Exhibit 99.4
Execution
SPECIAL SERVICING AGREEMENT
THIS SPECIAL SERVICING AGREEMENT (this "Agreement"), entered into as
of the 1st day of January, 1999, by and between XXXXXX CAPITAL, A DIVISION OF
XXXXXX BROTHERS HOLDINGS INC., a Delaware corporation ("Xxxxxx Capital"), and
OCWEN FEDERAL BANK FSB, a federal savings bank (the "Special Servicer"):
RECITALS
WHEREAS, Xxxxxx Capital has conveyed certain Mortgage Loans
identified on Schedule I hereto (the "Serviced Mortgage Loans") to Structured
Asset Securities Corporation ("SASCO"), which in turn has conveyed the
Serviced Mortgage Loans to The First National Bank of Chicago, as trustee (the
"Trustee") under a trust agreement dated as of January 1, 1999 (the "Trust
Agreement"), among the Trustee, Norwest Bank Minnesota, National Association,
as master servicer ("Norwest," and, together with any successor Master
Servicer appointed pursuant to the provisions of the Trust Agreement, the
"Master Servicer") and SASCO.
WHEREAS, multiple classes of Certificates, including the Class X-1
and Class X-2 Certificates (collectively, the "Class X Certificates"), will be
issued on the Closing Date pursuant to the Trust Agreement, and Xxxxxx
Brothers Inc. or a nominee thereof (together with any successor in interest
thereto and any permitted assignee or transferee thereof, the "Directing
Holder" with respect to each related Mortgage Pool) is expected to be the
initial registered Holder of each of the Class X Certificates.
WHEREAS, Xxxxxx Capital desires that the Special Servicer perform the
services with respect to the Serviced Mortgage Loans as provided in this
Agreement (including those provisions that are incorporated by reference
herein), and the Special Servicer has agreed to do so, subject to the
conditions set forth herein.
WHEREAS, Norwest and any successor Master Servicer shall be
obligated, among other things, to supervise the servicing of the Serviced
Mortgage Loans on behalf of the Trustee, and shall have the right, under
certain circumstances, to terminate the rights and obligations of the Special
Servicer under this Special Servicing Agreement.
NOW, THEREFORE, in consideration of the mutual agreements hereinafter
set forth and for other good and valuable consideration, the receipt and
adequacy of which are hereby acknowledged, Xxxxxx Capital and the Special
Servicer hereby agree as follows:
AGREEMENT
1. Definitions. Capitalized terms used and not defined in this
Agreement, including Exhibit A hereto and any provisions of the Servicing
Agreement dated as of December 1, 1997, between Xxxxxx Capital and the Special
Servicer (the "Servicing Agreement") incorporated by reference herein, shall
have the meanings ascribed to such terms in the Trust Agreement.
2. Special Servicing. The Special Servicer agrees, with respect to
the Serviced Mortgage Loans (as to the related Mortgage Pool), to perform and
observe the duties, responsibilities and obligations that are to be performed
and observed under the provisions of the Servicing Agreement, except as
otherwise provided herein and on Exhibit A hereto, and that the provisions of
the Servicing Agreement, as so modified, are and shall be a part of this
Agreement to the same extent as if set forth herein in full.
3. Master Servicing; Termination of Special Servicer. The Special
Servicer, including any successor special servicer hereunder, shall be subject
to the supervision of the Master Servicer, which Master Servicer shall be
obligated to ensure that the Special Servicer services the Serviced Mortgage
Loans (as to the related Mortgage Pool) in accordance with the provisions of
this Agreement. The Master Servicer, acting on behalf of the Trustee pursuant
to the Trust Agreement, shall have the same rights as the "Owner" (as defined
in the Servicing Agreement) to enforce the obligations of the Special Servicer
under the Servicing Agreement. The Master Servicer shall be entitled to
terminate the rights and obligations of the Special Servicer under this
Agreement upon the failure of the Special Servicer to perform any of its
obligations under this Agreement, after the expiration of any notice and cure
periods, if any, as provided in Section 9.01 of the Servicing Agreement. If
the Special Servicer is in default under this Agreement, after the expiration
of any notice and cure periods, if any, the Master Servicer shall, upon the
written direction of any Directing Holder, terminate the rights and
obligations of the Special Servicer as to the related Mortgage Pool under this
Agreement.
