SERVICING AGREEMENT
BETWEEN
XXXXXX CAPITAL, A DIVISION OF XXXXXX BROTHERS HOLDINGS INC.,
OWNER
AND
OCWEN FEDERAL BANK FSB,
SPECIAL
SERVICER
DATED AS OF DECEMBER 1, 1997
RESIDENTIAL ADJUSTABLE AND FIXED RATE MORTGAGE LOANS
GROUP NO. OFB-LB1
TABLE OF CONTENTS
Page
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ARTICLE I
DEFINITIONS
ARTICLE II
OWNER'S ENGAGEMENT OF STANDBY SERVICER TO PERFORM STANDBY SERVICING
RESPONSIBILITIES
Section 2.01. Contract for Standby Servicing; Possession of Servicing
Files .................................................. 14
Section 2.02. Books and Records ...................................... 14
Section 2.03. Commencement of Standby Servicing Responsibilities and
Servicing Responsibilities ............................. 15
Section 2.04. Owner Covenants Regarding Transfer of Servicing for
Transferred Mortgage Loans ............................. 16
Section 2.05. Special Servicer Covenants Regarding Transfer of
Servicing Transferred Mortgage Loans .................. 18
Section 2.06. Custodial Agreement .................................... 19
ARTICLE III
SERVICING OF THE TRANSFERRED MORTGAGE LOANS
Section 3.01. Special Servicer to Service Transferred Mortgage Loans .. 21
Section 3.02. Collection of Mortgage Loan Payments .................... 23
Section 3.03. Establishment of and Deposits to Custodial Account ...... 23
Section 3.04. Permitted Withdrawals From Custodial Account ............ 24
Section 3.05. Establishment of and Deposits to Escrow Account ......... 25
Section 3.06. Permitted Withdrawals From Escrow Account ............... 26
Section 3.07. Notification of Adjustments ............................. 27
Section 3.08. Completion and Recordation of Assignment of Mortgage .... 27
Section 3.09. Protection of Accounts ................................. 28
Section 3.10. Default Management Provisions ........................... 28
ARTICLE IV
PAYMENTS TO OWNER
Section 4.01. Remittances ............................................. 33
Section 4.02. Statements to Owner ..................................... 33
ARTICLE V
GENERAL SERVICING PROCEDURES
Section 5.01 Servicing Compensation .................................. 35
ARTICLE VI
REPRESENTATIONS, WARRANTIES
Section 6.01. Representations, Warranties and Agreements of the Special
Servicer ............................................... 37
Section 6.02. Remedies for Breach of Representations and Warranties of
the Special Servicer ................................... 39
Section 6.03. Representations and Warranties of the Owner ............ 40
Section 6.04. Remedies for Breach of Representations and Warranties of
the Owner .............................................. 41
ARTICLE VII
WHOLE LOAN TRANSFER; PASS-THROUGH TRANSFER
Section 7.01. Removal of Mortgage Loans from Inclusion Under this
Agreement Upon a Pass-Through Transfer or a Whole Loan
Transfer on One or More Reconstitution Dates ........... 43
Section 7.02. Additional Indemnification by the Special Servicer; Third
Party Claims .......................................... 44
ARTICLE VIII
THE STANDBY SERVICER
Section 8.01. Merger or Consolidation of the Special Servicer ....... 46
Section 8.02. Limitation on Liability of the Special Servicer and
Others ............................................... 46
Section 8.03. Limitation on Resignation and Assignment by the Special
Servicer ............................................. 47
ARTICLE IX
TERMINATION
Section 9.01. Termination for Cause ................................. 48
Section 9.02. Termination Without Cause ............................ 50
ARTICLE X
MISCELLANEOUS PROVISIONS
Section 10.01. Successor to the Special Servicer .................... 51
Section 10.02. Closing .............................................. 52
Section 10.03. Closing Documents .................................... 53
Section 10.04. Costs ................................................ 53
Section 10.05. Protection of Confidential Information ............... 54
Section 10.06. Notices .............................................. 54
Section 10.07. Severability Clause .................................. 55
Section 10.08. No Personal Solicitation ............................. 55
Section 10.09. Counterparts ......................................... 56
Section 10.10. Place of Delivery and Governing Law .................. 56
Section 10.11. Further Agreements ................................... 56
Section 10.12. Intention of the Parties.............................. 56
Section 10.13. Successors and Assigns; Assignment of Servicing
Agreement ............................................ 56
Section 10.14. Waivers .............................................. 57
Section 10.15. Exhibits ............................................. 57
Section 10.16. General Interpretive Principles ...................... 57
Section 10.17. Reproduction of Documents ............................ 57
EXHIBITS
EXHIBIT A MORTGAGE LOAN SCHEDULE
EXHIBIT B FORM OF NOTICE OF TRANSFER
EXHIBIT C CUSTODIAL ACCOUNT CERTIFICATION
EXHIBIT D ESCROW ACCOUNT CERTIFICATION
EXHIBIT E-1 OFFICER'S CERTIFICATE FOR FIRST CLOSING
EXHIBIT E-2 OFFICER'S CERTIFICATE FOR SUBSEQUENT CLOSINGS
EXHIBIT F-1 THE FIRST TRUST CUSTODIAL AGREEMENT
EXHIBIT F-2 THE TEXAS COMMERCE CUSTODIAL AGREEMENT
EXHIBIT F-3 FORM OF ASSIGNMENT OF CUSTODIAL AGREEMENT
EXHIBIT G FORM OF OPINION OF COUNSEL OF THE SPECIAL SERVICER
EXHIBIT H FORM OF ACKNOWLEDGMENT AGREEMENT
EXHIBIT I DECISION MATRIX
SERVICING AGREEMENT
-------------------
This is a Servicing Agreement (the "Agreement"), dated as of
December 1, 1997, by and between Xxxxxx Capital, A Division of Xxxxxx
Brothers Holdings Inc., having an office at 3 World Financial Center 12th
Floor, 000 Xxxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000-0000 (the "Owner") and
Ocwen Federal Bank FSB, having an office at The Forum, Suite 1002, 0000 Xxxx
Xxxxx Xxxxx Xxxx., Xxxx Xxxx Xxxxx, Xxxxxxx 00000 (the "Special Servicer").
W I T N E S S E T H
WHEREAS, the Owner has acquired certain first and second lien fixed
and adjustable rate residential mortgage loans (collectively, the "Mortgage
Loans") identified in the Mortgage Loan Schedule attached hereto as Exhibit A
pursuant to that certain Seller's Warranties and Servicing Agreement dated as
of September 30, 1997 by and between the Owner and Option One Mortgage
Corporation ("Option One") and that certain Purchase and Servicing Agreement
dated as of October 1, 1997 by and between the Owner and Long Beach Mortgage
Company ("Long Beach Mortgage" and together with Option One and Ameriquest,
the "Primary Servicers") and it being further understood that the servicing
rights to the Mortgage Loans acquired from Long Beach Mortgage will be
transferred to Aurora Loan Services Inc. ("Aurora"), pursuant to that certain
Flow Servicing Agreement dated September 1, 1997, by and between the Owner
and Aurora;
WHEREAS, the Owner may acquire mortgage loans in the future (the
"Additional Mortgage Loans") for which the Owner desires to contract with the
Special Servicer for certain special servicing responsibilities with respect
to such Additional Mortgage Loans;
WHEREAS, the Owner desires to contract with the Special Servicer
for certain special servicing responsibilities associated with the Mortgage
Loans and the Special Servicer desires to assume the special servicing
responsibilities with respect to such Mortgage Loans as more particularly
described herein; and
WHEREAS, the Owner desires to contract with the Special Servicer
for certain servicing responsibilities associated with the Transferred
Mortgage Loans (as defined herein) and the Special Servicer desires to assume
the servicing responsibilities with respect to such Transferred Mortgage
Loans.
NOW, THEREFORE, in consideration of the mutual agreements
hereinafter set forth, and for other good and reasonable consideration, the
receipt and adequacy of which is hereby acknowledged, the Owner and Special
Servicer hereby agree as follows:
ARTICLE I
DEFINITIONS
The following terms are defined as follows (except as otherwise
agreed in writing by the parties):
Accepted Servicing Practices: As defined in Section 3.01(A).
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Acknowledgment Agreement: The document to be executed by the Owner
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and the Special Servicer on or prior to each Additional Mortgage Loan
Transfer Date which document shall amend the Mortgage Loan Schedule attached
as Exhibit A hereto to reflect the addition of Additional Mortgage Loans to
such Exhibit A and which document reflects the addition of Additional
Mortgage Loans which are subject to the terms and conditions of this
Agreement. A form of the Acknowledgment Agreement is attached hereto as
Exhibit H.
Additional Mortgage Loan: Any mortgage loan for which the Owner
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and the Special Servicer mutually agree, subsequent to the execution of this
Agreement, that such mortgage loan shall be governed by this Agreement.
Additional Mortgage Loan Transfer Date(s): The date or dates upon
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which the Special Servicer receives the transfer of additional servicing
responsibilities with respect to Additional Mortgage Loans and begins to
perform the servicing of such Additional Mortgage Loans in accordance with
the terms set forth herein which dates shall be as set forth in the related
Acknowledgment Agreement.
Agreement: This Servicing Agreement and all amendments hereof and
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supplements hereto.
Ancillary Income: All income derived from the Transferred Mortgage
----------------
Loans, other than Transferred Mortgage Loan Servicing Fees, including but not
limited to, late charges, fees received with respect to checks or bank drafts
returned by the related bank for non-sufficient funds, assumption fees,
optional insurance administrative fees and all other incidental fees and
charges. The Special Servicer shall retain all Ancillary Income for the
Transferred Mortgage Loans.
Appraised Value: The value set forth in an appraisal made in
---------------
connection with the origination of the related Mortgage Loan as the value of
the Mortgaged Property.
Appropriate Federal Banking Agency: Appropriate Federal Banking
----------------------------------
Agency shall have the meaning ascribed to it by Section 1813(q) of Title 12
of the United States Code, as amended from time to time.
Assignment of Mortgage: An assignment of the Mortgage, notice of
----------------------
transfer or equivalent instrument in recordable form, sufficient under the
laws of the jurisdiction wherein the related Mortgaged Property is located to
reflect the transfer of the Mortgage to the party indicated therein.
Base Servicing Fee: With respect to any Mortgage Loan that becomes
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a Transferred Mortgage Loan for any month or part thereof, commencing in the
month after the related Transfer Date, one-twelfth the product of (a) the
Servicing Fee Rate and (b) the outstanding principal balance of such
Transferred Mortgage Loan or, in the case of an REO Property, the outstanding
principal balance of the Transferred Mortgage Loan immediately prior to its
becoming an REO Property. The obligation of the Owner to pay the Base
Servicing Fee is limited to, and such Base Servicing Fee is payable solely
from, the interest portion (including recoveries with respect to late
payments, Insurance Proceeds and/or Liquidation Proceeds to the extent
permitted by Section 3.04 of this Agreement) of such Monthly Payment
collected by the Special Servicer, or as otherwise provided under this
Agreement. To the extent such amount is not sufficient to cover the Base
Servicing Fee, the Special Servicer shall send to the Owner an invoice
detailing the amount of the unpaid Base Servicing Fee owed to the Special
Servicer and the Owner shall pay such amount to the Special Servicer within
20 Business Days of receiving such an invoice.
Best Efforts: Efforts determined to be reasonably diligent by the
------------
Owner or Special Servicer, as the case may be, in its sole discretion. Such
efforts do not require the Owner or Special Servicer, as the case may be, to
enter into any litigation, arbitration or other legal or quasi-legal
proceeding, nor do they require the Owner or Special Servicer, as the case
may be, to advance or expend fees or sums of money in addition to those
specifically set forth in this Agreement.
Breach: As defined in Section 6.02.
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Business Day: Any day other than (i) a Saturday or Sunday, or (ii)
------------
a day on which banking and savings and loan institutions in the State of
Florida or in the State of New York are authorized or obligated by law or
executive order to be closed.
Closing Date: December 8, 1997.
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Conversion Date: The date on which a Severely Delinquent Loan
---------------
becomes a Resolved Loan.
Custodial Account: The separate account or accounts created and
-----------------
maintained pursuant to Section 3.03.
Custodial Agreement: Either of the custodial agreements among the
-------------------
Owner, as initial Servicer, the Owner and First Trust National Association,
dated as of February 1, 1993, which is annexed hereto as Exhibit F-1 and the
custodial agreement among the Owner, Long Beach and Texas Commerce Bank,
dated as of October 1, 1997, which is annexed hereto as Exhibit F-2.
Custodian: The Custodian under the applicable Custodial Agreement,
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or its successors in interest or assigns or any successor to the related
Custodian under the related Custodial Agreement as provided therein.
Decision Matrix: As defined in Section 3.10(e).
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Determination Date: The last day of the month immediately
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preceding the related Remittance Date (or if such day is not a Business Day,
the Business Day immediately preceding such day).
Distressed Mortgage Loan: Any Mortgage Loan with respect to which
-------------------------
the related Mortgagor is 61 or more days delinquent (without giving effect to
any grace period permitted by the related Mortgage Note) in the payment of a
scheduled Monthly Payment.
Eligible Investments: Any one or more of the obligations and
--------------------
securities listed below which investment provides for a date of maturity not
later than the Determination Date in each month:
(i) direct obligations of, and obligations fully guaranteed
by, the United States of America, or any agency or
instrumentality of the United States of America the
obligations of which are backed by the full faith and
credit of the United States of America; and
(ii) federal funds, demand and time deposits in, certificates
of deposits of, or bankers' acceptances issued by, any
depository institution or trust company incorporated or
organized under the laws of the United States of America
or any state thereof and subject to supervision and
examination by federal and/or state banking authorities,
so long as at the time of such investment or contractual
commitment providing for such investment the commercial
paper or other short-term debt obligations of such
depository institution or trust company (or, in the case
of a depository institution or trust company which is the
principal subsidiary of a holding company, the commercial
paper or other short-term debt obligations of such
holding company) are rated "P-1" by Xxxxx'x and the long-
term debt obligations of such holding company) are rated
"P-1" by Xxxxx'x and the long-term debt obligations of
such depository institution or trust company (or, in the
case of a depository institution or trust company which
is the principal subsidiary of a holding company, the
long-term debt obligations of such holding company) are
rated at least "Aa" by Xxxxx'x;
provided, however, that no such instrument shall be an Eligible
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Investment if such instrument evidences either (i) a right to receive only
interest payments with respect to the obligations underlying such instrument,
or (ii) both principal and interest payments derived from obligations
underlying such instrument and the principal and interest payments with
respect to such instrument provide a yield to maturity of greater than 120%
of the yield to maturity at par of such underlying obligations.
Errors and Omissions Insurance: Errors and Omissions Insurance to
------------------------------
be maintained by the Special Servicer pursuant to the FNMA Guides or FHLMC
Guides.
Escrow Account: The separate account or accounts operated and
--------------
maintained pursuant to Section 3.05.
Escrow Payments: With respect to any Mortgage Loan, the amounts
---------------
constituting ground rents, taxes, assessments, water rates, sewer rents,
municipal charges, mortgage insurance premiums, fire and hazard insurance
premiums, condominium charges, homeowners association charges, and any other
payments required to be escrowed by the Mortgagor with the mortgagee pursuant
to the Mortgage or any other document.
Event of Default: Any event set forth in Section 9.01.
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FDIC: The Federal Deposit Insurance Corporation, or any successor
----
thereto.
FHLMC: The Federal Home Loan Mortgage Corporation, or any
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successor thereto.
FHLMC Guides: The FHLMC Selling Guide and the FHLMC Servicing
------------
Guide and all amendments or additions thereto.
Fidelity Bond: A fidelity bond to be maintained by the Special
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Servicer pursuant to the FNMA Guides or FHLMC Guides.
