Exhibit 10.1
MASTER SERVICING AGREEMENT
among
STRUCTURED ASSET MORTGAGE INVESTMENTS TRUST 199_-_,
Issuer,
STRUCTURED ASSET MORTGAGE INVESTMENTS INC.,
Seller,
and
----------------------,
Master Servicer
Dated as of ________________, 199_
Exhibit 10.1
313 (a)..........................................................7.4
(b) (1).......................................................7.4
(b) (2)......................................................11.5
(c)...........................................................7.4
(d)...........................................................7.3
314 (a)........................................................11.15
(b)..........................................................11.1
(c) (1)......................................................11.1
(c) (2)......................................................11.1
(c) (3)......................................................11.1
(d)..........................................................11.1
(e)..........................................................11.1
(f)..........................................................11.1
315 (a)..........................................................6.1
(b).....................................................6.5; 11.5
(c)...........................................................6.1
(d)...........................................................6.1
(e)..........................................................5.13
316 (a) (last sentence)..........................................2.7
(a) (1) (A)..................................................5.11
(a) (1) (B)..................................................5.12
(a) (2).......................................................N A
(b)...........................................................5.7
(c)...........................................................N A
317 (a) (1)...................................................5.3
(a) (2).......................................................5.3
(b)...........................................................3.3
318 (a).........................................................11.7
1 Note: This Cross Reference Table shall not, for any purpose, be deemed
to be part of this Indenture.
2 N.A. means Not Applicable.
TABLE OF CONTENTS
PAGE
ARTICLE I
Definitions
SECTION 1.1. Definitions......................................1
SECTION 1.2. Other Definitional Provisions...................18
SECTION 1.3. Interest Calculations...........................18
ARTICLE II
Conveyance of Mortgage Loans
SECTION 2.1. Conveyance of Mortgage Loans....................18
SECTION 2.2. Acceptance by the Trustee.......................20
SECTION 2.3. Intentionally Omitted...........................21
SECTION 2.3. Representations and Warranties of the
Seller Regarding the Mortgage Loans..........21
SECTION 2.5. Substitution of Mortgage Loans..................21
ARTICLE III
Administration and Servicing of Mortgage Loans
SECTION 3.1. Duties of Master Servicer.......................22
SECTION 3.2. Collection and Allocation of Mortgage
Loan Payments.................................22
SECTION 3.3. Withdrawals from each Collection Account........23
SECTION 3.4. Maintenance of Hazard Insurance; Property
Protection Expenses...........................24
SECTION 3.5. Maintenance of Mortgage Impairment
Insurance Policy..............................25
SECTION 3.6. Fidelity Bond...................................25
SECTION 3.7. Management and Realization Upon
Defaulted Mortgage Loans.....................26
SECTION 3.8. Trustee to Cooperate............................26
SECTION 3.9. Servicing Fee...................................27
SECTION 3.10. Master Servicer's Certificate...................27
SECTION 3.11 Annual Statement as to Compliance;
Notice of Default.............................27
SECTION 3.12. Annual Independent Certified Public
Accountants' Report........................28
SECTION 3.13. Access to Certain Documentation and
Information Regarding Mortgage Loans.........28
SECTION 3.14. Master Servicer Expenses........................28
SECTION 3.15. Advances by the Master Servicer.................29
SECTION 3.16. Optional Purchase of Defaulted Mortgage Loans...29
SECTION 3.17. Superior Liens..................................30
SECTION 3.18. Payment of Taxes, Insurance and Other Charges...30
SECTION 3.18. Appointment of Sub-Servicer.....................30
ARTICLE IV
Distributions; Reserve Account; Statements to Certificateholders
and Noteholders
SECTION 4.1. Establishment of Trust Accounts.................31
SECTION 4.2. Intentionally Omitted...........................32
SECTION 4.3. Application of Collections......................32
SECTION 4.4. Additional Deposits.............................33
SECTION 4.5. Distributions...................................33
SECTION 4.6. Reserve Account.................................34
SECTION 4.7. Intentionally Omitted...........................34
SECTION 4.8 Statements to Certificateholders
and Noteholders...............................34
SECTION 4.9. Net Deposits....................................35
ARTICLE V
The Seller
SECTION 5.1. Representations of Seller.......................35
SECTION 5.2. Corporate Existence.............................36
SECTION 5.3 Liability of Seller; Indemnities................37
SECTION 5.4. Merger or Consolidation of, or Assumption
of the Obligations of, Seller................38
SECTION 5.5. Limitation on Liability of Seller and Others....39
SECTION 5.6. Seller May Own Certificates or Notes............39
ARTICLE VI
The Master Servicer
SECTION 6.1. Representations of Master Servicer..............39
SECTION 6.2. Indemnities of Master Servicer..................41
SECTION 6.3. Merger or Consolidation of, or Assumption
of the Obligations of, Master Servicer......41
SECTION 6.4. Limitation on Liability of Master
Servicer and Others...........................42
SECTION 6.5. ____________________ Not To Resign as
Master Servicer................................42
ARTICLE VII
Default
SECTION 7.1. Servicer Default................................43
SECTION 7.2. Appointment of Successor........................44
SECTION 7.3. Payment of Servicing Fee........................44
SECTION 7.4. Notification to Noteholders
and Certificateholders........................45
SECTION 7.5. Waiver of Past Defaults.........................45
ARTICLE VIII
Termination
SECTION 8.1. Optional Purchase of All Mortgage Loans.........45
ARTICLE IX
Administrative Duties of the Master Servicer
SECTION 9.1. Administrative Duties...........................46
SECTION 9.2. Records.........................................48
SECTION 9.3. Additional Information To Be
Furnished to the Issuer.......................48
ARTICLE X
Miscellaneous Provisions
SECTION 10.1. Amendment.......................................48
SECTION 10.2. Protection of Title to Trust....................49
SECTION 10.3. Notices.........................................51
SECTION 10.4. Assignment......................................51
SECTION 10.5. Limitations on Rights of Others.................51
SECTION 10.6. Severability....................................51
SECTION 10.7. Separate Counterparts...........................52
SECTION 10.8. Headings........................................52
SECTION 10.9. Governing Law...................................52
SECTION 10.10. Assignment to Trustee...........................52
SECTION 10.11. Nonpetition Covenant............................52
SECTION 10.12. Limitation of Liability of Owner
Trustee and Trustee.......................52
SECTION 10.13. Independence of the Master Servicer.............53
SECTION 10.14. No Joint Venture................................53
MASTER SERVICING AGREEMENT dated as of _________________, 199_ , among
STRUCTURED ASSET MORTGAGE INVESTMENTS TRUST 199_-_, a Delaware business trust
(the "Issuer"), and STRUCTURED ASSET MORTGAGE INVESTMENTS INC., as Seller (the
"Seller"), and __________________________ as Master Servicer (the "Master
Servicer").
WHEREAS, The Issuer desires to purchase a portfolio of mortgage loans
from the Seller; and
WHEREAS, the Master Servicer is willing to service such mortgage
loans.
NOW, THEREFORE, in consideration of the premises and the mutual
covenants herein contained, the parties hereto agree as follows:
ARTICLE I
Definitions
SECTION 1.1. DEFINITIONS. Whenever used in this Agreement, the
following words and phrases shall have the following meanings:
"Aggregate Net Losses" means with respect to a Due Period, the
aggregate principal balance of all Mortgage Loans newly designated during such
Due Period as Liquidated Mortgage Loans minus Liquidation Proceeds collected
during such Due Period with respect to all Liquidated Mortgage Loans.
"Agreement" means this Master Servicing Agreement, as the same may be
amended and supplemented from time to time.
"Assignment of Mortgage" means, with respect to any Mortgage, an
assignment, notice of transfer or equivalent instrument, in recordable form,
sufficient under the laws of the jurisdiction in which the related Mortgaged
Property is located to reflect the sale of the Mortgage to the Issuer, which
assignment, notice of transfer or equivalent instrument may be in the form of
one or more blanket assignments covering the Mortgage Loans secured by Mortgaged
Properties located in the same jurisdiction.
"Available Principal" means with respect to any Distribution Date, the
sum of the following amounts without duplication: (a) that portion of all
collections on the Mortgage Loans allocable to principal in respect of the
preceding Due Period; (b) Liquidation Proceeds attributable to the principal
amount of Mortgage Loans which became Liquidated Mortgage Loans during the
preceding Due Period in accordance with the Master Servicer's customary
servicing procedures; and (c) to the extent attributable to principal, the
Purchase Price of each Mortgage Loan repurchased by the Seller or purchased by
the Master Servicer during the preceding Due Period; provided, however, that in
calculating the Available Principal, all payments and proceeds (including
Liquidation Proceeds) of any Mortgage Loans repurchased by the Seller or
purchased by the Master Servicer the Purchase Price of which has been included
in the Available Principal in a prior Due Period shall be excluded.
"Basic Documents" means the Certificate of Trust, the Trust Agreement,
the Indenture, the Depository Agreements and other documents and certificates
delivered in connection therewith.
"Business Day" means any day other than a Saturday or a Sunday or a
day on which banking institutions in The City of New York or
_______________________ are authorized or obligated by law, regulation or
executive order to remain closed.