Upon prior written notice, each Directing Holder shall have the
exclusive right to terminate the rights and obligations of the Special
Servicer under this Agreement, as to the related Mortgage Pool, without cause
and without payment of any termination fee in connection with such
termination; provided, that (i) any successor special servicer as to the
related Mortgage Pool shall be appointed in the manner provided below and (ii)
a letter is provided to the Trustee from each Rating Agency to the effect that
such termination and appointment will not result in the qualification,
reduction, or withdrawal of the ratings applicable to the Certificates.
Notwithstanding anything to the contrary in Sections 9.01, 9.02 and
10.01 of the Servicing Agreement, the applicable Directing Holder shall,
within 30 days of the receipt by the Special Servicer of a copy of any
termination notice delivered by the Master Servicer to the Special Servicer or
upon delivery by the applicable Directing Holder of any such notice pursuant
Section 9.02 or upon receipt by the Directing Holders of any resignation
notice given by the Special Servicer, notify the Master Servicer in writing of
each Directing Holder's nominee as successor special servicer, which nominee
shall be appointed as special servicer (as to the related Mortgage Pool) by
the Master Servicer unless the Master Servicer reasonably objects to such
nominee within 10 days following receipt of such notice. If the Master
Servicer objects to such nominee, then the Master Servicer shall, within such
10-day period, appoint a successor special servicer (as to the related
Mortgage Pool), which successor shall be reasonably acceptable to such
Directing Holder.
4. No Representations. Neither the Special Servicer nor the Master
Servicer shall be obligated or required to make any representations and
warranties regarding the Serviced Mortgage Loans in connection with the
transactions contemplated by the Trust Agreement and issuance of the
certificates issued pursuant thereto.
5. Notices. All notices and communications between or among the
parties hereto shall be in writing and shall be deemed received or given when
mailed first-class mail, postage prepaid, addressed to each other party at its
address specified below. Each party may designate to the other parties in
writing, from time to time, other addresses to which notices and
communications hereunder shall be sent.
6. Governing Law. THIS SPECIAL SERVICING AGREEMENT SHALL BE GOVERNED
BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK,
NOTWITHSTANDING NEW YORK OR OTHER CHOICE OF LAW RULES TO THE CONTRARY.
7. Counterparts. This Agreement may be executed in any number of
counterparts, each of which when so executed shall be deemed to be an
original, but all of which counterparts shall together constitute but one and
the same instrument.
8. Reconstitution. Xxxxxx Capital and the Special Servicer agree that
this Agreement is a Reconstitution Agreement, and that the date hereof is the
Reconstitution Date, each as defined in the Servicing Agreement. This
Agreement amends the terms and provisions of the Servicing Agreement only with
respect to the Serviced Mortgage Loans identified on Schedule I hereto and
does not purport to amend or modify the Servicing Agreement with respect to
any other loans that are or may become subject to the Servicing Agreement.
9. Notices and Remittances to the Master Servicer. All notices
required to be delivered to the Owner or the Master Servicer under this
Agreement shall be delivered to the Master Servicer at the following address:
Norwest Bank Minnesota, National Association
00000 Xxxxxx Xxxx Xxxxxxx
Xxxxxxxx, Xxxxxxxx 00000
Attn: Master Servicing Department, SASCO 1999-BC1
Copies of all such notices, and all notices to be delivered to the
initial Directing Holder under this Agreement, shall be delivered to the
Directing Holder at the following address:
Xxxxxx Brothers Inc.
Three World Financial Center
000 Xxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attn: Mortgage-Backed Securities
All remittances required to be made to the Master Servicer under this
Agreement shall be made to the following wire account:
Norwest Bank Minnesota, National Association
Minneapolis, Minnesota
ABA#: 000-000-000
Account Name: Corporate Trust Clearing
Account Number: 0000000000
For further credit to: #13502200, SASCO 1999-BC1
10. Termination of Rights of Directing Holders. The parties hereto
intend that the Directing Holders be third party beneficiaries of this
Agreement. All rights of any Directing Holder hereunder and under the Trust
Agreement and all obligations of the other parties hereto with respect to any
Directing Holder shall terminate immediately upon the transfer of the
respective Class X Certificate to any other Person, unless (i) the Special
Servicer consents in writing to the transfer of such rights and (ii) the
Trustee is provided with a letter from each Rating Agency to the effect that
the transfer of the rights of the related Directing Holder to such transferee
will not result in the qualification, withdrawal or downgrade of the ratings
then assigned to any Class of Certificates.
