EXECUTION
SPECIAL SERVICING AGREEMENT
THIS SPECIAL SERVICING AGREEMENT (this "Agreement"), entered into as of
the 1st day of March, 1998, by and between XXXXXX CAPITAL, A DIVISION OF
XXXXXX BROTHERS HOLDINGS INC., a Delaware corporation ("Xxxxxx Capital"), and
OCWEN FEDERAL BANK FSB, a federal savings bank ("the Special Servicer"):
RECITALS
WHEREAS, Xxxxxx Capital has conveyed certain Mortgage Loans identified
on Schedule I hereto (the "Serviced Mortgage Loans") to Structured Asset
Securities Corporation ("SASCO"), which in turn has conveyed the Serviced
Mortgage Loans to First Union National Bank, as trustee (the "Trustee") under
a trust agreement dated as of March 1, 1998 (the "Trust Agreement"), among
the Trustee, Norwest Bank Minnesota, National Association, as master servicer
("Norwest," and, together with any successor Master Servicer appointed
pursuant to the provisions of the Trust Agreement, the "Master Servicer") and
SASCO.
WHEREAS, multiple classes of Certificates, including the Class X
Certificate, will be issued on the Closing Date pursuant to the Trust
Agreement, and Ocwen Partnership, L.P. (together with any successor in
interest thereto and any permitted assignee or transferee thereof, the
"Directing Holder") is expected to purchase the Class X Certificate from the
Placement Agent and is expected to be the initial registered Holder (other
than the Placement Agent and any nominee thereof) of the Class X Certificate;
WHEREAS, Xxxxxx Capital desires that the Special Servicer perform the
services with respect to the Serviced Mortgage Loans as provided in this
Agreement (including those provisions that are incorporated by reference
herein), and the Special Servicer has agreed to do so, subject to the
conditions set forth herein.
WHEREAS, Norwest and any successor Master Servicer shall be obligated,
among other things, to supervise the servicing of the Serviced Mortgage Loans
on behalf of the Trustee, and shall have the right, under certain
circumstances, to terminate the rights and obligations of the Special
Servicer under this Special Servicing Agreement.
NOW, THEREFORE, in consideration of the mutual agreements hereinafter
set forth and for other good and valuable consideration, the receipt and
adequacy of which are hereby acknowledged, Xxxxxx Capital and the Special
Servicer hereby agree as follows:
AGREEMENT
I. Definitions. Capitalized terms used and not defined in this
-----------
Agreement, including Exhibit A hereto and any provisions of the Servicing
Agreement dated as of December 1, 1997, between Xxxxxx Capital and the
Servicer (the "Servicing Agreement") incorporated by reference herein, shall
have the meanings ascribed to such terms in the Trust Agreement.
II. Special Servicing. The Special Servicer agrees, with respect to
-----------------
the Serviced Mortgage Loans, to perform and observe the duties,
responsibilities and obligations that are to be performed and observed under
the provisions of the Servicing Agreement, except as otherwise provided
herein and on Exhibit A hereto, and that the provisions of the Servicing
Agreement, as so modified, are and shall be a part of this Agreement to the
same extent as if set forth herein in full.
III. Master Servicing; Termination of Special Servicer. The Special
-------------------------------------------------
Servicer, including any successor special servicer hereunder, shall be
subject to the supervision of the Master Servicer, which Master Servicer
shall be obligated to ensure that the Special Servicer services the Serviced
Mortgage Loans in accordance with the provisions of this Agreement. The
Master Servicer, acting on behalf of the Trustee pursuant to the Trust
Agreement, shall have the same rights as the "Owner" (as defined in the
Servicing Agreement) to enforce the obligations of the Special Servicer under
the Servicing Agreement. The Master Servicer shall be entitled to terminate
the rights and obligations of the Special Servicer under this Agreement upon
the failure of the Special Servicer to perform any of its obligations under
this Agreement, after the expiration of any notice and cure periods, if any,
as provided in Section 9.01 of the Servicing Agreement. If the Special
Servicer is in default under this Agreement, after the expiration of any
notice and cure periods, if any, the Master Servicer shall, upon the written
direction of the Directing Holder, terminate the rights and obligations of
the Special Servicer under this Agreement.
