EXECUTION
RECONSTITUTED SPECIAL SERVICING AGREEMENT
THIS RECONSTITUTED SPECIAL SERVICING AGREEMENT (this "Agreement"),
entered into as of the 1st day of June, 1998, by and among XXXXXX CAPITAL, A
DIVISION OF XXXXXX BROTHERS HOLDINGS INC., a Delaware corporation ("Xxxxxx
Capital"), AMERICAN RESIDENTIAL INVESTMENT TRUST, INC. ("AmREIT") and OCWEN
FEDERAL BANK FSB, a federal savings bank ("Ocwen"):
RECITALS
WHEREAS, AmREIT has purchased certain packages of conventional
residential mortgage loans (the "Flow Mortgage Loans") from Xxxxxx Capital,
which Mortgage Loans are currently being serviced for AmREIT pursuant to a
Servicing Agreement between Xxxxxx Capital and Ocwen, as special servicer (the
"Special Servicer"), dated as of December 1, 1997 (relating to residential
adjustable and fixed rate mortgage loans Group No. OFB-LB1)(the "Flow Special
Servicing Agreement");
WHEREAS, AmREIT intends to securitize its ownership of certain of the
Flow Mortgage Loans, and in connection therewith, for purposes of such
securitization, desires to add to such Flow Mortgage Loans presently serviced
under the Flow Special Servicing Agreement a group of Mortgage Loans (the
"Additional Mortgage Loans") presently being subserviced for AmREIT pursuant
to a Subservicing Agreement, dated as of February 1, 1998 (the "Subservicing
Agreement") between AmREIT and Aurora Loan Services Inc., which Subservicing
Agreement provides for the special servicing of the Additional Mortgage Loans
by the Special Servicer;
WHEREAS, in connection with such securitization, pursuant to an
Acknowledgement Agreement between AmREIT and the Special Servicer to be dated
June 17, 1998, AmREIT, as assignee of Xxxxxx Capital under the Flow Special
Servicing Agreement, will transfer to the Special Servicer the servicing
responsibilities related to the Additional Mortgage Loans and the Special
Servicer will assume all special servicing responsibilities related to the
Additional Mortgage Loans;
WHEREAS, in connection with such securitization, Xxxxxx, AmREIT and the
Special Servicer desire to enter into this Agreement to amend the Flow Special
Servicing Agreement with respect to the Flow Mortgage Loans and the Additional
Mortgage Loans (collectively referred to as the "Serviced Mortgage Loans") on
the terms and conditions set forth herein;
WHEREAS, AmREIT intends to convey the Serviced Mortgage Loans to American
Residential Eagle, Inc., a Delaware corporation (the "Depositor"), pursuant to
a Mortgage Loan Purchase Agreement dated as of June 1, 1998; the Depositor
intends to convey the Serviced Mortgage Loans to American Eagle Bond Trust
0000-0 (xxx "Xxxx Xxxxxx") pursuant to a Deposit Trust Agreement, dated as of
June 1, 1998 (the "Deposit Trust Agreement"); and the Bond Issuer intends, in
turn, to pledge the Mortgage Loans to First Union National Bank, as trustee
(the "Bond Trustee") under an Indenture dated as of June 1, 1998 between the
Bond Issuer and the Bond Trustee;
WHEREAS, Xxxxxx Capital and AmREIT desire 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 Bank Minnesota, National Association ("Norwest"), as
master servicer under the Master Servicing Agreement dated as of June 1, 1998
(the "Master Servicing Agreement") among the Bond Issuer, the Bond Trustee and
Norwest ("Norwest," and, together with any successor Master Servicer appointed
pursuant to the provisions of the Master Servicing Agreement, 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 Bond Issuer and the Bond Trustee, and shall have the right, under certain
circumstances, to terminate the rights and obligations of the Special Servicer
under this Special Servicing Agreement; and
WHEREAS, AmREIT, Xxxxxx Capital and Ocwen intend that American
Residential Eagle, Inc., as the initial holder of the Investor Certificate
(such initial holder, the "Investor Certificateholder"), have, among other
rights, certain repurchase rights with respect to the Serviced Mortgage Loans.
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, AmREIT 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 Flow Special Servicing
Agreement incorporated by reference herein, shall have the meanings ascribed
to such terms in the Master Servicing Agreement, dated as of June 1, 1998,
among the Bond Issuer, Norwest, as master servicer, and the Bond Trustee (the
"Master Servicing Agreement") or the Indenture, dated as of June 1, 1998,
between the Bond Issuer and First Union National Bank, as Indenture Trustee
(the "Indenture").
2. Inclusion of Additional Mortgage Loans. The Additional Mortgage Loans
as identified in Schedule I hereto shall be deemed included within the
definition of Mortgage Loans under the Flow Special Agreement for all purposes
thereunder, effective as of the date set forth in, and upon delivery to the
Special Servicer of, an Acknowledgment Agreement covering the Additional
Mortgage Loans in the form attached as Exhibit H to the Flow Special
Agreement.
3. 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 Flow Special Servicing Agreement, except as otherwise provided herein and
on Exhibit A hereto, and that the provisions of the Flow Special 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.
