Exhibit 99.1
BENEFICIAL MORTGAGE CORPORATION
as Master Servicer,
LOAN TRUST _-_,
as Issuer,
and
,
as Indenture Trustee
SERVICING AGREEMENT
Dated as of , _
TABLE OF CONTENTS
Page
ARTICLE I
DEFINITIONS1............................. 1
Section 1.01. Definitions................................................... 1
Section 1.02. Other Definitional Provisions................................. 1
Section 1.03. Interest Calculations......................................... 2
ARTICLE II
REPRESENTATIONS AND WARRANTIES.................... 2
Section 2.01. Representations and Warranties Regarding the Master Servicer.. 2
Section 2.02. Representations and Warranties of the Indenture Trustee....... 3
Section 2.03. Enforcement of Representations and Warranties................. 4
ARTICLE III
ADMINISTRATION AND SERVICING OF __________ LOANS............. 5
Section 3.01. The Master Servicer........................................... 5
Section 3.02. Collection of Certain __________ Loan Payments................ 7
Section 3.03. Withdrawals from the Collection Account....................... 9
Section 3.04. Maintenance of Hazard Insurance; Property Protection Expenses. 10
Section 3.05. Assumption and Modification Agreements; Certain Assignments... 11
Section 3.06. Realization Upon Defaulted __________ Loans................... 12
Section 3.07. Issuer and Indenture Trustee to Cooperate..................... 13
Section 3.08. Servicing Compensation; Payment of Certain Expenses by Master
Servicer...................................................... 14
Section 3.09. Annual Statement as to Compliance............................. 14
Section 3.10. Annual Servicing Report....................................... 15
Section 3.11. Access to Certain Documentation and Information Regarding the
__________ Loans.............................................. 15
Section 3.12. Maintenance of Certain Servicing Insurance Policies........... 15
ARTICLE IV
SERVICING CERTIFICATE......................... 16
Section 4.01. Statements to Holders......................................... 16
ARTICLE V
PAYMENT ACCOUNT.................................... 18
Section 5.01. Payment Account............................................... 18
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ARTICLE VI
THE MASTER SERVICER.......................... 18
Section 6.01. Liability of the Master Servicer.............................. 18
Section 6.02. Merger or Consolidation of, or Assumption of the
Obligations of, the Master Servicer........................... 18
Section 6.03. Limitation on Liability of the Master Servicer and Others..... 19
Section 6.04. Master Servicer Not to Resign................................. 20
Section 6.05. Delegation of Duties.......................................... 20
Section 6.06. Master Servicer to Pay Indenture Trustee's and Owner Trustee's
Fees and Expenses, Indemnification............................ 20
ARTICLE VII
DEFAULT................................ 21
Section 7.01. Events of Default............................................. 21
Section 7.02. Indenture Trustee to Act; Appointment of Successor............ 24
Section 7.03. Notification to Holders....................................... 25
ARTICLE VIII
MISCELLANEOUS PROVISIONS......................... 25
Section 8.01. Amendment..................................................... 25
Section 8.02. Governing Law................................................. 26
Section 8.03. Notices....................................................... 26
Section 8.04. Severability of Provisions.................................... 26
Section 8.05. Third-Party Beneficiaries..................................... 26
Section 8.06. Counterparts.................................................. 26
Section 8.07. Effect of Headings and Table of Contents...................... 27
Section 8.08. Termination Upon Purchase by the Master Servicer or Liquidation
of All __________ Loans....................................... 27
Section 8.09. Certain Matters Affecting the Indenture Trustee............... 27
Section 8.10. Limitation of Liability of Owner Trustee...................... 27
Section 8.11. Authority of the Administrator................................ 28
EXHIBIT A
__________ LOAN SCHEDULE........................ 30
EXHIBIT B
FORM OF REQUEST FOR RELEASE...................... 31
ii
EXHIBIT C
FORM OF LENDER CERTIFICATION
FOR ASSIGNMENT OF __________ LOAN................... 33
iii
This Servicing Agreement, dated as of ___________, _, among BENEFICIAL
MORTGAGE CORPORATION, as Master Servicer (the "Master Servicer"), Loan Trust _-_
(the "Issuer") and _____ , as Indenture Trustee (the "Indenture Trustee"),
W I T N E S S E T H T H A T:
WHEREAS, the Issuer has been formed pursuant to a Trust Agreement dated
as of _______________, ___ (the "Trust Agreement") between Beneficial Mortgage
Services, Inc., as depositor (the "Depositor"), __________ , and _____________,
as owner trustee (the "Owner Trustee");
WHEREAS, the Issuer will acquire the Initial Loans and the Retained
Balances (and will cquire Additional Loans and Additional Balances);
WHEREAS, pursuant to the terms of an Indenture dated as of ___________,
___ (the "Indenture"), between the Issuer, as debtor, and
________________________, as indenture trustee (the "Indenture Trustee"), the
Issuer will issue the ____________ Asset-Backed Notes, (the "Notes"), consisting
of the (Term) Notes (and the Variable Funding Notes) and secured by the
__________ Loans;
WHEREAS, the Issuer will also issue the ____________ Asset-Backed
Certificates (the "Certificates") representing undivided interests in the assets
of the Issuer subject to the lien of the Indenture; and
WHEREAS, pursuant to the terms of this Servicing Agreement, the Master
Servicer will service the __________ Loans directly or through one or more
Subservicers;
NOW, THEREFORE, in consideration of the mutual covenants herein
contained, the parties hereto agree as follows:
ARTICLE I
DEFINITIONS
Section 1.01. Definitions. For all purposes of this Servicing Agreement,
except as otherwise expressly provided herein or unless the context otherwise
requires, capitalized terms not otherwise defined herein shall have the meanings
assigned to such terms in the Definitions attached to the Indenture as Appendix
A, which is incorporated by reference herein. All other capitalized terms used
herein shall have the meanings specified herein.
Section 1.02. Other Definitional Provisions. (a) All terms defined in
this Servicing Agreement shall have the defined meanings when used in any
certificate or other document made or delivered pursuant hereto unless otherwise
defined therein.
(b) As used in this Servicing Agreement and in any certificate or other
document made or delivered pursuant hereto or thereto, accounting terms not
defined in this Servicing Agreement or in any such certificate or other
document, and accounting terms partly defined in this Servicing
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Agreement or in any such certificate or other document, to the extent not
defined, shall have the respective meanings given to them under generally
accepted accounting principles. To the extent that the definitions of accounting
terms in this Servicing Agreement or in any such certificate or other document
are inconsistent with the meanings of such terms under generally accepted
accounting principles, the definitions contained in this Servicing Agreement or
in any such certificate or other document shall control.
(c) The words "hereof," "herein," "hereunder" and words of similar
import when used in this Servicing Agreement shall refer to this Servicing
Agreement as a whole and not to any particular provision of this Servicing
Agreement; Section and Exhibit references contained in this Servicing Agreement
are references to Sections and Exhibits in or to this Servicing Agreement unless
otherwise specified; and the term "including" shall mean "including without
limitation".
(d) The definitions contained in this Servicing Agreement are applicable
to the singular as well as the plural forms of such terms and to the masculine
as well as the feminine and neuter genders of such terms.
(e) Any agreement, instrument or statute defined or referred to herein
or in any instrument or certificate delivered in connection herewith means such
agreement, instrument or statute as from time to time amended, modified or
supplemented and includes (in the case of agreements or instruments) references
to all attachments thereto and instruments incorporated therein; references to a
Person are also to its permitted successors and assigns.
Section 1.03. Interest Calculations. All calculations of interest
hereunder that are made in respect of the Asset Balance of a __________ Loan
shall be made on (a daily basis using a 365-day year). All calculations of
interest on the Securities shall be made on the basis of (the actual number of
days in an Interest Period and a year assumed to consist of 360 days). The
calculation of the Servicing Fee shall be made on the basis of (a 360-day year
consisting of twelve 30-day months). All dollar amounts calculated hereunder
shall be rounded to the nearest xxxxx with one-half of one xxxxx being rounded
down.