"Certificate" means a Trust Certificate (as defined in the Trust
Agreement).
"Certificate Balance" equals, initially, $_______________ and,
thereafter, equals the initial Certificate Balance, reduced by all amounts
allocable to principal previously distributed to Certificateholders.
"Certificate Distribution Account" has the meaning assigned to such
term in the Trust Agreement.
"Certificate Rate" means _____% per annum.
"Certificateholder" has the meaning assigned to such term in the Trust
Agreement.
"Certificateholders' Distributable Amount" means, with respect to any
Distribution Date, the sum of the Certificateholders' Interest Distributable
Amount and the Certificateholders' Principal Distributable Amount.
"Certificateholders' Interest Carryover Shortfall" means, with respect
to any Distribution Date, the excess of the Certificateholders' Monthly Interest
Distributable Amount for the preceding Distribution Date and any outstanding
Certificateholders' Interest Carryover Shortfall on such preceding Distribution
Date, over the amount in respect of interest at the Certificate Rate that is
actually deposited in the Certificate Distribution Account on such preceding
Distribution Date, plus interest on such excess, to the extent permitted by law,
at the Certificate Rate from and including such preceding Distribution Date to
but excluding the current Distribution Date.
"Certificateholders' Interest Distributable Amount" means, with
respect to any Distribution Date, the sum of the Certificateholders' Monthly
Interest Distributable Amount for such Distribution Date and the
Certificateholders' Interest Carryover Shortfall for such Distribution Date.
"Certificateholders' Monthly Interest Distributable Amount" means,
with respect to any Distribution Date, 30 days of interest (or, in the case of
the first Distribution Date, interest accrued from and including the Closing
Date to but excluding such Distribution Date) at the Certificate Rate on the
Certificate Balance on the immediately preceding Distribution Date, after giving
effect to all payments of principal to the Certificateholders on or prior to
such Distribution Date (or, in the case of the first Distribution Date, the
Certificate Balance on the Closing Date).
"Certificateholders' Monthly Principal Distributable Amount" means,
with respect to any Distribution Date, the Certificateholders' Percentage of the
Principal Distribution Amount or, with respect to any Distribution Date on or
after the Distribution Date on which the outstanding principal balance of the
Class ___ Notes is reduced to zero, _____% of the Principal Distribution Amount
(less any amount required on the first such Distribution Date to reduce the
outstanding principal balance of the Class ___ Notes to zero, which shall be
deposited into the Note Distribution Account).
"Certificateholders' Percentage" means 100% minus the Noteholders'
Percentage.
"Certificateholders' Principal Carryover Shortfall" means, as of the
close of any Distribution Date, the excess of the Certificateholders' Monthly
Principal Distributable Amount and any outstanding Certificateholders' Principal
Carryover Shortfall from the preceding Distribution Date, over the amount in
respect of principal that is actually deposited in the Certificate Distribution
Account on such current Distribution Date.
"Certificateholders' Principal Distributable Amount" means, with
respect to any Distribution Date, the sum of the Certificateholders' Monthly
Principal Distributable Amount for such Distribution Date and the
Certificateholders' Principal Carryover Shortfall as of the close of the
preceding Distribution Date; provided, however, that the Certificateholders'
Principal Distributable Amount shall not exceed the Certificate Balance. In
addition, on the Certificate Final Scheduled Distribution Date, the principal
required to be distributed to Certificateholders will include the lesser of (a)
any payments of principal due and remaining unpaid on each Mortgage Loan in the
Trust as of ___________, 199_ or (b) the portion of the amount that is necessary
(after giving effect to the other amounts to be deposited in the Certificate
Distribution Account on such Distribution Date and allocable to principal) to
reduce the Certificate Balance to zero, in either case after giving effect to
any required distribution of the Noteholders' Principal Distributable Amount to
the Note Distribution Account. In addition, on any Distribution Date on which,
after giving effect to all distributions to the Master Servicer, the Noteholders
and the Certificateholders on such Distribution Date, (i) the outstanding
principal balance of the Notes is zero and (ii) the amount on deposit in the
Reserve Account is equal to or greater than the Certificate Balance,
Certificateholders' Principal Distributable Amount shall include an amount equal
to such Certificate Balance.
"Charge-off Rate" means, with respect to a Due Period, the Aggregate
Net Losses with respect to the Mortgage Loans expressed, on an annualized basis,
as a percentage of the average of (x) the Pool Balance on the last day of the
immediately preceding Due Period and (y) the Pool Balance on the last day in
such Due Period.
"Civil Relief Act" means the Soldiers' and Sailors' Civil Relief Act
of 1940, as amended.
"Closing Date" means _____________, 199_.
"Collection Account" means the account designated as such, established
and maintained pursuant to Section 3.2(c).
"Cut-off Date" means ______________, 199_.
"Cut-off Date Principal Balance" means with respect to any Mortgage
Loan, the unpaid principal balance thereof as of the Cut-Off Date (or as of the
applicable date of substitution with respect to an Eligible Substitute Mortgage
Loan pursuant to Section 2.2 or 2.4).
"Debt Service Reduction" means with respect to any Mortgage Loan, a
reduction by a court of competent jurisdiction of the Monthly Payment due on
such Mortgage Loan.
"Defective Mortgage Loan" means any Mortgage Loan subject to
repurchase or substitution pursuant to Section 2.2 or 2.4.
"Delinquency Percentage" means, with respect to a Due Period, the
ratio of (a) the outstanding principal balance of all outstanding Mortgage Loans
60 days or more delinquent (which amount shall include Mortgage Loans in respect
of Mortgaged Properties that have been repossessed but not yet sold or otherwise
liquidated) as of the last day of such Due Period, determined in accordance with
the Master Servicer's normal practices, divided by (b) the outstanding principal
balance of all Mortgage Loans on the last day of such Due Period.
"Delivery" when used with respect to Trust Account Property means:
(a) with respect to bankers' acceptances, commercial paper,
negotiable certificates of deposit and other obligations that constitute
"instruments" within the meaning of Section 9.105(1)(i) of the UCC and are
susceptible of physical delivery, transfer thereof to the Trustee or its nominee
or custodian by physical delivery to the Trustee or its nominee or custodian
endorsed to, or registered in the name of, the Trustee or its nominee or
custodian or endorsed in blank, and, with respect to a certificated security (as
defined in Section 8-102 of the UCC) transfer thereof (i) by delivery of such
certificated security endorsed to, or registered in the name of, the Trustee or
its nominee or custodian or endorsed in blank to a financial intermediary (as
defined in Section 8-313 of the UCC) and the making by such financial
intermediary of entries on its books and records identifying such certificated
securities as belonging to the Trustee or its nominee or custodian and the
sending by such financial intermediary of a confirmation of the purchase of such
certificated security by the Trustee or its nominee or custodian, or (ii) by
delivery thereof to a "clearing corporation" (as defined in Section 8-102(3) of
the UCC) and the making by such clearing corporation of appropriate entries on
its books reducing the appropriate securities account of the transferor and
increasing the appropriate securities account of a financial intermediary by the
amount of such certificated security, the identification by the clearing
corporation of the certificated securities for the sole and exclusive account of
the financial intermediary, the maintenance of such certificated securities by
such clearing corporation or a "custodian bank" (as defined in Section 8-102(4)
of the UCC) or the nominee of either subject to the clearing corporation's
exclusive control, the sending of a confirmation by the financial intermediary
of the purchase by the Trustee or its nominee or custodian of such securities
and the making by such financial intermediary of entries on its books and
records identifying such certificated securities as belonging to the Trustee or
its nominee or custodian (all of the foregoing, "Physical Property"), and, in
any event, any such Physical Property in registered form shall be in the name of
the Trustee or its nominee or custodian; and such additional or alternative
procedures as may hereafter become appropriate to effect the complete transfer
of ownership of any such Trust Account Property to the Trustee or its nominee or
custodian, consistent with changes in applicable law or regulations or the
interpretation thereof;
(b) with respect to any securities issued by the U.S.
Treasury, ▇▇▇▇▇▇▇ Mac or ▇▇▇▇▇▇ Mae that is a book-entry security held through
the Federal Reserve System pursuant to federal book-entry regulations, the
following procedures, all in accordance with applicable law, including
applicable federal regulations and Articles 8 and 9 of the UCC: book-entry
registration of such Trust Account Property to an appropriate book-entry account
maintained with a Federal Reserve Bank by a financial intermediary which is also
a "depository" pursuant to applicable federal regulations and issuance by such
financial intermediary of a deposit advice or other written confirmation of such
book-entry registration to the Trustee or its nominee or custodian of the
purchase by the Trustee or its nominee or custodian of such book-entry
securities; the making by such financial intermediary of entries in its books
and records identifying such book-entry security held through the Federal
Reserve System pursuant to federal book-entry regulations as belonging to the
Trustee or its nominee or custodian and indicating that such custodian holds
such Trust Account Property solely as agent for the Trustee or its nominee or
custodian; and such additional or alternative procedures as may hereafter become
appropriate to effect complete transfer of ownership of any such Trust Account
Property to the Trustee or its nominee or custodian, consistent with changes in
applicable law or regulations or the interpretation thereof; and
(c) with respect to any item of Trust Account Property that is
an uncertificated security under Article 8 of the UCC and that is not governed
by clause (b) above, registration on the books and records of the issuer thereof
in the name of the financial intermediary, the sending of a confirmation by the
financial intermediary of the purchase by the Trustee or its nominee or
custodian of such uncertificated security, the making by such financial
intermediary of entries on its books and records identifying such uncertificated
certificates as belonging to the Trustee or its nominee or custodian.