First Remittance Date: With respect to each Mortgage Loan, the 10th
---------------------
day of the month following the month in which the related Transfer Date
occurs, or if such 10th day is not a Business Day, the first Business Day
immediately following such 10th day.
FNMA: The Federal National Mortgage Association, or any successor
----
thereto.
FNMA Guides: The FNMA Selling Guide and the FNMA Servicing Guide
-----------
and all amendments or additions thereto.
Foreclosed Mortgage Loan: A Transferred Mortgage Loan for which
------------------------
title to the Mortgaged Property is taken back by the Special Servicer either
through a deed in lieu of foreclosure or through the completion of the
foreclosure process consistent with this Agreement and the resulting REO
Property is liquidated consistent with the terms of this Agreement.
Insurance Expenses: Expenses incurred by the Special Servicer in
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connection with pursuing any insurance claim with respect to any Transferred
Mortgage Loan or REO Property acquired in respect thereof (including, without
limitation, reasonable legal fees and reasonable expenses) and any Servicing
Advances incurred and any unpaid Transferred Mortgage Loan Servicing Fee
payable with respect to such Transferred Mortgage Loan or such property not
previously reimbursed from collections or other proceeds therefrom.
Insurance Proceeds: With respect to each Mortgage Loan, proceeds
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of insurance policies insuring the Mortgage Loan or the related Mortgaged
Property.
Insured Depository Institution: Insured Depository Institution
------------------------------
shall have the meaning ascribed to such term by Section 1813(c)(2) of Title
12 of the United States Code, as amended from time to time.
Liquidation Expenses: Expenses incurred by the Special Servicer
--------------------
in connection with the liquidation of any Transferred Mortgage Loan or REO
Property acquired in respect thereof (including, without limitation,
reasonable legal fees and expenses, committee or referee fees, and, if
applicable, brokerage commissions, and conveyance taxes) and any Servicing
Advances incurred and any unpaid Transferred Mortgage Loan Servicing Fee
payable with respect to such Transferred Mortgage Loan or such REO Property
not previously reimbursed from collections or other proceeds therefrom.
Liquidation Proceeds: The amount (other than Insurance Proceeds)
--------------------
received in connection with (i) the taking of a Mortgaged Property by
exercise of the power of eminent domain or condemnation, to the extent such
proceeds are not to be applied to the restoration of the related Mortgaged
Property or released to the Mortgagor in accordance with the express
requirements of the Mortgage or Mortgage Note or any other Mortgage Loan
Documents or in accordance with Accepted Servicing Practices, (ii) the
liquidation of a Transferred Mortgage Loan through a trustee's sale,
foreclosure sale or otherwise, (iii) the sale of a Transferred Mortgage Loan
or an REO Property in accordance with the terms of this Agreement or (iv) the
sale of all of the Mortgage Loans.
Modified Mortgage Loan: A Transferred Mortgage Loan which is
----------------------
modified in a manner consistent with this Agreement and for which the
Mortgagor has made three consecutive payments consistent with the terms of
such Transferred Mortgage Loan as so modified.
Monthly Payment: The scheduled monthly payment of principal and
---------------
interest on a Mortgage Loan.
Mortgage: The mortgage, deed of trust or other instrument securing
--------
a Mortgage Note, which creates a first lien on an unsubordinated estate in
fee simple in real property securing the Mortgage Note.
Mortgage Impairment Insurance Policy: A mortgage impairment or
------------------------------------
blanket hazard insurance policy as described in the FNMA Guides or FHLMC
Guides.
Mortgage Interest Rate: The annual rate of interest borne on a
----------------------
Mortgage Note.
Mortgage Loan: An individual Mortgage Loan which is the subject
-------------
of this Agreement, each Mortgage Loan subject to this Agreement being
identified on the Mortgage Loan Schedule, which Mortgage Loan includes
without limitation the Mortgage Loan documents, the Monthly Payments,
Principal Prepayments, Liquidation Proceeds, Insurance Proceeds, REO
Disposition Proceeds, and all other rights, benefits, proceeds and
obligations arising from or in connection with such Mortgage Loan.
Mortgage Loan Documents: The documents listed in the applicable
-----------------------
section of the applicable Custodial Agreement.
Mortgage Loan Remittance Rate: With respect to each Mortgage Loan,
-----------------------------
the annual rate of interest remitted to the Owner, which shall be equal to
the Mortgage Interest Rate minus the applicable Transferred Mortgage Loan
Servicing Fee.
Mortgage Loan Schedule: A schedule of certain Mortgage Loans
----------------------
setting forth information with respect to such Mortgage Loans, which schedule
supplements this Agreement and becomes part of Exhibit A hereof on the
Closing Date which shall be modified from time to time upon repurchase or
substitution of a Mortgage Loan by the Primary Servicer or to reflect the
addition of any Additional Mortgage Loan to the terms of this Agreement.
Mortgage Note: The note or other evidence of the indebtedness of
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a Mortgagor secured by a Mortgage.
Mortgaged Property: The real property securing repayment of the
------------------
debt evidenced by a Mortgage Note.
Mortgagor: The obligor on a Mortgage Note.
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Net Insurance Proceeds: The excess of Insurance Proceeds received
----------------------
with respect to any Mortgage Loan or REO Property over the amount of
Insurance Expenses incurred with respect thereto.
Net Liquidation Proceeds: The excess of Liquidation Proceeds
------------------------
received with respect to any Mortgage Loan or REO Property over the amount of
Liquidation Expenses incurred with respect thereto.
Net Resolution Proceeds: With respect to each Resolved Loan, the
------------------------
"gross proceeds" received with respect to the final disposition of such
Resolved Loan on the Conversion Date; minus all customary and reasonable
expenses incurred in connection with the servicing and Resolution of
such Mortgage Loan including without limitation, any (a) legal expenses,
(b) advances of interest at the Mortgage Interest Rate, (c) unrecovered taxes
paid, (d) unrecovered hazard insurance premiums, (e) property protection
expenses, (f) maintenance expenses and (g) property expenses and with respect
to (i) a Foreclosed Mortgage Loan, the term "gross proceeds" shall mean
all proceeds from the sale of the REO Property less any real estate
brokerage fees and closing costs, (ii) a Paid-Off Mortgage Loan, the
term "gross proceeds" shall mean all the proceeds actually received by
the Special Servicer including prepayment penalties but not including late
charges and Ancillary Income, (iii) a Reinstated Mortgage Loan, the term
"gross proceeds" shall mean an amount equal to the unpaid principal
balance of the Reinstated Mortgage Loan at the time of the entering into
of the agreement with the related Mortgagor, and (iv) a Modified
Mortgage Loan, the term "gross proceeds" shall mean an amount equal to the
unpaid principal balance of the Modified Mortgage Loan at the time of the
entering into of the agreement with the related Mortgagor.
Nonrecoverable Advance: Any portion of an advance (whether an
----------------------
advance under Section 2.05 or a Servicing Advance) proposed to be made or
previously made which has not been previously reimbursed to the Special
Servicer, and which the Special Servicer has determined in its good faith
business judgment will not or, in the case of a proposed advance, would not,
be ultimately recoverable by the Special Servicer from late payments,
Insurance Proceeds, Liquidation Proceeds and other collections on or in
respect of the related Mortgage Loan. To the extent that any Mortgagor is
not obligated under the related Mortgage Loan Documents to pay or reimburse
any portion of any advances that are outstanding with respect to the related
Mortgage Loan as a result of a modification of such Mortgage Loan by the
Special Servicer which forgives unpaid scheduled payments or other amounts
which the Special Servicer had previously advanced, and the Special Servicer
determines that no other source of payment or reimbursement for such advances
is available to it, such advances shall be deemed to be nonrecoverable;
provided, however, that in connection with the foregoing the Special Servicer
shall provide a certificate as described below. The determination by the
Special Servicer that it has made a Nonrecoverable Advance or that any
proposed advance, if made, would constitute a Nonrecoverable Advance shall be
evidenced by a certificate of a Servicing Officer delivered to the Owner
setting forth such determination and the procedures and considerations of the
Special Servicer forming the basis of such determination, which shall include
a copy of any broker's price opinion and any other information or reports
obtained by the Special Servicer which may support such determinations.
Notice of Transfer: The document to be executed by the Owner on
------------------
or prior to each subsequent Transfer Date which document shall set forth the
Mortgage Loan or Mortgage Loans for which the Special Servicer must assume
servicing responsibilities which are subject to the terms and conditions of
this Agreement, a form of which is attached hereto as Exhibit B.
Officer's Certificate: A certificate signed by the Chairman of the
---------------------
Board or the Vice Chairman of the Board or the President or a Vice President
or an assistant Vice President and by the Treasurer or the Secretary or one
of the Assistant Treasurers or Assistant Secretaries of the Owner, and
delivered to the Special Servicer as required by this Agreement.
Opinion of Counsel: A written opinion of counsel, who may be an
------------------
employee of the Special Servicer, reasonably acceptable to the Owner.
Owner: Xxxxxx Capital, A Division of Xxxxxx Brothers Holdings
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Inc., or its successors in interest and assigns.
Paid-Off Mortgage Loan: A Transferred Mortgage Loan which is paid
----------------------
in full or for which a lesser final payment is made consistent with the terms
of this Agreement and such payment in full or lesser final payment is
received by the Special Servicer in full satisfaction of the indebtedness
owed under the applicable Mortgage Note.
Pass-Through Transfer: The sale or transfer of some or all of the
---------------------
Mortgage Loans to a trust to be formed as part of a publicly-issued and/or
privately placed, rated or unrated, mortgage pass-through transaction,
including a sale or transfer to FNMA or FHLMC pursuant to specially
negotiated transactions, retaining the Special Servicer as "standby servicer"
(with or without a primary servicer or master servicer) thereunder.
Person: Any individual, corporation, partnership, joint venture,
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association, joint-stock company, trust, limited liability company,
unincorporated organization, government or any agency or political
subdivision thereof.
Prepayment Interest Shortfall Amount: With respect to any Mortgage
------------------------------------
Loan that was subject to a Principal Prepayment in full during any Due
Period, which Principal Prepayment was applied to such Mortgage Loan prior to
such Mortgage Loan's Due Date in such Due Period, the amount of interest (net
of the related Transferred Mortgage Loan Servicing Fee) that would have
accrued on the amount of such Principal Prepayment during the period
commencing on the date as of which such Principal Prepayment was applied to
such Mortgage Loan and ending on the day immediately preceding such Due Date,
inclusive.
Prime Rate: The prime rate announced to be in effect from time to
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time, as published as the average rate in The Wall Street Journal Northeast
--- ---- ------ ------- ---------
Edition.
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Principal Prepayment: Any payment or other recovery of principal
--------------------
on a Mortgage Loan which is received in advance of its scheduled Due Date,
including any prepayment penalty or premium thereon and which is not
accompanied by an amount of interest representing scheduled interest due on
any date or dates in any month or months subsequent to the month of
prepayment.
Principal Prepayment Period: The month preceding the month in
---------------------------
which the related Remittance Date occurs.
Primary Servicer: Any one of Option One, Long Beach Mortgage or
----------------
Ameriquest or such other party as the Owner shall designate.
Qualified Depository: A depository the accounts of which are
--------------------
insured by the FDIC and the debt obligations of which are rated A or better
by Standard & Poor's Corporation and meets such requirements as are necessary
for any Reconstitution Agreement.
Reconstitution Agreements: The agreement or agreements entered
-------------------------
into by the Owner, the Special Servicer, or certain third parties on the
Reconstitution Date(s) with respect to any or all of the Mortgage Loans
serviced hereunder, in connection with a Whole Loan Transfer or a Pass-
Through Transfer as set forth in Section 7.01, including, but not limited to
(i) a Pooling and Servicing Agreement and/or a subservicing/master servicing
agreement and related custodial/trust agreement and related documents with
respect to a Pass-Through Transfer and (ii) a Seller's Warranties and
Servicing Agreement or a Sale and Servicing Agreement and related custodial
agreement and closing documents with respect to a Whole Loan Transfer. Such
agreement or agreements shall prescribe the rights and obligations of the
Special Servicer in providing servicing with respect to Distressed Mortgage
Loans which the Trustee thereunder determines should be serviced by the
Special Servicer and shall provide for servicing compensation to the Special
Servicer (calculated on a weighted average basis for all the related Mortgage
Loans as of the Reconstitution Date), at least equal to the Transferred
Mortgage Loan Servicing Fee due the Special Servicer in accordance with this
Agreement or the servicing fee required pursuant to the Reconstitution
Agreement. The form of relevant Reconstitution Agreement to be entered into
by the Owner and/or master servicer or trustee and the Special Servicer with
respect to Pass-Through Transfers and/or Whole Loan Transfers shall be
reasonably satisfactory in form and substance to the Owner and the Special
Servicer (giving due regard to any rating or master servicing requirements)
and the representations and warranties and servicing provisions contained
therein shall be substantially similar to those contained in this Agreement
(except that the Special Servicer may be required to service on a
scheduled/scheduled basis and may be required to pay up to 30 days
compensating interest on Principal Prepayments), or in Reconstitution
Agreements entered into by special servicers in connection with Pass-Through
Transfers substantially similar to any Pass-Through Transfer governed by such
Reconstitution Agreement otherwise mutually agreed by the parties.
Reconstitution Date: The date or dates on which any or all of the
-------------------
Mortgage Loans subject to this Agreement shall be removed from this Agreement
and reconstituted as part of a Pass-Through Transfer or a Whole Loan Transfer
pursuant to Section 7.01 hereof. On such date or dates, the Mortgage Loans
transferred shall cease to be covered by this Agreement and the Special
Servicer's responsibilities shall cease under this Agreement with respect to
the related transferred Mortgage Loans except as expressly set forth herein.
Reinstated Mortgage Loan: A Transferred Mortgage Loan for which
------------------------
the Mortgagor brings the Transferred Mortgage Loan back to a contractually
current status either through a lump-sum payment or otherwise consistent with
the terms of this Agreement and has made three consecutive timely payments
subsequent to bringing such Transferred Mortgage Loan's status current.
Remittance Date: The 10th day (or if such 10th day is not a
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Business Day, the first Business Day immediately following) of any month,
following the First Remittance Date. Upon the reconstitution of any
Transferred Mortgage Loan, the Remittance Date shall be the date prescribed
by such Reconstitution Agreement.
Resolution: Where a Transferred Mortgage Loan becomes a Resolved
----------
Mortgage Loan.
Resolved Loan: Each of a Reinstated Mortgage Loan, a Modified
-------------
Mortgage Loan, a Paid-Off Mortgage Loan or a Foreclosed Mortgage Loan.
REMIC: A "real estate mortgage investment conduit" within the
-----
meaning of Section 860D of the Code.
REO Disposition: The final sale by the Special Servicer of any REO
---------------
Property.
REO Disposition Proceeds: All amounts received with respect to an
------------------------
REO Disposition.
REO Property: A Mortgaged Property acquired by the Special
------------
Servicer on behalf of the Owner through foreclosure or by deed in lieu of
foreclosure.
Servicing Advances: All customary, reasonable and necessary "out
------------------
of pocket" costs and expenses (including reasonable attorneys' fees and
disbursements) incurred in the performance by the Special Servicer or Primary
Servicer, as applicable, of its servicing obligations, including, but not
limited to, the cost of (a) the preservation, restoration and protection of
the Mortgaged Property, (b) any enforcement or administrative or judicial
proceedings, including foreclosures, (c) the management and liquidation of
the Mortgaged Property if the Mortgaged Property is acquired in satisfaction
of the Mortgage, (d) taxes, assessments, water rates, sewer rates and other
charges which are or may become a lien upon the Mortgaged Property and fire
and hazard insurance coverage, (e) any losses sustained by the Special
Servicer or Primary Servicer, as applicable, with respect to the liquidation
of the Mortgaged Property and (f) compliance with the obligations pursuant to
the provisions of the FNMA Guides and FHLMC Guides or Accepted Servicing
Practices.