ARTICLE II
REPRESENTATIONS AND WARRANTIES
Section 2.01. Representations and Warranties Regarding the Master
Servicer. The Master Servicer represents and warrants to the Issuer and the
Indenture Trustee and for the benefit of the Securityholders, as of the Cut-Off
Date, ________________, _, the Closing Date (and any Deposit Date), that:
(i) The Master Servicer is a corporation duly organized, validly
existing and in good standing under the laws of the State of Delaware and has
the corporate power to own its assets and to transact the business in which it
is currently engaged. The Master Servicer is duly qualified to do business as a
foreign corporation and is in good standing in each jurisdiction in which the
character of the business transacted by it or properties owned or leased by it
requires such qualification and in which the failure to so qualify would have a
material adverse effect on
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the business, properties, assets, or condition (financial or other) of the
Master Servicer or the performance of its obligations hereunder;
(ii) The Master Servicer has the power and authority to make, execute,
deliver and perform its obligations under this Servicing Agreement and all of
the transactions contemplated under this Servicing Agreement, and has taken all
necessary corporate action to authorize the execution and delivery of this
Servicing Agreement and the performance by it of its obligations hereunder. When
executed and delivered, this Servicing Agreement will constitute the legal,
valid and binding obligation of the Master Servicer enforceable in accordance
with its terms, except as enforcement of such terms may be limited by
bankruptcy, insolvency or similar laws affecting the enforcement of creditors'
rights generally and by the availability of equitable remedies;
(iii) The Master Servicer is not required to obtain the consent of any
other party or any consent, license, approval or authorization from, or
registration or declaration with, any governmental authority, bureau or agency
in connection with the execution, delivery, performance, validity or
enforceability of this Servicing Agreement, except such as have been obtained or
filed, as the case may be, prior to the Closing Date; provided, however, that
the Master Servicer makes no representations and warranties with respect to any
requirements under any Blue Sky laws of any State;
(iv) The execution, delivery of this Servicing Agreement by the Master
Servicer will not violate any provision of any existing law or regulation or any
order or decree of any court applicable to the Master Servicer or any provision
of the Certificate of Incorporation or Bylaws of the Master Servicer, or
constitute a material breach of any mortgage, indenture, contract or other
agreement to which the Master Servicer is a party or by which the Master
Servicer may be bound; and
(v) No litigation or administrative proceeding of or before any court,
tribunal or governmental body is currently pending, or to the knowledge of the
Master Servicer threatened, against the Master Servicer or any of its properties
or with respect to this Servicing Agreement or the Notes or the Certificates
which in the opinion of the Master Servicer has a reasonable likelihood of
resulting in a material adverse effect on the transactions contemplated by this
Servicing Agreement.
It is understood and agreed that the representations and warranties set forth in
this Section 2.01 shall survive the sale and assignment of the ____________
Loans to the Indenture Trustee. Upon discovery of a breach of any of the
foregoing representations and warranties which materially and adversely affects
the interests of the Holders, the party discovering such breach shall give
prompt written notice to the other parties. Within 60 days of its discovery or
its receipt of notice of breach, the Master Servicer shall cure such breach in
all material respects.
Section 2.02. Representations and Warranties of the Indenture Trustee.
The Indenture Trustee hereby represents and warrants to the Master Servicer and
the Issuer for the benefit of the Securityholders, as of the Cut-Off Date,
__________, ___, the Closing Date (and any Deposit Date), that:
(i) The Indenture Trustee is a in good standing under the laws of
----------------------------------------;
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(ii) The Indenture Trustee has full power, authority and legal right to
execute and deliver this Servicing Agreement and to perform its obligations
under this Servicing Agreement, and has taken all necessary action to authorize
the execution, delivery and performance by it of this Servicing Agreement; and
(iii) The execution and delivery by the Indenture Trustee of this
Servicing Agreement and the performance by the Indenture Trustee of its
obligations under this Servicing Agreement will not violate any provision of any
law or regulation governing the Indenture Trustee or any order, writ, judgment
or decree of any court, arbitrator or governmental authority or agency
applicable to the Indenture Trustee or any of its assets. Such execution,
delivery, authentication and performance will not require the authorization,
consent or approval of, the giving of notice to, the filing or registration
with, or the taking of any other action with respect to, any governmental
authority or agency regulating the activities of national banking associations.
Such execution, delivery, authentication and performance will not conflict with,
or result in a breach or violation of, any material indenture, mortgage, deed of
trust, lease or other agreement or instrument to which the Indenture Trustee is
bound.
Section 2.03. Enforcement of Representations and Warranties. The Master
Servicer, on behalf of and subject to the direction of the Indenture Trustee [or
the Credit Enhancer], shall enforce the representations and warranties of the
Seller pursuant to the __________ Loan Purchase Agreement. Upon the discovery by
the Seller, the Master Servicer, the Indenture Trustee, [the Credit Enhancer],
the Issuer or any Custodian of a breach of any of the representations and
warranties made in the __________ Loan Purchase Agreement, in respect of any
__________ Loan which materially and adversely affects the interests of the
Holders [or the Credit Enhancer], the party discovering such breach shall give
prompt written notice to the other parties (any Custodian being so obligated
under a Custodial Agreement). The Master Servicer shall promptly notify the
Seller of such breach and request that, pursuant to the terms of the __________
Loan Purchase Agreement, the Seller either (i) cure such breach in all material
respects within _ days from the date the Seller was notified of such breach or
(ii) purchase such __________ Loan from the Issuer at the price and in the
manner set forth in Section 4 of the __________ Loan Purchase Agreement;
provided that the Seller shall, subject to the conditions set forth in the
__________ Loan Purchase Agreement, have the option to substitute an Eligible
Substitute __________ Loan or Loans for such __________ Loan. In the event that
the Seller elects to substitute one or more Eligible Substitute __________ Loans
pursuant to Section 4 of the __________ Loan Purchase Agreement, the Seller
shall deliver to the Indenture Trustee for the benefit of the Issuer and the
Holders with respect to such Eligible Substitute __________ Loans, the original
Mortgage Note, the Mortgage, and such other documents and agreements as are
required by the __________ Loan Purchase Agreement. No substitution will be made
in any calendar month after the Determination Date for such month. Payments due
with respect to Eligible Substitute __________ Loans in the month of
substitution shall not be transferred to the Issuer and will be retained by the
Master Servicer and remitted by the Master Servicer to the Seller on the next
succeeding Payment Date provided a payment has been received by the Issuer for
such month in respect of the __________ Loan to be removed. The Master Servicer
shall amend or cause to be amended the __________ Loan Schedule to reflect the
removal of such __________ Loan and the substitution of the Eligible Substitute
__________ Loans and the Master Servicer shall promptly deliver the amended
__________ Loan Schedule to the Owner Trustee and Indenture Trustee.
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It is understood and agreed that the obligation of the Seller to cure
such breach or purchase or substitute for such __________ Loan as to which such
a breach has occurred and is continuing shall constitute the sole remedy
respecting such breach available to the Issuer and Indenture Trustee against the
Seller. In connection with the purchase of or substitution for any such
__________ Loan by the Seller, the Issuer and the Indenture Trustee shall assign
to the Seller all of the right, title and interest in respect of the __________
Loan Purchase Agreement applicable to such __________ Loan. Upon receipt of the
Repurchase Price, or upon completion of such substitution, the applicable
Custodian shall deliver the Mortgage Files to the Master Servicer, together with
all relevant endorsements and assignments.
ARTICLE III
ADMINISTRATION AND SERVICING OF __________ LOANS
Section 3.01. The Master Servicer. Beneficial is hereby appointed as
Master Servicer hereunder.
The Master Servicer shall, or shall cause the related Subservicer to,
service and administer the ___________ Loans and shall have full power and
authority, acting alone or through such Subservicer, to do any and all things in
connection with such servicing and administration that it may deem necessary or
desirable. Any amounts received by any Subservicer in respect of a ___________
Loan shall be deemed to have been received by the Master Servicer whether or not
actually received by it. Without limiting the generality of the foregoing, the
Master Servicer shall continue, and is hereby authorized and empowered by the
Indenture Trustee, to execute and deliver on behalf of itself, the
Securityholders and the Indenture Trustee or any of them, any and all
instruments of satisfaction or cancellation, or of partial or full release or
discharge and all other comparable instruments, with respect to the ___________
Loans and with respect to the Mortgaged Properties. The Indenture Trustee shall,
upon written request of a Servicing Officer, furnish the Master Servicer with
any powers of attorney and other documents as are reasonably necessary or
appropriate to enable the Master Servicer to carry out its servicing and
administrative duties hereunder.
