Exhibit 99.7
EXECUTION
RECONSTITUTED SERVICING AGREEMENT
THIS RECONSTITUTED SERVICING AGREEMENT (this "Agreement"), entered
into as of the 1st day of October, 2000, by and between LEHMAN CAPITAL, A
DIVISION OF LEHMAN BROTHERS HOLDINGS INC., a Delaware corporation ("Lehman
Capital"), and COUNTRYWIDE HOME LOANS, INC., a California corporation (the
"Servicer") having an office at 4500 Park Granada, Calabasas, California
92302, recites and provides as follows:
RECITALS
WHEREAS, Centre Capital Group, Inc. ("CCGI") acquired certain first
lien, fixed and adjustable rate, conventional mortgage loans on a
servicing-retained basis from the Servicer, which mortgage loans were either
originated or acquired by the Servicer.
WHEREAS, such mortgage loans are currently being serviced by the
Servicer for CCGI pursuant to a Master Servicing Agreement for Fixed and
Adjustable Rate Mortgage Loans (the "Master Servicing Agreement"), dated as of
March 17, 2000 and annexed as Exhibit B hereto, by and between CCGI, as owner,
and the Servicer, as servicer.
WHEREAS, pursuant to an Assignment and Assumption Agreement, dated as
of March 17, 2000 (the "Assignment and Assumption Agreement") and annexed as
Exhibit C hereto, Lehman Capital acquired from CCGI all of CCGI's right, title
and interest in and to certain of the mortgage loans currently serviced under
the Master Servicing Agreement (hereinafter, the "Mortgage Loans") and assumed
for the benefit of each of the Servicer and CCGI the obligations of CCGI as
owner under such Agreement.
WHEREAS, Lehman Capital has conveyed certain of the Mortgage Loans,
as identified on Schedule I hereto (the "Serviced Mortgage Loans"), to
Structured Asset Securities Corporation, a Delaware special purpose
corporation ("SASCO"), which in turn has conveyed the Serviced Mortgage Loans
to Wells Fargo Bank Minnesota, N.A. (the "Trustee"), pursuant to a trust
agreement dated as of October 1, 2000 (the "Trust Agreement"), among the
Trustee, Aurora Loan Services Inc., as master servicer ("Aurora," and,
together with any successor Master Servicer appointed pursuant to the
provisions of the Trust Agreement, the "Master Servicer") and SASCO.
WHEREAS, Lehman Capital desires that the Servicer continue to service
the Serviced Mortgage Loans, and the Servicer has agreed to do so, subject to
the rights of Lehman Capital (with the consent of the Master Servicer) to
terminate the rights and obligations of the Servicer hereunder at any time
without cause and to the other conditions set forth herein.
WHEREAS, Lehman Capital and the Servicer agree that the provisions of
the Master Servicing Agreement shall continue to apply to the Serviced
Mortgage Loans, but only to the extent provided herein and that this Agreement
shall constitute a Reconstitution Agreement (as such term is defined in the
Master Servicing Agreement) which shall govern the Serviced Mortgage Loans for
so long as such Serviced Mortgage Loans remain subject to the provisions of
the Trust Agreement.
WHEREAS, the Master Servicer 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 the
conditions specified herein to terminate for cause the rights and obligations
of the Servicer under this Agreement.
WHEREAS, Lehman Capital and the Servicer intend that each of the
Master Servicer and the Trustee is an intended third party beneficiary of this
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, Lehman Capital and the 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 Master
Servicing Agreement incorporated by reference herein (regardless of whether
such terms are defined in the Master Servicing Agreement), shall have the
meanings ascribed to such terms in the Trust Agreement.