11. Annual Audit Report. On or before April 30 of each year,
beginning with April 30, 2000, Special Servicer shall cause a firm of
independent public accountants (who may also render other services to Special
Servicer), which is a member of the American Institute of Certified Public
Accountants, to furnish a statement to the Owner, each Directing Holder and
Master Servicer, to the effect that such firm has examined certain documents
and records for the preceding calendar year (or during the period from the
date of commencement of such servicer's duties hereunder until the end of such
preceding calendar year in the case of the first such certificate) and that,
on the basis of such examination conducted substantially in compliance with
the Uniform Single Attestation Program for Mortgage Bankers, such firm is of
the opinion that Special Servicer's overall servicing operations have been
conducted in compliance with the Uniform Single Attestation Program for
Mortgage Bankers except for such exceptions that, in the opinion of such firm,
the Uniform Single Attestation Program for Mortgage Bankers requires it to
report, in which case such exceptions shall be set forth in such statement.
12. Annual Officer's Certificate. On or before April 30 of each year,
beginning with April 30, 2000, the Special Servicer, at its own expense, will
deliver to the Owner, each Directing Holder and Master Servicer a Servicing
Officer's certificate stating, as to each signer thereof, that (i) a review of
the activities of the Special Servicer during such preceding fiscal year and
of performance under this Agreement has been made under such officers'
supervision, and (ii) to the best of such officers' knowledge, based on such
review, the Special Servicer has fulfilled all its obligations under this
Agreement for such year, or, if there has been a default in the fulfillment of
all such obligations, specifying each such default known to such officers and
the nature and status thereof including the steps being taken by the Special
Servicer to remedy such default.
Executed as of the day and year first above written.
XXXXXX CAPITAL, A DIVISION OF
XXXXXX BROTHERS HOLDINGS INC.
By:
------------------------------------
Name:
Title:
OCWEN FEDERAL BANK FSB
By:
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Name:
Title:
EXHIBIT A
Modifications to the Servicing Agreement
1. The following is hereby added immediately following the words "incidental
fees and charges" in the definition of "Ancillary Income" in Article I:
", but not including any premium or penalty associated with a prepayment
of principal of a Mortgage Loan."
2. The definition of "Base Servicing Fee" is hereby amended by deleting the
last sentence therefrom.
3. The definition of "Custodial Agreement" in Article I is hereby deleted
and replaced with the following:
"The custodial agreements relating to custody of the Serviced Mortgage
Loans among: (i) U.S. Bank Trust National Association, as Custodian, The
First National Bank of Chicago, as Trustee, and Structured Asset
Securities Corporation, (ii) Bankers Trust Company of California, N.A.,
as Custodian, The First National Bank of Chicago, as Trustee and
Structured Asset Securities Corporation, and (iii) Chase Bank of Texas,
N.A., as Custodian, The First National Bank of Chicago, as Trustee, and
Structured Asset Securities Corporation, each dated as of January 1,
1999."
4. The definition of "Distressed Mortgage Loan" in Article I is hereby
deleted and replaced with the following:
"Any Mortgage Loan with respect to which the related Mortgagor is 91 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."
5. The following is hereby added immediately following the words "Special
Servicer" in the definition of "Opinion of Counsel" in Article I:
"(except that such counsel must be Independent (as defined in the Trust
Agreement) outside counsel with respect to any such opinion relating to
the REMIC Provisions)."
6. The definition of "Primary Servicer" in Article I is hereby deleted and
replaced with the following:
"Aurora Loan Services Inc. or any of its successors and AMRESCO
Residential Mortgage Corporation or any of its successors."
7. The following definitions are hereby added to Article I:
"Monthly Advance: With respect to each Remittance Date and each
Mortgage, an amount equal to the Monthly Payment (with the interest
portion of such Monthly Payment adjusted to the Mortgage Loan Remittance
Rate) which was due on the Mortgage Loan, and (i) which was delinquent at
the close of business on the immediately preceding Determination Date and
(ii) which was not the subject of a previous Monthly Advance, unless such
Advance would constitute a Nonrecoverable Advance.