In connection with the servicing and administration of the ___________
Loans, the Master Servicer shall not, and shall not permit any Subservicer to,
consent to an increase in the Credit Limit specified in any Loan Agreement
unless (i) the Master Servicer or such Subservicer and such Mortgagor execute a
new Loan Agreement providing for such increase and (ii) the Master Servicer, not
later than (x) the Business Day immediately preceding the Payment Date
applicable to the Collection Period during which a new Loan Agreement was
executed or (y) in the event the Master Servicer is not entitled to retain and
commingle with its own funds amounts referred to in Section 3.02(c), not later
than the second Business Day following the date on which such new Loan Agreement
was executed, deposit in the Collection Account the amount necessary (including
any accrued and unpaid interest) to prepay in full on behalf of the Mortgagor
the Trust Balance of the related ___________ Loan. Upon making any such deposit
the Master Servicer shall be entitled to receive an instrument of assignment or
transfer from the Indenture Trustee. The Master Servicer and each Subservicer
may consent to the placing of a lien or liens junior to that of the Mortgage on
the related Mortgaged Property so long as the total of the principal amounts of
any first lien loan, the Credit Limit and the combined principal balances
secured by
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any such junior lien loan or loans does not exceed ___%, if such Mortgage is a
second deed of trust or mortgage, and ___%, if such Mortgage is a first deed of
trust or mortgage, of the Appraised Value of the Mortgaged Property as specified
in an appraisal made by or on behalf of the Master Servicer at the time of and
in connection with such consent. The Master Servicer and each Subservicer may
also consent to the placing of a lien or liens senior to that of the Mortgage on
the Mortgaged Property so long as the Combined Loan-to-Value Ratio of such
___________ Loan following the placement of such lien or liens is equal to or
less than the Combined Loan-to- Value Ratio of such ____________ Loan at
origination.
The relationship of the Master Servicer (and of any successor to the
Master Servicer as servicer under this Agreement) to the Indenture Trustee under
this Agreement is intended by the parties to be that of an independent
contractor and not that of a joint venturer, partner or agent.
Section 3.02. Collection of Certain __________ Loan Payments. (a) The
Master Servicer and each Subservicer shall follow such collection procedures as
it follows from time to time with respect to ____________ loans in its servicing
portfolio comparable to the __________ Loans. Consistent with the foregoing, the
Master Servicer and any such Subservicer may in its discretion (i) waive any
late payment charge or any prepayment or other fees that may be collected in the
ordinary course of servicing such ____________ Loans and (ii) if a Mortgagor is
in default or about to be in default under a ____________ Loan, arrange with
such Mortgagor a schedule for the payment of interest due and unpaid; provided
such arrangement is consistent with the Master Servicer's or such Subservicer's
policies with respect to the __________ loans it owns or services.
(b) The Master Servicer shall establish an account (the "Collection
Account") in which the Master Servicer shall deposit or cause to be deposited
any amounts representing payments on and any collections in respect of the
__________ Loans received by it subsequent to the Cut-Off Date as to any Initial
Loan [or the related Deposit Date as to any Additional Loan] (other than in
respect of the payments referred to in the following paragraph) within ___
Business Days following receipt thereof (or otherwise on or prior to the Closing
Date), including the following payments and collections received or made by it
(without duplication):
(i) all payments of principal of or interest on the __________ Loans
received by the Master Servicer from the respective Subservicer, net of any
portion of the interest thereof retained by the Subservicer as Subservicing
Fees;
(ii) the aggregate Repurchase Price of the __________ Loans purchased
by the Master Servicer pursuant to Section 3.14;
(iii) Net Liquidation Proceeds net of any related Foreclosure Profit;
(iv) all proceeds of any __________ Loans repurchased by the Seller
pursuant to the __________ Loan Purchase Agreement;
(v) insurance proceeds, other than Net Liquidation Proceeds, resulting
from any insurance policy maintained on a Mortgaged Property; and
(vi) amounts required to be paid by the Master Servicer pursuant to
Section 8.08.
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provided, however, that with respect to each Collection Period, the Master
Servicer shall be permitted to retain from payments in respect of interest on
the __________ Loans, the Master Servicing Fee for such Collection Period. The
foregoing requirements respecting deposits to the Collection Account are
exclusive, it being understood that, without limiting the generality of the
foregoing, the Master Servicer need not deposit in the Collection Account
amounts representing Foreclosure Profits, fees (including annual fees) or late
charge penalties or assumption fees, payable by Mortgagors, or amounts received
by the Master Servicer for the accounts of Mortgagors for application towards
the payment of taxes, insurance premiums, assessments and similar items. In the
event any amount not required to be deposited in the Collection Account is so
deposited, the Master Servicer may at any time withdraw such amount from the
Collection Account, any provision herein to the contrary notwithstanding. The
Collection Account may contain funds that belong to one or more trust funds
created for the notes or certificates of other series and may contain other
funds respecting payments on mortgage loans belonging to the Master Servicer or
serviced or master serviced by it on behalf of others. Notwithstanding such
commingling of funds, the Master Servicer shall keep records that accurately
reflect the funds on deposit in the Collection Account that have been identified
by it as being attributable to the __________ Loans and shall hold all
collections in the Collection Account to the extent they represent collections
on the __________ Loans for the benefit of the Issuer, the Indenture Trustee
[and the Credit Enhancer], as their interests may appear. [The Master Servicer
shall remit all Foreclosure Profits to itself as additional servicing compensati
on.]
The Master Servicer may cause the institution maintaining the Collection
Account to invest any funds in the Collection Account in Eligible Investments
(including obligations of the Master Servicer or any of its Affiliates, if such
obligations otherwise qualify as Eligible Investments), which shall mature not
later than the Business Day next preceding the Payment Date and shall not be
sold or disposed of prior to its maturity. Except as provided above, all income
and gain realized from any such investment shall be for the benefit of the
Master Servicer and shall be subject to its withdrawal or order from time to
time. The amount of any losses incurred in respect of the principal amount of
any such investments shall be deposited in the Collection Account by the Master
Servicer out of its own funds immediately as realized.
(c) Until the Business Day prior to each Distribution Date on which
amounts are required to be deposited in the Collection Account pursuant to
Section 3.02(b), the Master Servicer may retain and commingle such amounts with
its own funds so long as (i) no Event of Default shall have occurred and be
continuing and (ii) either (x) the Master Servicer remains an affiliate of
Beneficial Corporation and the short-term debt obligations of Beneficial
Corporation are rated at least A-1 by Standard & Poor's, F-1 by Fitch and P-1 by
Moody's (or such lower rating as each such organization may otherwise agree to
in writing) or (y) the Master Servicer arranges for and maintains a letter of
credit acceptable in form and substance to each Rating Agency (which
acceptability shall be confirmed in writing); provided, however, that amounts
permitted to be retained and commingled pursuant to this clause (y) shall not
exceed the amount available under such letter of credit. In the event the Master
Servicer is entitled to retain and commingle the amounts referred to in the
preceding sentence, it shall be entitled to retain for its own account any
investment income thereon, and any such investment income shall not be subject
to any claim of the Indenture Trustee or Securityholders. Any amounts retained
and commingled by the Master Servicer pursuant to this Section 3.02(c) shall be
held by the Master Servicer in constructive trust for the benefit of the
Securityholders. In the event that the Master Servicer is not permitted to
retain and commingle such amounts with its own funds, it shall, any provisions
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herein to the contrary notwithstanding, deposit such amounts not later than the
second Business Day following receipt in the Collection Account created and
maintained pursuant to Section 3.02(b), subject to withdrawal to the same extent
as withdrawals are permitted pursuant to Section 3.03.
Section 3.03. Withdrawals from the Collection Account. The Master
Servicer shall, from time to time as provided herein, make withdrawals from the
Collection Account of amounts on deposit therein pursuant to Section 3.02 that
are attributable to the __________ Loans for the following purposes:
(i) to deposit in the Payment Account, on the Business Day prior to each
Payment Date, an amount equal to the Security Collections required to be
distributed on such Payment Date;
[(ii) prior to either an Amortization Event or the Collection Period
preceding the Accelerated Amortization Date, to pay to the Seller, the amount of
any Additional Balances as and when created during the related Collection
Period, provided, that the aggregate amount so paid to the Seller in respect of
Additional Balances at any time during any Collection Period shall not exceed
the amount of Principal Collections theretofore received for such Collection
Period;]
[(iii) to the extent deposited to the Collection Account, to reimburse
itself or the related Subservicer for previously unreimbursed expenses incurred
in maintaining individual insurance policies pursuant to Section 3.04, or
Liquidation Expenses, paid pursuant to Section 3.06 or otherwise reimbursable
pursuant to the terms of this Servicing Agreement (to the extent not payable
pursuant to Section 3.08), such withdrawal right being limited to amounts
received on particular __________ Loans (other than any Repurchase Price in
respect thereof) which represent late recoveries of the payments for which such
advances were made, or from related Liquidation Proceeds or the proceeds of the
purchase of such __________ Loan;]
(iv) to pay to itself out of each payment received on account of
interest on a __________ Loan as contemplated by Section 3.08, an amount equal
to the related Master Servicing Fee (to the extent not retained pursuant to
Section 3.02), and to pay to any Subservicer any Subservicing Fees not
previously withheld by the Subservicer;
[(v) to the extent deposited in the Collection Account to pay to itself
as additional servicing compensation any interest or investment income earned on
funds deposited in the Collection Account and Payment Account that it is
entitled to withdraw pursuant to Sections 3.02(b) and 5.01;]
(vi) to the extent deposited in the Collection Account, to pay to
itself as additional servicing compensation any Foreclosure Profits;
[(vii) to pay to itself or the Seller, with respect to any __________
Loan or property acquired in respect thereof that has been purchased or
otherwise transferred to the Seller, the Master Servicer or other entity, all
amounts received thereon and not required to be distributed to Holders as of the
date on which the related Purchase Price or Repurchase Price is determined;]
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[(viii) to withdraw any other amount deposited in the Collection Account
that was not required to be deposited therein pursuant to Section 3.02;]
[(ix) to pay to the Seller the amount, if any, deposited in the
Collection Account by the Indenture Trustee upon release thereof from the
Funding Account representing payments for Additional Loans; and
(x) after the occurrence of an Amortization Event, to pay to the
Seller, the Excluded Amount.]