Servicing Fee Rate: With respect to each Mortgage Loan subject to
------------------
this Agreement as of the Closing Date and which becomes a Transferred
Mortgage Loan, 0.50% per annum. With respect to each Additional Mortgage
Loan which becomes a Transferred Mortgage Loan, the rate per annum set forth
in the applicable Acknowledgment Agreement.
Servicing File: The items pertaining to a particular Mortgage Loan
--------------
including, but not limited to, the computer files, data disks, books,
records, data tapes, notes, and all additional documents generated as a
result of or utilized in originating and/or servicing each Mortgage Loan,
which are held in trust for the Owner by the Primary Servicer the Special
Servicer.
Servicing Officer: Any officer of the Special Servicer involved
-----------------
in or responsible for, the administration and servicing of the Mortgage Loans
whose name appears on a list of servicing officers furnished by the Special
Servicer to the Owner upon request, as such list may from time to time be
amended.
Severely Delinquent Loan: Any Transferred Mortgage Loan which does
------------------------
not become a Resolved Loan prior to the 150th day of delinquency (without
giving effect to any grace period permitted by the related Mortgage Note) in
the payment of a Monthly Payment.
Special Servicer: Ocwen Federal Bank FSB or its successor in
----------------
interest or assigns or any successor to the Special Servicer under this
Agreement as herein provided.
Transfer Date: Any date specified on the Notice of Transfer on
-------------
which the Special Servicer receives additional servicing responsibilities
pursuant to receipt of such Notice of Transfer from the Owner with respect to
any Distressed Mortgage Loan.
Transferred Mortgage Loan: Any Distressed Mortgage Loan for which
-------------------------
a Notice of Transfer has been delivered to the Special Servicer.
Transferred Mortgage Loan Servicing Fee: Each of the Base
---------------------------------------
Servicing Fee, the Special Servicing Fee, the Extended Special Servicing Fee,
if any and the Incentive Fee, if any.
Well Capitalized: Well Capitalized shall mean, with respect to any
----------------
Insured Depository Institution, the maintenance by such Insured Depository
Institution of capital ratios at or above the required minimum levels for
such capital category under the regulations promulgated pursuant to Section
1831(o) of the United States Code, as amended from time to time, by the
Appropriate Federal Banking Agency for such institution, as such regulation
may be amended from time to time.
Whole Loan Transfer: The sale or transfer of some or all of the
-------------------
Mortgage Loans to a third party purchaser in a whole loan transaction
pursuant to a seller's warranties and servicing agreement or a participation
and servicing agreement, retaining the Special Servicer as "special servicer"
hereunder.
ARTICLE II
OWNER'S ENGAGEMENT OF STANDBY SERVICER TO PERFORM STANDBY SERVICING
RESPONSIBILITIES
Section 2.01. Contract for Standby Servicing; Possession of Servicing
-------------------------------------------------------
Files.
-----
The Owner, by execution and delivery of this Agreement (and any
related Acknowledgment Agreement with respect to any Additional Mortgage
Loans), does hereby contract with the Special Servicer, subject to the terms
of this Agreement, for the standby servicing of the Mortgage Loans, and
pursuant to this Agreement, on any Transfer Date, the Owner shall transfer or
cause to be transferred by the Primary Servicers the Servicing Files with
respect to any Transferred Mortgage Loan identified on the related Notice of
Transfer to the Special Servicer to be held in trust for the Owner pursuant
to this Agreement. On or before the related Transfer Date, the Owner shall
cause to be delivered or will use its Best Efforts to cause to be delivered
each Servicing File relating to such Transferred Mortgage Loans to the
Special Servicer. Each Servicing File delivered to the Special Servicer
shall be held by the Special Servicer in order to service the Transferred
Mortgage Loans pursuant to this Agreement and are and shall be held in trust
by the Special Servicer for the benefit of the Owner as the owner thereof.
The Special Servicer's possession of any portion of the Transferred Mortgage
Loan documents shall be at the will of the Owner for the sole purpose of
facilitating servicing of the related Transferred Mortgage Loan pursuant to
this Agreement, and such retention and possession by the Special Servicer
shall be in a custodial capacity only. The ownership of each Mortgage Note,
Mortgage, and the contents of the Servicing File shall be vested in the Owner
and the ownership of all records and documents with respect to the related
Transferred Mortgage Loan prepared by or which come into the possession of
the Special Servicer shall immediately vest in the Owner and shall be
retained and maintained, in trust, by the Special Servicer at the will of the
Owner in such custodial capacity only. The portion of each Servicing File
retained by the Special Servicer pursuant to this Agreement shall be
segregated from the other books and records of the Special Servicer and shall
be appropriately marked to clearly reflect the ownership of the related
Transferred Mortgage Loan by the Owner. The Special Servicer shall release
from its custody the contents of any Servicing File retained by it only in
accordance with this Agreement.
Section 2.02. Books and Records.
-----------------
Record title to each Mortgage and the related Mortgage Note shall
remain in the name of (i) the Owner or (ii) in the name as the Owner shall
designate. The Owner shall cause to be prepared and recorded any Assignments
of Mortgage required pursuant to this Section 2.02 and any powers of attorney
required to be executed in favor of the Special Servicer. The Owner or the
Primary Servicer shall pay all necessary fees associated with the preparation
and recording of the Assignments of Mortgage and such powers of attorney as
referred to above. Notwithstanding the foregoing, the Special Servicer shall
cooperate with the Owner or its designee in the Owner's or such designee's
preparation and recording of any and all Assignments of Mortgage relating to
Transferred Mortgage Loans. Additionally, the Special Servicer shall prepare
and execute, at the direction of the Owner, any note endorsements required in
connection with any and all Reconstitution Agreements. All rights arising
out of the Mortgage Loans shall be vested in the Owner. All funds received
on or in connection with a Transferred Mortgage Loan shall be received and
held by the Special Servicer in trust for the benefit of the Owner as the
owner of the Transferred Mortgage Loans pursuant to the terms of this
Agreement.
This Agreement continuously, from the time of its execution, shall
be an official record of the Special Servicer and Special Servicer will
maintain a copy of this Agreement and each agreement related hereto in its
official books and records.
Section 2.03. Commencement of Standby Servicing Responsibilities and
------------------------------------------------------
Servicing Responsibilities.
--------------------------
Pursuant to the execution of this Agreement the Special Servicer
shall assume and accept such appointment for, all standby servicing
responsibilities for the Mortgage Loans identified in the Mortgage Loan
Schedule attached hereto as Exhibit A.
On each Additional Mortgage Loan Transfer Date, the Owner shall
appoint the Special Servicer to perform, and the Special Servicer shall
assume and accept such appointment for, all standby servicing
responsibilities for the related Additional Mortgage Loans on the related
Mortgage Loan Schedule. The engagement of the Special Servicer to perform
the standby servicing responsibilities with respect to the Additional
Mortgage Loans hereunder is not mandatory and is expressly conditioned upon
the acquisition of the related Additional Mortgage Loans by the Owner, the
election of the Owner respecting the engagement of the Special Servicer to
perform the related standby servicing responsibilities and the election, in
the manner hereinafter set forth, of the Special Servicer to accept such
transfer.
Upon the Owner's determination in its sole discretion to engage the
Special Servicer to perform the standby servicing responsibilities with
respect to Additional Mortgage Loans pursuant to the terms of this Agreement,
the Owner shall execute and the Owner shall notify the Special Servicer by
telephone of its determination to transfer such standby servicing
responsibilities to the Special Servicer and shall deliver an Acknowledgment
Agreement to the Special Servicer within 2 Business Days of such verbal
notification. The Special Servicer may elect to accept or reject on an all
or nothing basis such engagement to perform the standby servicing
responsibilities with respect to the Additional Mortgage Loans by either (i)
in the case of an acceptance, executing the Acknowledgment Agreement and
delivering the same to the Owner within 5 Business Days of receipt of such
Acknowledgment Agreement, or (ii) in the case of a rejection, by written
notification thereof delivered to the Owner within 5 Business Days of
receipt of such Acknowledgment Agreement.
Pursuant to the execution of this Agreement (and any applicable
Acknowledgment Agreement), the Owner shall have the right, at its option, to
transfer servicing responsibilities with respect to any Distressed Mortgage
Loan to the Special Servicer upon five calendar days notice to the Special
Servicer pursuant to a Notice of Transfer. On each Transfer Date, the Owner
may appoint, pursuant to the execution of a Notice of Transfer, the Special
Servicer to perform, and the Special Servicer shall assume and accept such
appointment for, all servicing responsibilities for the related Transferred
Mortgage Loans identified in the related Notice of Transfer. The engagement
of the Special Servicer to perform the servicing responsibilities with
respect to Transferred Mortgage Loans hereunder is mandatory.
Section 2.04. Owner Covenants Regarding Transfer of Servicing for
---------------------------------------------------
Transferred Mortgage Loans.
--------------------------
On or before each Transfer Date the Owner shall use its Best
Efforts to cause the Primary Servicer to effectuate and evidence the transfer
of the servicing of any Transferred Mortgage Loan from such Primary Servicer
to the Special Servicer including the following:
(a) Notice to Mortgagors. The Owner shall cause the relevant
--------------------
Primary Servicer to mail to the Mortgagor of each Mortgage a letter advising
the Mortgagor of the transfer of the servicing thereof to the Special
Servicer, in accordance with the relevant provisions of the Xxxxxxxx-Xxxxxxxx
National Affordable Housing Act, as the same may be amended from time to
time, and the regulations provided in accordance with the Real Estate
Settlement Procedures Act. The Owner shall cause the related Primary
Servicer to promptly provide the Special Servicer with copies of all such
notices.
(b) Notice to Taxing Authorities and Insurance Companies. The
----------------------------------------------------
Owner shall cause the related Primary Servicer to transmit to the applicable
taxing authorities and insurance companies and/or agents, notification of the
transfer of the servicing to the Special Servicer and instructions to deliver
all notices, tax bills and insurance statements, as the case may be, to the
Special Servicer from and after the related Transfer Date. The Owner shall
cause the Primary Servicer to promptly provide the Special Servicer with
copies of all such notices.
(c) Delivery of Servicing Records. The Owner shall cause the
-----------------------------
Primary Servicer to forward to the Special Servicer all Servicing Files
within five (5) Business Days prior to the Transfer Date, and any other
Mortgage Loan documents in the Primary Servicer's possession relating to each
Transferred Mortgage Loan.
(d) Escrow Payments; Servicing Advances. The Owner shall cause
-----------------------------------
the Primary Servicer to provide the Special Servicer with immediately
available funds by wire transfer in the amount of the net Escrow Payments and
suspense balances and all loss draft balances associated with the Transferred
Mortgage Loans. The Owner shall cause the Primary Servicer to provide the
Special Servicer with an accounting statement of Escrow Payments and suspense
balances and loss draft balances sufficient to enable the Special Servicer to
reconcile the amount of such payment with the accounts of the
Transferred Mortgage Loans. Additionally, the Owner shall cause the
Primary Servicer (i) to provide to the Special Servicer Mortgage Loan
level documentation regarding unreimbursed Servicing Advances and (ii) to
wire the Special Servicer the amount of any agency, trustee or prepaid
Transferred Mortgage Loan payments and all other similar amounts held by the
Primary Servicer.
(e) Payoffs and Assumptions. The Owner shall cause the Primary
-----------------------
Servicer to provide to the Special Servicer copies of all assumption and
payoff statements generated by the Primary Servicer on the Transferred
Mortgage Loans.
(f) Costs, Expenses and Information. The Owner shall be
-------------------------------
responsible for all costs and expenses associated with a Transferred Mortgage
Loan resulting from a Primary Servicer or any previous servicer failing to
service such Transferred Mortgage Loan correctly or failing to give correct
information with respect to such Transferred Mortgage Loan to any previous
servicer, Primary Servicer or the Special Servicer (including, but not
limited to, tax information, insurance information and a failure to make
servicing advances). The Owner shall be responsible for all out-of-pocket
costs associated with the transfer of a Transferred Mortgage Loan to the
Special Servicer. The Owner shall cause the Primary Servicer to forward to
the Special Servicer all information required to be transferred pursuant to
this Agreement in the form of data tapes or other electronic media reasonably
acceptable to the Special Servicer.
(g) Mortgage Payments Received Prior to Transfer Date. The Owner
-------------------------------------------------
shall cause the Primary Servicer to forward all payments received by the
Primary Servicer on each Transferred Mortgage Loan prior to the related
Transfer Date to the account of the particular Mortgagor.
(h) Mortgage Payments Received After Transfer Date. The Owner
----------------------------------------------
shall cause the Primary Servicer to endorse any Monthly Payments received by
the Primary Servicer after the related Transfer Date directly to the Special
Servicer with respect to any Transferred Mortgage Loan and shall cause the
Primary Servicer to forward any such endorsed Monthly Payment to the Special
Servicer by overnight mail on the date of receipt. The Owner shall cause the
Primary Servicer to notify the Special Servicer of the particulars of the
payment, which notification requirement shall be satisfied if the Primary
Servicer forwards with its payment sufficient information to permit
appropriate processing of the payment by the Special Servicer. The Owner
shall cause the Primary Servicer to assume full responsibility for the
necessary and appropriate legal application of Monthly Payments received by
the Primary Servicer after the related Transfer Date with respect to
Transferred Mortgage Loans then in foreclosure or bankruptcy; provided, for
purposes of this Agreement, necessary and appropriate legal application of
such Monthly Payments shall include, but not be limited to endorsement of a
Monthly Payment to the Special Servicer with the particulars of the payment
such as the account number, dollar amount, date received and any special
Mortgagor application instructions.
(i) Reconciliation; Principal and Interest Advances. The Owner
-----------------------------------------------
shall cause the Primary Servicer to, on or before the related Transfer Date,
reconcile principal balances and make any monetary adjustments required by
the Special Servicer. Any such monetary adjustments will be transferred
between the Primary Servicer and the Special Servicer as appropriate. In
addition, the Owner shall cause the Primary Servicer to provide the
Special Servicer Mortgage Loan Level documentation regarding principal
and interest advances.
(j) IRS Forms. The Owner shall cause the Primary Servicer to file
---------
all IRS forms 1098, 1099, 1099A or 1041 and K-1 which are required to be
filed on or before the related Transfer Date in relation to the servicing and
ownership of the Transferred Mortgage Loans for the current calendar year.
The Special Servicer shall be responsible for the filing of forms 1098, 1099
and 1099A and will provide all required information and data to the Owner
necessary for the Owner to file forms 1041 and K-1 with respect to
Transferred Mortgage Loans relating to the actual time periods for which the
Special Servicer has serviced the Transferred Mortgage Loans. The Owner
shall cause the Primary Servicer to provide copies of such forms to the
Special Servicer or the Mortgagors upon request and shall cause the Primary
Servicer to reimburse the Special Servicer for any costs or penalties
incurred by the Special Servicer due to the Primary Servicer's failure to
comply with this paragraph.
Section 2.05. Special Servicer Covenants Regarding Transfer of
------------------------------------------------
Servicing of Transferred Mortgage Loans.
---------------------------------------
(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 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
shall be reimbursed to the Special Servicer in accordance with Section 3.04
hereof.
(ii) The Special Servicer shall, in accordance with the relevant
provisions of the Xxxxxxxx-Xxxxxxxx National Affordable Housing Act, as the
same may be amended from time to time, and the regulations provided in
accordance with the Real Estate Settlement Procedures Act, provide notice to
the Mortgagor of each Mortgage of the transfer of the servicing thereto to
the Special Servicer.
(iii) The Special Servicer shall be responsible for the
preparation and costs associated with notifications to Mortgagors sent by the
Special Servicer, with respect to the assumption of servicing by the Special
Servicer. The Special Servicer shall not be responsible for the preparation
and costs associated with notifications to Mortgagors sent by a Primary
Servicer with respect to assumption of servicing by the Special Servicer.