2. Servicing. The 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
Master Servicing Agreement, except as otherwise provided herein and on Exhibit
A hereto, and that the provisions of the Master 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 Servicer. The Servicer, including
any successor servicer hereunder, shall be subject to the supervision of the
Master Servicer, which Master Servicer shall be obligated to ensure that the
Servicer services the Serviced Mortgage Loans in accordance with the
provisions of this Agreement. The Master Servicer, acting on behalf of the
Trustee and the SASCO 2000-4 Trust Fund (the "Trust Fund") created pursuant to
the Trust Agreement, shall have the same rights as Lehman Capital, as owner,
under the Master Servicing Agreement to enforce the obligations of the
Servicer under the Master Servicing Agreement and the term "Owner" as used in
the Master Servicing Agreement in connection with any rights of the Owner
shall refer to the Trust Fund or, as the context requires, the Master Servicer
acting in its capacity as agent for the Trust Fund, except as otherwise
specified in Exhibit A hereto. The Master Servicer shall be entitled to
terminate the rights and obligations of the Servicer under this Agreement upon
the failure of the Servicer to perform any of its obligations under this
Agreement, which failure results in an Event of Default as provided in Article
IX of the Master Servicing Agreement. Notwithstanding anything herein to the
contrary, in no event shall the Master Servicer assume any of the obligations
of Lehman Capital under the Master Servicing Agreement; and in connection with
the performance of the Master Servicer's duties hereunder, the parties and
other signatories hereto agree that the Master Servicer shall be entitled to
all of the rights, protections and limitations of liability afforded to the
Master Servicer under the Trust Agreement.
4. No Representations. Neither the Servicer nor the Master Servicer
shall be obligated or required to make any representations and warranties
regarding the characteristics of 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 (including any third party beneficiary thereof) or required to
be provided to the Trustee 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 or, if sent by facsimile or electronic
mail, when facsimile or electronic confirmation of receipt by the recipient is
received by the sender of such notice. 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.
All notices required to be delivered to the Master Servicer under
this Agreement shall be delivered to the Master Servicer at the following
address:
Aurora Loan Services Inc.
2530 South Parker Road
Suite 601
Aurora, Colorado 80014
Attention: E. Todd Whittemore, Master Servicing, SASCO 2000-4
Telephone: (303) 632-3000
Telecopier: (303) 632-3001
All remittances required to be made to the Master Servicer under this
Agreement shall be made on a scheduled/scheduled basis to the following wire
account:
The Chase Manhattan Bank
New York, New York
ABA #: 021-000-021
Account Name: Aurora Loan Services Inc., Master Servicing
Payment Clearing Account
Account No.: 066-611059
Beneficiary: Aurora Loan Services Inc.
For further credit to: SASCO 2000-4
All notices required to be delivered to the Trustee hereunder shall
be delivered to the Trustee at the following address:
Wells Fargo Bank Minnesota, N.A.
11000 Broken Land Parkway
Columbia, Maryland 21044
Attention: Corporate Trust Services
Telephone: (410) 884-2136
Telecopier: (410) 884-2363
All notices required to be delivered to Lehman Capital hereunder
shall be delivered to Lehman Capital at the following address:
Lehman Capital, a Division of Lehman
Brothers Holdings Inc.
200 Vesey Street
New York, New York 10285-0900
Attention: Mortgage Backed Finance Department
Telephone: (212) 526-7000
Telecopier: (212) 526-7209
All notices required to be delivered to the Servicer hereunder shall
be delivered to the address of its office as set forth in the first paragraph
of this Agreement.
6. Governing Law. THIS 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. Lehman Capital and the Servicer agree that this
Agreement is a "Reconstitution Agreement" and that the date hereof is the
"Reconstitution Date", each as defined in the Master Servicing Agreement.
<PAGE>
Executed as of the day and year first above written.
LEHMAN CAPITAL, A DIVISION OF
LEHMAN BROTHERS HOLDINGS INC.,
as Owner
By:/s/ Joseph J. Kelly
--------------------------------
Name: Joseph J. Kelly
Title: Authorized Signatory
COUNTRYWIDE HOME LOANS, INC.,
as Servicer
By:/s/ Celia Coulter
---------------------------------
Name: Celia Coulter
Title: Senior Vice President
Acknowledged By:
AURORA LOAN SERVICES INC.,
as Master Servicer
By:/s/ Ralph A. Lenzi, III
----------------------------------
Name: Ralph A. Lenzi, III
Title: CEO
WELLS FARGO BANK MINNESOTA, N.A.,
as Trustee
By:/s/ Randall S. Reider
----------------------------------
Name: Randall S. Reider
Title: Assistant Vice President
<PAGE>
EXHIBIT A
Modifications to the Master Servicing Agreement
1. Unless otherwise specified herein, any provisions of the Master
Servicing Agreement, including definitions, relating to (i)
representations and warranties of the Owner and (ii) Whole-Loan
Transfers, Pass-Through Transfers, Acknowledgement Agreements,
Closing Dates, Cut-off Dates and First Remittance Dates, shall be
disregarded. Unless otherwise specified herein, for purposes of this
Agreement, the exhibits to the Master Servicing Agreement and all
references to such exhibits shall also be disregarded.