Section 3.04. Maintenance of Hazard Insurance; Property Protection
Expenses. The Master Servicer shall cause to be maintained for each __________
Mortgaged Property hazard insurance with an appropriate endorsement in favor of
the Master Servicer or the related Subservicer and extended coverage in an
amount that is at least equal to the lesser of (i) the maximum insurable value
of the improvements securing the related __________ Loan from time to time or
(ii) the combined principal balance owing on such __________ Loan and any
___________ loan senior to such __________ Loan from time to time, but in no
event shall such amount be less than is necessary to prevent the Mortgagor from
becoming a coinsurer thereunder. The Master Servicer shall also cause to be
maintained on property acquired upon foreclosure, or deed in lieu of
foreclosure, hazard insurance with an appropriate endorsement in favor of the
Master Servicer or the related Subservicer with extended coverage in an amount
which is at least equal to the lesser of (i) the maximum insurable value from
time to time of the improvements that are a part of such property or (ii) the
combined principal balance owing on such __________ Loan and any ___________
loan senior to such __________ Loan from time to time at the time of such
foreclosure or deed in lieu of foreclosure plus accrued interest and the
good-faith estimate of the Master Servicer of related Liquidation Expenses to be
incurred in connection therewith. Amounts collected by the Master Servicer under
any such policies shall be deposited in the Collection Account to the extent
called for by Section 3.02.
In cases in which any Mortgaged Property is located in a federally
designated flood area, the hazard insurance to be maintained for the related
__________ Loan shall include flood insurance (to the extent available). All
such flood insurance shall be in amounts as are required under applicable
guidelines of the Federal National Mortgage Association. The Master Servicer
shall be under no obligation to require that any Mortgagor maintain earthquake
or other additional insurance and shall be under no obligation itself to
maintain any such additional insurance on property acquired in respect of a
__________ Loan, other than pursuant to such applicable laws and regulations as
shall at any time be in force and as shall require such additional insurance. If
the Master Servicer shall obtain and maintain a blanket policy issued by an
insurer acceptable to the Rating Agencies insuring against hazard losses on all
of the __________ Loans, it shall conclusively be deemed to have satisfied its
obligations as set forth in the first sentence of this Section 3.04, it being
understood and agreed that such policy may contain a deductible clause, in which
case the Master Servicer shall, in the event that there shall not have been
maintained on the related Mortgaged Property a policy complying with the first
sentence of this Section 3.04, and there shall have been a loss which would have
been covered by such policy, deposit in the Collection Account the amount not
otherwise payable under the blanket policy because of such deductible clause.
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Section 3.05. Assumption and Modification Agreements. In any case in
which a Mortgaged Property has been or is about to be conveyed by the Mortgagor,
the Master Servicer and each Subservicer shall exercise its right to accelerate
the maturity of the related ____________ Loan and require that the balance
thereof be paid in full on or prior to such conveyance by the Mortgagor under
any "due-on-sale" clause applicable thereto. If such "due-on-sale" clause, by
its terms, is not operable or the Master Servicer is prevented, as provided in
the following paragraph of this Section 3.05, from enforcing any such clause,
the Master Servicer is authorized to take or enter into an assumption and
modification agreement from or with the Person to whom such property has been or
is about to be conveyed, pursuant to which such Person becomes liable under the
Loan Agreement and the Mortgagor remains liable thereon. In connection with any
such agreement, the provisions for the adjustment of the rate thereon shall not
be modified to increase or decrease the rate. Any such agreement shall, for all
purposes, be considered part of the related Mortgage File. Any fee collected by
the Master Servicer for entering into any such agreement will be retained by the
Master Servicer as additional servicing compensation.
Notwithstanding the foregoing paragraph of this Section 3.05 or any
other provision of this Agreement, the Master Servicer shall not be deemed to be
in default, breach or any other violation of its obligations hereunder by reason
of any assumption of a ____________ Loan, or transfer of any Mortgaged Property
without the assumption thereof, by operation of law or any assumption or
transfer which the Master Servicer reasonably believes it may be restricted by
law from preventing, for any reason whatsoever.
Section 3.06 Realization upon Defaulted __________ Loans. The Master
Servicer shall, or shall cause the applicable Subservicer to, foreclose upon or
otherwise comparably convert to ownership Mortgaged Properties securing such of
the ____________ Loans as come into and continue in default when, in the opinion
of the Master Servicer, no satisfactory arrangements can be made for collection
of delinquent payments pursuant to Section 3.02. In connection with such
foreclosure or other conversion, the Master Servicer or such Subservicer shall
follow such practices (including, in the case of any default on a related prior
deed of trust, the advancing of funds to correct such default) and procedures as
it shall deem necessary or advisable and as shall be normal and usual from time
to time in its general mortgage servicing activities. In determining whether to
foreclose upon or otherwise comparably convert the ownership of a Mortgaged
Property, the Master Servicer and each Subservicer shall take into account (and
shall not be required to foreclose or otherwise convert the ownership of such
Mortgaged Property in the case of) the existence of any hazardous substances,
hazardous wastes or solid wastes, as such terms are defined in the Comprehensive
Environmental Response Compensation and Liability Act, the Resource Conservation
and Recovery Act of 1976, or other federal, state or local environmental
legislation, on such Mortgaged Property. The foregoing is subject to the proviso
that neither the Master Servicer nor any Subservicer shall be required to expend
its own funds in connection with any foreclosure or other conversion or towards
the correction of any default on a related prior mortgage loan or restoration of
any property unless it shall determine that such foreclosure, correction or
restoration will increase Net Liquidation Proceeds.
Section 3.07. Indenture Trustee to Cooperate. (a) Upon the payment
in full of the balance of any ____________ Loan, the Master Servicer will
promptly notify the Indenture Trustee by a certification substantially in the
form of Exhibit C hereto of a Servicing Officer. Such notification shall be made
each month at the time that the Master Servicer delivers the
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Servicing Certificate to the Indenture Trustee pursuant to Section 4.01. Upon
any such payment in full, the Master Servicer is authorized to execute, pursuant
to the authorization contained in Section 3.01, an instrument of satisfaction
regarding the related Mortgage, which instrument of satisfaction shall be
recorded by the Master Servicer if required by applicable law and be delivered
to the Person entitled thereto, it being understood and agreed that no expenses
incurred in connection with such instrument of satisfaction shall be reimbursed
from amounts deposited in the Collection Account.
(b) If the Indenture Trustee is holding the Mortgage
Files, from time to time and as appropriate for the servicing or foreclosure of
any ____________ Loan, the Trustee shall, within ___ Business Days of receipt by
the Indenture Trustee of a written request substantially in the form of Exhibit
B hereto transmitted by the Master Servicer to the Indenture Trustee or made in
writing signed by a Servicing Officer and delivered to the Indenture Trustee as
provided in Section 8.03, deliver the related Mortgage File to the Master
Servicer and shall execute such documents, in the forms provided by the Master
Servicer, as shall be certified by a Servicing Officer to be necessary to the
prosecution of any such proceedings. The Master Servicer shall return the
Mortgage File to the Indenture Trustee when the need therefor by the Master
Servicer no longer exists unless the ____________ Loan shall be liquidated, in
which case the Master Servicer shall deliver a certificate of a Servicing
Officer similar to that hereinabove specified, and the Master Servicer shall be
entitled to retain the Mortgage File.
Section 3.08. Servicing Compensation; Payment of Certain Expenses by
Master Servicer. The Master Servicer shall be entitled to retain in accordance
with Section 3.03 as servicing compensation the Master Servicing Fee. Additional
servicing compensation in the form of late payment charges and certain other
receipts not required to be deposited in the Collection Account as specified in
Section 3.02 shall be retained by the Master Servicer. The Master Servicer shall
be required to pay all expenses incurred by it in connection with its activities
hereunder (including payment of all other fees and expenses not expressly stated
hereunder to be for the account of the Holders, including, without limitation,
the fees and expenses of the Administrator, Owner Trustee, Indenture Trustee and
any Custodian) and shall not be entitled to reimbursement therefor except as
specifically provided herein.