(b) The Special Servicer, with the Owner and the Primary
Servicers, in order to accomplish any provision contained herein, shall take
any steps reasonably necessary, including, but not limited to (i) executing,
acknowledging and delivering all such further acts, deeds, assignments,
transfers, conveyances, powers of attorney and assurances as may be
reasonably required in order to accomplish any provision herein, (ii)
facilitating and completing the transfer of any Servicing File with respect
to any Transferred Mortgage Loan from a Primary Servicer to the Special
Servicer, (iii) entering into and performing under any Reconstitution
Agreement and (iv) remitting to a Primary Servicer any principal and interest
or Servicing Advance made by such Primary Servicer with respect to a
Transferred Mortgage Loan for which such Primary Servicer has not been
reimbursed. All costs and expenses incurred by compliance with Section
2.05(b), (i) through (iv) shall be the responsibility of the Owner or the
Primary Servicer, as applicable, and all costs incurred by compliance with
Section 2.05(b), (iv) shall be the responsibility of the Special Servicer.
Section 2.06. Custodial Agreement.
-------------------
Pursuant to the applicable Custodial Agreement, the Owner shall
deliver and release to the related Custodian on or prior to each Transfer
Date those Mortgage Loan documents required by the applicable Custodial
Agreement with respect to each Transferred Mortgage Loan, a list of which is
set forth in Section 2 of the applicable Custodial Agreement. In the event
of any conflict, inconsistency or discrepancy between any of the provisions
of this Agreement and any of the provisions of the applicable Custodial
Agreement, the provisions of this Agreement shall control and be binding upon
the Owner and the Special Servicer.
Prior to each Transfer Date, the related Custodian shall have
certified its receipt of all such Mortgage Loan documents required to be
delivered pursuant to the applicable Custodial Agreement, as evidenced by the
Initial Certification of the related Custodian in the form annexed to the
applicable Custodial Agreement. The Owner shall be responsible for, as and
when due, any and all initial document review fees, initial and final
certification fees and recertification fees and any costs associated with
correcting any deficiencies identified in connection with such review(s).
The Owner shall be responsible for maintaining the applicable Custodial
Agreement with respect to the Transferred Mortgage Loans and shall pay all
other fees and expenses of the related Custodian including but not limited
to, (i) any and all annual and warehousing fees, (ii) any and all termination
fees in the event the related Custodian is terminated by the Special
Servicer, except that the Owner shall pay such termination fees in the event
the related Custodian is terminated pursuant to the Owner's request and (iii)
any and all fees due in connection with the deposit or retrieval of a
Transferred Mortgage Loan document or documents.
The Special Servicer shall forward to the related Custodian
original documents evidencing an assumption, modification, consolidation or
extension of any Transferred Mortgage Loan entered into in accordance with
this Agreement within two weeks of their execution, provided, however, that
the Special Servicer shall provide the related Custodian with a certified
true copy of any such document submitted for recordation within one week of
its execution, and shall provide the original of any document submitted for
recordation or a copy of such document certified by the appropriate public
recording office to be a true and complete copy of the original within thirty
days after such certified document is returned from such public recording
office.
ARTICLE III
SERVICING OF THE TRANSFERRED MORTGAGE LOANS
Section 3.01. Special Servicer to Service Transferred Mortgage Loans.
------------------------------------------------------
(A) Acting directly or through one or more subservicers as
provided in Section 8.03 hereof, the Special Servicer, as an independent
contractor, shall service and administer the Transferred Mortgage Loans from
and after the related Transfer Date on behalf of the Owner in accordance with
the terms of this Agreement and the respective Transferred Mortgage Loans
and, to the extent consistent with such terms, in the same manner in which it
services and administers similar mortgage loans for its own portfolio, giving
due consideration to customary and usual standards of practice of prudent
mortgage lenders and loan servicers administering similar mortgage loans but
without regard to:
(i) any relationship that the Special Servicer, any subservicer or
any affiliate of the Special Servicer or any subservicer may have with the
related Mortgagor;
(ii) the Special Servicer's obligation to make principal and
interest advances or Servicing Advances; or
(iii) the Special Servicer's or any subservicer's right to
receive compensation for its services hereunder or with respect to any
particular transaction.
The standards set forth in this Section 3.01(A) shall be defined
herein as "Accepted Servicing Practices."
(B) The Special Servicer shall (i) enforce each Mortgagor's
obligations under the related Mortgage Loan to cause each Mortgaged Property
to be insured against risks, hazards and liabilities as required by all
applicable laws, regulations and Mortgage Loan Documents, in an amount at
least equal to the lesser of (A) the full replacement cost of the
improvements, and (B) the outstanding principal balance of the related
Mortgage Loan or such other amount as is necessary to prevent any reduction
in such policy by reason of the application of co-insurance and to prevent
the Owner from being deemed to be a co-insurer, and (ii) cause each REO
Property to be insured against risks, hazards and liabilities, in an amount
which is at least equal to the lesser of (A) the full replacement value of
the improvements which are a part of such REO Property, and (B) the
outstanding principal balance of the related Mortgage Loan at the time it
became an REO Property; such insurance shall be obtained from an insurer
having a "General Policy Rating" of A or better in Best's Key Rating Guide.
The Special Servicer shall retain copies of all hazard insurance policies or
certificates of insurance representing such coverage. In the event of an
insured loss with respect to any Mortgaged Property, unless the Special
Servicer has actual knowledge that the Mortgagor has filed such a claim with
respect to a Mortgaged Property, the Special Servicer shall promptly file or
cause to be filed a claim on the hazard insurance. In the case of a
Mortgaged Property, the Special Servicer shall apply or disburse all
insurance proceeds in accordance with the terms and provisions of the
Mortgage Loans and this Agreement, and, in the case of a REO Property, the
Special Servicer shall apply or disburse all insurance proceeds in accordance
with the instructions of Owner, in each case net of any amounts due to
Special Servicer as otherwise provided herein. The Special Servicer shall,
where the Mortgagor fails or refuses to maintain insurance on the
Mortgaged Property in accordance with the applicable Mortgage Loan (or
to pay escrows sufficient therefor, as the case may be), subject the
Mortgaged Property to the coverage of its "force-placed" hazard insurance
policy with such deductible as the Special Servicer maintains for similar
mortgaged properties serviced for itself and for others. The amount
of any premiums to the Special Servicer resulting from obtaining such
coverage shall be treated as a Servicing Advance hereunder. The Owner shall
be solely responsible for the amount of the deductible in the event of any
loss and the Special Servicer shall have no liability to Owner therefor.
Subject to the preceding paragraph, the Special Servicer shall, at
its own expense, keep in force during the term of this Agreement a fidelity
bond and a policy or policies of insurance covering errors and omissions in
the performance of the Special Servicer's obligations under this Agreement.
Such fidelity bond and policy or policies shall be maintained with recognized
insurers and shall be in such form and amount as would permit the Special
Servicer to be qualified as a FNMA or FHLMC seller-servicer. The Servicer
shall be deemed to have complied with this provision if an affiliate of the
Special Servicer has such errors and omissions and fidelity bond coverage
and, by the terms of such insurance policy or fidelity bond, the coverage
afforded thereunder extends to the Special Servicer.
Notwithstanding the foregoing paragraph, the Owner and the Special
Servicer hereby agree as follows:
(a) The Owner or the Owner's designee shall prepare and record all
Assignments of Mortgage and powers of attorney, and shall pay the recording
costs associated therewith. The Special Servicer shall track such
Assignments of Mortgage, with respect to Transferred Mortgage Loans, to
ensure they have been recorded.
(b) The Special Servicer shall utilize its internal tax services
and will bear the expense of any outside tax services, if utilized;
provided, however, in accordance with Accepted Servicing Practices, if the
Special Servicer uses outside tax services, the cost of such services, so
long as such cost is reasonable, shall be paid by the Owner.
(c) The Special Servicer shall retain all Ancillary Income with
respect to Transferred Mortgage Loans.
(d) Notwithstanding the foregoing, at any time and from time to
time, the Owner may at its election terminate this Agreement with respect to
any Transferred Mortgage Loan or REO Property as provided by Section 9.02.
Consistent with and subject to Accepted Servicing Practices and the
terms of this Agreement, the Special Servicer may waive, modify or vary any
term of any Transferred Mortgage Loan. or consent to the postponement of
strict compliance with any such term or in any manner grant indulgence to any
Mortgagor. Without limiting the generality of the foregoing, the Special
Servicer shall continue, and is hereby authorized and empowered, to execute
and deliver on behalf of itself and the Owner, all instruments of
satisfaction or cancellation, or of partial or full release, discharge and
all other comparable instruments, with respect to the Transferred Mortgage
Loans and with respect to the related Mortgaged Properties. If reasonably
required by the Special Servicer, the Owner shall furnish the Special
Servicer with any powers of attorney and other documents necessary or
appropriate to enable the Special Servicer to carry out its servicing
and administrative duties under this Agreement.
Section 3.02. Collection of Mortgage Loan Payments.
------------------------------------
Continuously from the related Transfer Date until the date each
Transferred Mortgage Loan ceases to be subject to this Agreement, the Special
Servicer shall proceed diligently to collect all payments due under each of
the Transferred Mortgage Loans when the same shall become due and payable and
shall take special care in ascertaining and estimating Escrow Payments and
all other charges that will become due and payable with respect to the
Transferred Mortgage Loans and each related Mortgaged Property, to the end
that the installments payable by the Mortgagors will be sufficient to pay
such charges as and when they become due and payable.
Section 3.03. Establishment of and Deposits to Custodial Account.
--------------------------------------------------
The Special Servicer shall segregate and hold all funds collected
and received pursuant to the Transferred Mortgage Loans separate and apart
from any of its own funds and general assets and shall establish and maintain
one or more Custodial Accounts, in the form of time deposit or demand
accounts, titled "(Special Servicer), in trust for Xxxxxx Capital, A Division
of Xxxxxx Brothers Holdings Inc., owner of Residential Mortgage Loans, Group
No. _______, and various Mortgagors". The Custodial Account shall be
established with a Qualified Depository. Any funds deposited in the
Custodial Account shall at all times be fully insured by the FDIC and any
amounts therein may be invested in Eligible Investments subject to the
provisions of Section 3.09 hereof. Funds deposited in the Custodial Account
may be drawn on by the Special Servicer in accordance with Section 3.04. The
creation of any Custodial Account shall be evidenced by a certification in
the form of Exhibit C hereto. A copy of such certification shall be
furnished to the Owner and, upon request, to any subsequent owner of the
Mortgage Loans.
The Special Servicer shall deposit in the Custodial Account on a
daily basis, and retain therein, the following collections received by the
Special Servicer in the Special Servicer's lock-box and payments required to
be made by the Special Servicer after the related Transfer Date:
(i) all payments on account of principal on the
Transferred Mortgage Loans, including all Principal Prepayments;
(ii) all payments on account of interest on the Transferred
Mortgage Loans adjusted to the Mortgage Loan Remittance Rate;
(iii) all Net Liquidation Proceeds;
(iv) all Net Insurance Proceeds;
(v) any amount required to be deposited in the Custodial
Account;
(vi) any amounts required to be deposited by the Special
Servicer in connection with the deductible clause in any blanket hazard
insurance policy; and
(vii) any amounts received with respect to or related to any
REO Property or REO Disposition Proceeds.
Any interest paid on funds deposited in the Custodial Account by
the depository institution shall accrue to the benefit of the Special
Servicer and the Special Servicer shall be entitled to retain and withdraw
such interest from the Custodial Account pursuant to Section 3.04.
Additionally, any other benefit derived from the Custodial Account associated
with the receipt, disbursement and accumulation of principal, interest,
taxes, hazard insurance, mortgage insurance, etc. shall accrue to the Special
Servicer.
Section 3.04. Permitted Withdrawals From Custodial Account.
--------------------------------------------
The Special Servicer shall, from time to time, withdraw funds from
the Custodial Account (without implication) for the following purposes:
(i) to make payments to the Owner in the amounts and in the
manner provided for in Section 4.01;
(ii) to reimburse itself for unreimbursed advances of the
Special Servicer's funds made pursuant to Section 2.05 hereof and for
any unreimbursed Servicing Advances, 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, 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 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. If the disposition
of a Transferred Mortgage Loan results in the Special Servicer not
recovering all of the foregoing sums, the Owner shall be responsible for
reimbursing to the Special Servicer a sum equal to such non-recovered
amount. In the event that a Transferred Mortgage becomes a
Reconstituted Mortgage Loan, pursuant to the related Reconstitution
Agreement, the Special Servicer shall be able to recover unreimbursed
advances from the related Custodial Account prior to payments to be made
to certificateholders;
(iii) to pay itself any unpaid Transferred Mortgage Loan
Servicing Fees, it being understood that for those Transferred Mortgage
Loans in foreclosure, the Owner shall reimburse the Special Servicer
for Transferred Mortgage Loan Servicing Fees through the completion
of the sale of the defaulted Mortgage Loan or the foreclosure and
disposition of the REO Property. If the disposition of a Transferred
Mortgage Loan results in the Special Servicer not recovering all of the
foregoing sums, the Owner shall be responsible for reimbursing to the
Special Servicer a sum equal to such non-recovered amount;
(iv) to pay itself interest on funds deposited in the Custodial
Account;
(v) to clear and terminate the Custodial Account upon the
termination of this Agreement;
(vi) to transfer funds to another Qualified Depository in
accordance with Section 3.09 hereof;
(xii) to invest funds in certain Eligible Investments in
accordance with Section 3.09 hereof; and
(viii) to withdraw amounts erroneously deposited into the
Custodial Account.
Section 3.05. Establishment of and Deposits to Escrow Account.
-----------------------------------------------
The Special Servicer shall segregate and hold all funds collected
and received pursuant to a Transferred Mortgage Loan constituting Escrow
Payments separate and apart from any of its own funds and general assets and
shall establish and maintain one or more Escrow Accounts, in the form of time
deposit or demand accounts, titled, "(Special Servicer), in trust for Xxxxxx
Capital, A Division of Xxxxxx Brothers Holdings Inc., owner of Residential
Mortgage Loans, Group No. _______, and various Mortgagors". The Escrow
Accounts shall be established with a Qualified Depository in a manner that
shall provide maximum available insurance thereunder. Funds deposited in the
Escrow Account may be drawn on by the Special Servicer in accordance with
Section 3.06. The creation of any Escrow Account shall be evidenced by a
certification in the form of Exhibit D hereto. A copy of such certification
shall be furnished to the Owner and, upon request, to any subsequent owner of
the Transferred Mortgage Loans.
The Special Servicer shall deposit in the Escrow Account or
Accounts on a daily basis, and retain therein:
(i) all Escrow Payments collected on account of the
Transferred Mortgage Loans, for the purpose of effecting timely payment
of any such items as required under the terms of this Agreement; and
(ii) all amounts representing Insurance Proceeds or
Liquidation Proceeds which are to be applied to the restoration or
repair of any Mortgaged Property relating to a Transferred Mortgage
Loan.
The Special Servicer shall make withdrawals from the Escrow Account
only to effect such payments as are required under this Agreement, as set
forth in Section 3.06. The Special Servicer shall retain any interest paid
on funds deposited in the Escrow Account by the depository institution,
other than interest on escrowed funds required by law to be paid to the
Mortgagor. To the extent required by law, the Special Servicer shall
pay interest on escrowed funds to the Mortgagor notwithstanding that the
Escrow Account may be non-interest bearing or that interest paid thereon
is insufficient for such purposes.
Section 3.06. Permitted Withdrawals From Escrow Account.