Upon prior written notice, the Directing Holder shall have the exclusive
right to terminate the rights and obligations of the Special Servicer under
this Agreement without cause and without payment of any termination fee in
connection with such termination; provided, that any successor special
servicer shall be appointed in the manner provided below.
Notwithstanding anything to the contrary in Sections 9.01, 9.02 and
10.01 of the Servicing Agreement, the Directing Holder shall, within 30 days
of the receipt by the Special Servicer of a copy of any termination notice
delivered by the Master Servicer to the Special Servicer or upon delivery by
the Directing Holder of any such notice pursuant Section 9.02 or upon receipt
by the Directing Holder of any resignation notice given by the Special
Servicer, notify the Master Servicer in writing of the Directing Holder's
nominee as successor special servicer, which nominee shall be appointed as
special servicer by the Master Servicer unless the Master Servicer reasonably
objects to such nominee within 10 days following receipt of such notice. If
the Master Servicer objects to such nominee, then the Master Servicer shall,
within such 10-day period, appoint a successor special servicer, which
successor shall be reasonably acceptable to the Directing Holder.
IV. 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.
V. 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.
VI. 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.
VII. 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.
VIII. 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.
IX. Notices and Remittances to the Master Servicer. All notices
----------------------------------------------
required to be delivered to the Owner or the Master Servicer under this
Agreement shall be delivered to the Master Servicer at the following address:
Norwest Bank Minnesota, National Association
00000 Xxxxxx Xxxx Xxxxxxx
Xxxxxxxx, Xxxxxxxx 00000
Attn: Master Servicing Department, SASCO 1998-3
Copies of all such notices, and all notices to be delivered to the
Directing Holder under this Agreement, shall be delivered to the Directing
Holder at the following address:
Ocwen Asset Investment Corp.
The Forum
Suite 1002
1675 Palm Beach Xxxxx Xxxxxxxxx
Xxxx Xxxx Xxxxx, Xxxxxxx 00000
Attn: Secretary
All remittances required to be made to the Master Servicer under this
Agreement shall be made to the following wire account:
Norwest Bank Minnesota, National Association
Minneapolis, Minnesota
ABA#: 000-000-000
Account Name: Corporate Trust Clearing
Account Number: 0000000000
For further credit to: 13415500, SASCO 1998-3
X. Termination of Rights of Directing Holder. The parties hereto
-----------------------------------------
intend that the Directing Holder be a third party beneficiary of this
Agreement. All rights of the Directing Holder hereunder and under the Trust
Agreement and all obligations of the other parties hereto with respect to the
Directing Holder shall terminate immediately upon any transfer of the Class X
Certificate to any other Person, unless (i) the Special Servicer consents in
writing to the transfer of such rights and (ii) the Trustee is provided with
a letter from each Rating Agency to the effect that the transfer of the
rights of the Directing Holder to such transferee will not result in the
qualification, withdrawal or downgrade of the ratings then assigned to any
Class of Certificates.
XI. Annual Audit Report. On or before April 30 of each year, beginning
-------------------
with April 30, 1999, Special Servicer shall cause a firm of independent
public accountants (who may also render other services to Special Servicer),
which is a member of the American Institute of Certified Public Accountants,
to furnish a statement to Owner, Directing Holder and Master Servicer, to the
effect that such firm has examined certain documents and records for the
preceding calendar year (or during the period from the date of commencement
of such servicer's duties hereunder until the end of such preceding calendar
year in the case of the first such certificate) and that, on the basis of
such examination conducted substantially in compliance with the Uniform
Single Attestation Program for Mortgage Bankers, such firm is of the opinion
that Special Servicer's overall servicing operations have been conducted in
compliance with the Uniform Single Attestation Program for Mortgage Bankers
except for such exceptions that, in the opinion of such firm, the Uniform
Single Attestation Program for Mortgage Bankers requires it to report, in
which case such exceptions shall be set forth in such statement.