4. 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 Bond Issuer and the Bond Trustee pursuant to
the Master Servicing Agreement, shall have the same rights as the "Owner" (as
defined in the Flow Special Servicing Agreement) to enforce the obligations of
the Special Servicer under the Flow Special 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
Flow Special Servicing Agreement.
5. 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 Master Servicing Agreement, Indenture and
issuance of the Underlying Bond issued pursuant thereto.
6. 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.
7. 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.
8. 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.
9. Termination of Rights of Investor Certificateholder. The parties
hereto intend that the Investor Certificateholder be a third party beneficiary
of this Agreement. All rights granted the Investor Certificateholder hereunder
may not be assigned or otherwise transferred.
10. Reconstitution. Xxxxxx Capital, AmREIT 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 Flow Special Servicing
Agreement. This Agreement amends the terms and provisions of the Flow Special
Servicing Agreement only with respect to the Serviced Mortgage Loans
identified on Schedule I hereto and does not purport to amend or modify the
Flow Special Servicing Agreement with respect to any other loans that are or
may become subject to the Flow Special Servicing Agreement.
11. 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, AmREIT Eagle 1998-1
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
All notices required to be delivered to AmREIT under this Agreement shall
be delivered to AmREIT at the following address:
AmREIT Residential Investors Trust, Inc.
000 Xxxxxx Xxxxxx, Xxxxx 000
XxxXxx, Xxxxxxxxxx 00000
Attention: Xxxx Xxxxxx, EVP
12. 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 Xxxxxx Capital, AmREIT and the 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.
13. 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 Xxxxxx Capital, AmREIT and the 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: Authorized Signatory
OCWEN FEDERAL BANK FSB
By: ___________________________________
Name:
Title:
AMERICAN RESIDENTIAL INVESTMENT
TRUST, INC.
By: ___________________________________
Name:
Title:
EXHIBIT A
MODIFICATIONS TO THE SPECIAL FLOW 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) Chase Bank of Texas,
N.A., as Custodian, and First Union National Bank, as Trustee, and (ii)
Bankers Trust Company of California, N.A., as Custodian, and First Union
National Bank, as Trustee."
4. The definition of "Primary Servicer" in Article I is hereby deleted and
replaced with the following:
"Aurora Loan Services Inc. or any successor thereto."
5. The following definition is 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."
6. Section 2.03 is hereby amended by deleting the first, second and third
paragraphs thereof in their entirety.
7. 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."
8. 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
assigns, including copies of any related agreements of sale, in
determining which representations and warranties are applicable to such
Mortgage Loan."
9. 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 American Residential Eagle Bond Trust
1998-1 and First Union National Bank, as Bond Trustee."
10. 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 Custodial 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;"
11. 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, the Primary Servicer, the Bond
Issuer or the Bond Trustee; 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.
12. 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 American Residential Eagle Bond Trust
1998-1 and First Union National Bank, as Bond Trustee."
13. 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, or
(B) defer or forgive the payment of principal or interest
(except with respect to liquidation of such Performing Loan).
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."
14. Section 3.10(e) is hereby deleted in its entirety and replaced with the
following:
"(e) At any time, the Investor Certificateholder 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 Investor Certificateholder 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
Investor Certificateholder of its decision within the two
Business Day period), then the Investor Certificateholder 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 Master Servicing Agreement). If the Investor
Certificateholder does not indicate whether it wishes to
exercise this option within two Business Days of receipt of
such notice, then the Investor Certificateholder shall not be
entitled to object to the action taken by the Special Servicer
with respect to such Mortgage Loan." In addition, the Investor
Certificateholder 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 Master Servicing Agreement). The Special Servicer shall
send a written notice (the "Initial Notice") to the Investor
Certificateholder advising the Investor Certificateholder that
the Special Servicer intends to purchase a Severely Delinquent
Loan. The Investor Certificateholder 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 Investor Certificateholder, (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 Investor Certificateholder intends to
purchase such Severely Delinquent Loan, in which case the
Investor Certificateholder shall have the sole right and option
to purchase the Severely Delinquent Loan at the Purchase Price;
provided, however, that if the Investor Certificateholder 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 Investor Certificateholder the Initial
Notice, then the Investor Certificateholder shall be deemed to
have consented to the Special Servicer purchasing the Severely
Delinquent Loan for its own account."
15. 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."
16. 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. The first sentence of the definition of "Remittance Date" shall be
amended to read "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." The definition of "First Remittance Date"
shall be amended by substituting the words "18th day" in each place the
words "10th day" appears.
18. The following Sections 7.03 and 7.04 are hereby added immediately
following Section 7.02:
"Section 7.03 Monthly Advances and Compensating Interest.
(i) Notwithstanding anything to the contrary herein, the
Special Servicer shall make Monthly Advances (unless such
Monthly Advances constitute Nonrecoverable Advances) 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.
(ii) 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 Special Servicing Compensation
Agreement attached as an exhibit to the Master Servicing Agreement."
19. Section 9.02 is hereby deleted in its entirety.
20. 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."
21. 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.
22. 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 July 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."
23. The definitions of "Extended Special Servicing Fee," "Incentive Fee,"
"Loss Severity Percentage" and "Special Servicing Fee" are hereby deleted
in their entirety.
24. 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."