-----------------------------------------
Withdrawals from the Escrow Account or Accounts may be made by the
Special Servicer only:
(i) to effect timely payments of ground rents, taxes,
assessments, water rates, mortgage insurance premiums, condominium
charges, homeowners association charges, fire and hazard insurance
premiums or other items constituting Escrow Payments for the related
Mortgage;
(ii) to reimburse the Special Servicer for any Servicing
Advance made by the Special Servicer with respect to a related
Transferred Mortgage Loan, but only from amounts received on the related
Transferred Mortgage Loan which represent late collections of Escrow
Payments thereunder;
(iii) to refund to any Mortgagor any funds found to be in excess
of the amounts required under the terms of the related Transferred
Mortgage Loan;
(iv) for transfer to the Custodial Account and application to
reduce the principal balance of the Transferred Mortgage Loan in
accordance with the terms of the related Mortgage and Mortgage Note;
(v) for application to restoration or repair of the
Mortgaged Property in accordance with Accepted Servicing Practices;
(vi) to pay to the Special Servicer, or any Mortgagor to the
extent required by law, any interest paid on the funds deposited in the
Escrow Account; and
(vii) to clear and terminate the Escrow Account on the
termination of this Agreement.
Section 3.07. Notification of Adjustments.
---------------------------
With respect to each adjustable rate Transferred Mortgage Loan, the
Special Servicer shall adjust the Mortgage Interest Rate on the related
interest rate adjustment date and shall adjust the Monthly Payment on the
related mortgage payment adjustment date, if applicable, in compliance with
the requirements of applicable law and the related Mortgage and Mortgage
Note. The Special Servicer shall execute and deliver any and all necessary
notices required under applicable law and the terms of the related Mortgage
Note and Mortgage regarding the Mortgage Interest Rate and Monthly Payment
adjustments. The Special Servicer shall promptly, upon written request
therefor, deliver to the Owner such notifications and any additional
applicable data regarding such adjustments and the methods used to calculate
and implement such adjustments. Such data provided by the Special Servicer
shall be in a form acceptable to the Owner and shall be provided by the
Special Servicer within a reasonable period of time subsequent to such
request. Upon the discovery by the Special Servicer or the receipt of notice
from the Owner that the Special Servicer has failed to adjust a Mortgage
Interest Rate or Monthly Payment in accordance with the terms of the related
Mortgage Note, the Special Servicer shall immediately deposit in the
Custodial Account from its own funds the amount of any interest loss or
deferral caused the Owner thereby. Any such losses, to the extent resulting
from the conveyance of incorrect data to the Special Servicer from any
Primary Servicer or any previous servicer, as the case may be, shall not be
the responsibility of the Special Servicer.
Section 3.08. Completion and Recordation of Assignment of Mortgage.
----------------------------------------------------
To the extent permitted by applicable law, each of the Assignments
of Mortgage is subject to recordation in all appropriate public offices for
real property records in all the counties or other comparable jurisdictions
in which any or all of the Mortgaged Properties are situated, and in any
other appropriate public recording office or elsewhere, such recordation to
be effected at the Owner's expense at the direction of the Owner. At the
Owner's direction, the Special Servicer shall cause to be made the
endorsements on the Mortgage Note, the Assignment of Mortgage and the
assignment of security agreement.
Section 3.09. Protection of Accounts.
----------------------
The Special Servicer may transfer the Custodial Account or the
Escrow Account to a different Qualified Depository from time to time. Such
transfer shall be made only upon obtaining the consent of the Owner, which
consent shall not be withheld unreasonably.
The Special Servicer shall bear any expenses, losses or damages
sustained by the Owner if the Custodial Account and/or the Escrow Account are
not demand deposit accounts.
Amounts on deposit in the Custodial Account may at the option of
the Special Servicer be invested in Eligible Investments; provided that in
the event that amounts on deposit in the Custodial Account exceed the amount
fully insured by the FDIC (the "Insured Amount") the Servicer shall be
--------------
obligated to invest the excess amount over the Insured Amount in Eligible
Investments on the same Business Day as such excess amount becomes present in
the Custodial Account. Any such Eligible Investment shall mature no later
than the Determination Date next following the date of such Eligible
Investment, provided, however, that if such Eligible Investment is an
obligation of a Qualified Depository (other than the Special Servicer) that
maintains the Custodial Account, then such Eligible Investment may mature on
such Remittance Date. Any such Eligible Investment shall be made in the
name of the Special Servicer in trust for the benefit of the Owner. All
income on or gain realized from any such Eligible Investment shall be for
the benefit of the Special Servicer and may be withdrawn at any time by the
Special Servicer. Any losses incurred in respect of any such investment
shall be deposited in the Custodial Account, by the Special Servicer
out of its own funds immediately as realized.
Section 3.10. Default Management Provisions.
-----------------------------
(a) Default Management Responsibilities: Subject only to Accepted
-----------------------------------
Servicing Practices and the Decision Matrix attached hereto as Exhibit I, 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, Special Servicer is hereby authorized and empowered by 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 and the Decision
Matrix) to take the following actions (without limitation (i) prepare,
execute and deliver, on behalf of the Owner at its expense, 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 Transferred Mortgage 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.
(b) Alternatives to Foreclosure:
---------------------------
(i) Repayment Plan and Forbearance Agreement. If the Special
----------------------------------------
Servicer pursues a repayment plan in respect of a Transferred Mortgage Loan
pursuant to the authority granted to the Special Servicer by the terms and
provisions of Section 3.10 (a) above, the Special Servicer will negotiate an
agreement with the Mortgagor for repayment of the delinquent payments over a
period and for forbearance from foreclosure during the term of such
agreement. If such Mortgagor shall at any time be in default under any such
agreement, the Special Servicer shall promptly proceed with foreclosure
proceedings in accordance with Section 3.10 (c) hereof (while simultaneously
pursuing other resolution strategies). The Special Servicer shall retain any
fees paid by the Mortgagor in connection with such repayment plan or
forbearance agreement as Ancillary Income.
(ii) Suit Against the Mortgagor; Garnishments, Etc.: If the
----------------------------------------------
Special Servicer determines in accordance with Accepted Servicing Practices
and this Agreement that it would be prudent to file suit against a Mortgagor
rather than to seek foreclosure, the Special Servicer may file suit against a
Mortgagor directly to recover the indebtedness, to seek a garnishment of
wages, to seek a temporary restraining order and/or temporary and/or
permanent injunction, and/or to seek any other relief available at law or in
equity against the Mortgagor. Additionally, if the circumstances warrant
same and applicable law so permits, the Special Servicer may file any such
suit while simultaneously seeking nonjudicial or judicial foreclosure or may
seek such relief in the same action as that filed to seek a judicial
foreclosure.
(iii) Pre-Sale. In order to avoid foreclosure, the Special
--------
Servicer may (pursuant to the authority granted to the Special Servicer by
the terms and provisions of Section 3.10 (a) above) attempt (i) to effect a
sale of the Mortgaged Property (including causing the Mortgaged Property to
be listed for sale with a real estate broker) or (ii) to effect an assumption
or prepayment of the Mortgage Loan, with the Mortgagor's cooperation, and, if
appropriate, enter into an agreement with the Mortgagor regarding payment of
any deficiency (a "Pre-Sale"). The Special Servicer, or any of its
affiliates, may act as a broker on behalf of the Mortgagor. The Owner
acknowledges that if the Special Servicer or any affiliate of the Special
Servicer has accepted a listing agreement with a Mortgagor in connection with
such sale or assumption, the Special Servicer or such affiliate, acting in
such capacity, is legally obligated to present all offers to purchase the
Mortgaged Property or assume the Mortgage Loan to the Mortgagor and will
negotiate a sale of the Mortgaged Property or assumption of the Transferred
Mortgage Loan pursuant to the instructions from the Mortgagor. The proceeds
of any Pre-Sale distributable to the Owner pursuant to and subject to the
distribution priorities set forth in this Agreement will reflect reductions
for customary and reasonable costs of closing, including brokerage
commissions, make-ready expenses, title insurance, financing costs, recording
fees, transfer taxes, tax certificates, title and closing agent fees and pro-
rated items, that will reduce the proceeds of sale payable to the Owner.
(iv) Sale of Distressed Mortgage Loan. The Special Servicer may
--------------------------------
effect a sale of a Distressed Mortgage Loan or Severely Delinquent Mortgage
Loan to a third party.
(v) Modification. If the Special Servicer pursues a modification
------------
of a Transferred Mortgage Loan pursuant to the authority granted to the
Special Servicer by the terms and provisions of Section 3.10 (a) above, the
Special Servicer will negotiate and execute Mortgage Loan modification
documents on behalf of the Owner in accordance with Accepted Servicing
Practices. The Special Servicer shall retain any fees paid by the Mortgagor
in connection with such modification as Ancillary Income.
(vi) Discounted Payoff. The Special Servicer may (pursuant to the
-----------------
authority granted to the Special Servicer by the terms and provisions of
Section 3.10 (a) above), subject to the Decision Matrix, accept a discounted
payoff of a Transferred Mortgage Loan. The Special Servicer, or any of its
affiliates, may provide new financing to the Mortgagor to facilitate such
discounted payoff provided that the Special Servicer obtains the Owner's
prior written consent with respect thereto. The Owner acknowledges
that if the Special Servicer provides such financing, the Special
Servicer may receive fees from the Mortgagor in connection therewith and
the Owner will not be entitled to any such fees to the extent that such
fees are customary and reasonable.
(vii) Deed in Lieu of Foreclosure. If the Special Servicer
---------------------------
pursues a deed in lieu of foreclosure pursuant to the authority granted to
the Special Servicer by the terms and provisions of Section 3.10 (a) above,
the Special Servicer will retain counsel to prepare appropriate
documentation, execute and deliver such documentation on behalf of the Owner
and may enter into an agreement with Mortgagor regarding payment of any
deficiency. The actions described herein shall be taken by the Special
Servicer in accordance with Accepted Servicing Practices or otherwise with
the consent of the Owner. Title to such Mortgaged Property may be taken in
the name of the Owner or its designee. Notwithstanding anything to the
contrary contained herein, in connection with a deed in lieu of foreclosure,
in the event the Special Servicer has reasonable cause to believe that a
Mortgaged Property is an Environmental Problem Property as described in
Section 3.10 (g) hereof, the Special Servicer shall notify the Owner of the
existence of the Environmental Problem Property, describe such problem, make
a recommendation to the Owner regarding handling such Environmental Problem
Property and carry out the recommendation unless otherwise directed by the
Owner in writing within five (5) Business Days after the Owner's receipt of
such notice. In no event will the Special Servicer be required to acquire
record title to an Environmental Problem Property. The Special Servicer will
provide the services described in Section 3.10 (g) with respect to each
Mortgaged Property for which a deed in lieu of foreclosure is received by the
Special Servicer.
(viii) Priority; Insurance Claims. The Special Servicer will
--------------------------
be responsible for retaining counsel on behalf of the Owner to advise the
Special Servicer whether any proposed relief for the Mortgagor pursuant to
this Section 3.10 (b) will adversely affect claims against any other
Mortgagor or the priority of the lien securing the Mortgage Loan. The
Special Servicer shall consider the effect of such relief on the priority of
the lien and claims against other Mortgagors in acting hereunder.
(ix) Monitoring. The Special Servicer will be responsible for
----------
monitoring compliance with a repayment plan, modification agreement,
agreement regarding payment of a deficiency or other agreement entered into
pursuant to this Section 3.10 (b) regarding payments in respect of a Mortgage
Loan, and sending appropriate reminder notices to the Mortgagor or other
appropriate Person.
(c) Foreclosure. If the Special Servicer reasonably determines
-----------
that foreclosure is appropriate with respect to a Mortgage Loan (including if
it determines that foreclosure is appropriate in conjunction with or as an
alternative to collection efforts and default management services hereunder),
the Special Servicer will (pursuant to the authority granted to the Special
Servicer by the terms and provisions of Section 3.10 (a) above) retain an
attorney and supervise the conduct of the foreclosure proceeding. If the
Mortgaged Property is acquired in the foreclosure proceeding, the Special
Servicer may acquire the Mortgaged Property in the name of the Owner or its
designee (as specified by the Owner), and the Special Servicer shall
commence providing property management and disposition services as provided
in Section 3.10 (f). Notwithstanding, anything to the contrary contained
herein, in connection with a foreclosure, in the event the Special Servicer
has reasonable cause to believe that a Mortgaged Property is an Environmental
Problem Property as described in Section 3.10 (g) hereof, the Special
Servicer shall notify the Owner of the existence of the Environmental Problem
Property, describe such problem, make a recommendation to the Owner regarding
handling the Environmental Problem Property and carry out the recommendation
unless otherwise directed by the Owner in writing within five (5) Business
Days after the Owner's receipt of such notice. In no event will the Special
Servicer be required to acquire record title to an Environmental Problem
Property. If the Special Servicer elects to proceed with a foreclosure in
accordance with the laws of the state where the Mortgaged Property is
located, the Special Servicer shall not be required to pursue a deficiency
judgment against the related Mortgagor or any other liable party if the laws
of the state do not permit such a deficiency judgment after such foreclosure
or if the Special Servicer determines, in accordance with Accepted Servicing
Practices, that the likely recovery if a deficiency judgment is obtained will
not be sufficient to warrant the cost, time, expense and/or exposure to the
Owner of pursuing the deficiency judgment.
(d) Bankruptcy of Mortgagor. If the Special Servicer has actual
-----------------------
knowledge that a Mortgagor is the subject of a proceeding under the
Bankruptcy Code or any other similar law, has made an assignment for the
benefit of creditors or has had a receiver or custodian appointed for its
property, the Special Servicer will (pursuant to the authority granted to the
Servicer by the terms and provisions of Section 3.10 (a) above) retain an
attorney to pursue claims to payment on the Mortgage Loan and foreclosure on
the Mortgaged Property. If the Mortgaged Property is acquired in an
insolvency proceeding it shall be acquired in the name of the Owner or its
designee.
(e) Decision Matrix. The Special Servicer shall be authorized to
---------------
do or cause to be done any and all things in connection with the Transferred
Mortgage Loans and related Mortgaged Properties in accordance with Accepted
Servicing Practices and the terms and provisions of this Article III as
limited by the matrix (the "Decision Matrix") attached hereto and made a part
hereof for all purposes as Exhibit I.
(f) Property Management and Disposition Responsibilities. With
----------------------------------------------------
respect to each Mortgaged Property that becomes an REO Property, the Special
Servicer shall, in accordance with Accepted Servicing Practices, provide
property management and disposition services with respect to such REO
Property, including analysis of sale and leasing potential of such REO
Property, leasing and collection of rents, property management (including
maintenance and repairs to such REO Property to render it leasable or
salable), Escrow Account administration for payment of Escrow Payments and
property sales.
(g) Environmental Problems. If the Servicer hereafter becomes
----------------------
aware that a Mortgaged Property is in violation of any environmental law,
rule or regulation (an "Environmental Problem Property"), the Special
Servicer will notify the Owner of the existence of the Environmental Problem
Property. Additionally, the Special Servicer shall set forth in such notice
a description of such problem, a recommendation to the Owner relating to the
proposed action regarding the Environmental Problem Property and the Special
Servicer shall carry out the recommendation set forth in such notice
unless otherwise directed by the Owner in writing within five (5)
Business Days after the Owner's receipt of such notice. If the Special
Servicer has reason to believe that a Mortgaged Property is in violation of
any environmental law, rule or regulation (e.g., the Special Servicer
obtains a broker's price opinion which reveals the potential for such
problem), the Special Servicer will not accept a deed-in-lieu of
foreclosure upon any such Mortgaged Property without first obtaining a
preliminary environmental investigation for the Mortgaged Property
satisfactory to the Owner.
ARTICLE IV
PAYMENTS TO OWNER
Section 4.01. Remittances.
-----------
On each Remittance Date the Special Servicer shall remit by wire
transfer of immediately available funds to the Owner all amounts deposited in
the Custodial Account as of the close of business on the Determination Date
(net of charges against or withdrawals from the Custodial Account pursuant to
Section 3.04).