XII. Annual Officer's Certificate. On or before April 30 of each year,
----------------------------
beginning with April 30, 1999, the Special Servicer, at its own expense, will
deliver to the Owner, Directing Holder and Master Servicer a Servicing
Officer's certificate stating, as to each signer thereof, that (i) a review
of the activities of the Special Servicer during such preceding fiscal year
and of performance under this Agreement has been made under such officers'
supervision, and (ii) to the best of such officers' knowledge, based on such
review, the Special Servicer has fulfilled all its obligations under this
Agreement for such year, or, if there has been a default in the fulfillment
of all such obligations, specifying each such default known to such officers
and the nature and status thereof including the steps being taken by the
Special Servicer to remedy such default.
Executed as of the day and year first above written.
XXXXXX CAPITAL, A DIVISION OF
XXXXXX BROTHERS HOLDINGS INC.
By:
---------------------------------
Name:
Title:
OCWEN FEDERAL BANK FSB
By:
---------------------------------
Name: Xxx X. Xxxxxxx
Title: Vice President
EXHIBIT A
Modifications to the Servicing Agreement
1. The following is hereby added immediately following the words
"incidental fees and charges" in the definition of "Ancillary Income" in
Article I: ", but not including any premium or penalty associated with
a prepayment of principal of a Mortgage Loan."
2. The definition of "Base Servicing Fee" is hereby amended by deleting the
last sentence therefrom.
3. The definition of "Custodial Agreement" in Article I is hereby deleted
and replaced with the following:
"The custodial agreement relating to custody of the Serviced Mortgage
Loans between First Trust National Association, as Custodian, and First
Union National Bank, as Trustee, dated as of March 1, 1998."
4. The following is hereby added immediately following the words "Special
Servicer" in the definition of "Opinion of Counsel" in Article I:
"(except that such counsel must be Independent (as defined in the Trust
Agreement) outside counsel with respect to any such opinion relating to
the REMIC Provisions)"
5. The definition of "Primary Servicer" in Article I is hereby deleted and
replaced with the following:
"Any of Option One Mortgage Corporation, Aurora Loan Services Inc. or
any successor to either of them."
6. The following definitions are hereby added to Article I:
"Monthly Advance: With respect to each Remittance Date and each
---------------
Mortgage, an amount equal to the Monthly Payment (with the interest portion
of such Monthly Payment adjusted to the Mortgage Loan Remittance Rate) which
was due on the Mortgage Loan, and (i) which was delinquent at the close of
business on the immediately preceding Determination Date and (ii) which was
not the subject of a previous Monthly Advance, unless such Advance would
constitute a Nonrecoverable Advance.
"REMIC Provisions: The provisions of the federal income tax law
----------------
relating to a REMIC, which appear at Section 860A through 860G of Subchapter
M of Chapter 1, Subtitle A of the Code, and related provisions, and
regulations, rulings or pronouncements promulgated thereunder, as the
foregoing may be in effect from time to time."
7. The definition of "Remittance Date" in Article I is hereby deleted and
replaced with the following:
"The 18th day (or if such 18th day is not a Business Day, the first
Business Day immediately following) of any month, following the First
Remittance Date."
8. 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)".
9. 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."
10. 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."
11. The words "(Special Servicer, in trust for Xxxxxx Capital, A Division of
Xxxxxx Brothers Holdings, Inc., owner of Residential Mortgage Loans,
Group No. ______, and various Mortgagors" in the first paragraph of
Section 3.03 are hereby deleted and replaced with the following: "Ocwen
Federal Bank FSB, in trust for Norwest Bank Minnesota, National
Association, as master servicer for SASCO 1998-3."