"REMIC Provisions: The provisions of the federal income tax law
relating to a REMIC, which appear at Section 860A through 860G of
Subchapter M of Chapter 1, Subtitle A of the Code, and related
provisions, and regulations, rulings or pronouncements promulgated
thereunder, as the foregoing may be in effect from time to time."
8. The definition of "First Remittance Date" in Article I is hereby deleted
and replaced with the following:
"The 18th day (or if such 18th day is not a Business Day, the first
Business Day immediately following) of the month, following the month in
which the related Transfer Date occurs."
9. The definition of "Remittance Date" in Article I is hereby deleted and
replaced with the following:
"The 18th day (or if such 18th day is not a Business Day, the first
Business Day immediately following) of any month, following the First
Remittance Date."
10. Section 2.03 is hereby amended by deleting the first, second and third
paragraphs thereof in their entirety and, in the fourth paragraph
thereof, deleting the following: "(and any applicable Acknowledgement
Agreement)".
11. Section 2.05(a)(i) is deleted in its entirety and replaced with the
following:
"(a)(i) Within five business days following a Transfer Date, the
Special Servicer shall reimburse the Primary Servicer for all principal
and interest and Servicing Advances made by such Primary Servicer and all
accrued and unpaid Servicing Fees due to the Primary Servicer with
respect to any Transferred Mortgage Loan identified on such Notice of
Transfer for which the Primary Servicer has not been reimbursed.
Thereafter, such amounts paid by the Special Servicer, if any, shall be
reimbursed to the Special Servicer in accordance with Section 3.04
hereof."
12. Section 3.01 is hereby amended by deleting clause (a) of the third
paragraph of subsection (B) thereof and by adding the following at the
end of such Section:
"(C) In connection with the transfer of any Distressed Mortgage
Loan, (i) the Special Servicer will be responsible for servicing the
Distressed Mortgage Loan from and after the effective date of transfer of
servicing to the Special Servicer, but shall have no obligation to
service such Distressed Mortgage Loan on or prior to such effective date
of the transfer of servicing, (ii) notwithstanding clause (i) above, the
Special Servicer shall not include the Distressed Mortgage Loan in its
monthly remittance report pursuant to Section 4.02 for the month in which
such transfer is effected and shall not be obligated to make the Monthly
Advance with respect to such Distressed Mortgage Loan on the Remittance
Date in the month in which such transfer is effected, in each case,
regardless of whether the Remittance Date occurs before or after the
effective date of such transfer, (iii) the amount of Monthly Advances to
be reimbursed to the Servicer by the Special Servicer hereunder shall
include the Monthly Advance made by the Servicer on such Remittance Date,
regardless of whether the Servicer makes such Monthly Advance before or
after the effective date of such transfer, and (iv) the Special Servicer
shall be entitled to the Base Servicing Fee with respect to each such
Distressed Mortgage Loan for the entire month in which such transfer
occurs.
Promptly after the transfer of any Distressed Mortgage Loan, the
Special Servicer shall use its best reasonable efforts to determine
whether any seller's representation or warranty applicable to such
Mortgage Loan has been breached, and shall notify the Trustee and the
Master Servicer in writing of any possible breach so identified. The
Special Servicer may conclusively rely upon information provided by
Xxxxxx Capital, and its successors and assigns, including copies of any
related agreements of sale, in determining which representations and
warranties are applicable to such Mortgage Loan."
13. The words "Special Servicer, in trust for Xxxxxx Capital, A Division of
Xxxxxx Brothers Holdings, Inc., owner of Residential Mortgage Loans,
Group No. ______, and various Mortgagors" in the first paragraph of
Section 3.03 are hereby deleted and replaced with the following: "Ocwen
Federal Bank FSB, in trust for Norwest Bank Minnesota, National
Association, as master servicer for SASCO 1999-BC1."