2. The definition of "Custodial Agreement" in Article I is hereby amended
in its entirety to read as follows:
"Custodial Agreement" means the Trust Agreement.
3. The definition of "Custodian" in Article I is hereby amended in its
entirety to read as follows:
"Custodian" means Norwest Bank Minnesota, N.A., any successor
in interest or any successor custodian appointed pursuant to
the Custodial Agreement.
4. The definition of "Due Period" in Article I is hereby amended in its
entirety to read as follows:
"Due Period": With respect to each Remittance Date, the
period commencing on the second day of the month immediately
preceding the month of such Remittance Date and ending on
the first day of the month of such Remittance Date.
5. The definition of "Eligible Investments" in Article I is hereby
amended in its entirety to read as follows:
"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 as to timely payment of principal and interest
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 ("Direct
Obligations");
(ii) federal funds, or demand and time deposits in,
certificates of deposits of, or bankers' acceptances
issued by, any depository institution or trust company
(including U.S. subsidiaries of foreign depositories and
the Trustee or any agent of the Trustee, acting in its
respective commercial capacity) incorporated or organized
under the laws of the United States of America or any
state thereof and subject to supervision and examination
by federal or state banking authorities, so long as at the
time of investment or the 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 or deposit obligations of such
holding company or deposit institution, as the case may
be) have been rated by each Rating Agency in its highest
short-term rating category or one of its two highest
long-term rating categories;
(iii) repurchase agreements collateralized by Direct
Obligations or securities guaranteed by GNMA, Fannie Mae
or Freddie Mac with any registered broker/dealer subject
to Securities Investors' Protection Corporation
jurisdiction or any commercial bank insured by the FDIC,
if such broker/dealer or bank has an uninsured, unsecured
and unguaranteed obligation rated by each Rating Agency in
its highest short-term rating category;
(iv) securities bearing interest or sold at a
discount issued by any corporation incorporated under the
laws of the United States of America or any state thereof
which have a credit rating from each Rating Agency, at the
time of investment or the contractual commitment providing
for such investment, at least equal to one of the two
highest long-term credit rating categories of each Rating
Agency; provided, however, that securities issued by any
particular corporation will not be Eligible Investments to
the extent that investment therein will cause the then
outstanding principal amount of securities issued by such
corporation and held as part of the Trust Fund to exceed
20% of the sum of the aggregate principal balance of the
Mortgage Loans; provided, further, that such securities
will not be Eligible Investments if they are published as
being under review with negative implications from either
Rating Agency;
(v) commercial paper (including both
non-interest-bearing discount obligations and
interest-bearing obligations payable on demand or on a
specified date not more than 180 days after the date of
issuance thereof) rated by each Rating Agency in its
highest short-term rating category;
(vi) a Qualified GIC;
(vii) certificates or receipts representing direct
ownership interests in future interest or principal
payments on obligations of the United States of America or
its agencies or instrumentalities (which obligations are
backed by the full faith and credit of the United States
of America) held by a custodian in safekeeping on behalf
of the holders of such receipts; and
(viii) any other demand, money market, common trust
fund or time deposit or obligation, or interest-bearing or
other security or investment, (A) rated in the highest
rating category by each Rating Agency or (B) that would
not adversely affect the then current rating by each
Rating Agency of any of the Certificates. Such investments
in this subsection (viii) may include money market mutual
funds or common trust funds, including any fund for which
the Trustee, the Master Servicer or an affiliate thereof
serves as an investment advisor, administrator,
shareholder servicing agent, and/or custodian or
subcustodian, notwithstanding that (x) the Trustee, the
Master Servicer or an affiliate thereof charges and
collects fees and expenses from such funds for services
rendered, (y) the Trustee, the Master Servicer or an
affiliate thereof charges and collects fees and expenses
for services rendered pursuant to this Agreement, and (z)
services performed for such funds and pursuant to this
Agreement may converge at any time, provided, however,
that no such instrument shall be an Eligible 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.
6. The definition of "GNMA" is hereby added to Article I to immediately
follow the definition of "Freddie Mac":
"GNMA": The Government National Mortgage Association, or
any successor thereto.