"Depository Agreements" mean the Certificate Depository Agreement and
the Note Depository Agreement.
"Determination Date" means, with respect to any Distribution Date, the
____ Business Day prior to each Distribution Date.
"Distribution Date" means, with respect to each Due Period, the ______
day of the following month, or if such day is not a Business Day, the
immediately following Business Day, commencing on ___________, 199_.
"Due Period" means a calendar month, except with respect to the first
Due Period, which shall be the period from the Cut-off Date to ____________,
199_. Any amount stated "as of the close of business on the last day of a Due
Period" shall give effect to the following calculations as determined as of the
end of the day on such last day: (1) all applications of collections and (2) all
distributions to be made on the immediately following Distribution Date.
"Eligible Deposit Account" means either (a) a segregated account with
an Eligible Institution or (b) a segregated trust account with the corporate
trust department of a depository institution (other than the Seller or any
affiliate of the Seller) organized under the laws of the United States of
America or any one of the states thereof or the District of Columbia (or any
domestic branch of a foreign bank), having corporate trust powers and acting as
trustee for funds deposited in such account, so long as any of the securities of
such depository institution have a credit rating from each Rating Agency in one
of its generic rating categories which signifies investment grade.
"Eligible Institution" means a depository institution (other than the
Seller or any affiliate of the Seller) organized under the laws of the United
States of America or any one of the states thereof or the District of Columbia
(or any domestic branch of a foreign bank), which has (i) either a long-term
senior unsecured debt rating of ____ or a short-term senior unsecured debt or
certificate of deposit rating of ____ or better by ________ and (ii) a long-term
senior unsecured debt rating of ___ or better and (2) a short-term senior
unsecured debt rating of ___ or better by _______, or any other long-term,
short-term or certificate of deposit rating acceptable to the Rating Agencies
and (ii) whose deposits are insured by the Federal Deposit Insurance
Corporation. If so qualified, the Owner Trustee or the Trustee may be considered
an Eligible Institution.
"Eligible Investments" mean book-entry securities, negotiable
instruments or securities represented by instruments in bearer or registered
form which evidence:
(a) direct obligations of, and obligations fully
guaranteed as to timely payment by, the United States of America;
(b) demand deposits, time deposits or certificates of deposit
of any depository institution (including the Seller or any Affiliate of the
Seller) or trust company incorporated under the laws of the United States of
America or any state thereof or the District of Columbia (or any domestic branch
of a foreign bank) and subject to supervision and examination by federal or
state banking or depository institution authorities (including depository
receipts issued by any such institution or trust company as custodian with
respect to any obligation referred to in clause (a) above or portion of such
obligation for the benefit of the holders of such depository receipts);
provided, however, that at the time of the investment or contractual commitment
to invest therein (which shall be deemed to be made again each time funds are
reinvested following each Distribution Date), the commercial paper or other
short-term senior unsecured debt obligations (other than such obligations the
rating of which is based on the credit of a Person other than such depository
institution or trust company) of such depository institution or trust company
shall have a credit rating from ___________ of ___ and from __________ of ___;
(c) commercial paper (including commercial paper of the Seller
or any Affiliate of the Seller) having, at the time of the investment or
contractual commitment to invest therein, a rating from ____________ of ___ and
from ____________ of ___;
(d) investments in money market funds (including funds for
which the Seller, the Trustee or the Owner Trustee or any of their respective
Affiliates is investment manager or advisor) having a rating from ______________
of ___ and from ___________ of ___;
(e) bankers' acceptances issued by any depository institution
or trust company referred to in clause (b) above;
(f) repurchase obligations with respect to any security that
is a direct obligation of, or fully guaranteed by, the United States of America
or any agency or instrumentality thereof the obligations of which are backed by
the full faith and credit of the United States of America, in either case
entered into with a depository institution or trust company (acting as
principal) referred to in clause (b) above; and
(g) any other investment which would not cause either Rating
Agency to downgrade or withdraw its then current rating of any class of Notes or
the Certificates.
"Eligible Substitute Mortgage Loan" means a Mortgage Loan substituted
by the Seller for a Defective Mortgage Loan which must, on the date of such
substitution, (i) have an outstanding Principal Balance not in excess of and not
more than ___% less than the Principal Balance of the Defective Mortgage Loan;
(ii) have a current Mortgage Rate not less than the Mortgage Rate of the
Defective Mortgage Loan and not more than ___% in excess of the Mortgage Rate of
such Defective Mortgage Loan; (iii) have a Mortgage of the same or higher level
of lien priority as the Mortgage relating to the Defective Mortgage Loan at the
time such Mortgage was transferred to the Trust; (iv) have a remaining term to
maturity not more than six months earlier and not later than the remaining term
to maturity of the Defective Mortgage Loan; (v) comply with each representation
and warranty set forth in Section 2.4 (deemed to be made as of the date of
substitution); and (vi) have an original Loan-to-Value Ratio not greater than
that of the Defective Mortgage Loan.
"▇▇▇▇▇▇ ▇▇▇" means Federal National Mortgage Association or any
successor thereto.
"Final Scheduled Distribution Date" means with respect to [List All
Classes of Notes] and their Respective Final Scheduled Distribution Dates .
"Final Scheduled Maturity Date" means __________, 20__.
"First Lien" means, with respect to any Mortgage Loan which is a
second priority lien, the mortgage loan relating to the corresponding Mortgaged
Property having a first priority lien.
"Foreclosure Profits" means, with respect to a Liquidated Mortgage
Loan, the amount, if any, by which (i) the aggregate of the related Net
Liquidation Proceeds exceeds (ii) the related Principal Balance (plus accrued
and unpaid interest thereon at the applicable Mortgage Rate from the date
interest was last paid through the date of receipt of the final Liquidation
Proceeds) of such Liquidated Mortgage Loan immediately prior to the final
recovery of its Liquidation Proceeds.
"▇▇▇▇▇▇▇ Mac" means ▇▇▇▇▇▇▇ Mac (formerly Federal Home Loan Mortgage
Corporation) or any successor thereto.
"GP Interest" means the _____% interest in the Trust held by
___________________, a ______________, pursuant to the Trust Agreement.
"Indenture" means the Indenture dated as of ______________, 199_,
between the Issuer and the Trustee, as the same may be amended and supplemented
from time to time.
"Insolvency Event" means, with respect to a specified Person, (a) the
filing of a decree or order for relief by a court having jurisdiction in the
premises in respect of such Person or any substantial part of its property in an
involuntary case under any applicable federal or state bankruptcy, insolvency or
other similar law now or hereafter in effect, or appointing a receiver
(including any receiver appointed under the Financial Institutions Reform,
Recovery and Enforcement Act of 1989, as amended), liquidator, assignee,
custodian, trustee, sequestrator or similar official for such Person or for any
substantial part of its property, or ordering the winding-up or liquidation of
such Person's affairs, and such decree or order shall remain unstayed and in
effect for a period of 60 consecutive days; or (b) the commencement by such
Person of a voluntary case under any applicable federal or state bankruptcy,
insolvency or other similar law now or hereafter in effect, or the consent by
such Person to the entry of an order for relief in an involuntary case under any
such law, or the consent by such Person to the appointment of or taking
possession by a receiver, liquidator, assignee, custodian, trustee, sequestrator
or similar official for such Person or for any substantial part of its property,
or the making by such Person of any general assignment for the benefit of
creditors, or the failure by such Person generally to pay its debts as such
debts become due, or the taking of action by such Person in furtherance of any
of the foregoing.
"Insurance Proceeds" means proceeds paid by any insurer pursuant to
any insurance policy covering a Mortgage Loan, or amounts required to be paid by
the Master Servicer pursuant to Section 3.5, net of any component thereof (i)
covering any expenses incurred by or on behalf of the Master Servicer in
connection with obtaining such proceeds, (ii) that is applied to the restoration
or repair of the related Mortgaged Property, (iii) released to the Mortgagor in
accordance with the Master Servicer's normal servicing procedures or (iv)
required to be paid to any holder of a mortgage senior to such Mortgage Loan.
"Interest Distribution Amount" means, with respect to any Distribution
Date, the sum of the following amounts without duplication: (a) that portion of
all collections on the Mortgage Loans allocable to interest in respect of the
preceding Due Period; (b) Liquidation Proceeds attributable to interest on the
Mortgage Loans which became Liquidated Mortgage Loans during the preceding Due
Period in accordance with the Master Servicer's customary servicing procedures;
(c) the Purchase Price of each Mortgage Loan that became a Purchased Mortgage
Loan during the preceding Due Period to the extent attributable to accrued
interest on such Mortgage Loan; (d) Recoveries for such Due Period and (e)
Investment Earnings for such Distribution Date; provided, however, that in
calculating the Interest Distribution Amount, all payments and proceeds
(including Liquidation Proceeds) of any Purchased Mortgage Loans the Purchase
Price of which has been included in the Interest Distribution Amount in a prior
Due Period shall be excluded.