14. Section 3.04(ii) is deleted in its entirety and replaced with the
following:
"(ii) to reimburse itself for unreimbursed advances of the Special
Servicer's funds made pursuant to Section 2.05 hereof, including advances
by the Special Servicer to reimburse the Primary Servicer for principal
and interest advances, Servicing Advances and unpaid servicing fees due
to them, if any, the Special Servicer's right to reimburse itself
pursuant to this subclause (ii) being limited to either (x) amounts
received on the related Transferred Mortgage Loan which represent late
payments of principal and/or interest respecting which any such advance
was made, and related Liquidation Proceeds, condemnation proceeds,
Insurance Proceeds, REO Disposition Proceeds and other amounts received
in respect of the related Mortgage Loan, it being understood that, in the
case of any such reimbursement, the Special Servicer's right thereto
shall be prior to the rights of the Owner, the Master Servicer, any
Primary Servicer and any Certificateholder or (y) any other amounts in
the Collection Account in the event that such advances have been deemed
to be Nonrecoverable Advances or are not recovered from recoveries in
respect of the related Transferred Mortgage Loan or REO Property after a
final determination has been made as to what amounts have been or will be
recovered, it being understood that for those Transferred Mortgage Loans
in foreclosure, the Owner shall reimburse the Special Servicer for
Servicing Advances and advances made pursuant to Section 2.05 hereof
through the completion of the sale of the defaulted Mortgage Loan, or the
foreclosure and disposition of the REO Property;"
15. Section 3.04 is hereby amended by deleting clause (iii) in its entirety
and replacing such clause with the following clauses (iii) and (iv):
"(iii) to reimburse itself for Monthly Advances of the Special
Servicer's funds made pursuant to Section 7.03, the Special Servicer's
right to reimburse itself pursuant to this subclause (iii) being limited
to amounts received on the related Mortgage Loan which represent late
payments of principal and/or interest respecting which any such advance
was made, related Liquidation Proceeds, Insurance Proceeds, condemnation
proceeds, REO Disposition Proceeds and other amounts received in respect
of the related REO Property, and such other amounts as may be collected
by the Special Servicer from the Mortgagor or otherwise relating to such
Mortgage Loan, it being understood that, in the case of any such
reimbursement, the Special Servicer's right thereto shall be prior to the
rights of the Owner, the Master Servicer, any Primary Servicer and any
Certificateholder ; provided, that if the Special Servicer reasonably
determines that any unreimbursed Monthly Advance is a Nonrecoverable
Advance, the foregoing limitation shall not apply thereto;
(iv) to reimburse itself for unreimbursed Servicing Advances, and
for any unpaid Base Servicing Fees, the Special Servicer's right to
reimburse itself pursuant to this subclause (iv) with respect to any
Mortgage Loan being limited to related late collections, Liquidation
Proceeds, condemnation proceeds, Insurance Proceeds, REO Disposition
Proceeds and other amounts received in respect of the related REO
Property, and such other amounts as may be collected by the Special
Servicer from the Mortgagor or otherwise relating to the Mortgage Loan,
it being understood that, in the case of any such reimbursement, the
Special Servicer's right thereto shall be prior to the rights of the
Owner; provided, that if the Special Servicer reasonably determines that
any unreimbursed Servicing Advance is a Nonrecoverable Advance, the
foregoing limitation shall not apply thereto;"
Clauses (iv) through (viii) in Section 3.04 are hereby redesignated
clauses (v) through (ix), as applicable.
16. The words "Special Servicer, in trust for Xxxxxx Capital, A Division of
Xxxxxx Brothers Holdings, Inc., owner of Residential Mortgage Loans,
Group No. ______, and various Mortgagors" in the first paragraph of
Section 3.05 are hereby deleted and replaced with the following: "Ocwen
Federal Bank FSB, in trust for Norwest Bank Minnesota, National
Association, as master servicer for SASCO 1999-BC1."