7. The definition of "Monthly Advance" in Article I is hereby amended in
its entirety to read as follows:
"Monthly Advance" means with respect to each Remittance Date
and each Mortgage Loan, an amount equal to the Monthly
Payment (with the interest portion of such Monthly Payment
adjusted to the Mortgage Loan Remittance Rate) that was due
on the Mortgage Loan, and that (i) was delinquent at the
close of business on the first day of the month in which
such Remittance Date occurs and (ii) was not the subject of
a previous Monthly Advance, but only to the extent that such
amount is expected, in the reasonable judgment of the
Servicer, to be recoverable from collections or other
recoveries in respect of such Mortgage Loan. To the extent
that the Servicer determines that any such amount is not
recoverable from collections or other recoveries in respect
of such Mortgage Loan, such determination shall be evidenced
by a certificate of a Servicing Officer delivered to the
Master Servicer setting forth such determination and the
procedures and considerations of the 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 Servicer which may support such
determinations.
8. The definition of "Mortgage Loan" in Article I is hereby amended in
its entirety to read as follows:
"Mortgage Loan": An individual servicing retained Mortgage
Loan which has been assigned by CCGI to Lehman Capital
pursuant to the Assignment and Assumption Agreement and is
subject to this Agreement being identified on the Mortgage
Loan Schedule to this Agreement, which Mortgage Loan
includes without limitation the Mortgage Loan documents, the
Monthly Reports, Principal Prepayments, Liquidation
Proceeds, Condemnation Proceeds, Insurance Proceeds, REO
Disposition Proceeds and all other rights, benefits,
proceeds and obligations arising from or in connection with
such Mortgage Loan.
9. The definition of "Mortgage Loan Schedule" in Article I is hereby
amended in its entirety to read as follows:
"Mortgage Loan Schedule": The schedule of Mortgage Loans
prepared by Lehman Capital setting forth certain information
with respect to the Mortgage Loans which were acquired by
Lehman Capital pursuant to the Assignment and Assumption
Agreement, which Mortgage Loan Schedule is attached as
Exhibit D to this Agreement. The Servicer makes no
representations or warranties with respect to the accuracy
or completeness of the Mortgage Loan Schedule as prepared by
Lehman Capital.
10. The definition of "Opinion of Counsel" in Article I is hereby amended
by adding the following proviso at the end of such definition:
provided that any Opinion of Counsel relating to (a)
qualification of the Mortgage Loans in a REMIC or (b)
compliance with the REMIC Provisions, must be an opinion of
counsel who (i) is in fact independent of the Servicer and
the Master Servicer of the Mortgage Loans, (ii) does not
have any material direct or indirect financial interest in
the Servicer or the Master Servicer of the Mortgage Loans or
in an affiliate of either and (iii) is not connected with
the Servicer or the Master Servicer of the Mortgage Loans as
an officer, employee, director or person performing similar
functions.
11. The definition of "Prepayment Interest Shortfall Amount" in Article I
is hereby amended by inserting the words (i) "voluntary (not
including discounted payoffs)" between the words "a" and "Principal"
in the second line thereof, (ii) "or in part" between the words
"full" and "during" in the second line thereof and (iii) "for
Principal Prepayments in full only" at the end of the parenthetical
appearing in the fifth line thereof.
12. The definition of "Qualified Depository" is hereby amended and
restated in its entirety to read as follows:
"Qualified Depository": Any of (i) a depository the accounts
of which are insured by the FDIC and the debt obligations of
which are rated AA (or its equivalent) or better by each
Rating Agency; (ii) the corporate trust department of any
bank the debt obligations of which are rated at least A-1 or
its equivalent by each Rating Agency; or (iii) Lehman
Brothers Bank, F.S.B., a federal savings bank.
13. The definition of "Qualified GIC" is hereby added to Article I to
immediately follow the definition of "Qualified Depository", to read
as follows:
"Qualified GIC": A guaranteed investment contract or surety
bond providing for the investment of funds in the Custodial
Account and insuring a minimum, fixed or floating rate of
return on investments of such funds, which contract or
surety bond shall:
(a) be an obligation of an insurance company or
other corporation whose long-term debt is rated by each
Rating Agency in one of its two highest rating categories
or, if such insurance company has no long-term debt, whose
claims paying ability is rated by each Rating Agency in one
of its two highest rating categories, and whose short-term
debt is rated by each Rating Agency in its highest rating
category;
(b) provide that the Servicer may exercise all of
the rights under such contract or surety bond without the
necessity of taking any action by any other Person;
(c) provide that if at any time the then current
credit standing of the obligor under such guaranteed
investment contract is such that continued investment
pursuant to such contract of funds would result in a
downgrading of any rating of the Servicer, the Servicer
shall terminate such contract without penalty and be
entitled to the return of all funds previously invested
thereunder, together with accrued interest thereon at the
interest rate provided under such contract to the date of
delivery of such funds to the Trustee;
(d) provide that the Servicer's interest therein
shall be transferable to any successor Servicer or the Master
Servicer hereunder; and
(e) provide that the funds reinvested thereunder
and accrued interest thereon be returnable to the Custodial
Account, as the case may be, not later than the Business Day
prior to any Determination Date.