"Investment Earnings" means, with respect to any Distribution Date,
the investment earnings (net of losses and investment expenses) on amounts on
deposit in the Trust Accounts and the Certificate Distribution Account to be
deposited into the Collection Account on such Distribution Date pursuant to
Section 4.1(b).
"Issuer" means Structured Asset Mortgage Investments Trust 199_-_.
"Lien" means a security interest, lien, charge, pledge or encumbrance
of any kind, other than tax liens, mechanics' liens and any liens which attach
to the respective Mortgage Loan by operation of law as a result of any act or
omission by the related Mortgagor.
"Liquidated Mortgage Loan" means, as to any Distribution Date, any
Mortgage Loan with respect to which the Master Servicer has determined, in
accordance with the servicing procedures specified herein, as of the end of the
related Due Period that all Liquidation Proceeds which it expects to recover
with respect to the liquidation of the Mortgage Loan or disposition of the
related REO Property have been recovered.
"Liquidation Proceeds" means proceeds (including Insurance Proceeds)
received in connection with the liquidation of any Mortgage Loan or related REO
Property, whether through trustee's sale, foreclosure sale or otherwise.
"Loan-to-Value Ratio" means the fraction, expressed as a percentage,
the numerator of which is the original principal balance of the related Mortgage
Loan and the denominator of which is the Original Value of the related Mortgaged
Property.
"Master Servicer" means _______________, the Master Servicer of the
Mortgage Loans, and each successor to _________________ (in the same capacity)
pursuant to Section 6.3 or 7.2.
"Master Servicer's Certificate" means an Officers' Certificate of the
Master Servicer delivered pursuant to Section 3.10.
"Monthly Advance" means an advance made by the Master Servicer
pursuant to Section 3.15 hereof.
"Monthly Payment" means the scheduled monthly payment of principal
and/or interest required to be made by a Mortgagor on the related Mortgage Loan.
"Mortgage" means the mortgage, deed of trust or other instrument
creating a first or second lien on an estate in fee simple interest in real
property securing a Mortgage Loan.
"Mortgage File" means, with respect to any Mortgage Loan,
collectively, the following documents (and any additional documents required to
be added to the Mortgage File pursuant to this Agreement): (i) The original
Mortgage Note, with all prior and intervening endorsements showing a complete
chain of endorsements from the originator of the Mortgage Loan to the Person so
endorsing the Mortgage Loan to the Trustee, endorsed by such Person "Pay to the
order of, ____________, as Trustee for Structured Asset Mortgage Investments
Trust 199_-_ without recourse" and signed, by facsimile or manual signature, in
the name of the Seller by a Responsible Officer; (ii) any of: (1) the original
Mortgage, and related power of attorney, if any, with evidence of recording
thereon, (2) a copy of the Mortgage and related power of attorney, if any,
certified as a true copy of the original Mortgage or power of attorney by a
Responsible Officer of the Seller or by the closing attorney by facsimile or
manual signature, or by an officer of the title insurer or agent of the title
insurer that issued the related title insurance policy if the original has been
transmitted for recording until such time as the original is returned by the
public recording office or (3) a copy of the Mortgage and related power of
attorney, if any, certified by the public recording office; (iii) the original
Assignment of Mortgage in recordable form, to "___________, as Trustee for
Structured Asset Mortgage Investments Trust 199_-_", provided that any such
Assignments of Mortgage may be made by blanket assignments for Mortgage Loans
secured by the Mortgaged Properties in the same county, if permitted by
applicable law; (iv) the original lender's policy of title insurance or a true
copy thereof, or if such original lender's title insurance policy has been lost,
a copy thereof certified by the appropriate title insurer to be true and
complete, or if such lender's title insurance policy has not been issued as of
the Closing Date, a marked up commitment (binder) to issue such policy; (v) all
intervening assignments, if any, showing a complete chain of assignments from
the originator to the Seller, including any recorded warehousing assignments,
with evidence of recording thereon, certified by a Responsible Officer of the
Seller by facsimile or manual signature as a true copy of the original of such
intervening assignments; and (vi) originals of all assumption, written
assurance, substitution and modification agreements, if any.
"Mortgage Loan" means a fixed rate mortgage loan identified in the
Mortgage Loan Schedule.
"Mortgage Loan Schedule" means with respect to any date, the schedule
of Mortgage Loans included in the Trust on such date. The initial schedule of
Mortgage Loans as of the Cut- off Date is the schedule set forth herein as
Exhibit A, which schedule sets forth as to each Mortgage Loan (i) the Cut-Off
Date Principal Balance, (ii) the account number, (iii) the original principal
amount, (iv) the Loan-to-Value Ratio as of the date of the origination of the
related Mortgage Loan, (v) the Due Date, (vi) the Mortgage Rate, (vii) the first
date on which a Monthly Payment is due under the Mortgage Note, (viii) the
original stated maturity date of the Mortgage Note, (ix) the remaining number of
months to maturity as of the Cut-off Date, (x) the state in which the related
Mortgaged Property is situated, (xi) the type of property, and (xii) the lien
status.
"Mortgage Note" means the originally executed note or other evidence
of indebtedness evidencing the indebtedness of a Mortgagor under the related
Mortgage Loan.
"Mortgage Rate" means the rate per annum at which interest accrues
with respect to a Mortgage Loan.
"Mortgaged Property" means the land and improvements securing the
indebtedness of a Mortgagor under the related Mortgage Loan.
"Mortgagor" means the obligor or obligors on a Mortgage Note.
"Net Liquidation Proceeds" means, with respect to any Liquidated
Mortgage Loan, Liquidation Proceeds net of unreimbursed Servicing Fees,
unreimbursed Servicing Advances and Monthly Advances with respect thereto.
"Net Rate" means, with respect to any Mortgage Loan as to any day, the
Mortgage Rate less the related Servicing Fee Rate.
"Nonrecoverable Advances" means, with respect to any Mortgage Loan,
(i) any Monthly Advance previously made and not reimbursed pursuant to Section
3.2(c) or 3.3(ii), or (ii) a Servicing Advance or Monthly Advance proposed to be
made in respect of a Mortgage Loan or REO Property which, in the good faith
business judgment of the Master Servicer, will not or, in the case of a proposed
advance, would not be ultimately recoverable pursuant to Sections 3.2(c) or
3.3(ii).
"Note Distribution Account" means the account designated as such,
established and maintained pursuant to Section 4.1.
"Noteholders' Distributable Amount" means, with respect to any
Distribution Date, the sum of the Noteholders' Principal Distributable Amount
and the Noteholders' Interest Distributable Amount.
"Noteholders' Interest Carryover Shortfall" means, with respect to any
Distribution Date, the excess of the Noteholders' Monthly Interest Distributable
Amount for the preceding Distribution Date and any outstanding Noteholders'
Interest Carryover Shortfall on such preceding Distribution Date, over the
amount in respect of interest that is actually deposited in the Note
Distribution Account on such preceding Distribution Date, plus interest on the
amount of interest due but not paid to Noteholders on the preceding Distribution
Date, to the extent permitted by law, at the respective Interest Rate borne by
each class of Notes from such preceding Distribution Date through the current
Distribution Date.
"Noteholders' Interest Distributable Amount" means, with respect to
any Distribution Date, the sum of the Noteholders' Monthly Interest
Distributable Amount for such Distribution Date and the Noteholders' Interest
Carryover Shortfall for such Distribution Date.
"Noteholders' Monthly Interest Distributable Amount" means, with
respect to any Distribution Date, the product of (i)(A) in the case of the Class
___ Notes, the product of the Interest Rate for such class and a fraction, the
numerator of which is the number of days elapsed from and including the prior
Distribution Date (or, in the case of the first Distribution Date, from and
including the Closing Date) to but excluding such Distribution Date and the
denominator of which is ______ and (B) in the case of each other class of Notes,
of the Interest Rate for such class (or, in the case of the first Distribution
Date, the Interest Rate for such class multiplied by a fraction, the numerator
of which is the number of days elapsed from and including the Closing Date to
but excluding such Distribution Date and the denominator of which is _______)
and (ii) the outstanding principal balance of the Notes of such class on the
immediately preceding Distribution Date, after giving effect to all
distributions of principal to Noteholders of such class on such Distribution
Date (or, in the case of the first Distribution Date, on the Closing Date).
"Noteholders' Monthly Principal Distributable Amount" means, with
respect to any Distribution Date, the Noteholders' Percentage of the Principal
Distribution Amount.
"Noteholders' Percentage" means 100% until the point in time at which
[List All Classes of Notes] have been paid in full and zero thereafter.
"Noteholders' Principal Carryover Shortfall" means, as of the close of
any Distribution Date, the excess of the Noteholders' Monthly Principal
Distributable Amount and any outstanding Noteholders' Principal Carryover
Shortfall from the preceding Distribution Date over the amount in respect of
principal that is actually deposited in the Note Distribution Account.