Section 3.09. Annual Statement as to Compliance. (a) The Master Servicer
will deliver to the Indenture Trustee, on or before March 31, of each year,
beginning March 31, ____, an Officer's Certificate stating that (i) a review of
the activities of the Master Servicer during the preceding calendar year and of
its performance under this Servicing Agreement has been made under such
officer's supervision and (ii) to the best of such officer's knowledge, based on
such review, the Master Servicer has fulfilled all its material obligations
under this Servicing Agreement throughout such year, or, if there has been a
material default in the fulfillment of any such obligation, specifying each such
default known to such officer and the nature and status thereof.
Section 3.10 Annual Independent Public Accountants' Servicing Report. On
or before March 31 of each year, beginning with March 31, ____, the Master
Servicer at its expense shall cause a firm of independent public accountants
(who may also render other services to the Master Servicer) to furnish a report
to the Indenture Trustee to the effect that such firm has examined certain
documents and records relating to the servicing of __________ loans under this
Servicing Agreement, and that such examination, which has been conducted
substantially in compliance with
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the Uniform Single Audit Program for Mortgage Bankers (to the extent that the
procedures in such audit guide are applicable to the servicing obligations set
forth in such agreements), has disclosed no items of noncompliance with the
provisions of this Servicing Agreement which, in the opinion of such firm, are
material, except for such items of noncompliance as shall be set forth in such
report.
Section 3.11 Access to Certain Documentation and Information Regarding
the ____________ Loans. (a) The Master Servicer shall provide to
Certificateholders that are federally insured savings associations, the Office
of Thrift Supervision, the Federal Deposit Insurance Corporation and the
supervisory agents and examiners of such office and such corporation access to
the documentation regarding the ____________ Loans required by applicable
regulations of the Office of Thrift Supervision, such access being afforded
without charge but only upon reasonable request and during normal business hours
at the offices of the Master Servicer. Nothing in this Section 3.11 shall
derogate from the obligation of the Master Servicer to observe any applicable
law prohibiting disclosure of information regarding the Mortgagors and the
failure of the Master Servicer or the Indenture Trustee to provide access as
provided in this Section 3.11 as a result of such obligation shall not
constitute a breach of this Section 3.11.
(b) The Master Servicer shall supply such supplemental information, in
such form as the Indenture Trustee shall reasonably request, to the Paying Agent
and the Indenture Trustee, on or before the start of the third Business Day
preceding the related Payment Date, as is required in the Indenture Trustee's
reasonable judgment to enable the Paying Agent or the Indenture Trustee, as the
case may be, to make required payments and to furnish the required reports to
the Holders.
Section 3.12. Maintenance of Certain Servicing Insurance Policies. The
Master Servicer shall during the term of its service as servicer maintain in
force (i) a policy or policies of insurance covering errors and omissions in the
performance of its obligations as master servicer hereunder and (ii) a fidelity
bond in respect of its officers, employees or agents. Each such policy or
policies and bond shall, together, comply with the requirements from time to
time of FNMA, for Persons performing servicing for mortgage loans purchased by
such entity.
ARTICLE IV
SERVICING CERTIFICATE
Section 4.01. Statements to Holders. (a) With respect to each Payment
Date, the Master Servicer shall forward to the Indenture Trustee and the
Indenture Trustee shall forward by mail to each Certificateholder, Noteholder,
[holder of the Residual Ownership Interest, the Credit Enhancer], the Depositor,
the Owner Trustee, the Certificate Paying Agent and each Rating Agency, a
statement setting forth the following information as to [the Variable Funding
Notes, Term] Notes, [the Residual Ownership Interest] and Certificates, to the
extent applicable:
(i) the aggregate of all Security Interest Collections received
during the related Collection Period;
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(ii) the aggregate of all Security Principal Collections received
during the related Collection Period;
(iii) the aggregate of all Insurance Proceeds received during the
related Collection Period;
(iv) the aggregate of the Liquidation Proceeds received during the
calendar month preceding the month of such Payment Date;
(v) the number and aggregate principal balance of any __________ Loans
that were identified as Deleted ____________ Loans required to be repurchased
pursuant to the __________ Loan Purchase Agreement or by the Master Servicer
pursuant to this Servicing Agreement during the related Collection Period and
(A) the aggregate Repurchase Price of any such Deleted ___________ Loans that
will be repurchased by the related Originator or the Master Servicer prior to
the following Payment Date and (B) the aggregate amount of any shortfall in
respect of the aggregate Principal Balance of any Deleted _________ Loans for
which the related Originator or the Master Servicer substituted one or more
Eligible Substitute __________ Loans, if any, to be deposited in the Collection
Account prior to such Payment Date;
(vi) the monthly Servicing Fee;
(vii) the sum of the amounts specified pursuant to clauses (i)-(v),
inclusive, above, net of the amount specified in clause (vi) above;
(viii) the amount of interest on the Notes payable on such Payment Date
and any previously accrued and unpaid interest for prior Payment Dates;
(ix) the Principal Collections Distribution Amount for such Payment
Date;
(x) the Certificate Distribution Amount for such Payment Date;
(xi) the amounts remaining available in the Payment Account on the
related Payment Date after the payment of amounts required to be paid pursuant
to the Indenture on such Payment Date;
(xii) the outstanding Principal Balance of the Notes and the
Certificates after giving effect to the payments to be made on such Payment
Date;
(xiii) any Liquidated Loss Amounts for such Payment Date, including
cumulative losses up to such date;
(xiv) in the event the Master Servicer has obtained a letter of credit,
surety or similar agreement, the amount available under such letter of credit,
surety or similar agreement after giving effect to any drawings made thereunder
to and including the date of such statement;
(xv) the book value (within the meaning of 12 C.F.R. Section 571.13 or
comparable provision) of any real estate acquired through foreclosure or grant
of a deed in lieu of foreclosure and held by the Indenture Trust for the benefit
of the Holders of the Securities as of the last day of the related Collection
Period;
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(xvi) the number and aggregate outstanding balances of all __________
Loans delinquent (a) ___ to ___ days and (b) ___ days or more, respectively, as
of the end of the related Collection Period; and
(xvii) the Pool Balance for the following Payment Date.
ARTICLE V
PAYMENT ACCOUNT
Section 5.01. Payment Account. The Indenture Trustee shall establish and
maintain a separate trust account (the "Payment Account") titled
"________________________, as Indenture Trustee, for the benefit of the
Noteholders, the Certificateholders [and the Credit Enhancer] pursuant to the
Indenture, dated as of __________, ___, between Loan Trust _-_ and ___________".
The Payment Account shall be an Eligible Account. On each Payment Date, amounts
on deposit in the Payment Account will be distributed by the Indenture Trustee
in accordance with Section 3.05 of the Indenture. The Indenture Trustee shall,
upon written request from the Master Servicer, invest or cause the institution
maintaining the Payment Account to invest the funds in the Payment Account in
Eligible Investments designated in the name of the Indenture Trustee, which
shall mature not later than the Business Day next preceding the Payment Date
next following the date of such investment (except that (i) any investment in
the institution with which the Payment Account is maintained may mature on such
Payment Date and (ii) any other investment may mature on such Payment Date if
the Indenture Trustee shall advance funds on such Payment Date to the Payment
Account in the amount payable on such investment on such Payment Date, pending
receipt thereof to the extent necessary to make distributions on the Securities)
and shall not be sold or disposed of prior to maturity. All income and gain
realized from any such investment shall be for the benefit of the Master
Servicer and shall be subject to its withdrawal or order from time to time. The
amount of any losses incurred in respect of any such investments shall be
deposited in the Payment Account by the Master Servicer out of its own funds
immediately as realized.
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ARTICLE VI
THE MASTER SERVICER
Section 6.01. Liability of the Master Servicer. The Master Servicer
shall be liable in accordance herewith only to the extent of the obligations
specifically imposed upon and undertaken by the Master Servicer herein.
Section 6.02. Merger or Consolidation of, or Assumption of the
Obligations of, the Master Servicer. Any corporation into which the Master
Servicer may be merged or consolidated, or any corporation resulting from any
merger, conversion or consolidation to which the Master Servicer shall be a
party, or any corporation succeeding to the business of the Master Servicer,
shall be the successor of the Master Servicer, hereunder, without the execution
or filing of any paper or any further act on the part of any of the parties
hereto, anything herein to the contrary notwithstanding.
Section 6.03. Limitation on Liability of the Master Servicer and Others.