14. The definition of "Servicing Fee" in Article I is hereby amended in
its entirety to read as follows:
"Servicing Fee": An amount equal to one-twelfth the product
of (a) the Servicing Fee Rate and (b) the outstanding
principal balance of the Mortgage Loan. The Servicing Fee is
payable solely from the interest portion (including
recoveries with respect to interest from Liquidation
Proceeds, Condemnation Proceeds, Insurance Proceeds, REO
Disposition Proceeds) of such Monthly Payment collected by
the Servicer or as otherwise provided under this Agreement.
15. The parties hereto acknowledge that Section 2.02 (Books and Records)
of the Master Servicing Agreement shall be modified to indicate that
the Servicer shall prepare and execute at the direction of Lehman
Capital any note endorsements in connection with transfer of the
Mortgage Loans to the Trust Fund as the Owner of the Mortgage Loans
and that Lehman Capital shall pay for any fees associated with the
preparation and execution of such note endorsements to the Trust
Fund.
16. The parties hereto acknowledge that Section 2.03 (Commencement of
Servicing Responsibilities) shall be inapplicable to this Agreement.
17. The parties hereto acknowledge that Section 2.04 (Custodial
Agreement) shall be inapplicable to this Agreement, as superseded by
the provisions of the Custodial Agreement and the Trust Agreement.
18. The parties hereto acknowledge that references to "Owner" in the
second and third paragraphs of Section 3.02 shall refer to the Master
Servicer, except that the expense of any environmental inspection or
review at the request of the Master Servicer shall be an expense of
the Trust Fund.
19. The parties hereto acknowledge that the (i) reference to "Centre
Capital Group, Inc." in the first sentence of Section 3.04 shall be
changed to "SASCO 2000-4 and SASCO 2000-5 Trust Funds" and (ii)
reference to "Cut-off Date" in the second paragraph of Section 3.04
shall mean the "close of business on October 1, 2000."
20. Section 3.06 (Establishment of and Deposits to Escrow Account) is
hereby amended by changing the words "Centre Capital Group, Inc."
appearing in the fourth and fifth lines of the first paragraph
thereof to "SASCO 2000-4 and SASCO 2000-5 Trust Funds."
21. Section 4.03 (Monthly Advances by Servicer) is hereby amended by
adding the following new sentence immediately following the first
sentence of such Section:
Any amounts held for future distribution and so
used to make Monthly Advances shall be replaced by the
Servicer by deposit in the Custodial Account on or before
any future Remittance Date if funds in the Custodial Account
on such Remittance Date shall be less than payments to the
Trust Fund required to be made on such Remittance Date.
22. Section 5.01 (Servicing Compensation) is hereby amended by adding the
following sentences at the end of such Section:
The aggregate of the Servicing Fees payable to the
Servicer for any month with respect to the Mortgage Loans
shall be reduced by any Prepayment Interest Shortfall Amount
with respect to such month.
The Servicer shall be required to pay all expenses
incurred by it in connection with its servicing activities
hereunder and shall not be entitled to reimbursement thereof
except as specifically provided for herein.
23. Section 5.06 (Annual Independent Public Accountants Servicing Report)
is hereby amended and restated in its entirety to read as follows:
Section 5.06 Annual Audit Report.
On or before July 31 of each year, beginning with
July 31, 2001, Servicer shall, at its own expense, cause a
firm of independent public accountants (who may also render
other services to Servicer), which is a member of the
American Institute of Certified Public Accountants, to
furnish to the Seller and Master Servicer (i) year-end
audited (if available) financial statements of the Servicer
and (ii) a statement to the effect that such firm has
examined certain documents and records for the preceding
fiscal year (or during the period from the date of
commencement of such Servicer's duties hereunder until the
end of such preceding fiscal 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 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.
24. A new Section 5.07 is added to the Master Servicing Agreement to
read as follows:
Section 5.07 Annual Officer's Certificate.