"Noteholders' Principal Distributable Amount" means, with respect to
any Distribution Date, the sum of the Noteholder's Monthly Principal
Distributable Amount for such Distribution Date and the Noteholders' Principal
Carryover Shortfall as of the close of the preceding Distribution Date;
provided, however, that the Noteholders' Principal Distributable Amount shall
not exceed the outstanding principal balance of the Notes. In addition, on the
Final Scheduled Distribution Date of each class of Notes, the principal required
to be deposited in the Note Distribution Account will include the amount
necessary (after giving effect to the other amounts to be deposited in the Note
Distribution Account on such Distribution Date and allocable to principal) to
reduce the Current Principal Amount of such class of Notes to zero.
"Officers' Certificate" means a certificate signed by (a) the chairman
of the board, the president, the vice chairman of the board, any executive vice
president, any senior vice president or any vice president and (b) a cashier,
assistant cashier, secretary or assistant secretary of the Seller or the Master
Servicer, as appropriate, provided that no one person may sign in a capacity
fulfilling both clause (a) and clause (b). "Opinion of Counsel" means one or
more written opinions of counsel who may be an employee of or counsel to the
Seller or the Master Servicer, which counsel shall be acceptable to the Trustee,
the Owner Trustee or the Rating Agencies, as applicable.
"Original Pool Balance" means the Pool Balance as of the Cut-off Date
which is $_____________.
"Original Value" means the value of the Mortgaged Property at the time
of origination of the related Mortgage Loan, such value being the lower of the
value of such property set forth in an appraisal acceptable to the originator of
the Mortgage Loan or the sales price of such property at the time of origination
or, in the case of a refinancing, the value of such property set forth in an
appraisal acceptable to the originator.
"Owner Trust Estate" has the meaning assigned to such term in the
Trust Agreement.
"Owner Trustee" means _______________, not in its individual capacity
but solely as Owner Trustee under the Trust Agreement, its successors in
interest or any successor Owner Trustee under the Trust Agreement.
"Person" means any individual, corporation, limited liability company,
estate, partnership, joint venture, association, joint stock company, trust
(including any beneficiary thereof), unincorporated organization or government
or any agency or political subdivision thereof.
"Physical Property" has the meaning assigned to such term in the
definition of "Delivery" above.
"Pool Balance" as of the close of business on the last day of a Due
Period means the aggregate Principal Balance of the Mortgage Loans (excluding
Purchased Mortgage Loans and Liquidated Mortgage Loans).
"Primary Mortgage Insurance Policy" means the certificate of primary
mortgage insurance relating to a particular Mortgage Loan, or any replacement
policy therefor.
"Principal Balance" means as to any Mortgage Loan other than a
Liquidated Mortgage Loan and any day, the related Cut-Off Date Principal Balance
(or unpaid principal balance as of the date of substitution), minus all
collections credited against the Principal Balance of any such Mortgage Loan.
For purposes of this definition, a Liquidated Mortgage Loan shall be deemed to
have a Principal Balance equal to the Principal Balance of the related Mortgage
Loan immediately prior to the final recovery of related Liquidation Proceeds and
a Principal Balance of zero thereafter.
"Principal Distribution Amount" means, with respect to any
Distribution Date, the sum of the following amounts, without duplication, in
respect of the preceding Due Period: (a) that portion of all collections on
Mortgage Loans allocable to principal, (b) Liquidation Proceeds attributable to
the principal amount of Mortgage Loans which became Liquidated Mortgage Loans
during such Due Period in accordance with the Master Servicer's customary
servicing procedures, plus the amount of Realized Losses with respect to such
Liquidated Mortgage Loans, (c) to the extent attributable to principal, the
Purchase Price of each Mortgage Loan that became a Purchased Mortgage Loan
during such Due Period and (d) on the Final Scheduled Distribution Date for the
Certificates, any amounts advanced by the Master Servicer on such Final
Scheduled Distribution Date with respect to principal on the Mortgage Loans;
provided, however, that in calculating the Principal Distribution Amount the
following will be excluded: (i) all payments and proceeds (including Liquidation
Proceeds) of any Purchased Mortgage Loans the Purchase Price of which has been
included in the Principal Distribution Amount in a prior Due Period and (ii)
Recoveries.
"Purchase Price" means as to any Defective Mortgage Loan repurchased
on any date pursuant to Sections 2.2 or 2.4, an amount equal to the sum of (i)
the unpaid Principal Balance thereof, (ii) the greater of (a) all unpaid accrued
interest thereon and (b) _____ days' interest thereon, computed at the
applicable Mortgage Rate and (iii) any unreimbursed Servicing Advances with
respect to such Mortgage Loan; provided, however, that if at the time of
repurchase the Seller or an Affiliate is the Master Servicer, the amount
described in clause (ii) shall be computed at the Net Rate.
"Purchased Mortgage Loan" means a Mortgage Loan purchased as of the
close of business on the last day of a Due Period by the Master Servicer
pursuant to Section 3.16 or repurchased by the Seller pursuant to Section 2.2.
"Rating Agency" means __________ or ___________ and/or any other
rating agency requested by the Seller or an affiliate thereof to rate the Notes
and/or the Certificates. If no such organization or successor is any longer in
existence, "Rating Agency" shall be a nationally recognized statistical rating
organization or other comparable Person designated by the Seller, notice of
which designation shall be given to the Trustee, the Owner Trustee and the
Master Servicer.
"Rating Agency Condition" means, with respect to any action, that each
Rating Agency shall have been given ____ days' prior notice thereof (or such
shorter period as shall be acceptable to the Rating Agencies) and that neither
of the Rating Agencies shall have notified the Seller, the Master Servicer, the
Owner Trustee or the Trustee in writing that such action will, in and of itself,
result in a reduction or withdrawal of the then current rating of any class of
Notes, or the Certificates.
"Realized Losses" means the excess of the Principal Balance of any
Liquidated Mortgage Loan over Liquidation Proceeds to the extent allocable to
principal.
"Recoveries" means, with respect to any Liquidated Mortgage Loan,
monies collected in respect thereof, from whatever source, during any Due Period
following the Due Period in which such Mortgage Loan became a Liquidated
Mortgage Loan, net of the sum of any amounts expended by the Master Servicer for
the account of the Mortgagor and any amounts required by law to be remitted to
the Mortgagor.
"REO Property" means a Mortgaged Property that is acquired by the
Master Servicer on behalf of the Trustee in foreclosure or by deed-in-lieu of
foreclosure.
"Released Mortgaged Property Proceeds" means, as to any Mortgage Loan,
proceeds received by the Master Servicer in connection with (a) a taking of an
entire Mortgaged Property by exercise of the power of eminent domain or
condemnation or (b) any release of part of the Mortgaged Property from the lien
of the related Mortgage, whether by partial condemnation, sale or otherwise,
which are not released to the Mortgagor in accordance with applicable law,
mortgage servicing standards the Master Servicer would use in servicing mortgage
loans for its own account and this Agreement.
"Reserve Account" means the account designated as such, established
and maintained pursuant to Section 4.1.
"Reserve Account Initial Deposit" means, with respect to the Closing
Date, $________________.
"Reserve Account Transfer Amount" means an amount equal to the lesser
of (i) the amount of cash or other immediately available funds on deposit in the
Reserve Account on such Distribution Date (before giving effect to any
withdrawals therefrom relating to such Distribution Date) or (ii) the amount, if
any, by which (x) the sum of the Total Servicing Fee, the Noteholders' Interest
Distributable Amount, the Certificateholders' Interest Distributable Amount, the
Noteholders' Principal Distributable Amount and the Certificateholders'
Principal Distributable Amount for such Distribution Date exceeds (y) the sum of
the Interest Distribution Amount and the Available Principal for such
Distribution Date.
"Responsible Officer" means respect to any entity the President, any
Vice President or officer performing similar functions on behalf of such entity.
"Seller" means Structured Asset Mortgage Investments Inc., as the
seller of the Mortgage Loans, and each successor to Structured Asset Mortgage
Investments Inc. (in the same capacity) to the extent permitted hereunder.
"Servicer Default" means an event specified in Section 7.1.
"Servicing Advances" means all reasonable and customary "out of
pocket" costs and expenses incurred in the performance by the Master Servicer of
its servicing obligations, including, but not limited to, the cost of (i) the
preservation, restoration and protection of the Mortgaged Property, (ii) any
enforcement or judicial proceedings, including foreclosures, (iii) the
management and liquidation of the REO Property, including reasonable fees paid
to any independent contractor in connection therewith, (iv) compliance with the
obligations under Sections 3.4 or 3.7 and (v) in connection with the liquidation
of a Mortgage Loan, expenditures relating to the purchase or maintenance of the
First Lien pursuant to Section 3.17.
"Servicing Compensation" means the Servicing Fee, the Supplemental
Servicing Fee and any other amounts to which the Master Servicer is entitled
pursuant to Section 3.9.
"Servicing Fee" has the meaning specified in Section 3.9.
"Servicing Fee Rate" means a rate of _____% per annum.
"Servicing Officer" means any officer of the Master Servicer or a
sub-servicer through which all or part of the Master Servicer's servicing
responsibilities are carried out, involved in, or responsible for, the
administration and servicing of the Mortgage Loans whose name and specimen
signature appear on a list of servicing officers furnished to the Trustee by the
Master Servicer as such list may from time to time be amended in accordance with
the foregoing.