Neither the Master Servicer nor any of the directors or officers or employees or
agents of the Master Servicer shall be under any liability to the Issuer, the
Owner Trustee, the Indenture Trustee or the Holders for any action taken or for
refraining from the taking of any action in good faith pursuant to this
Servicing Agreement, provided, however, that this provision shall not protect
the Master Servicer or any such Person against any liability which would
otherwise be imposed by reason of its willful misfeasance, bad faith or gross
negligence in the performance of its duties hereunder or by reason of its
reckless disregard of its obligations and duties hereunder. The Master Servicer
and any director or officer or employee or agent of the Master Servicer may rely
in good faith on any document of any kind prima facie properly executed and
submitted by any Person respecting any matters arising hereunder. Subject to the
second succeeding sentence, the Master Servicer and any director or officer or
employee or agent of the Master Servicer shall be indemnified by the Issuer and
held harmless against any loss, liability or expense incurred in connection with
any legal action relating to this Servicing Agreement or the Securities, other
than any loss, liability or expense related to any specific __________ Loan or
__________ Loans (except as any such loss, liability or expense shall be
otherwise reimbursable pursuant to this Servicing Agreement) and any loss,
liability or expense incurred by reason of its willful misfeasance, bad faith or
gross negligence in the performance of its duties hereunder or by reason of its
reckless disregard of its obligations and duties hereunder. The Master Servicer
shall not be under any obligation to appear in, prosecute or defend any legal
action which is not incidental to its duties to service the Mortgage Loans in
accordance with this Servicing Agreement, and which in its opinion may involve
it in any expense or liability; provided, however, that the Master Servicer may
in its sole discretion undertake any such action which it may deem necessary or
desirable in respect of this Servicing Agreement, and the rights and duties of
the parties hereto and the interests of the Holders hereunder. In such event,
the reasonable legal expenses and costs of such action and any liability
resulting therefrom shall be expenses, costs and liabilities of the Issuer and
the Master Servicer shall be entitled to be reimbursed therefor. The Master
Servicer's right to indemnity or reimbursement pursuant to this Section 6.03
shall survive any resignation or termination of the Master Servicer pursuant to
Section 6.04 or 7.01 with respect to any losses, liabilities or expenses arising
prior to such resignation or termination (or arising from events that occurred
prior to such resignation or termination).
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Section 6.04. Master Servicer Not to Resign. Subject to the provisions
of Section 6.02, the Master Servicer shall not resign from the obligations and
duties hereby imposed on it except (i) upon determination that the performance
of its obligations or duties hereunder are no longer permissible under
applicable law or are in material conflict by reason of applicable law with any
other activities carried on by it or its subsidiaries or Affiliates, the other
activities of the Master Servicer so causing such a conflict being of a type and
nature carried on by the Master Servicer or its subsidiaries or Affiliates at
the date of this Servicing Agreement or (ii) upon satisfaction of the following
conditions: (a) the Master Servicer has proposed a successor servicer to the
Administrator and the Indenture Trustee in writing and such proposed successor
servicer is reasonably acceptable to the Administrator, the Indenture Trustee
[and the Credit Enhancer]; (b) each Rating Agency shall have delivered a letter
to the Issuer, [the Credit Enhancers] and the Indenture Trustee stating that the
proposed appointment of such successor servicer as Master Servicer hereunder
will not result in the reduction or withdrawal of the then current rating of the
Securities; and (c) such proposed successor master servicer has agreed in
writing to assume the obligations of Master Servicer hereunder and the Master
Servicer has delivered to the Indenture Trustee an Opinion of Counsel to the
effect that all conditions precedent to the resignation of the Master Servicer
and the appointment of and acceptance by the proposed successor master servicer
have been satisfied; provided, however, that in the case of clause (i) above no
such resignation shall become effective until the Trustee or a successor Master
Servicer shall have assumed the Master Servicer's responsibilities and
obligations hereunder in accordance with Section 7.02. Any such resignation
shall not relieve the Master Servicer of responsibility for any of the
obligations specified in Sections 7.01 and 7.02 as obligations that survive the
resignation or termination of the Master Servicer. Any such determination
permitting the resignation of the Master Servicer shall be evidenced by an
Opinion of Counsel to such effect delivered to the Trustee.
Section 6.05 Delegation of Duties. In the ordinary course of business,
the Master Servicer at any time may delegate any of its duties hereunder to any
Person, including any of its Affiliates, who agrees to conduct such duties in
accordance with standards comparable to those with which the Master Servicer
complies pursuant to Section 3.01. Such delegation shall not relieve the Master
Servicer of its liabilities and responsibilities with respect to such duties and
shall not constitute a resignation within the meaning of Section 6.04. The
Master Servicer shall provide each Rating Agency and the Indenture Trustee with
written notice prior to the delegation of any of its duties to any Person other
than any of the Master Servicer's Affiliates or their respective successors and
assigns.
Section 6.06. Master Servicer to Pay Indenture Trustee's and Owner
Trustee's Fees and Expenses, Indemnification. The Master Servicer covenants and
agrees to pay to the Owner Trustee, the Indenture Trustee and any co-trustee of
either the Owner Trustee or Indenture Trustee from time to time, and the Owner
Trustee, the Indenture Trustee and any such co-trustee shall be entitled to,
reasonable compensation (which shall not be limited by any provision of law in
regard to the compensation of a trustee of an express trust) for all services
rendered by each of them in the execution of the trusts created under the Trust
Agreement and the Indenture and in the exercise and performance of any of the
powers and duties under the Trust Agreement or the Indenture, as the case may
be, of the Owner Trustee, the Indenture Trustee and any co-trustee, and the
Master Servicer will pay or reimburse the Indenture Trustee and any co-trustee
upon request for all reasonable expenses, disbursements and advances incurred or
made by the
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Indenture Trustee or any co-trustee in accordance with any of the provisions of
this Servicing Agreement except any such expense, disbursement or advance as may
arise from its negligence or bad faith.
INSER X
ARTICLE VII
DEFAULT
Section 7.01. Events of Default. If any one of the following events
("Events of Default") shall occur and be continuing:
(i) any failure by the Master Servicer to deposit in the Collection
Account, the Funding Account or Payment Account any deposit required to be made
under the terms of this Servicing Agreement which continues unremedied for a
period of ____ Business Days after the date upon which written notice of such
failure shall have been given to the Master Servicer by the Issuer or the
Indenture Trustee [or to the Master Servicer, the Issuer and the Indenture
Trustee by the Credit Enhancer] or to the Indenture Trustee, Master Servicer and
the Issuer by the Holders of not less than 51% of the aggregate Principal
Balance of the Notes and the Certificates; or
(ii) failure on the part of the Master Servicer duly to observe or
perform in any material respect any other covenants or agreements of the Master
Servicer set forth in the Securities or in this Servicing Agreement, which
failure (x) materially and adversely affects the interests of Holders [or the
Credit Enhancer] and (y) continues unremedied for a period of ____________ days
after the date on which written notice of such failure, requiring the same to be
remedied, shall have been given to the Master Servicer by the Issuer [or the
Indenture Trustee or to the Master Servicer, the Issuer and the Indenture
Trustee by the Credit Enhancer] or to the Indenture Trustee, Master Servicer and
the Issuer by the Holders of not less than 51% of the aggregate Principal
Balance of the Notes and the Certificates; or
(iii) the entry against the Master Servicer of a decree or order by a
court or agency or supervisory authority having jurisdiction in the premises for
the appointment of a trustee, conservator, receiver or liquidator in any
insolvency, conservatorship, receivership, readjustment of debt, marshalling of
assets and liabilities or similar proceedings, or for the winding up or
liquidation of its affairs, and the continuance of any such decree or order
unstayed and in effect for a period of ___ consecutive days; or
(iv) the consent to the appointment of a conservator, receiver or
liquidator in any insolvency, readjustment of debt, marshalling of assets and
liabilities or similar proceedings of or relating to the Master Servicer or of
or relating to all or substantially all of its property, or the Master Servicer
shall admit in writing its inability to pay its debts generally as they become
due, file a petition to take advantage of any applicable insolvency or
reorganization statute, make an assignment for the benefit of its creditors or
voluntarily suspend payment of its obligations; or
(v) total expected losses exceed ___% of the Cut-Off Date Asset Balance
on or prior to the fifth anniversary of the Cut-Off Date or ___% of the Cut-Off
Date Asset Balance on or prior to the tenth anniversary of the Cut-Off Date.