12. 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;"
13. 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 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 (viii) with respect to any
Mortgage Loan being limited to related late collections, Liquidation
Proceeds, condemnation proceeds, Insurance Proceeds, REO Disposition
Proceeds and other amounts received in respect of the related REO
Property, and such other amounts as may be collected by the Special
Servicer from the Mortgagor or otherwise relating to the Mortgage Loan,
it being understood that, in the case of any such reimbursement, the
Special Servicer's right thereto shall be prior to the rights of the
Owner; provided, that if the Special Servicer reasonably determines that
any unreimbursed Advance is a Nonrecoverable Advance, the foregoing
limitation shall not apply thereto;"
Clauses (iv) through (viii) in Section 3.04 are hereby redesignated
clauses (v) through (ix), as applicable.
14. The words "Special Servicer, in trust for Xxxxxx Capital, A Division of
Xxxxxx Brothers Holdings, Inc., owner of Residential Mortgage Loans,
Group No. ______, and various Mortgagors" in the first paragraph of
Section 3.05 are hereby deleted and replaced with the following: "Ocwen
Federal Bank FSB, in trust for Norwest Bank Minnesota, National
Association, as master servicer for SASCO 1998-3."
15. 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."
16. Section 3.10(e) is hereby deleted in its entirety and replaced with the
following:
"(e) At any time, the Directing Holder may request that the Special
Servicer take a particular action with respect to a particular Mortgage
Loan, including without limitation foreclosure, waivers or
modifications. Any such request shall be in writing, a copy of which
shall be delivered to the Master Servicer. If the Special Servicer
determines that such requested action is consistent with Accepted
Servicing Practices, then the Special Servicer may, but is not required
to, comply with such request. Within two Business Days of receipt of
such a request, the Special Servicer shall notify the Directing Holder
whether the Special Servicer intends to comply with such request. If
the Special Servicer declines to comply with such request (or fails to
notify the Directing Holder of its decision within the two Business Day
period), then the Directing Holder may, at its sole option and upon
written notice to the Special Servicer and the Master Servicer, purchase
the related Mortgage Loan from the Trust Fund at the Purchase Price (as
defined in the Trust Agreement). If the Directing Holder does not
indicate whether it wishes to exercise this option within two Business
Days of receipt of such notice, then the Directing Holder shall not be
entitled to object to the action taken by the Special Servicer with
respect to such Mortgage Loan." In addition, the Directing Holder may
purchase any Severely Delinquent Mortgage Loan upon written notice to
the Master Servicer and the Special Servicer within three days of the
day on which such Mortgage Loan becomes a Severely Delinquent Loan.
The Special Servicer shall have the right to purchase any Severely
Delinquent Loan at the Purchase Price (as defined in the Trust
Agreement). The Special Servicer shall send a written notice (the
"Initial Notice") to the Directing Holder advising the Directing Holder
that the Special Servicer intends to purchase a Severely Delinquent
Loan. The Directing Holder shall have the option to (i) direct the
Special Servicer not to purchase any such Severely Delinquent Loan but
to proceed with a particular default resolution strategy otherwise
mutually acceptable to the Special Servicer and the Directing Holder,
(ii) direct the Special Servicer to proceed with the purchase of such
loan on the terms proposed by the Special Servicer, or (iii) indicate
that the Directing Holder intends to purchase such Severely Delinquent
Loan, in which case the Directing Holder shall have the sole right and
option to purchase the Severely Delinquent Loan at the Purchase Price;
provided, however, that if the Directing Holder fails or refuses to
deliver a written notice of its election to the Special Servicer within
two Business Days after the Special Servicer has sent to the Directing
Holder the Initial Notice, then the Directing Holder shall be deemed to
have consented to the Special Servicer purchasing the Severely
Delinquent Loan for its own account."
17. The following Section 3.11 is hereby added immediately following Section
3.10:
"Section 3.11 REMIC Provisions.
----------------
(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."