With respect to any remittance received by the Owner after the
second Business Day following the Business Day on which such payment was due,
the Special Servicer shall pay to the Owner interest on any such late payment
at an annual rate equal to the Prime Rate, adjusted as of the date of each
change, plus two percentage points, but in no event greater than the maximum
amount permitted by applicable law. Such interest shall be deposited in the
Custodial Account by the Special Servicer on the date such late payment is
made and shall cover the period commencing with the day following such second
Business Day and ending with the Business Day on which such payment is made,
both inclusive. Such interest shall be remitted along with the distribution
payable on the next succeeding Remittance Date. The payment by the Special
Servicer of any such interest shall not be deemed an extension of time for
payment or a waiver of any Event of Default by the Special Servicer. The
Special Servicer shall have no advancing obligations with respect to
principal and/or interest on the Transferred Mortgage Loans, other than with
respect to a Reconstitution Agreement as described herein.
Section 4.02. Statements to Owner.
-------------------
Not later than the Remittance Date, the Special Servicer shall
furnish to the Owner a monthly remittance advice containing such information
in the form of FNMA form 2010 and any other information mutually agreed upon
by the Special Servicer and the Owner and any REO reports, foreclosure
reports and any reports reasonably requested by the Owner) in hard copy and
electronic medium mutually acceptable to the parties as to the accompanying
remittance and the period ending on the preceding Determination Date.
In addition, not more than 60 days after the end of each calendar
year, commencing December 31, 1997, the Special Servicer shall furnish to the
Owner at any time during such calendar year sufficient information for the
Owner to file tax reports.
Such obligation of the Special Servicer shall be deemed to have
been satisfied to the extent that substantially comparable information shall
be provided by the Special Servicer pursuant to any requirements of the
Internal Revenue Code as from time to time are in force.
The Special Servicer shall prepare and file IRS forms 1098, 1099
and 1099A (and will provide all data and information necessary for the Owner
to file forms 1041 and K-1) for all time periods that the Special Servicer
actually services any Transferred Mortgage Loans during the term of this
Agreement. In addition, the Special Servicer shall provide the Owner with
such information concerning the Transferred Mortgage Loans as is necessary
for the Owner to prepare its federal income tax return as the Owner may
reasonably request from time to time.
ARTICLE V
GENERAL SERVICING PROCEDURES
[Omitted]
ARTICLE VI
REPRESENTATIONS, WARRANTIES
AND AGREEMENTS
Section 6.01. Representations, Warranties and Agreements of the Special
---------------------------------------------------------
Servicer.
--------
The Special Servicer, as a condition to the consummation of the
transactions contemplated hereby, hereby makes the following representations
and warranties to the Owner as of each Transfer Date:
(a) Due Organization and Authority. The Special Servicer is a
------------------------------
federal savings bank duly organized, validly existing and in good standing
under the laws of the United States and has all licenses necessary to carry
on its business as now being conducted and is licensed, qualified and in good
standing in each state where a Mortgaged Property is located if the laws of
such state require licensing or qualification in order to conduct business of
the type conducted by the Special Servicer, and in any event the Special
Servicer is in compliance with the laws of any such state to the extent
necessary to ensure the enforceability of the terms of this Agreement; the
Special Servicer has the full power and authority to execute and deliver this
Agreement and to perform in accordance herewith; the execution, delivery and
performance of this Agreement (including all instruments of transfer to be
delivered pursuant to this Agreement) by the Special Servicer and the
consummation of the transactions contemplated hereby have been duly and
validly authorized; this Agreement evidences the valid, binding and
enforceable obligation of the Special Servicer and all requisite action has
been taken by the Special Servicer to make this Agreement valid and binding
upon the Special Servicer in accordance with its terms;
(b) Ordinary Course of Business. The consummation of the
---------------------------
transactions contemplated by this Agreement are in the ordinary course of
business of the Special Servicer;
(c) No Conflicts. Neither the execution and delivery of this
------------
Agreement, the acquisition of the servicing responsibilities by the Special
Servicer or the transactions contemplated hereby, nor the fulfillment of or
compliance with the terms and conditions of this Agreement, will conflict
with or result in a breach of any of the terms, conditions or provisions of
the Special Servicer's charter or by-laws or any legal restriction or any
agreement or instrument to which the Special Servicer is now a party or by
which it is bound, or constitute a default or result in an acceleration under
any of the foregoing, or result in the violation of any law, rule,
regulation, order, judgment or decree to which the Special Servicer or its
property is subject, or impair the ability of the Special Servicer to service
the Mortgage Loans, or impair the value of the Mortgage Loans;
(d) Ability to Perform. The Special Servicer does not believe,
------------------
nor does it have any reason or cause to believe, that it cannot perform each
and every covenant contained in this Agreement. The Special Servicer is
solvent and the transfer of servicing responsibilities to the Special
Servicer hereunder is not undertaken to hinder, delay or defraud any of the
Special Servicer's creditors;
(e) No Litigation Pending. There is no action, suit, proceeding
---------------------
or investigation pending or threatened against the Special Servicer which,
either in any one instance or in the aggregate, may result in any material
adverse change in the business, operations, financial condition, properties
or assets of the Special Servicer, or in any material impairment of the right
or ability of the Special Servicer to carry on its business substantially as
now conducted, or in any material liability on the part of the Special
Servicer, or which would draw into question the validity of this Agreement or
of any action taken or to be taken in connection with the obligations of the
Special Servicer contemplated herein, or which would be likely to impair
materially the ability of the Special Servicer to perform under the terms of
this Agreement;
(f) No Consent Required. No consent, approval, authorization or
-------------------
order of any court or governmental agency or body is required for the
execution, delivery and performance by the Special Servicer of or compliance
by the Special Servicer with this Agreement, or if required, such approval
has been obtained prior to each Transfer Date;
(g) Ability to Service. The Servicer is an approved
------------------
seller/servicer of conventional residential mortgage loans for FNMA or FHLMC,
with the facilities, procedures, and experienced personnel necessary for the
sound servicing of mortgage loans of the same type as the Mortgage Loans.
The Servicer is in good standing to service mortgage loans for either FNMA or
FHLMC, and no event has occurred, including but not limited to a change in
insurance coverage, which would make the Servicer unable to comply with
either FNMA or FHLMC eligibility requirements or which would require
notification to any of FNMA or FHLMC;
(h) No Untrue Information. No representation or warranty made by
---------------------
the Special Servicer pursuant to this Section 6.01 contains any untrue
statement of fact or omits to state a fact necessary to make the statements
contained therein not misleading; and
(i) No Commissions to Third Parties. The Special Servicer has not
-------------------------------
dealt with any broker or agent or anyone else who might be entitled to a fee
or commission in connection with this transaction other than the Owner.
(j) Insured Depository Institution Representations. Special
----------------------------------------------
Servicer is an "insured depository institution" as that term is defined in
Section 1813(c)(2) of Title 12 of the United States Code, as amended, and
accordingly, Special Servicer makes the following additional representations
and warranties:
(i) This Agreement between Owner and Special Servicer
conforms to all applicable statutory and regulatory requirements; and
(ii) This Agreement is (1) executed contemporaneously with the
agreement reached by Owner and Special Servicer, (2) approved by a
specific corporate or banking association resolution by the Special
Servicer's board of directors, which approval shall be reflected in the
minutes of said board, and (3) an official record of the Special
Servicer. A copy of such resolution, certified by a vice president or
higher officer of Special Servicer has been provided to Owner.
Section 6.02. Remedies for Breach of Representations and Warranties of
--------------------------------------------------------
the Special Servicer.
--------------------
It is understood and agreed that the representations and warranties
set forth in Section 6.01 shall survive the engagement of the Special
Servicer to perform the servicing responsibilities under this Agreement and
shall inure to the benefit of the Owner. Upon discovery by either the
Special Servicer or the Owner of a Breach of any of the foregoing
representations and warranties which materially and adversely affects the
ability of the Special Servicer to perform its duties and obligations under
this Agreement or otherwise materially and adversely affects the value of the
Mortgage Loans, the Mortgaged Property or the priority of the security
interest on such Mortgaged Property or the interest of the Owner (in the case
of any of the foregoing, a "Breach"), the party discovering such Breach shall
give prompt written notice to the other.
Within 60 days of the earlier of either discovery by or notice to
the Special Servicer of any Breach of a representation or warranty set forth
in Section 6.01 which materially and adversely affects the ability of the
Special Servicer to perform its duties and obligations under this Agreement
or otherwise materially and adversely affects the value of the Mortgage
Loans, the Mortgaged Property or the priority of the security interest on
such Mortgaged Property, the Special Servicer shall use its Best Efforts
promptly to cure such Breach in all material respects and, if such Breach
cannot be cured, the Special Servicer shall, at the Owner's option, assign
the Special Servicer's rights and obligations under this Agreement (or
respecting the affected Mortgage Loans) to a successor standby servicer,
subject to the approval of the Owner, which approval shall be in the Owner's
sole discretion. Such assignment shall be made in accordance with Section
10.01.
In addition, the Special Servicer shall indemnify the Owner and
hold it harmless against any losses, damages, penalties, fines, forfeitures,
reasonable and necessary legal fees and related costs, judgments, and other
costs and expenses resulting from any claim, demand, defense or assertion
based on or grounded upon, or resulting from, a Breach of the Special
Servicer representations and warranties contained in this Agreement. It is
understood and agreed that the obligation of the Special Servicer to
indemnify the Owner pursuant to this Section 6.02 constitutes the sole remedy
of the Owner respecting a breach of the foregoing representations and
warranties.
Any cause of action against the Special Servicer relating to or
arising out of the Breach of any representations and warranties made in
Section 6.01 shall accrue upon (i) discovery of such Breach by the Special
Servicer or notice thereof by the Owner to the Special Servicer, (ii) failure
by the Special Servicer to cure such Breach within the applicable cure
period, and (iii) demand upon the Special Servicer by the Owner for
compliance with this Agreement.
Section 6.03. Representations and Warranties of the Owner.
-------------------------------------------
The Owner, as a condition to the consummation of the transactions
contemplated hereby, makes the following representations and warranties to
the Special Servicer as of each Transfer Date:
(a) Due Organization and Authority. The Owner is a Delaware
------------------------------
corporation duly organized, validly existing and in good standing under the
laws of the state of its incorporation and has all licenses necessary to
carry on its business as now being conducted; the Owner has the full
corporate power and authority to execute and deliver this Agreement and to
perform in accordance herewith; the execution, delivery and performance of
this Agreement (including all instruments of transfer to be delivered
pursuant to this Agreement) by the Owner and the consummation of the
transactions contemplated hereby have been duly and validly authorized; this
Agreement evidences the valid, binding and enforceable obligation of the
Owner; and all requisite corporate action has been taken by the Owner to make
this Agreement valid and binding upon the Owner in accordance with its terms;
(b) Ordinary Course of Business. The consummation of the
---------------------------
transactions contemplated by this Agreement are in the ordinary course of
business of the Owner;
(c) No Conflicts. Neither the execution and delivery of this
------------
Agreement, the conveyance of the servicing responsibilities to the Special
Servicer or the transactions contemplated hereby, nor the fulfillment of or
compliance with the terms and conditions of this Agreement, will conflict
with or result in a Breach of any of the terms, conditions or provisions of
the Owner's charter or by-laws or any legal restriction or any agreement or
instrument to which the Owner is now a party or by which it is bound, or
constitute a default or result in an acceleration under any of the foregoing,
or result in the violation of any law, rule, regulation, order, judgment or
decree to which the Owner or its property is subject, or impair the value of
the servicing contract consummated hereby;
(d) Ability to Perform. The Owner does not believe, nor does it
------------------
have any reason or cause to believe, that it cannot perform each and every
covenant contained in this Agreement;
(e) No Litigation Pending. There is no action, suit, proceeding
---------------------
or investigation pending or threatened against the Owner which, either in any
one instance or in the aggregate, may result in any material adverse change
in the business, operations, financial condition, properties or assets of the
Owner, or in any material impairment of the right or ability of the Owner to
carry on its business substantially as now conducted, or in any material
liability on the part of the Owner, or which would draw into question the
validity of this Agreement or of any action taken or to be taken in
connection with the obligations of the Owner contemplated herein, or which
would be likely to impair materially the ability of the Owner to perform
under the terms of this Agreement;
(f) No Consent Required. No consent, approval, authorization or
-------------------
order of any court or governmental agency or body is required for the
execution, delivery and performance by the Owner of or compliance by the
Owner with this Agreement, or if required, such approval has been obtained
prior to each Transfer Date;
(g) Ownership. The Owner is the sole owner and holder of the
---------
Mortgage Loans;
(h) No Untrue Information. No representation or warranty made by
---------------------
the Owner pursuant to this Section 6.03 contains any untrue statement of fact
or omits to state a fact necessary to make the statements contained therein
not misleading; and
(i) No Commissions to Third Parties. The Owner has not dealt with
-------------------------------
any broker or agent or anyone else who might be entitled to a fee or
commission in connection with this transaction other than the Special
Servicer.
Section 6.04. Remedies for Breach of Representations and Warranties of
--------------------------------------------------------
the Owner.
---------
It is understood and agreed that the representations and warranties
set forth in Section 6.03 shall survive the engagement of the Special
Servicer to perform the standby servicing responsibilities as of any Transfer
Date and the delivery of Servicing Files to the Special Servicer and shall
inure to the benefit of the Special Servicer. Upon discovery by either the
Special Servicer or the Owner of a Breach of any of the foregoing
representations and warranties which materially and adversely affects the
value of the servicing contract established herein or the interest of the
Special Servicer, the party discovering such Breach shall give prompt written
notice to the other.
Within 60 days of the earlier of either discovery by or notice to
the Owner of any Breach of a representation or warranty set forth in Section
6.03 which materially and adversely affects the value of the servicing
contract, the Owner shall use its Best Efforts promptly to cure such Breach
in all material respects.
The Owner shall indemnify the Special Servicer and hold it harmless
against any losses, damages, penalties, fines, forfeitures, reasonable and
necessary legal fees and related costs, judgments, and other costs and
expenses resulting from any claim, demand, defense or assertion based on or
grounded upon, or resulting from, a Breach of the Owner representations and
warranties contained in this Agreement. It is understood and agreed that the
obligation of the Owner to indemnify the Special Servicer pursuant to this
Section 6.04 constitutes the sole remedy of the Special Servicer respecting a
Breach of the foregoing representation and warranties.
Any cause of action against the Owner relating to or arising out of
the Breach of any representations and warranties made in Section 6.03 shall
accrue upon (i) discovery of such Breach by the Owner or notice thereof by
the Special Servicer to the Owner, (ii) failure by the Owner to cure such
Breach within the applicable cure period, and (iii) demand upon the Owner by
the Special Servicer for compliance with this Agreement.
ARTICLE VII
WHOLE LOAN TRANSFER; PASS-THROUGH TRANSFER
Section 7.01. Removal of Mortgage Loans from Inclusion Under this
---------------------------------------------------
Agreement Upon a Pass-Through Transfer or a Whole
-------------------------------------------------
Loan Transfer on One or More Reconstitution Dates.
-------------------------------------------------
The Owner and the Special Servicer agree that with respect to some
or all of the Mortgage Loans, from time to time the Owner shall effect a
Whole Loan Transfer and/or a Pass-Through Transfer, retaining the Special
Servicer as the standby servicer thereof. On the related Reconstitution Date,
the Mortgage Loans transferred shall continue to be covered by this
Agreement.