"Specified Reserve Account Balance" means, with respect to (i) any
Distribution Date prior to the Distribution Date on which the Current Principal
Amount of the Class ____ Notes has been paid in full, $______________ and (ii)
any Distribution Date on or after the Distribution Date on which the Current
Principal Amount of the Class ____ Notes has been paid in full, the greater of
(a) _________% of the sum of the aggregate outstanding principal amount of each
class of Notes plus the outstanding Certificate Balance on such Distribution
Date (after giving effect to all payments on the Notes and distributions with
respect to the Certificates to be made on such Distribution Date); or (b)
______% of the sum of the aggregate initial principal of the Notes plus the
initial Certificate Balance except that, if on any Distribution Date (x) the
average of the Charge off Rates for the _______ preceding Due Periods exceeds
____% or (y) the average of the Delinquency Percentages for the _______
preceding Due Periods exceeds _____%, then the Specified Reserve Account Balance
shall be an amount equal to ________% of the sum of the aggregate Current
Principal Amount of each class of Notes and the aggregate outstanding
Certificate Balance on such Distribution Date (after giving effect to all
payments on the Notes and distributions with respect to the Certificates to be
made on such Distribution Date).
"Supplemental Servicing Fee" means the fee payable to the Master
Servicer for certain services rendered during the respective Due Period,
determined pursuant to and defined in Section 3.9.
"Total Servicing Fee" means with respect to each Distribution Date the
Servicing Fee for the related Due Period and all accrued and unpaid Servicing
Fees for prior Due Periods.
"Total Distribution Amount" means, for each Distribution Date, the sum
of (i) the Interest Distribution Amount, (ii) the Available Principal and (iii)
the Reserve Account Transfer Amount, in each case in respect of such
Distribution Date; provided, however, that if on the Class ____ Final Scheduled
Distribution Date, the Total Distribution Amount (as defined above) would be
insufficient to pay the Total Servicing Fee, Noteholders' Interest Distributable
Amount, Certificateholders' Interest Distributable Amount and the Noteholders'
Principal Distributable Amount for such Distribution Date, then the Total
Distribution Amount for such Distribution Date will include, in addition to the
Total Distribution Amount (as defined above), an amount, up to the amount
necessary to pay any such items, of the Interest Distribution Amount and the
Available Principal on deposit (or, if the conditions specified in Section
3.2(c) have been satisfied, that would have been required to have been deposited
but for the satisfaction of such conditions) in the Collection Account on the
Determination Date relating to such Class A-1 Final Scheduled Distribution Date
which would have constituted the Interest Distribution Amount or Available
Principal, as the case may be, for the Due Period relating to the succeeding
Distribution Date and the Interest Distribution Amount and Available Principal,
as the case may be, for such succeeding Distribution Date will be reduced
accordingly.
"Transfer Date" means, with respect to any Distribution Date, the
Business Day preceding such Distribution Date.
"Trust" means the Issuer.
"Trust Account Property" means the Trust Accounts, all amounts and
investments held from time to time in any Trust Account (whether in the form of
deposit accounts, Physical Property, book-entry securities, uncertificated
securities or otherwise), including the Reserve Account Initial Deposit, and all
proceeds of the foregoing.
"Trust Accounts" has the meaning assigned thereto in Section 4.1.
"Trust Agreement" means the Trust Agreement dated as of __________,
199_ between the Seller and the Owner Trustee, as the same may be amended and
supplemented from time to time.
"Trust Officer" means, (i) in the case of the Trustee, any Officer
within the Corporate Trust Office of the Trustee, including any Vice President,
Assistant Vice President, Assistant Treasurer, Assistant Secretary or any other
officer of the Trustee customarily performing functions similar to those
performed by any of the above designated officers and also, with respect to a
particular matter, any other officer to whom such matter is referred because of
such officer's knowledge of and familiarity with the particular subject and (ii)
in the case of the Owner Trustee, any officer in the corporate trust office of
the Owner Trustee with direct responsibility for the administration of this
Agreement or any of the Basic Documents on behalf of the Owner Trustee.
"Trustee" means the Person acting as Trustee under the Indenture, its
successors in interest and any successor trustee under the Indenture, or, if at
the date of determination instruments acknowledging satisfaction and discharge
of the Indenture with respect to the Notes have been executed as provided in
Section 4.1 of the Indenture, then "Trustee" shall mean the Owner Trustee.
SECTION 1.2. OTHER DEFINITIONAL PROVISIONS. (a) Capitalized terms used
herein and not otherwise defined herein have the meanings assigned to them in
the Indenture, or, if not defined therein, in the Trust Agreement.
(b) All terms defined in this Agreement shall have the defined
meanings when used in any instrument governed hereby and in any certificate or
other document made or delivered pursuant hereto unless otherwise defined
therein.
(c) As used in this Agreement, in any instrument governed
hereby and in any certificate or other document made or delivered pursuant
hereto or thereto, accounting terms not defined in this Agreement or in any such
instrument, certificate or other document, and accounting terms partly defined
in this Agreement or in any such instrument, certificate or other document to
the extent not defined, shall have the respective meanings given to them under
generally accepted accounting principles as in effect on the date of this
Agreement or any such instrument, certificate or other document, as applicable.
To the extent that the definitions of accounting terms in this Agreement or in
any such instrument, certificate or other document are inconsistent with the
meanings of such terms under generally accepted accounting principles, the
definitions contained in this Agreement or in any such instrument, certificate
or other document shall control.
(d) The words "hereof," "herein," "hereunder" and words of
similar import when used in this Agreement shall refer to this Agreement as a
whole and not to any particular provision of this Agreement; Section and Exhibit
references contained in this Agreement are references to Sections and Exhibits
in or to this Agreement unless otherwise specified; and the term "including"
shall mean "including without limitation."
(e) The definitions contained in this Agreement are applicable
to the singular as well as the plural forms of such terms and to the masculine
as well as to the feminine and neuter genders of such terms.
SECTION 1.3. INTEREST CALCULATIONS. Unless otherwise provided in the
applicable Mortgage Note, Mortgage or Mortgage File, all calculations of
interest hereunder that are made in respect of the Principal Balance of a
Mortgage Loan or in respect of the Notes or the Certificates shall be made on
the basis of a 360-day year consisting of twelve 30-day months. The calculation
of the Servicing Fee shall be made on the basis of the actual number of days
elapsed and a year assumed to consist of 365 days.
ARTICLE II
Conveyance of Mortgage Loans
SECTION 2.1. Conveyance of Mortgage Loans. (a) In consideration of the
Issuer's delivery to or upon the order of the Seller on the Closing Date of the
net proceeds from the sale of the Notes and the Certificates and the other
amounts to be distributed from time to time to the Seller in accordance with the
terms of this Agreement, the Seller does hereby sell, transfer, assign, set over
and otherwise convey to the Issuer, without recourse (subject to the obligations
herein): (A) all right, title and interest of the Seller in and to the Mortgage
Loans, and all moneys received thereon, on or after the Cut-off Date; (B) all
right, title and interest of the Seller in the security interests in the
Mortgaged Properties granted by Mortgagors pursuant to the Mortgage Loans and
any other interest of the Seller in the Mortgaged Properties; (C) the interest
of the Seller in any proceeds with respect to the Mortgage Loans from claims on
any physical damage, theft, credit life or disability insurance policies
covering Mortgaged Properties or Mortgagors; (D) all right, title and interest
in all funds on deposit from time to time in the Certificate Distribution
Account, in the Trust Accounts, including the Reserve Account Initial Deposit,
and in all investments and proceeds thereof (including all income thereon); and
(E) the proceeds of any and all of the foregoing. In connection with such
transfer, assignment and conveyance by the Seller, the Seller shall deliver to,
and deposit with the Trustee, on or before the Closing Date, the following
documents or instruments with respect to each Mortgage Loan (the "Related
Documents"): (i) The original Mortgage Note, with all prior and intervening
endorsements showing a complete chain of endorsements from the originator of the
Mortgage Loan to the Person so endorsing the Mortgage Loan to the Trustee,
endorsed by such Person "Pay to the order of ___________, as Trustee for ▇▇▇▇▇▇▇
Mortgage Securities Trust 199_-_ without recourse" and signed, by facsimile or
manual signature, in the name of the Seller by a Responsible Officer; (ii) Any
of: (1) the original Mortgage, and related power of attorney, if any, with
evidence of recording thereon, (2) a copy of the Mortgage and related power of
attorney, if any, certified as a true copy of the original Mortgage or power of
attorney by a Responsible Officer of the Seller or by the closing attorney by
facsimile or manual signature, or by an officer of the title insurer or agent of
the title insurer that issued the related title insurance policy if the original
has been transmitted for recording until such time as the original is returned
by the public recording office or (3) a copy of the Mortgage and related power
of attorney, if any, certified by the public recording office; (iii) The
original Assignment of Mortgage in recordable form, to "__________ , as Trustee
for Structured Asset Mortgage Investments Trust 199_-_ ". Any such Assignments
of Mortgage may be made by blanket assignments for Mortgage Loans secured by the
Mortgaged Properties in the same county, if permitted by applicable law; (iv)
The original lender's policy of title insurance or a true copy thereof, or if
such original lender's title insurance policy has been lost, a copy thereof
certified by the appropriate title insurer to be true and complete, or if such
lender's title insurance policy has not been issued as of the Closing Date, a
marked up commitment (binder) to issue such policy; (v) All intervening
assignments, if any, showing a complete chain of assignments from the originator
to the Seller, including any recorded warehousing assignments, with evidence of
recording thereon, certified by a Responsible Officer of the Seller by facsimile
or manual signature as a true copy of the original of such intervening
assignments; and (vi) Originals of all assumption, written assurance,
substitution and modification agreements, if any. In instances where the
original recorded Mortgage cannot be delivered by the Seller to the Trustee
prior to or concurrently with the execution and delivery of this Agreement due
to a delay in connection with recording, the Seller may in lieu of delivering
such original recorded Mortgage, deliver to the Trustee a copy thereof, provided
that the Seller certifies that the original Mortgage has been delivered to a
title insurance company for recordation after receipt of its policy of title
insurance or binder therefor. In all such instances, the Seller will deliver or
cause to be delivered the original recorded Mortgage to the Trustee promptly
upon receipt of the original recorded Mortgage but in no event later than one
year after the Closing Date.