On or before July 31st of each year, beginning with
July 31, 2001, the Servicer, at its own expense, will
deliver to Lehman Capital and the Master Servicer a
Servicing Officer's certificate stating, as to each signer
thereof, that (i) a review of the activities of the 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 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
officer and the nature and status thereof including the
steps being taken by the Servicer to remedy such default.
25. The second, third and fourth paragraphs of Section 6.02 (Remedies
for Breach of Representations and Warranties of the Servicer) are
hereby restated to read as follows:
Within 60 days of the earlier of either discovery
by or notice to the Servicer of any breach of a
representation or warranty set forth in Section 6.01 which
materially and adversely affects the ability of the 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
Servicer shall use its best efforts promptly to cure such
Breach in all material respects and, if such Breach cannot
be cured, the Servicer shall, at the Trustee's option,
assign the Servicer's rights and obligations under this
Agreement (or respecting the affected Mortgage Loans) to a
successor Servicer selected by the Trustee with the prior
consent and approval of the Master Servicer. Such assignment
shall be made in accordance with Section 10.01.
In addition, the Servicer shall indemnify (from its
own funds) the Trustee, the Trust Fund and the Master
Servicer and hold each of them harmless against any costs
resulting from any claim, demand, defense or assertion based
on or grounded upon, or resulting from, a Breach of the
Servicer's representations and warranties contained in this
Agreement. It is understood and agreed that the remedies set
forth in this Section 6.02 constitute the sole remedies of
the Master Servicer, the Trust Fund and the Trustee
respecting a breach of the foregoing representations and
warranties.
Any cause of action against the 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 Servicer or notice thereof
by the Trustee or Master Servicer to the Servicer, (ii)
failure by the Servicer to cure such breach within the
applicable cure period, and (iii) demand upon the Servicer
by the Trustee or the Master Servicer for compliance with
this Agreement.
26. The parties hereto acknowledge that Section 6.03 (Representations and
Warranties of the Owner), Section 6.04 (Remedies for Breach of
Representations and Warranties of Owner), Section 7.01 (Removal of
Mortgage Loans from Inclusion Under the Agreement Upon a Pass-Through
Transfer or a Whole Loan Transfer on One or More Reconstitution
Dates) and Section 7.02 (Owner's Repurchase and Indemnification
Obligations) are inapplicable to this Agreement.
27. Section 7.03 (Indemnification; Third Party Claims) is hereby amended
in its entirety to read as follows:
The Servicer shall indemnify the Trust Fund, the
Trustee and the Master Servicer and hold each of them
harmless against any and all claims, losses, damages,
penalties, fines, forfeitures, reasonable and necessary
legal fees and related costs, judgements, and any other
costs, fees and expenses that any of such parties may
sustain in any way related to the failure of the Servicer to
perform its duties and service the Mortgage Loans in strict
compliance with the terms of this Agreement. The Servicer
immediately shall notify Lehman Capital, the Master Servicer
and the Trustee or any other relevant party if a claim is
made by a third party with respect to this Agreement or the
Mortgage Loans, assume (with the prior written consent of
the indemnified party) the defense of any such claim and pay
all expenses in connection therewith, including counsel
fees, and promptly pay, discharge and satisfy any judgement
or decree which may be entered against it or any of such
parties in respect of such claim. The Servicer shall follow
any written instructions received from the Trustee in
connection with such claim. The Trustee from the assets of
the Trust Fund promptly shall reimburse the Servicer for all
amounts advanced by it pursuant to the preceding sentence
except when the claim is in any way related to the
Servicer's indemnification pursuant to Section 6.02, or the
failure of the Servicer to service and administer the
Mortgage Loans in strict compliance with the terms of this
Agreement.
The Trust Fund shall indemnify the Servicer 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 Servicer may sustain
in any way related to the failure of the Trustee or the
Master Servicer to perform its duties in compliance with the
terms of this Agreement.
In the event a dispute arises between an
indemnified party and the Servicer 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 attorney's fees and other costs and expenses
related to the adjudication of said dispute.
28. Section 8.02 is hereby amended by changing the word "Owner" to
"Trustee" where it appears in the proviso to the third sentence
thereof and the word "Owner" to "Trust Fund" in the fourth sentence
of such Section.