17. Section 3.10(a) is deleted in its entirety and replaced with the
following:
"(a) Default Management Responsibilities: Subject only to Accepted
Servicing Practices and Section 3.11 below, the Special Servicer shall
have full power and authority to do or cause to be done any and all
things in connection with such servicing and administration which it may
deem necessary or desirable. Without limiting the generality of the
foregoing, the Special Servicer is hereby authorized and empowered by the
Owner (if, in the Special Servicer's reasonable judgment, such action
with respect to the Transferred Mortgage Loans and/or the Mortgaged
Properties is in the best interests of Owner in accordance with, or is
required by, this Agreement, and subject to Accepted Servicing Practices)
to take the following actions (without limitation): (i) prepare, execute
and deliver, on behalf of the Owner with expenses associated therewith
being Servicing Advances hereunder, any and all financing statements,
continuation statements and other documents or instruments necessary to
maintain the lien on each Mortgaged Property and related collateral; and,
subject to the remaining terms and provisions of this Section,
modifications, waivers (including, without limitation, waivers of any
late payment charge in connection with any delinquent payment on a
Transferred Mortgage Loan), consents, amendments, discounted payoff
agreements, forbearance agreements, cash management agreements or
consents to or with respect to any documents contained in the related
servicing file; and any and all instruments of satisfaction or
cancellation, or of partial or full release or discharge, and all other
instruments comparable to any of the types of instruments described in
this subsection (i), and (ii) institute and prosecute judicial and
non-judicial foreclosures, suits on promissory notes, indemnities,
guaranties or other loan documents, actions for equitable and/or
extraordinary relief (including, without limitation, actions for
temporary restraining orders, injunctions, and appointment of receivers),
suits for waste, fraud and any and all other tort, contractual and/or
other claims of whatever nature, and to appear in and file on behalf of
the Owner such pleadings or documents as may be necessary or advisable in
any bankruptcy action, state or federal suit or any other action. In the
event that any Mortgage Loan is in default or, in the judgment of the
Special Servicer, such default is reasonably foreseeable, the Special
Servicer, consistent with Accepted Servicing Practices, may waive, modify
or vary any term of such Mortgage Loan (including modifications that
would change the Mortgage Interest Rate, defer or forgive the payment of
principal or interest or extend the final maturity date of such Mortgage
Loan), accept payment from the related Mortgagor of an amount less than
the full outstanding and unpaid principal balance in final satisfaction
of such Mortgage or consent to the postponement of strict compliance with
any such term or otherwise grant indulgence to any Mortgagor if in the
Special Servicer's determination such waiver, modification, postponement
or indulgence is not materially adverse to the interests of the
Certificateholders (taking into account any estimated Realized Loss that
might result absent such action). In addition, if, with respect to a
Transferred Mortgage Loan, a default (or any condition resulting in a
default being reasonably foreseeable) is cured (such Mortgage Loan being
referred to herein as a "Performing Loan"), the Special Servicer may
thereafter waiver, modify or vary terms of such Performing Loan provided
that no such action will (A) decrease the Mortgage Rate on the Performing
Loan, (B) defer or forgive the payment of principal or interest (except
with respect to liquidation of such Performing Loan) or (C) extend the
final maturity date of such Performing Loan, provided, however, that no
such modification shall be permitted to the extent that it would (a)
affect adversely the status of the Trust Fund as a REMIC or (b) cause the
Trust Fund to be subject to a tax on "prohibited transactions" or
"contributions" pursuant to the REMIC Provisions.
Notwithstanding anything to the contrary in this Agreement, the
Special Servicer shall not waive any premium or penalty in connection
with a prepayment of principal of any Mortgage Loan, and shall not
consent to the modification of any Mortgage Note to the extent that such
modification relates to payment of a prepayment premium or penalty;
provided, that the foregoing shall not (i) apply to any Severely
Delinquent Loan or (ii) prohibit the Special Servicer from entering into
any agreement for modification, waiver, forbearance, amendment or
discounted payoff of a Mortgage Loan in accordance with this Agreement
that does not have the effect of waiving any prepayment premium or
penalty or modifying any provision requiring payment thereof.
Notwithstanding the foregoing, in the event of any conflict between
the provisions of this Section 3.10 and the provisions of Section 3.11,
the provisions of Section 3.11 shall control."
18. Section 3.10(e) is hereby deleted in its entirety and replaced with the
following:
"(e) At any time, a Directing Holder may request that the Special
Servicer take a particular action with respect to a particular Mortgage
Loan in the related Mortgage Pool, including without limitation
foreclosure, waivers or modifications. Any such request shall be in
writing, a copy of which shall be delivered to the Master Servicer. If
the Special Servicer determines that such requested action is consistent
with Accepted Servicing Practices, then the Special Servicer shall comply
with such request. Within two Business Days of receipt of such a request,
the Special Servicer shall notify such Directing Holder whether the
Special Servicer intends to comply with such request. If the Special
Servicer does not comply with such request (or fails to notify such
Directing Holder of its decision within the two Business Day period),
then such Directing Holder may, at its sole option and upon written
notice to the Special Servicer and the Master Servicer, purchase the
related Mortgage Loan from the Trust Fund at the Purchase Price (as
defined in the Trust Agreement). In addition, a Directing Holder may
purchase any Severely Delinquent Mortgage Loan from the related Mortgage
Pool upon written notice to the Master Servicer and the Special Servicer
within three Business Days of the day on which such Mortgage Loan becomes
a Severely Delinquent Loan.