(b) The Trustee agrees, for the benefit of the Noteholders and the
Certificateholders, within 90 days after execution and delivery of this
Agreement, to review the Mortgage Files to ascertain that all required documents
set forth in paragraphs (i) -- (v) of Section 2.1(a) have been executed and
received, and that the Mortgage Notes have been endorsed as set forth in Section
2.1(a), and that such documents relate to the Mortgage Loans identified on the
Mortgage Loan Schedule and in so doing the Trustee may rely on the purported due
execution and genuineness of any signature thereon. If within such 90-day period
the Trustee finds any document constituting a part of a Mortgage File not to
have been executed or received or to be unrelated to the Mortgage Loans
identified in said Mortgage Loan Schedule or, if in the course of its review,
the Trustee determines that such Mortgage File is otherwise defective in any
material respect, the Trustee shall promptly upon the conclusion of its review
notify the Seller, and the Seller shall have a period of 90 days after such
notice within which to correct or cure any such defect.
(c) The Trustee shall have no responsibility for reviewing any
Mortgage File except as expressly provided in Section 2.1(b). Without limiting
the effect of the preceding sentence, in reviewing any Mortgage File pursuant to
such subsection, the Trustee shall have no responsibility for determining
whether any document is valid and binding, whether the text of any assignment or
endorsement is in proper or recordable form (except, if applicable, to determine
if the Trustee is the assignee or endorsee), whether any document has been
recorded in accordance with the requirements of any applicable jurisdiction, or
whether a blanket assignment is permitted in any applicable jurisdiction, but
shall only be required to determine whether a document has been executed, that
it appears to be what it purports to be, and, where applicable, that it purports
to be recorded, but shall not be required to determine whether any Person
executing any document is authorized to do so or whether any signature thereon
is genuine.
SECTION 2.2. Acceptance by Trustee. The Trustee hereby acknowledges,
subject to the review and period for delivery provided for in Section 2.1, its
receipt of the Mortgage Files, and declares that the Trustee holds and will hold
such documents and all amounts received by it thereunder and hereunder in trust,
upon the terms herein set forth, for the use and benefit of all present and
future Noteholders and Certificateholders. If the Seller is given notice under
Section 2.1(c) above and if the Seller does not correct or cure such omission or
defect within the 90-day period specified in Section 2.1(c) above, the Seller
shall substitute one or more Eligible Substitute Mortgage Loans therefor as
provided in Section 2.5 hereof or purchase such Mortgage Loan from the Trustee
on the Determination Date in the month following the month in which such 90-day
period expired at the Purchase Price of such Mortgage Loan. The Purchase Price
for the purchased Mortgage Loan shall be deposited in the Collection Account no
later than the applicable Determination Date or the Business Day preceding the
expiration of such 90-day period, as the case may be, and, upon receipt by the
Trustee of written notification of such deposit signed by an officer of the
Seller, the Trustee shall release to the Seller the related Mortgage File and
the Trustee shall execute and deliver such instruments of transfer or
assignment, in each case without recourse, as shall be necessary to vest in the
Seller or its designee any Mortgage Loan released pursuant hereto. It is
understood and agreed that the obligation of the Seller to cure, substitute for
or purchase any Mortgage Loan as to which a material defect in or omission of a
constituent document exists shall constitute the sole remedy against the Seller
respecting such defect or omission available to the Issuer.
SECTION 2.4. Intentionally Omitted.
SECTION 2.4. REPRESENTATIONS AND WARRANTIES OF THE SELLER REGARDING
THE MORTGAGE LOANS. The Seller represents and warrants to the Issuer as follows
as of the Closing Date: [Insert representations and warranties regarding the
Mortgage Loans.].
SECTION 2.5. SUBSTITUTION OF MORTGAGE LOANS. (a) On a Determination
Date within two years following the Closing Date and which is on or before the
date on which the Seller would otherwise be required to repurchase a Mortgage
Loan under Section 2.2 or 2.4, the Seller may deliver to the Trustee one or more
Eligible Substitute Mortgage Loans in substitution for any one or more of the
Defective Mortgage Loans which the Seller would otherwise be required to
repurchase pursuant to Sections 2.2 or 2.4. (b) The Seller shall notify the
Issuer, the Owner Trustee, the Servicer and the Trustee in writing not less than
five Business Days before the related Determination Date which is on or before
the date on which the Seller would otherwise be required to repurchase such
Mortgage Loan pursuant to Section 2.2 or 2.4 of its intention to effect a
substitution under this Section. On such Determination Date (the "Substitution
Date"), the Seller shall deliver to the Issuer (1) the Eligible Substitute
Mortgage Loans to be substituted for the Original Mortgage Loans, (2) a list of
the Original Mortgage Loans to be substituted for by such Eligible Substitute
Mortgage Loans, (3) an Officers' Certificate (A) stating that no failure by the
Servicer described in Section 7.1 shall have occurred and be continuing, (B)
stating that all conditions precedent to such substitution specified in
subsection (a) have been satisfied and attaching as an exhibit a supplemental
Mortgage Loan schedule (the "Supplemental Mortgage Loan Schedule") setting forth
the same type of information as appears on the Mortgage Loan Schedule and
representing as to the accuracy thereof and (C) confirming that the
representations and warranties contained in Section 2.4 are true and correct in
all material respects with respect to the Substitute Mortgage Loans on and as of
such Determination Date, provided that remedies for the inaccuracy of such
representations are limited as set forth in Sections 2.2, 2.4 and this Section
2.5 and (4) a certificate stating that cash in the amount of the related
Substitution Adjustment, if any, has been deposited to the Collection Account.
Upon receipt of the foregoing, the Issuer shall release such Original Mortgage
Loans to the Seller. (c) Concurrently with the satisfaction of the conditions
set forth in Section 2.5(a) and (b) above and the grant of such Eligible
Substitute Mortgage Loans to the Trustee pursuant to Section 2.5(a) above,
Exhibit A to this Agreement shall be deemed to be amended to exclude all
Mortgage Loans being replaced by such Eligible Substitute Mortgage Loans and to
include the information set forth on the Supplemental Mortgage Loan Schedule
with respect to such Eligible Substitute Mortgage Loans, and all references in
this Agreement to Mortgage Loans shall include such Eligible Substitute Mortgage
Loans and be deemed to be made on or after the related Substitution Date, as the
case may be, as to such Eligible Substitute Mortgage Loans.
ARTICLE III
Administration and Servicing of Mortgage Loans
SECTION 3.1. DUTIES OF MASTER SERVICER. (a) The Master Servicer, as
agent for the Issuer (to the extent provided herein) shall supervise, or take
such actions as are necessary to ensure, the servicing and administration of the
Mortgage Loans and any REO Property in accordance with this Agreement and the
customary and usual standards of an institution prudently servicing mortgage
loans for its own account and shall have full authority to do anything it
reasonably deems appropriate in connection with such servicing and
administration. The Master Servicer shall maintain servicing standards
equivalent to those required for approval by ▇▇▇▇▇▇ ▇▇▇ or ▇▇▇▇▇▇▇ Mac. The
Master Servicer may perform its responsibilities relating to servicing through
other agents or independent contractors, but shall not thereby be released from
any of its responsibilities as hereinafter set forth. The authority of the
Master Servicer, in its capacity as Master Servicer, shall include the power to
(i) supervise the filing and collection of insurance claims and take or cause to
be taken such actions on behalf of the insured person thereunder as shall be
reasonably necessary to prevent the denial of coverage thereunder, and (ii)
effectuate foreclosure or other conversion of the ownership of the Mortgaged
Property securing a related Mortgage Loan, including the employment of
attorneys, the institution of legal proceedings, the collection of deficiency
judgments, the acceptance of compromise proposals, the filing of claims under
any Primary Insurance Policy and any other matter pertaining to a delinquent
Mortgage Loan. The authority of the Master Servicer shall include, in addition,
the power to (i) execute and deliver customary consents or waivers and other
instruments and documents, (ii) consent to transfers of any related Mortgaged
Property and assumptions of the related Mortgage Notes and Security Instruments
(but only in the manner provided in this Agreement) and (iii) collect any
Insurance Proceeds and Liquidation Proceeds. Without limiting the generality of
the foregoing, the Master Servicer is authorized and empowered to execute and
deliver, on behalf of itself, the Issuer, the Owner Trustee, the Trustee, the
Certificateholders and the Noteholders or any of them, any and all instruments
of satisfaction or cancellation, or partial or full release or discharge, and
all other comparable instruments, with respect to such Mortgage Loans or to the
Mortgaged Properties securing such Mortgage Loans.