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then, and in every such case, so long as an Event of Default shall not have been
remedied by the Master Servicer, either the Indenture Trustee [with the consent
of the Credit Enhancer, the Credit Enhancer with the consent of Holders of not
less than 51% of the aggregate Principal Balance of the Notes and the
Certificates,] or by the Holders of not less than 51% of the aggregate Principal
Balance of the Notes and the Certificates, by notice then given in writing to
the Master Servicer and to the Indenture Trustee if given by [the Credit
Enhancer or] the Holders, may terminate all of the rights and obligations of the
Master Servicer as master servicer under this Servicing Agreement, on or after
the receipt by the Master Servicer of such written notice, all authority and
power of the Master Servicer under this Servicing Agreement, whether with
respect to the Securities or the __________ Loans or otherwise, shall pass to
and be vested in [the Successor Master Servicer][the Indenture Trustee] pursuant
to and under this Section 7.01; and, without limitation, the Indenture Trustee
is hereby authorized and empowered to execute and deliver, on behalf of the
Master Servicer, as attorney-in-fact or otherwise, any and all documents and
other instruments, and to do or accomplish all other acts or things necessary or
appropriate to effect the purposes of such notice of termination, whether to
complete the transfer and endorsement of each __________ Loan and related
documents, or otherwise. The Master Servicer agrees to cooperate with [the
Successor Master Servicer] [the Indenture Trustee] in effecting the termination
of the responsibilities and rights of the Master Servicer hereunder, including,
without limitation, the transfer to [the Successor Master Servicer] [the
Indenture Trustee] for the administration by it of all necessary documentation
and all cash amounts that shall at the time be held by the Master Servicer and
to be deposited by it in the Collection Account, or that have been deposited by
the Master Servicer in the Collection Account or thereafter received by the
Master Servicer with respect to the __________ Loans. All reasonable costs and
expenses (including, but not limited to, attorneys' fees) incurred in connection
with amending this Servicing Agreement to reflect such succession as Master
Servicer pursuant to this Section 7.01 shall be paid by the predecessor Master
Servicer [or if the predecessor Master Servicer is the Indenture Trustee, the
initial Master Servicer] upon presentation of reasonable documentation of such
costs and expenses.
Section 7.02. Indenture Trustee to Act; Appointment of Successor. (a) On
and after the time the Master Servicer receives a notice of termination pursuant
to Section 7.01 or gives notice of its resignation under clause (i) of Section
6.04, the Indenture Trustee shall be the successor in all respects to the Master
Servicer in its capacity as servicer under this Servicing Agreement and the
transactions set forth or provided for herein and shall be subject to all the
responsibilities, duties and liabilities relating thereto placed on the Master
Servicer by the terms and provisions hereof provided, however, that any
liability of the Indenture Trustee in its capacity as successor master servicer
shall be limited to the extent such liability results from an inability to
fulfill its responsibilities and duties as successor master servicer due to any
failure on the part of the original Master Servicer to deliver the documentation
and cash amounts referred to in Section 7.01 or otherwise fulfill its
obligations hereunder. As compensation therefor, the Indenture Trustee shall be
entitled to such compensation as the Master Servicer would have been entitled to
hereunder if no such notice of termination had been given, including, without
limitation, any investment earnings on any Eligible Investments hereunder to
which the Master Servicer would have been entitled. Notwithstanding the above,
the Indenture Trustee may, if it shall be unwilling so to act, or shall, if it
is legally unable so to act, appoint, or petition a court of competent
jurisdiction to appoint, any established housing and home finance institution
that is then servicing a __________ loan portfolio and having all licenses,
permits and approvals required by applicable law, and a net worth of not less
than $________ as the successor to the Master Servicer
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hereunder in the assumption of all or any part of the responsibilities, duties
or liabilities of the Master Servicer hereunder. Pending appointment of a
successor to the Master Servicer hereunder, unless the Indenture Trustee is
prohibited by law from so acting, the Indenture Trustee shall act in such
capacity as hereinabove provided. In connection with such appointment and
assumption, the successor shall be entitled to receive compensation out of
payments on ____________ Loans in an amount equal to the compensation which the
Master Servicer would otherwise have received pursuant to Section 3.08 (or such
lesser compensation as the Indenture Trustee and such successor shall agree).
The Indenture Trustee and such successor shall take such action, consistent with
this Servicing Agreement, as shall be necessary to effectuate any such
succession. The appointment of a successor Master Servicer, including the
Indenture Trustee, shall not affect any liability of a predecessor Master
Servicer that may have arisen under this Servicing Agreement prior to its
termination as Master Servicer (including, without limitation, any deductible
under an insurance policy pursuant to Section 3.04), nor shall any successor
Master Servicer, including the Indenture Trustee, be liable for any acts or
omissions of any predecessor Master Servicer or for any breach by such
predecessor Master Servicer or the Depositor of any of their representations or
warranties contained herein or in any related document or agreement.
(b) Any successor, including the Indenture Trustee, to the Master
Servicer as servicer shall during the term of its service as servicer (i)
continue to service and administer the __________ Loans for the benefit of the
Holders, (ii) maintain in force a policy or policies of insurance covering
errors and omissions in the performance of its obligations as Master Servicer
hereunder and a fidelity bond in respect of its officers, employees and agents
to the same extent as the Master Servicer is so required pursuant to Section
3.12.
Section 7.03. Notification to Holders. Upon any termination or
appointment of a successor to the Master Servicer pursuant to this Article VII
or Section 6.04, the Indenture Trustee shall gave prompt written notice thereof
to the Holders, [the Credit Enhancer,] the Issuer and each Rating Agency.
Section 7.04 Waiver of Past Events of Default. The Holders of
Certificates evidencing not less than 51% of the aggregate Principal Balance of
the Notes and the Certificates may, on behalf of all Holders, waive any default
by the Master Servicer in the performance of its obligations hereunder and its
consequences, except a default in making any required deposits to or payments
from the Collection Account in accordance with this Servicing Agreement. Upon
any such waiver of a past default, such default shall cease to exist, and any
Event of Default arising therefrom shall be deemed to have been remedied for
every purpose of this Agreement. No such waiver shall extend to any subsequent
or other default or impair any right consequent thereon.
ARTICLE VIII
MISCELLANEOUS PROVISIONS
Section 8.01. Amendment. This Servicing Agreement may be amended from
time to time by the parties hereto, provided that any amendment be accompanied
by a letter from the Rating Agencies that the amendment will not result in the
downgrading or withdrawal of the
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rating then assigned to the Securities [and the consent of the Credit Enhancer]
and the Indenture Trustee.
Section 8.02. Governing Law. THIS SERVICING AGREEMENT SHALL BE
CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK
AND THE OBLIGATIONS, RIGHTS AND REMEDIES OF THE PARTIES HEREUNDER
SHALL BE DETERMINED IN ACCORDANCE WITH SUCH LAWS.
Section 8.03. Notices. All demands, notices and communications hereunder
shall be in writing and shall be deemed to have been duly given if personally
delivered at or mailed by certified mail, return receipt requested, to (a) in
the case of the Master Servicer, Beneficial Mortgage Corporation, One Xxxxxxxxx
Centre, 000 Xxxxx Xxxxxx Xxxxxx, Xxxxxxxxxx, Xxxxxxxx 00000, Attention: Managing
Director - Mortgage Finance, [(b) in the case of the Credit Enhancer,
______________________ Attention: ________________, (c) in the case of Xxxxx'x,
______________ 00 Xxxxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000, Attention:
________________, (d) in the case of Standard & Poor's, 00 Xxxxxxxx, 00xx Xxxxx,
Xxx Xxxx, Xxx Xxxx 00000, Attention: ___________________________,] (e) in the
case of the Owner Trustee, the Corporate Trust Office, and (f) in the case of
the Issuer, to _____________________ Loan Trust _-_, c/o _________________,
Attention: Corporate Trust Department, with a copy to the Administrator at
______________________, Attention: __________________________, or, as to each
party, at such other address as shall be designated by such party in a written
notice to each other party. [Any notice required or permitted to be mailed to a
Holder shall be given by first class mail, postage prepaid, at the address of
such Holder as shown in the Register. Any notice so mailed within the time
prescribed in this Servicing Agreement shall be conclusively presumed to have
been duly given, whether or not the Holder receives such notice. Any notice or
other document required to be delivered or mailed by the Indenture Trustee to
any Rating Agency shall be given on a reasonable efforts basis and only as a
matter of courtesy and accommodation and the Indenture Trustee shall have no
liability for failure to delivery such notice or document to any Rating Agency.]
Section 8.04. Severability of Provisions. If any one or more of the
covenants, agreements, provisions or terms of this Servicing Agreement shall be
for any reason whatsoever held invalid, then such covenants, agreements,
provisions or terms shall be deemed severable from the remaining covenants,
agreements, provisions or terms of this Servicing Agreement and shall in no way
affect the validity or enforceability of the other provisions of this Servicing
Agreement or of the Securities or the rights of the Holders thereof.