29. The first paragraph of Section 8.03 (Limitation on Resignation and
Assignment by Servicer) is hereby amended in its entirety to read as
follows:
The Servicer shall neither assign this Agreement or
the servicing hereunder or delegate its rights or duties
hereunder or any portion hereof (to other than a third party
in the case of outsourcing routine tasks such as taxes,
insurance and property inspection, in which case the
Servicer shall fully liable for such tasks as if the
Servicer performed them itself) or sell or otherwise dispose
of all or substantially all of its property or assets
without the prior written consent of the Trustee and the
Master Servicer, which consent shall be granted or withheld
in the reasonable discretion of such parties, provided,
however, that the Servicer may assign its rights and
obligations hereunder without prior written consent of the
Trustee and the Master Servicer to any entity that is
directly owned or controlled by the Servicer, and the
Servicer guarantees the performance of such entity
hereunder. In the event of such assignment by the Servicer,
the Servicer shall provide the Trustee and the Master
Servicer with a written statement guaranteeing the successor
entity's performance of the Servicer's obligations under the
Agreement.
References to "Owner" in the second and third paragraph of Section
8.03 shall refer to the "Master Servicer, at the direction, or with the prior
approval of, the Trustee".
30. Section 9.01 is hereby amended by changing the references to "Owner"
in the third and fourth paragraph of such section to "Master
Servicer."
31. Section 9.02 (Termination Without Cause) is hereby amended in its
entirety to read as follows:
Section 9.02 Termination Without Cause.
This Agreement shall terminate upon: (i) the later
of (a) the distribution of the final payment or liquidation
proceeds on the last Mortgage Loan to the Owner (or advances
by the Servicer for the same), and (b) the disposition of
all REO Property acquired upon foreclosure of the last
Mortgage Loan and the remittance of all funds due hereunder,
or (ii) mutual consent of the Servicer, Lehman Capital and
the Master Servicer in writing or (iii) at the sole option
of the Lehman Capital, without cause, upon 30 days written
notice. Any such notice of termination shall be in writing
and delivered to the Servicer by registered mail to the
address set forth at the beginning of this Agreement. The
Master Servicer, the Trustee and the Servicer shall comply
with the termination procedures set forth in Sections 10.01
and 10.03 hereof and the procedures set forth below,
provided that, in the event Lehman Capital terminates this
Agreement without cause in accordance with subclause (iii)
above, Lehman Capital shall pay the Servicer a termination
fee equal to 2.0% of the aggregate unpaid balance of the
Mortgage Loans as of such termination date.
In connection with any such termination referred to
in clause (ii) or (iii) above, Lehman Capital will be
responsible for reimbursing the Servicer for all
unreimbursed out-of-pocket Servicing Advances within 15
Business Days following the date of termination and other
reasonable and necessary out-of-pocket costs associated with
any transfer of servicing.
Notwithstanding and in addition to the foregoing,
in the event that (i) a Mortgage Loan becomes delinquent for
a period of 90 days or more (a "Delinquent Mortgage Loan")
or (ii) a Mortgage Loan becomes an REO Property, Lehman
Capital may at its election terminate this Agreement (a)
with respect to such Delinquent Mortgage Loan or (b) REO
Property, in each case, upon 15 days' written notice to the
Servicer. In the event of such election, Lehman Capital
shall reimburse the Servicer for all unreimbursed
out-of-pocket Servicing Advances and Monthly Advances on the
date of termination and other reasonable and necessary
out-of-pocket costs associated with any transfer of
servicing, including, but not limited to, costs associated
with the transfer of the related files to the Lehman
Capital's designee.
32. Section 10.01 (Successor to the Servicer) is hereby amended in its
entirety to read as follows:
Simultaneously with the termination of the
Servicer's responsibilities and duties under this Agreement
(a) pursuant to Sections 6.02, 7.03, 8.03, 9.01 or 9.02, the
Master Servicer shall, in accordance with the provisions of
the Trust Agreement (i) succeed to and assume all of the
Servicer's responsibilities, rights, duties and obligations
under this Agreement, or (ii) appoint a successor meeting
the eligibility requirements of this Agreement set forth in
Sections 8.01(i) and (ii) and which shall succeed to all
rights and assume all of the responsibilities, duties and
liabilities of the Servicer under this Agreement with the
termination of the Servicer's responsibilities, duties and
liabilities under this Agreement. Any successor to the
Servicer that is not at that time a Servicer of other
mortgage loans for the Trust Fund shall be subject to the
approval of the Master Servicer, Lehman Capital, the Trustee
and each Rating Agency (as such term is defined in the Trust
Agreement). Unless the Successor Servicer is at that time a
Servicer of other mortgage loans for the Trust Fund, each
Rating Agency must deliver to the Trustee a letter to the
effect that such transfer of servicing will not result in a
qualification, withdrawal or downgrade of the then-current
rating of any of the Certificates. In connection with such
appointment and assumption, the Master Servicer or the
Depositor, as applicable, may make such arrangements for the
compensation of such successor out of payments on the
Mortgage Loans as it and such successor shall agree;
provided, however, that no such compensation shall be in
excess of that permitted the Servicer under this Agreement.