18. The first paragraph of Section 4.01 is hereby deleted and replaced with
the following:
"On each Remittance Date the Servicer shall remit by wire transfer
of immediately available funds to the Master Servicer (a) all amounts
deposited in the Custodial Account as of the close of business on the
last day of the related Collection Period (net of charges against or
withdrawals from the Custodial Account pursuant to Section 3.04), plus
(b) all amounts, if any, which the Servicer is obligated to advance
pursuant to Section 7.03, minus (c) any amounts attributable to
Principal Prepayments, Liquidation Proceeds, Insurance Proceeds or REO
Disposition Proceeds received after the applicable Prepayment Period,
which amounts shall be remitted on the following Remittance Date,
together with any additional interest required to be deposited in the
Custodial Account in connection with such Principal Prepayment in
accordance with Section 7.03, and minus (d) any amounts attributable to
Monthly Payments collected but due on a due date or dates subsequent to
the first day of the month in which such Remittance Date occurs, which
amounts shall be remitted on the Remittance Date next succeeding the Due
Period for such amounts."
19. 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.
21. The following Sections 7.03 and 7.04 are hereby added immediately
following Section 7.02:
"Section 7.03 Monthly Advances and Compensating Interest.
------------------------------------------
(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.
(b) Notwithstanding anything to the contrary herein, with respect
to each Principal Prepayment of a Mortgage Loan the Special Servicer
shall deposit in the Custodial Account on a daily basis and retain
therein the Prepayment Interest Shortfall Amount, if any, for the month
of distribution. Such deposit shall be made from the Special Servicer's
own funds, without reimbursement therefor, up to a maximum amount per
month equal to the aggregate of the Base Servicing Fees otherwise
payable to the Special Servicer with respect to such month.
Section 7.04 Special Servicing Compensation. Notwithstanding
------------------------------
anything to the contrary herein, the Special Servicer shall not be entitled
to pay itself any compensation out of amounts collected on or in respect of
the Mortgage Loans other than the Base Servicing Fee and any Ancillary
Income, to the extent provided herein. Any other compensation payable to the
Special Servicer hereunder, including the Special Servicing Fee, the Extended
Special Servicing Fee and the Incentive Fee, shall be payable to the Special
Servicer on each Distribution Date as provided in the Trust Agreement.
22. Section 9.02 is hereby deleted in its entirety.
23. The following paragraph is added at the end of Section 10.01:
"Neither the Master Servicer nor any successor special servicer
(including the Owner and the Master Servicer) shall be liable for any
acts or omissions of the Special Servicer or any predecessor servicer.
In particular, neither the Master Servicer nor any successor special
servicer (including the Owner and the Master Servicer) shall be liable
for any servicing errors or interruptions resulting from any failure of
the Special Servicer to maintain computer and other information systems
that are year-2000 compliant."
24. All references in the Servicing Agreement or in any schedules or
exhibits thereto, including, without limitation, Exhibit I, to the
"Decision Matrix" are hereby deleted in their entirety.
25. The following definition is hereby added:
"Prepayment Period: With respect to the first Remittance Date, the
-----------------
period beginning on the Cut-off Date and ending on April 1. With respect to
each subsequent Remittance Date, the period commencing on the second day of
the month immediately preceding the month in which such Remittance Date
occurs and ending on the first day of the month in which such Remittance Date
occurs."
26. The definitions of "Extended Special Servicing Fee," "Incentive Fee,"
"Loss Severity Percentage" and "Special Servicing Fee" are hereby
deleted in their entirety.
27. Section 5.01 is hereby deleted in its entirety and replaced with the
following:
"Section 5.01 Servicing Compensation. As consideration for servicing
----------------------
the Transferred Mortgage Loans subject to this Agreement, the Special
Servicer shall be entitled to (i) retain the Base Servicing fee equal to one-
twelfth of (x) the Servicing Fee Rate and (y) the outstanding principal
balance of such Transferred Mortgage Loan during any month or part thereof
(unless otherwise specified herein) and (ii) receive such additional
compensation as is specified in a separate letter agreement dated the Closing
Date."