Section 8.05. Third-Party Beneficiaries. This Servicing Agreement will
inure to the benefit of and be binding upon the parties hereto, the Holders,
[the Credit Enhancer,] the Owner Trustee and their respective successors and
permitted assigns. Except as otherwise provided in this Servicing Agreement, no
other Person will have any right or obligation hereunder. In the event the
Indenture is terminated and the __________ Loans are held by the Issuer, the
Owner Trustee agrees, on behalf of the Issuer, to exercise all the rights and
fulfill the obligations of the Indenture Trustee hereunder with the same effect
as if the Owner Trustee were named wherever the term "Indenture Trustee" appears
herein other than the obligations of the Indenture Trustee to act as successor
Master Servicer pursuant to Section 7.02.
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Section 8.06. Counterparts. This instrument may be executed in any
number of counterparts, each of which so executed shall be deemed to be an
original, but all such counterparts shall together constitute but one
and the same instrument.
Section 8.07. Effect of Headings and Table of Contents. The Article and
Section headings herein and the Table of Contents are for convenience only and
shall not affect the construction hereof.
Section 8.08. Termination Upon Purchase by the Master Servicer or
Liquidation of All __________ Loans. The respective obligations and
responsibilities of the Master Servicer, the Issuer and the Indenture Trustee
created hereby shall terminate upon the last action required to be taken by the
Issuer pursuant to the Trust Agreement and by the Indenture Trustee pursuant to
the Indenture following the earlier of:
(i) the date on or before which the Indenture or Trust Agreement is
terminated, or
(ii) the purchase by the Master Servicer from the Issuer of all
__________ Loans and all property acquired in respect of any __________ Loan at
a price equal to the greater of (a) ___% of the unpaid Asset Balance of each
__________ Loan, plus accrued and unpaid interest thereon at the Weighted
Average Net Loan Rate up to the day preceding the Payment Date on which such
amounts are to be distributed to Securityholders, [plus any amounts due and
owing to the Credit Enhancer under the Insurance Agreement] and (b) the fair
market value of the __________ Loans as determined by two bids from competitive
participants in the residential loan market.
The right of the Master Servicer to purchase the assets of the Issuer pursuant
to clause (ii) above is conditioned upon the Pool Balance as of the Final
Scheduled Payment Date being less than ten percent of the aggregate of the
Cut-Off Date Asset Balances of the __________ Loans. If such right is exercised
by the Master Servicer, the Master Servicer shall deposit the amount calculated
pursuant to clause (ii) above with the Indenture Trustee pursuant to Section
4.10 of the Indenture and, upon the receipt of such deposit, the Indenture
Trustee or relevant Custodian shall release to the Master Servicer, the files
pertaining to the __________ Loans being purchased.
The Master Servicer, at its expense, shall prepare and deliver to the
Indenture Trustee and the Owner Trustee for execution, at the time the
__________ Loans are to be released to the Master Servicer, appropriate
documents assigning each such __________ Loan from the Indenture Trustee to the
Master Servicer or the appropriate party.
Section 8.09. Certain Matters Affecting the Indenture Trustee. For all
purposes of this Servicing Agreement, in the performance of any of its duties or
in the exercise of any of its powers hereunder, the Indenture Trustee shall be
subject to and entitled to the benefits of Article VI of the Indenture.
Section 8.10. Limitation of Liability of Owner Trustee. Notwithstanding
anything contained herein to the contrary, this Agreement has been executed by
_____________________ not in its individual capacity but solely in its capacity
as Owner Trustee of the Issuer and in no event shall _________________ in its
individual capacity, or except as expressly provided in
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the Trust Agreement, as Owner Trustee of the Issuer, have any liability for the
representations, warranties, covenants, agreements or other obligations of the
Owner Trustee or the Issuer hereunder or in any of the certificates, notices or
agreements delivered pursuant hereto, as to all of which recourse shall be had
solely to the assets of the Issuer; provided, that this provision shall not
diminish the Owner Trustee's obligations to take actions that it is expressly
required to perform hereunder, provided, further that the Owner Trustee will
remain liable for its own willful misconduct, negligence or bad faith. For all
purposes of this Servicing Agreement, in the performance of its duties or
obligations hereunder or in the performance of any duties or obligations of the
Issuer hereunder, the Owner Trustee shall be subject to, and entitled to the
benefits of, the terms and provisions of Article VII of the Trust Agreement.
Section 8.11. Authority of the Administrator. Each of the parties to
this Agreement acknowledges that the Issuer and the Owner Trustee have each
appointed the Administrator to act as its agent to perform the duties and
obligations of the Issuer hereunder. Unless otherwise instructed by the Issuer
or the Owner Trustee, copies of all notices, requests, demands and other
documents to be delivered to the Issuer or the Owner Trustee pursuant to the
terms hereof shall be delivered to the Administrator. Unless otherwise
instructed by the Issuer or the Owner Trustee, all notices, requests, demands
and other documents to be executed or delivered, and any action to be taken, by
the Issuer or the Owner Trustee pursuant to the terms hereof may be executed,
delivered and/or taken by the Administrator pursuant to the Administration
Agreement.
Section 8.12. Assignment. Notwithstanding anything to the contrary
contained herein, except as provided in Sections 6.02 and 6.04, this Agreement
may not be assigned by the Master Servicer without the prior written consent of
the Holders of not less than 66% of the aggregate Principal Balance of the Notes
and the Certificates.
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IN WITNESS WHEREOF, the Master Servicer, the Issuer and the Indenture
Trustee have caused this Servicing Agreement to be duly executed by their
respective officers all as of the day and year first above written.
BENEFICIAL MORTGAGE CORPORATION,
as Master Servicer
By:______________________________
Name:
Title:
______________, LOAN TRUST _-_,
as Issuer
By:____________________________
not in its individual capacity
but solely as Owner Trustee
By:______________________________
Name:
Title:
---------------------------------
as Indenture Trustee
By:______________________________
Name:
Title:
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EXHIBIT A
__________ LOAN SCHEDULE
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EXHIBIT B
FORM OF REQUEST FOR RELEASE
DATE:
TO:
RE: REQUEST FOR RELEASE OF DOCUMENTS
In connection with the administration of the pool of __________ Loans held by
you for the referenced pool, we request the release of the Mortgage File
described below.
Servicing Agreement Dated:
Series #:
Account #:
Pool #:
Loan #:
Borrower Name(s):
Reason for Document Request: (circle one)
__________ Loan Prepaid in Full __________ Loan Repurchased
"We hereby certify that all amounts received or to be received in connection
with such payments which are required to be deposited have been or will be so
deposited as provided in the Servicing Agreement."
---------------------------------
--------------------
Authorized Signature
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TO CUSTODIAN/INDENTURE TRUSTEE: Please acknowledge this request, and check off
documents being enclosed with a copy of this form. You should retain this form
for your files in accordance with the terms of the Servicing Agreement.
Enclosed Documents: ( ) Promissory Note
( ) Primary Insurance Policy
( ) Mortgage or Deed of Trust
( ) Assignment(s) of Mortgage or
Deed of Trust
( ) Title Insurance Policy
( ) Other:
-----------------------------
Name
-----------------------------
Title
-----------------------------
Date
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EXHIBIT C
FORM OF LENDER CERTIFICATION
FOR ASSIGNMENT OF __________ LOAN
_____________________, 19__
-------------------------
-------------------------
Attention: ________________________ Loan Trust _-_
Re: _______________________ Loan Trust ---_-_
Ladies and Gentlemen:
This letter is delivered to you in connection with the assignment by
____________________ (the "Indenture Trustee") to ______________________ (the
"Lender") of ______________________ (the "__________ Loan") pursuant to Section
3.05(c) of the Servicing Agreement (the "Servicing Agreement"), dated as of
_________________, _ between Beneficial Mortgage Services, Inc., as depositor
(the "Depositor"), _________________ Loan Trust _-_, as issuer, and the
Indenture Trustee. All terms used herein and not otherwise defined shall have
the meanings set forth in the Servicing Agreement. The Lender hereby certifies,
represents and warrants to, and covenants with, the Master Servicer,
___________________________ and the Indenture Trustee that:
(i) the __________ Loan is secured by a Mortgaged Property located in a
jurisdiction in which an assignment in lieu of satisfaction is required to
preserve lien priority, minimize or avoid mortgage recording taxes or otherwise
comply with, or facilitate a refinancing under, the laws of such jurisdiction;
(ii) the substance of the assignment is, and is intended to be, a
refinancing of such __________ Loan and the form of the transaction is solely to
comply with, or facilitate the transaction under, such local laws;
(iii) the __________ Loan following the proposed assignment will be
modified to have a rate of interest no more than 0.25 percent below or above the
rate of interest on such __________ Loan prior to such proposed assignment; and
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(iv) such assignment is at the request of the borrower under the
related __________ Loan.
Very truly yours,
---------------------------
(Lender)
By:________________________
Title:_____________________
Name:______________________
Title:_____________________
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