In the event that the Servicer's duties, responsibilities
and liabilities under this Agreement should be terminated
pursuant to the aforementioned sections, the 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 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 Servicer of the representations and warranties made
pursuant to Section 6.01 and the remedies available to the
Trustee under Sections 6.02 and 7.03, it being understood
and agreed that the provisions of such Sections 6.01, 6.02
and 7.03 shall be applicable to the Servicer notwithstanding
any such resignation or termination of the Servicer, or the
termination of this Agreement.
Within a reasonable period of time, but in no event
longer than 30 days of the appointment of a successor
entity, the 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. The Servicer shall cooperate
with the Trustee and the Master Servicer, as applicable, and
such successor in effecting the termination of the
Servicer's responsibilities and rights hereunder and the
transfer of servicing responsibilities to the successor
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 Servicer to the
Custodial Account or any Escrow Account or thereafter
received with respect to the Mortgage Loans.
Any successor appointed as provided herein shall
execute, acknowledge and deliver to the Trustee, the
Servicer and the Master Servicer an instrument (i) accepting
such appointment, wherein the successor shall make the
representations and warranties set forth in Section 6.01 and
(ii) an assumption of the due and punctual performance and
observance of each covenant and condition to be performed
and observed by the Servicer under this Agreement, whereupon
such successor shall become fully vested with all the
rights, powers, duties, responsibilities, obligations and
liabilities of the Servicer, with like effect as if
originally named as a party to this Agreement. Any
termination or resignation of the Servicer or termination of
this Agreement pursuant to Sections 10.01 shall not affect
any claims that the Master Servicer or the Trustee may have
against the Servicer arising out of the Servicer's actions
or failure to act prior to any such termination or
resignation.
The Servicer shall deliver within three (3)
Business Days to the successor 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 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
Servicer.
Upon a successor's acceptance of appointment as
such, the Servicer shall notify the Trustee and Master
Servicer of such appointment in accordance with the notice
procedures set forth herein.
Except as otherwise provided in this Agreement, all
reasonable costs and expenses incurred in connection with
any transfer of servicing hereunder (whether as a result of
termination or removal of the Servicer or resignation of the
Servicer or otherwise), including, without limitation, the
costs and expenses of the Master Servicer or any other
Person in appointing a successor servicer, or of the Master
Servicer in assuming the responsibilities of the Servicer
hereunder, or of transferring the Servicing Files and the
other necessary data to the successor servicer shall be paid
by the terminated, removed or resigning Servicer from its
own funds without reimbursement.
33. The parties hereto acknowledge that Section 10.02 (Closing),
Section 10.03 (Closing Documents), Section 10.07 (Notices) and
Section 10.16 (Exhibits) are inapplicable to this Agreement.
34. Intended Third Party Beneficiaries. Notwithstanding any provision
herein to the contrary, the parties to this Agreement agree that it
is appropriate, in furtherance of the intent of such parties as set
forth herein, that the Master Servicer and the Trustee receive the
benefit of the provisions of this Agreement as intended third party
beneficiaries of this Agreement to the extent of such provisions. The
Servicer shall have the same obligations to the Master Servicer and
the Trustee as if they were parties to this Agreement, and the Master
Servicer and the Trustee shall have the same rights and remedies to
enforce the provisions of this Agreement as if they were parties to
this Agreement. The Servicer shall only take direction from the
Master Servicer (if direction by the Master Servicer is required
under this Agreement) unless otherwise directed by this Agreement.
Notwithstanding the foregoing, all rights and obligations of the
Master Servicer and the Trustee hereunder (other than the right to
indemnification) shall terminate upon termination of the Trust
Agreement and of the Trust Fund pursuant to the Trust Agreement.
<PAGE>
EXHIBIT B
Master Servicing Agreement
<PAGE>
EXHIBIT C
Assignment and Assumption Agreement
<PAGE>
EXHIBIT D
Mortgage Loan Schedule
