan." 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 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 otherwise mutually acceptable to the Special Servicer and
the Directing Holder, (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."
17. The following Section 3.11 is hereby added immediately following
Section 3.10:
"Section 3.11 REMIC Provisions.
(b) 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.
(c) 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."
18. 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 Collection
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."
19. 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. is hereby amended by deleting the last sentence of each of
subsections (a) and (b) thereof.
21. The following Sections 7.03 and 7.04 are hereby added immediately
following Section 7.02:
"Section 7.03 Monthly Advances and Compensating Interest.
(d) 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.
(e) 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 1.02. 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."
22. is hereby deleted in its entirety.
23. 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."
24. 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.
25. 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 May 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."
26. The definitions of "Extended Special Servicing Fee," "Incentive Fee,"
"Loss Severity Percentage" and "Special Servicing Fee" are hereby
deleted in their entirety.
27. is 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 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."