The Special Servicer shall cooperate with the Owner in connection
with any Pass-Through Transfer or Whole Loan Transfer contemplated by the
Owner pursuant to this Section 7.01. In that connection, the Special
Servicer shall (a) execute any Reconstitution Agreement within a reasonable
period of time after receipt of any Reconstitution Agreement which time shall
be sufficient for the Special Servicer and Special Servicer's counsel to
review such Reconstitution Agreement, but such time shall not exceed ten (10)
Business Days after such receipt, and (b) provide to the trustee, subject to
any Reconstitution Agreement and/or the Owner: (i) any and all information
and appropriate verification of information which may be reasonably available
to the Special Servicer, whether through letters of its auditors and counsel
or otherwise, as the Owner shall reasonably request and at the Owner's
expense; and (ii) such additional representations, warranties, covenants,
opinions of counsel (at the Owner's expense), letters from auditors (at the
Owner's expense), and certificates of public officials or officers of the
Special Servicer as are reasonably believed necessary by the trustee, any
master servicer, any rating agency or the Owner, as the case may be, in
connection with such transactions. The Owner shall be responsible for
reasonable and documented out-of-pocket costs of the Special Servicer in
connection with the review of any Reconstitution Agreement by the Special
Servicer.
In the event that the Special Servicer enters into any
Reconstitution Agreement in accordance with the provisions of this Section,
the servicing of the applicable Mortgage Loans subject thereto shall be
governed by the servicing provisions set forth therein. Such servicing
provisions shall be substantially similar to the servicing provisions set
forth herein or may provide for the Special Servicer (i) to service in
accordance with FNMA, FHLMC or REMIC servicing, (ii) to service on a
"scheduled/scheduled" basis and advance principal and interest payments
through liquidation of each Mortgage Loan or until any such advances are
deemed nonrecoverable, (iii) to pay up to 30 days' compensating interest on
any prepayments of principal and interest (up to the amount of its monthly
servicing fee) and (iv) to otherwise comply with any applicable REMIC or
rating agency servicing requirements.
In the event the Owner has elected to have an entity other than the
Owner hold record title to the Mortgages, prior to a Reconstitution Date the
Owner or its designee shall prepare an Assignment of Mortgage in blank from
the Owner, acceptable to the trustee, for each Mortgage Loan that is part of
a Whole Loan Transfer or Pass-Through Transfer and shall pay all preparation
and recording costs associated therewith. At the expense of the Owner, the
Special Servicer shall execute each Assignment of Mortgage, track such
Assignments of Mortgage to ensure they have been recorded and deliver them as
required by the trustee upon the Special Servicer's receipt thereof.
Additionally, the Special Servicer shall prepare and execute, at the
direction of the Owner, any note endorsements in connection with any and all
Reconstitution Agreements.
All Mortgage Loans not sold or transferred pursuant to a Whole Loan
Transfer or Pass-Through Transfer and any and all Mortgage Loans repurchased
by the Owner pursuant to Section 7.02 below with respect to a Whole Loan
Transfer or Pass-Through Transfer shall be subject to this Agreement and
shall continue to be serviced in accordance with the terms of this Agreement
and with respect thereto this Agreement shall remain in full force and
effect.
Section 7.02. Additional Indemnification by the Special Servicer;
-----------------------------------------------------
Third Party Claims.
------------------
The Special Servicer shall indemnify the Owner and hold it harmless
against any and all claims, losses, damages, penalties, fines, forfeitures,
reasonable and necessary legal fees and related costs, judgments, and any
other costs, fees and expenses that the Owner may sustain in any way related
to the failure of the Special Servicer to perform its duties and service the
Transferred Mortgage Loans in strict compliance with the terms of this
Agreement or any Reconstitution Agreement entered into pursuant to Section
7.01. The Special Servicer shall immediately notify the Owner if a claim is
made by a third party with respect to this Agreement or any Reconstitution
Agreement or the Transferred Mortgage Loans, shall promptly notify the
trustee or other relevant third party with respect to any claim made by a
third party with respect to any Reconstitution Agreement, assume (with the
prior written consent of the Owner) the defense of any such claim and pay all
expenses in connection therewith, including reasonable counsel fees, promptly
pay, discharge and satisfy any judgment or decree which may be entered
against it or the Owner in respect of such claim and follow any written
instructions received from the Owner in connection with such claim. The Owner
promptly shall reimburse the Special Servicer for all amounts advanced by it
pursuant to the preceding sentence except when the claim is in any way
related to the Special Servicer's indemnification pursuant to Section 6.02,
or the failure of the Special Servicer to service and administer the
Transferred Mortgage Loans in strict compliance with the terms of this
Agreement or any Reconstitution Agreement. In the event a dispute arises
between the Special Servicer and the Owner with respect to any of the rights
and obligations of the parties pursuant to this Agreement, and such dispute
is adjudicated in a court of law, by an arbitration panel or any other
judicial process, then the losing party shall indemnify and reimburse the
winning party for all reasonable attorney's fees and other reasonable costs
and expenses related to the adjudication of said dispute.
ARTICLE VIII
THE STANDBY SERVICER
Section 8.01. Merger or Consolidation of the Special Servicer.
-----------------------------------------------
The Special Servicer shall keep in full effect its existence,
rights and franchises as a federal savings bank, and shall obtain and
preserve its qualification to do business (or any exemption therefrom) in
each jurisdiction in which such qualification (or exemption) is or shall be
necessary to protect the validity and enforceability of this Agreement or any
of the Mortgage Loans and to perform its duties under this Agreement.
Any Person into which the Special Servicer may be merged or
consolidated, or any corporation resulting from any merger, conversion or
consolidation to which the Special Servicer shall be a party, or any Person
succeeding to the business of the Special Servicer, shall be the successor of
the Special Servicer hereunder, without the execution or filing of any paper
or any further act on the part of any of the parties hereto, anything herein
to the contrary notwithstanding, provided, however, that the successor or
surviving Person shall be an institution (i) having a net worth of not less
than $25,000,000, and (ii) which is a FNMA- and FHLMC-approved Servicer in
good standing.
Section 8.02. Limitation on Liability of the Special Servicer and
---------------------------------------------------
Others.
------
Neither the Special Servicer nor any of the directors, officers,
employees or agents of the Special Servicer shall be under any liability to
the Owner for any action taken or for refraining from the taking of any
action in good faith pursuant to this Agreement, or for errors in judgment,
provided, however, that this provision shall not protect the Special Servicer
or any such person against any Breach of warranties or representations made
herein, or failure to perform its obligations in strict compliance with any
standard of care set forth in this Agreement, or any liability which would
otherwise be imposed by reason of any breach of the terms and conditions of
this Agreement. The Special Servicer and any director, officer, employee or
agent of the Special Servicer may rely in good faith on any document of any
kind prima facie properly executed and submitted by any Person respecting any
matters arising hereunder. The Special Servicer shall not be under any
obligation to appear in, prosecute or defend any legal action which is not
incidental to its duties to standby service the Mortgage Loans in accordance
with this Agreement and which in its opinion may involve it in any expense or
liability, provided, however, that the Special Servicer may, with the consent
of the Owner, undertake any such action which it may deem necessary or
desirable in respect of this Agreement and the rights and duties of the
parties hereto. In such event, the Special Servicer shall be entitled to
reimbursement from the Owner for the reasonable legal expenses and costs of
such action. Notwithstanding the foregoing, in no event shall the Special
Servicer be liable to the Owner for indirect, consequential, punitive or
loss-of-profit damages; provided, however, the Special Servicer shall
indemnify the Owner for any losses with respect to punitive damages caused by
the Special Servicer and incurred by the Owner from a final and non-
appealable judgment from a court of competent jurisdiction in favor of a
third party, provided that the Special Servicer has been provided with an
opportunity to defend and control the litigation and that the Owner has not
agreed to any settlement without the Special Servicer's prior written consent
which consent shall not be unreasonably withheld. This Section 8.02 shall
survive any termination of this Agreement.
Section 8.03. Limitation on Resignation and Assignment by the Special
-------------------------------------------------------
Servicer.
--------
The Owner has entered into this Agreement with the Special Servicer
and subsequent transferees of the Owner will purchase the Mortgage Loans in
reliance upon the independent status of the Special Servicer, and the
representations as to the adequacy of its servicing facilities, plant,
personnel, records and procedures, its integrity, reputation and financial
standing, and the continuance thereof. Therefore, the Special Servicer shall
not assign this Agreement or the servicing responsibilities hereunder or
delegate its rights or duties hereunder or any portion hereof (to other than
a Subservicer) or sell or otherwise dispose of all or substantially all of
its property or assets without the prior written consent of the Owner, which
consent shall be granted or withheld in the sole discretion of the Owner.
Except in connection with any termination permitted to be exercised
by the Special Servicer in accordance with Section 9.02, the Special Servicer
shall not resign from the obligations and duties hereby imposed on it except
by mutual consent of the Special Servicer and the Owner or upon the
determination that its duties hereunder are no longer permissible under
applicable law and such incapacity cannot be cured by the Special Servicer.
Any such determination permitting the resignation of the Special Servicer
shall be evidenced by an Opinion of Counsel to such effect delivered to the
Owner which Opinion of Counsel shall be in form and substance acceptable to
the Owner. No such resignation shall become effective until a successor
shall have assumed the Special Servicer's responsibilities and obligations
hereunder in the manner provided in Section 10.01.
Without in any way limiting the generality of this Section 8.03, in
the event that the Special Servicer either shall assign this Agreement or the
servicing responsibilities hereunder or delegate its duties hereunder or any
portion thereof (to other than a Subservicer) or sell or otherwise dispose of
all or substantially all of its property or assets, without the prior written
consent of the Owner, then the Owner shall have the right to terminate this
Agreement upon notice given as set forth in Section 9.01, without any payment
of any penalty or damages and without any liability whatsoever to the Special
Servicer or any third party.
ARTICLE IX
TERMINATION
Section 9.01. Termination for Cause.
---------------------
(a) This Agreement shall be terminable at the sole option of the
Owner, if any of the following events of default exist on the part of the
Special Servicer:
(i) any failure by the Special Servicer to remit to the Owner
any payment required to be made under the terms of this Agreement which
continues unremedied for a period of five Business Days after the date
upon which written notice of such failure, requiring the same to be
remedied, shall have been given to the Special Servicer by the Owner; or
(ii) failure by the Special Servicer duly to observe or
perform in any material respect any other of the covenants or agreements
on the part of the Special Servicer set forth in this Agreement which
continues unremedied for a period of 30 days after the date on which
written notice of such failure, requiring the same to be remedied, shall
have been given to the Special Servicer by the Owner; or
(iii) to the extent that the Special Servicer is required to
maintain a license, failure by the Special Servicer to maintain its
license to do business or service residential mortgage loans in any
jurisdiction where the Mortgaged Properties are located; or
(iv) a decree or order of a court or agency or supervisory
authority having jurisdiction for the appointment of a conservator or
receiver or liquidator in any insolvency, readjustment of debt,
including bankruptcy, marshaling of assets and liabilities or similar
proceedings, or for the winding-up or liquidation of its affairs, shall
have been entered against the Special Servicer and such decree or order
shall have remained in force undischarged or unstayed for a period of 60
days; or
(v) the Special Servicer shall consent to the appointment of
a conservator or receiver or liquidator in any insolvency, readjustment
of debt, marshaling of assets and liabilities or similar proceedings of
or relating to the Special Servicer or of or relating to all or
substantially all of its property; or
(vi) the Special Servicer shall admit in writing its inability
to pay its debts generally as they become due, file a petition to take
advantage of any applicable insolvency, bankruptcy or reorganization
statute, make an assignment for the benefit of its creditors,
voluntarily suspend payment of its obligations or cease its normal
business operations for three Business Days; or
(vii) the Special Servicer fails to maintain a minimum net
worth of $25,000,000; or
(viii) the Special Servicer, if it is an Insured Depository
Institution, shall become the subject of a cease and desist order of the
Appropriate Federal Banking Agency or interest into a memorandum of
understanding, consent agreement or any similar agreement with the
Appropriate Federal Banking Agency, any of which, would have or is
purportedly the result of, any condition which would have a material
adverse effect on the Mortgage Loans, the Special Servicer, or the
Special Servicer's ability to service the Mortgage Loans as provided
hereunder; or
(ix) the Special Servicer shall fail to maintain its status
as Well Capitalized; or
(x) the Special Servicer attempts, without the consent of
the Owner, to assign the standby servicing of the Mortgage Loans or the
servicing of the Transferred Mortgage Loans or its right to servicing
compensation hereunder or the Special Servicer attempts, without the
consent of the Owner, to sell or otherwise dispose of all or
substantially all of its property or assets or to assign this Agreement
or the servicing responsibilities hereunder or to delegate its duties
hereunder or any portion thereof.
In each and every such case, so long as an event of default shall
not have been remedied, in addition to whatever rights the Owner may have at
law or equity to damages, including injunctive relief and specific
performance, the Owner, by notice in writing to the Special Servicer, may
terminate all the rights and obligations of the Special Servicer under this
Agreement and in and to the servicing contract established hereby and the
proceeds thereof.
Upon receipt by the Special Servicer of such written notice, all
authority and power of the Special Servicer under this Agreement, whether
with respect to the Mortgage Loans or otherwise, shall pass to and be vested
in a successor servicer appointed by the Owner. Upon written request from
the Owner, the Special Servicer shall prepare, execute and deliver to the
successor entity designated by the Owner any and all documents and other
instruments, place in such successor's possession all Servicing Files, and do
or cause to be done all other acts or things necessary or appropriate to
effect the purposes of such notice of termination, including but not limited
to the transfer and endorsement or assignment of the Transferred Mortgage
Loans and related documents, at the Special Servicer's sole expense. The
Special Servicer shall cooperate with the Owner and such successor in
effecting the termination of the Special Servicer's responsibilities and
rights hereunder, including without limitation, the transfer to such
successor for administration by it of all cash amounts which shall at the
time be credited by the Special Servicer to the Custodial Account or Escrow
Account or thereafter received with respect to the Transferred Mortgage
Loans.
By a written notice, the Owner may waive any default by the Special
Servicer in the performance of its obligations hereunder and its
consequences. Upon any waiver of a past default, such default shall cease to
exist, and any Event of Default arising therefrom shall be deemed to have
been remedied for every purpose of this Agreement. No such waiver shall
extend to any subsequent or other default or impair any right consequent
thereon except to the extent expressly so waived.
Section 9.02. Termination Without Cause.
-------------------------
This Agreement shall terminate upon the earlier of: (a) the
distribution of the final payment or liquidation proceeds on the last
Mortgage Loan to the Owner (or advances by the Primary Servicer or Special
Servicer for the same), (b) the disposition of all REO Property acquired upon
foreclosure of the last Mortgage Loan and the remittance of all funds due
hereunder or (c) any mutual or unilateral termination as hereinafter
provided. In no event shall this Agreement terminate pursuant to this
Section within six months of the date of this Agreement. Any termination
pursuant to this Section 9.02 subsequent to such six month period but prior
to six years from the date of this Agreement is subject to rating agency
approval (with respect to Transferred Mortgage Loans subject to a
Reconstitution Agreement) and a termination fee per Transferred Mortgage Loan
and/or REO Property in an amount as the Special Servicer and the Owner shall
mutually agree upon at the time of termination of this Agreement. On or
after six years from the date of this Agreement but prior to ten years from
the date of this Agreement, this Agreement may be terminated upon mutual
consent of the Owner and the Special Servicer in writing. On or after ten
years from the date of this Agreement, this Agreement may be terminated
pursuant to sixty days notice by either party to the other.
Any such notice of termination shall be in writing and delivered to
the Special Servicer by registered mail to the address set forth at the
beginning of this Agreement. The Owner and the Special Servicer shall comply
with the termination procedures set forth in Sections 9.01 and 10.01 hereof.
ARTICLE X
MISCELLANEOUS PROVISIONS
Section 10.01. Successor to the Special Servicer.