The Special Servicer shall have the right to purchase any Severely
Delinquent Loan at the Purchase Price (as defined in the Trust
Agreement). The Special Servicer shall send a written notice (the
"Initial Notice") to the Directing Holder with respect to the related
Mortgage Pool advising such Directing Holder that the Special Servicer
intends to purchase a Severely Delinquent Loan in the related Mortgage
Pool. Such Directing Holder shall have the option to (i) direct the
Special Servicer not to purchase any such Severely Delinquent Loan but to
proceed with a particular default resolution strategy consistent with
Accepted Servicing Practices, (ii) direct the Special Servicer to proceed
with the purchase of such loan on the terms proposed by the Special
Servicer, or (iii) indicate that such Directing Holder intends to
purchase such Severely Delinquent Loan, in which case such Directing
Holder shall have the sole right and option to purchase the Severely
Delinquent Loan at the Purchase Price; provided, however, that if such
Directing Holder fails or refuses to deliver a written notice of its
election to the Special Servicer within two Business Days after the
Special Servicer has sent to such Directing Holder the Initial Notice,
then such Directing Holder shall be deemed to have consented to the
Special Servicer purchasing the Severely Delinquent Loan for its own
account."
19. The following Section 3.11 is hereby added immediately following Section
3.10:
"Section 3.11 REMIC Provisions.
(a) Unless the Mortgagor is in default with respect to the related
Mortgage Loan or such default is, in the judgment of the Special
Servicer, reasonably foreseeable, the Special Servicer shall not permit
any modification of any material term of any Mortgage Loan, including any
modification that would change the Mortgage Interest Rate, defer or
forgive the payment of principal or interest, reduce or increase the
outstanding principal balance (except for actual payments of principal),
change the final maturity date on such Mortgage Loan, or permit any
alteration, substitution or release of any collateral for such Mortgage
Loan.
(b) The Special Servicer shall dispose of any REO Property as soon
as possible and shall sell such REO Property in any event within three
years after title has been taken to such REO Property, unless (i) the
Owner shall have been supplied with an Opinion of Counsel to the effect
that the holding by the Trust Fund of such Mortgaged Property subsequent
to such three-year period (and specifying the period beyond such
three-year period for which the Mortgaged Property may be held) will not
result in the imposition of taxes on "prohibited transactions" of the
Trust Fund as defined in section 860F of the Code, or cause the related
REMIC to fail to qualify as a REMIC, in which case the Trust Fund may
continue to hold such Mortgaged Property (subject to any conditions
contained in such Opinion of Counsel), or (ii) the Owner (at the Special
Servicer's expense) or the Special Servicer shall have applied for, not
later than 61 days prior to the expiration of such three-year period, an
extension of such three-year period in the manner contemplated by section
856(e)(3) of the Code, in which case the three-year period shall be
extended by the applicable period. If a period longer than three years is
permitted under the foregoing sentence and is necessary to sell any REO
Property, (i) the Special Servicer shall report monthly to the Owner as
to the progress being made in selling such REO Property and (ii) if, with
the written consent of the Owner, a purchase money mortgage is taken in
connection with such sale, such purchase money mortgage shall name the
Special Servicer as mortgagee, and such purchase money mortgage shall not
be held pursuant to this Agreement, but instead a separate participation
agreement between the Special Servicer and the Owner shall be entered
into with respect to such purchase money mortgage.
Notwithstanding any other provision of this Agreement, no Mortgaged
Property held by a REMIC shall be rented (or allowed to continue to be
rented) or otherwise used for the production of income by or on behalf of
the Trust Fund or sold in such a manner or pursuant to any terms that
would (i) cause such Mortgaged Property to fail to qualify at any time as
"foreclosure property" within the meaning of section 860G(a)(8) of the
Code, (ii) subject the Trust Fund to the imposition of any federal or
state income taxes on "net income from foreclosure property" with respect
to such Mortgaged Property within the meaning of section 860G(c) of the
Code, or (iii) cause the sale of such Mortgaged Property to result in the
receipt by the Trust Fund of any income from non-permitted assets as
described in section 860F(a)(2)(B) of the Code, unless the Special
Servicer has agreed to indemnify and hold harmless the Trust Fund with
respect to the imposition of any such taxes."