---------------------------------
Simultaneously with the termination of the Special Servicer's
responsibilities and duties under this Agreement pursuant to Sections 6.02,
8.03, 9.01 or 9.02, the Owner shall (i) succeed to and assume all of the
Special Servicer's responsibilities, rights, duties and obligations under
this Agreement, or (ii) appoint a successor having the characteristics set
forth in clauses (i) and (ii) of Section 8.01 and which shall succeed to all
rights and assume all of the responsibilities, duties and liabilities of the
Special Servicer under this Agreement simultaneously with the termination of
the Special Servicer's responsibilities, duties and liabilities under this
Agreement. In connection with such appointment and assumption, the Owner may
make such arrangements for the compensation of such successor out of payments
on Mortgage Loans as it and such successor shall agree, provided, however,
that no such compensation shall be in excess of that permitted the Special
Servicer under this Agreement without the consent of the Owner. In the event
that the Special Servicer's duties, responsibilities and liabilities under
this Agreement should be terminated pursuant to the aforementioned sections,
the Special Servicer shall discharge such duties and responsibilities during
the period from the date it acquires knowledge of such termination until the
effective date thereof with the same degree of diligence and prudence which
it is obligated to exercise under this Agreement, and shall take no action
whatsoever that might impair or prejudice the rights or financial condition
of its successor. The resignation or removal of the Special Servicer
pursuant to the aforementioned sections shall not become effective until a
successor shall be appointed pursuant to this Section 10.01 and shall in no
event relieve the Special Servicer of the representations and warranties made
pursuant to Sections 6.01 and the remedies available to the Owner under
Section 6.02 and 7.02, it being understood and agreed that the provisions of
such Sections 6.01, 6.02 and 7.02 shall be applicable to the Special Servicer
notwithstanding any such resignation or termination of the Special Servicer,
or the termination of this Agreement.
Within 30 days of the appointment of a successor entity by the
Owner, the Special Servicer shall prepare, execute and deliver to the
successor entity any and all documents and other instruments, place in such
successor's possession all Servicing Files, and do or cause to be done all
other acts or things necessary or appropriate to effect the purposes of such
notice of termination, including but not limited to the transfer and
endorsement of the Mortgage Notes and related documents, and the preparation
and recordation of Assignments of Mortgage, with respect to Transferred
Mortgage Loans, at the discretion of the Owner and, at the Owner's sole
expense. The Special Servicer shall cooperate with the Owner and such
successor in effecting the termination of the Special Servicer's
responsibilities and rights hereunder and the transfer of servicing
responsibilities to the successor standby servicer, including without
limitation, the transfer to such successor for administration by it of all
cash amounts which shall at the time be credited by the Special Servicer to
the Custodial Account or Escrow Account or thereafter received with respect
to the Transferred Mortgage Loans.
Any successor appointed as provided herein shall execute,
acknowledge and deliver to the Special Servicer and to the Owner an
instrument accepting such appointment, wherein the successor shall make
the representations and warranties set forth in Section 6.01, whereupon
such successor shall become fully vested with all the rights,
powers, duties, responsibilities, obligations and liabilities of the
Special Servicer, with like effect as if originally named as a party
to this Agreement. Any termination or resignation of the Special
Servicer or termination of this Agreement pursuant to Sections 6.02, 8.03,
9.01 or 9.02 shall not affect any claims that the Owner may have against
the Special Servicer arising out of the Special Servicer's actions or
failure to act prior to any such termination or resignation.
The Special Servicer shall deliver promptly to the successor
standby servicer the funds in the Custodial Account and Escrow Account and
all Mortgage Loan documents and related documents and statements held by it
hereunder and the Special Servicer shall account for all funds and shall
execute and deliver such instruments and do such other things as may
reasonably be required to more fully and definitively vest in the successor
all such rights, powers, duties, responsibilities, obligations and
liabilities of the Special Servicer.
Upon a successor's acceptance of appointment as such, the Special
Servicer shall notify by mail the Owner of such appointment in accordance
with the procedures set forth in Section 10.06.
Section 10.02. Closing.
-------
The closing for the engagement of the Special Servicer to perform
the standby servicing responsibilities respecting Mortgage Loans shall take
place on the Closing Date. At the Owner's option, the closing shall be
either: by telephone, confirmed by letter or wire as the parties shall agree;
or conducted in person, at such place as the parties shall agree.
Each closing shall be subject to each of the following conditions:
a) all of the representations and warranties of the Special
Servicer and the Owner under this Agreement shall be true and
correct as of the Closing Date and no event shall have
occurred which, with notice or the passage of time, would
constitute a default under this Agreement;
b) the Owner and Special Servicer each shall have received, or
the Owner's attorneys shall have received in escrow, all
Closing Documents as specified in Section 10.03 hereof and the
Closing Documents specified in (b), (c), (f) and (i) of
Section 10.03 hereof, in such forms as are agreed upon and
acceptable to the Special Servicer and the Owner, duly
executed by all signatories other than the Owner as required
pursuant to the respective terms thereof; and
c) all other terms and conditions of this Agreement shall have
been complied with and no default or Event of Default under
this Agreement shall have occurred and be continuing for a
period of 30 days or more prior to the Closing Date.
Section 10.03. Closing Documents.
-----------------
The Closing Documents shall consist of fully executed originals of
the following documents:
d) this Agreement;
e) the Mortgage Loan Schedule, with one copy to be attached to
each counterpart of this Agreement as Exhibit A,;
f) with respect to each Transfer Date, a Notice of Transfer in
the form of Exhibit B hereto;
g) a Custodial Account Letter Agreement in the form of Exhibit C
hereto;
h) an Escrow Account Letter Agreement in the form of Exhibit D
hereto;
i) an Officer's Certificate of the Special Servicer, in the form
of Exhibit E-1 hereto, including all attachments thereto, and
with respect to subsequent Transfer Dates, an Officer's
Certificate in the form of Exhibit E-2 hereto, including all
attachments thereto;
j) an Opinion of Counsel of the Special Servicer in the form of
Exhibit G hereto;
k) an Assignment of the applicable Custodial Agreement in the
form of Exhibit F-3 hereto; and
l) with respect to Additional Mortgage Loan Transfer Dates (i) a
Mortgage Loan Schedule reflecting the Additional Mortgage
Loans to be serviced by the Special Servicer and a cumulative
Mortgage Loan Schedule, reflecting all Mortgage Loans being
serviced by the Special Servicer from the Closing Date up to,
and including the related Subsequent Transfer Date and (ii) an
Acknowledgment Agreement in the form of Exhibit H hereto.
Section 10.04. Costs.
-----
The Owner shall pay any commissions due its salesmen and the legal
fees and expenses of its attorneys. Costs and expenses incurred in
connection with the transfer of the servicing responsibilities, including
fees for delivering Servicing Files, costs associated with notifications sent
by the Primary Servicer to notify Mortgagors of a transfer and powers of
attorney, shall be paid by the Owner or the Primary Servicer, as applicable.
The Owner or Primary Servicer, as applicable, shall pay the costs associated
with the preparation, delivery and recording of Assignments of Mortgages
required on each Reconstitution Date and any customary reasonable out-of-
pocket costs of the Special Servicer to review Reconstitution Agreements, and
any other reasonable fees, costs and expenses of the Special Servicer
incurred in connection with any Pass-Through Transfer, Whole Loan Transfer or
Reconstitution Agreement including, without limitation, any reasonable fees,
costs and expenses of the Special Servicer's accountants for any comfort
letters or audits required by the Owner, any underwriter, any rating agency
and/or any certificate insurer and any reasonable fees, costs and expenses of
the Special Servicer's attorneys for any such review of any such
Reconstitution Agreement or the rendering of any opinion in connection
therewith. All other costs and expenses associated with this Agreement shall
be borne by the applicable party as set forth in this Agreement.
Section 10.05. Protection of Confidential Information.
--------------------------------------
The Special Servicer shall keep confidential and shall not divulge
to any party, without the Owner's prior written consent, any Transferred
Mortgage Loan Servicing Fee paid by the Owner for the servicing of the
Mortgage Loans, any other economic arrangements between the Owner and the
Special Servicer set forth in this Agreement and any information pertaining
to the Mortgage Loans or any borrower thereunder, except to the extent that
it is appropriate for the Special Servicer to do so in working with legal
counsel, auditors, taxing authorities or other governmental agencies.
Section 10.06. Notices.
-------
All demands, notices and communications hereunder shall be in
writing and shall be deemed to have been duly given if mailed by overnight
courier, addressed as follows (or such other address as may hereafter be
furnished to the other party by like notice):
(i) if to the Owner:
Xxxxxx Capital, A Division of
Xxxxxx Brothers Holdings Inc.
3 World Financial Center
000 Xxxxx Xxxxxx, 00xx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000-0000
Attention: Manager Contract Finance
(ii) if to the Special Servicer:
Ocwen Federal Bank FSB
The Forum, Suite 1002
0000 Xxxx Xxxxx Xxxxx Xxxx.
Xxxx Xxxx Xxxxx, Xxxxxxx 00000
Attention: Secretary
Any such demand, notice or communication hereunder shall be deemed
to have been received on the date delivered to or received at the premises of
the addressee.
Section 10.07. Severability Clause.
-------------------
Any part, provision, representation or warranty of this Agreement
which is prohibited or which is held to be void or unenforceable shall be
ineffective to the extent of such prohibition or unenforceability without
invalidating the remaining provisions hereof. Any part, provision,
representation or warranty of this Agreement which is prohibited or
unenforceable or is held to be void or unenforceable in any jurisdiction
shall be ineffective, as to such jurisdiction, to the extent of such
prohibition or unenforceability without invalidating the remaining provisions
hereof, and any such prohibition or unenforceability in any jurisdiction as
to any Mortgage Loan shall not invalidate or render unenforceable such
provision in any other jurisdiction. To the extent permitted by applicable
law, the parties hereto waive any provision of law which prohibits or renders
void or unenforceable any provision hereof. If the invalidity of any part,
provision, representation or warranty of this Agreement shall deprive any
party of the economic benefit intended to be conferred by this Agreement, the
parties shall negotiate, in good-faith, to develop a structure the economic
effect of which is as close as possible to the economic effect of this
Agreement without regard to such invalidity.
Section 10.08. No Personal Solicitation. From and after each
------------------------
related Transfer Date, the Special Servicer hereby agrees that it will not
take any action or permit or cause any action to be taken by any of its
agents or affiliates, or by any independent contractors on the Special
Servicer's behalf, to personally, by telephone or mail, solicit the borrower
or obligor under any Mortgage Loan for any purpose whatsoever, including to
refinance a Mortgage Loan, in whole or in part, without the prior written
consent of the Owner. It is understood and agreed that all rights and
benefits relating to the solicitation of any Mortgagors and the attendant
rights, title and interest in and to the list of such Mortgagors and data
relating to their Mortgages (including insurance renewal dates) shall be
transferred to the Owner pursuant hereto on the related Transfer Date and the
Special Servicer shall take no action to undermine these rights and benefits.
A response to an inquiry from a Mortgagor regarding refinancing shall not be
considered a personal solicitation under this Section 10.08. General
solicitation by the Special Servicer or an affiliate of the Special Servicer
of such affiliate's or Special Servicer's customer base, shall not constitute
a breach of this Section 10.08. Notwithstanding the foregoing, it is
understood and agreed that offers to refinance a Mortgage Loan made within 30
days following receipt by the Special Servicer of a pay-off request from the
Mortgagor and promotions undertaken by the Special Servicer or any affiliate
of the Special Servicer which are directed to the general public at large,
including, without limitation, mass mailing based on commercially acquired
mailing lists, newspaper, radio and television advertisements shall not
constitute solicitation under this Section 10.08.
Section 10.09. Counterparts.
------------
This Agreement may be executed simultaneously in any number of
counterparts. Each counterpart shall be deemed to be an original, and all
such counterparts shall constitute one and the same instrument.
Section 10.10. Place of Delivery and Governing Law.
-----------------------------------
THIS AGREEMENT SHALL BE DEEMED IN EFFECT WHEN A FULLY EXECUTED
COUNTERPART THEREOF IS RECEIVED BY THE OWNER IN THE STATE OF NEW YORK AND
SHALL BE DEEMED TO HAVE BEEN MADE IN THE STATE OF NEW YORK. THE AGREEMENT
SHALL BE CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK AND
THE OBLIGATIONS, RIGHTS AND REMEDIES OF THE PARTIES HEREUNDER SHALL BE
DETERMINED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK, EXCEPT TO
THE EXTENT PREEMPTED BY FEDERAL LAW.
Section 10.11. Further Agreements.
------------------
The Owner and the Special Servicer each agree to execute and
deliver to the other such reasonable and appropriate additional documents,
instruments or agreements as may be necessary or appropriate to effectuate
the purposes of this Agreement.
Section 10.12. Intention of the Parties.
------------------------
It is the intention of the parties that the Owner is conveying, and
the Special Servicer is receiving only a contract for servicing the Mortgage
Loans. Accordingly, the parties hereby acknowledge that the Owner remains
the sole and absolute owner of the Mortgage Loans and all rights related
thereto.
Section 10.13. Successors and Assigns; Assignment of Servicing
-----------------------------------------------
Agreement.
---------
This Agreement shall bind and inure to the benefit of and be
enforceable by the Special Servicer and the Owner and the respective
successors and assigns of the Special Servicer and the Owner. This Agreement
shall not be assigned, pledged or hypothecated by the Special Servicer to a
third party without the prior written consent of the Owner, which consent
shall be given or withheld at the sole discretion of the Owner.
Section 10.14. Waivers.
-------
No term or provision of this Agreement may be waived or modified
unless such waiver or modification is in writing and signed by the party
against whom such waiver or modification is sought to be enforced.
Section 10.15. Exhibits.
--------
The exhibits to this Agreement are hereby incorporated and made a
part hereof and are an integral part of this Agreement.
Section 10.16. General Interpretive Principles.
-------------------------------
For purposes of this Agreement, except as otherwise expressly
provided or unless the context otherwise requires:
(a) the terms defined in this Agreement have the meanings assigned
to them in this Agreement and include the plural as well as the singular, and
the use of any gender herein shall be deemed to include the other gender;
(b) accounting terms not otherwise defined herein have the
meanings assigned to them in accordance with generally accepted accounting
principles;
(c) references herein to "Articles", "Sections", "Subsections",
"Paragraphs", and other subdivisions without reference to a document are to
designated Articles, Sections, Subsections, Paragraphs and other subdivisions
of this Agreement;
(d) a reference to a Subsection without further reference to a
Section is a reference to such Subsection as contained in the same Section in
which the reference appears, and this rule shall also apply to Paragraphs and
other subdivisions;
(e) the words "herein", "hereof", "hereunder" and other words of
similar import refer to this Agreement as a whole and not to any particular
provision; and
(f) the term "include" or "including" shall mean by reason of
enumeration.
Section 10.17. Reproduction of Documents.
-------------------------
This Agreement and all documents relating thereto, including,
without limitation, (a) consents, waivers and modifications which may
hereafter be executed, (b) documents received by any party at the closing,
and (c) financial statements, certificates and other information previously
or hereafter furnished, may be reproduced by any photographic, photostatic,
microfilm, micro-card, miniature photographic or other similar process. The
parties agree that any such reproduction shall be admissible in evidence as
the original itself in any judicial or administrative proceeding, whether or
not the original is in existence and whether or not such reproduction was
made by a party in the regular course of business, and that any enlargement,
facsimile or further reproduction of such reproduction shall likewise be
admissible in evidence.
IN WITNESS WHEREOF, the Special Servicer and the Owner have caused
their names to be signed hereto by their respective officers thereunto duly
authorized as of the date first above written.
XXXXXX CAPITAL, A DIVISION OF
XXXXXX BROTHERS HOLDINGS INC.
(Owner)
By:
-------------------------------
Name:
-------------------------------
Title:
-------------------------------
OCWEN FEDERAL BANK FSB
(Special Servicer)
By:
-------------------------------
Name:
-------------------------------
Title:
-------------------------------