20. The first paragraph of Section 4.01 is hereby deleted and replaced with
the following:
"On each Remittance Date the Servicer shall remit by wire transfer
of immediately available funds to the Master Servicer (a) all amounts
deposited in the Custodial Account as of the close of business on the
last day of the related Due Period (net of charges against or withdrawals
from the Custodial Account pursuant to Section 3.04), plus (b) all
amounts, if any, which the Servicer is obligated to advance pursuant to
Section 7.03, minus (c) any amounts attributable to Principal
Prepayments, Liquidation Proceeds, Insurance Proceeds or REO Disposition
Proceeds received after the applicable Prepayment Period, which amounts
shall be remitted on the following Remittance Date, together with any
additional interest required to be deposited in the Custodial Account in
connection with such Principal Prepayment in accordance with Section
7.03, and minus (d) any amounts attributable to Monthly Payments
collected but due on a due date or dates subsequent to the first day of
the month in which such Remittance Date occurs, which amounts shall be
remitted on the Remittance Date next succeeding the Due Period for such
amounts."
21. Section 4.02 is hereby amended by deleting the words "Remittance Date" in
the first line of such Section, and substituting the following: "tenth
day of each month, or if such tenth day is not a Business Day, the
immediately preceding Business Xxx"
00. Section 5.01 is hereby amended by deleting the last sentence of each of
subsections (a) and (b) thereof.
23. The following Section 7.03 is hereby added immediately following Section
7.02:
"Section 7.03 Monthly Advances and Compensating Interest.
(a) Notwithstanding anything to the contrary herein, the Special
Servicer shall make Monthly Advances (other than Balloon Payments as
defined in the Trust Agreement) on each Remittance Date through the
Remittance Date immediately preceding the distribution of all Liquidation
Proceeds and other payments or recoveries (including Insurance Proceeds
and condemnation proceeds) with respect to the related Mortgage Loans,
unless such advances would constitute Nonrecoverable Advances.
(b) Notwithstanding anything to the contrary herein, with respect to
each Principal Prepayment of a Mortgage Loan the Special Servicer shall
deposit in the Custodial Account on a daily basis and retain therein the
Prepayment Interest Shortfall Amount, if any, for the month of
distribution. Such deposit shall be made from the Special Servicer's own
funds, without reimbursement therefor, up to a maximum amount per month
equal to the aggregate of the Base Servicing Fees otherwise payable to
the Special Servicer with respect to such month.
24. Section 9.02 is hereby deleted in its entirety.
25. The following paragraph is added at the end of Section 10.01:
"Neither the Master Servicer nor any successor special servicer
(including the Owner and the Master Servicer) shall be liable for any
acts or omissions of the Special Servicer or any predecessor servicer. In
particular, neither the Master Servicer nor any successor special
servicer (including the Owner and the Master Servicer) shall be liable
for any servicing errors or interruptions resulting from any failure of
the Special Servicer to maintain computer and other information systems
that are year-2000 compliant."
26. All references in the Servicing Agreement or in any schedules or exhibits
thereto, including, without limitation, Exhibit I, to the "Decision
Matrix" are hereby deleted in their entirety.
27. The following definition is hereby added:
"Prepayment Period: With respect to the first Remittance Date, the
period beginning on the Cut-off Date and ending on August 1. With respect
to each subsequent Remittance Date, the period commencing on the second
day of the month immediately preceding the month in which such Remittance
Date occurs and ending on the first day of the month in which such
Remittance Date occurs."
28. The definitions of "Extended Special Servicing Fee," "Incentive Fee,"
"Loss Severity Percentage" and "Special Servicing Fee" are hereby deleted
in their entirety.
29. Section 5.01is hereby deleted in its entirety and replaced with the
following:
"Section 5.01 Servicing Compensation. As consideration for servicing
the Transferred Mortgage Loans subject to this Agreement, the Special
Servicer shall be entitled to receive such compensation as is specified
in a special servicing compensation agreement dated the Closing Date
between Xxxxxx Capital and the Special Servicer."
30. The definition of "Prepayment Interest Shortfall Amount" is hereby
amended by adding the words "or in part" immediately following the words
"subject to a Principal Prepayment in full."