(b) Notwithstanding the provisions of Subsection 3.1(a), the Master
Servicer shall not take any action inconsistent with the interest of the
Noteholders or the Certificateholders in the Mortgage Loans or with the rights
and interests of the Owner Trustee, the Trustee, the Noteholders or the
Certificateholders under this Agreement.
(c) The Owner Trustee shall furnish the Master Servicer with any
powers of attorney and other documents in form as provided to it necessary or
appropriate (as certified to the Owner Trustee by the Master Servicer) to enable
the Master Servicer to service and administer the related Mortgage Loans and REO
Property.
SECTION 3.2. COLLECTION AND ALLOCATION OF MORTGAGE LOAN PAYMENTS. (a)
The Master Servicer shall make reasonable efforts to collect all payments called
for under the terms and provisions of the Mortgage Loans as and when the same
shall become due and shall follow such collection procedures as it follows with
respect to all mortgage loans in its servicing portfolio comparable to the
Mortgage Loans that it services for itself or others.
(b) Consistent with the terms of this Agreement, the Master Servicer
may waive, modify or vary any term of any Mortgage Loan or consent to the
postponement of strict compliance with any such term or in any manner grant
indulgence to any Mortgagor if in the Master Servicer's determination such
waiver, modification, postponement or indulgence is not materially adverse to
the interests of the Noteholders and the Certificateholders; provided, however,
that the Master Servicer may not permit any modification with respect to any
Mortgage Loan that would change the Mortgage Rate, defer or forgive the payment
of any principal or interest (unless in connection with the liquidation of the
related Mortgage Loan) or extend the Final Scheduled Maturity Date on the
Mortgage Loan. No costs incurred by the Master Servicer in respect of Servicing
Advances shall for the purposes of distributions to Noteholders or
Certificateholders be added to the amount owing under the related Mortgage Loan.
(c) The Master Servicer, for the benefit of the Noteholders and the
Certificateholders, shall establish and maintain in the name of the Trustee an
Eligible Deposit Account (the "Collection Account"), bearing a designation
clearly indicating that the funds deposited therein are held for the benefit of
the Noteholders and the Certificateholders. The Collection Account shall
initially be established with the Trustee. The Master Servicer shall on the
Closing Date deposit into the Collection Account any amounts representing
payments on and any collections in respect of the Mortgage Loans received on or
after the Cut-off Date and prior to the Closing Date, and thereafter shall use
its best efforts to deposit within one Business Day, and shall in any event
deposit within _______ Business Days following receipt thereof the following
payments and collections received or made by it (without duplication) with
respect to the Mortgage Loans: (i) all payments received on and after the
Cut-off Date on account of principal on the Mortgage Loans and all full or
partial prepayments collected after the Cut-off Date; (ii) all payments received
on and after the Cut-off Date on account of interest on the Mortgage Loans;
(iii) all Net Liquidation Proceeds net of Foreclosure Profits; (iv) all
Insurance Proceeds; (v) all Released Mortgaged Property Proceeds; (vi) any
amounts payable in connection with the repurchase of any Mortgage Loan; and
(vii) any amount required to be deposited in the Collection Account pursuant to
Sections 3.5, 3.7, 3.15, 3.16 or 8.1; provided, however, that (x) with respect
to each Due Period, the Master Servicer shall be permitted to retain from
payments in respect of interest on the Mortgage Loans, the Servicing Fee for
such Due Period and (y) the Master Servicer shall be permitted to retain late
collections, including Liquidation Proceeds, Released Mortgaged Property
Proceeds and Insurance Proceeds, to the extent of any unpaid Servicing Fees,
unreimbursed Monthly Advances and/or Servicing Advances with respect to the
related Mortgage Loan. 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), late charges or penalties 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.
SECTION 3.3. WITHDRAWALS FROM EACH COLLECTION Account. The Trustee
shall withdraw or cause to be withdrawn funds from the Collection Account for
the following purposes with respect to the Mortgage Loans: (i) the deposits and
distributions required by Section 4.5(d); (ii) to the extent not retained by the
Master Servicer as provided in Section 3.2(c), to reimburse the Master Servicer
for any accrued unpaid Servicing Fees and for unreimbursed Monthly Advances and
Servicing Advances. The Master Servicer's right to reimbursement for unpaid
Servicing Fees and unreimbursed Servicing Advances shall be limited to late
collections on the related Mortgage Loan, including Liquidation Proceeds,
Released Mortgaged Property Proceeds, Insurance Proceeds and such other amounts
as may be collected by the Master Servicer from the related Mortgagor or
otherwise relating to the Mortgage Loan in respect of which such reimbursed
amounts are owed. If a Monthly Advance was made net of the Servicing Fee as
permitted by Section 3.15 hereof, no additional Servicing Fee for the related
Mortgage loan and Due Period shall be payable. The Master Servicer's right to
reimbursement from such Collection Account for unreimbursed Monthly Advances
shall be limited to late collections of interest on any Mortgage Loan and to
Liquidation Proceeds and Insurance Proceeds on related Mortgage Loans; (iii) to
withdraw any amount received from a Mortgagor that is recoverable and sought to
be recovered as a voidable preference by a trustee in bankruptcy pursuant to the
United States Bankruptcy Code in accordance with a final, nonappealable order of
a court having competent jurisdiction; (iv) (a) to make investments in Eligible
Investments and (b) to pay to the Master Servicer interest earned in respect of
Eligible Investments or on funds deposited in the Collection Account; (v) to
withdraw any funds deposited in such Collection Account that were not required
to be deposited therein (such as Servicing Compensation) or were deposited
therein in error and to pay such funds to the appropriate Person; (vi) to pay
the Master Servicer Servicing Compensation pursuant to Section 3.9 hereof to the
extent not retained or paid pursuant to Section 3.2(c); (vii) to withdraw funds
necessary for the conservation and disposition of REO Property pursuant to
Section 3.7; and (viii) to clear and terminate such Collection Account upon the
termination of this Agreement and to pay any amounts remaining therein in
accordance with Section 8.1(b).
SECTION 3.4. MAINTENANCE OF HAZARD INSURANCE; PROPERTY PROTECTION
EXPENSES. The Master Servicer shall cause to be maintained for each Mortgage
Loan fire and hazard insurance naming the Master Servicer as loss payee
thereunder providing extended coverage in an amount which is at least equal to
the lesser of (i) the maximum insurable value of the improvements securing such
Mortgage Loan from time to time, (ii) the combined principal balance owing on
such Mortgage Loan and any related First Lien and (iii) the minimum amount
required to compensate for damage or loss on a replacement cost basis. The
Master Servicer shall also maintain on property acquired upon foreclosure, or by
deed in-lieu of foreclosure, hazard insurance 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 which are a part of such property, (ii)
the combined principal balance owing on such Mortgage Loan and any related First
Lien and (iii) the minimum amount required to compensate for damage or loss on a
replacement cost basis at the time of such foreclosure, fire and or deed in lieu
of foreclosure plus accrued interest and the good-faith estimate of the Master
Servicer of related Servicing Advances 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 3.2. In
cases in which any Mortgaged Property is located in a federally designated flood
area, the hazard insurance to be maintained for the related Mortgage Loan shall
include flood insurance to the extent such flood insurance is available and the
Master Servicer has determined such insurance to be necessary in accordance with
accepted mortgage loan servicing standards for mortgage loans comparable to the
Mortgage Loans. All such flood insurance shall be in amounts equal to the least
of the amount in clause (i) above, clause (ii) above and the maximum amount of
insurance available under the National Flood Insurance Act of 1968, as amended.
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 Mortgage 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.
SECTION 3.5. MAINTENANCE OF MORTGAGE IMPAIRMENT INSURANCE POLICY. In
the event that the Master Servicer shall obtain and maintain a blanket policy
with an insurer having a General Policy rating of A:VIII or better in Best's Key
Rating Guide insuring against fire and hazards of extended coverage on all of
the Mortgage Loans, then, to the extent such policy names the Master Servicer as
loss payee and provides coverage in an amount equal to the aggregate unpaid
principal balance on the Mortgage Loans without co-insurance, and otherwise
complies with the requirements of Section 3.4, the Master Servicer shall be
deemed conclusively to have satisfied its obligations with respect to fire and
hazard insurance coverage under Section 3.4, it being understood and agreed that
such blanket 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 Section 3.4, and there shall
have been a loss which would have been covered by such policy, deposit in the
Collection Account the difference, if any, between the amount that would have
been payable under a policy complying with Section 3.4 and the amount paid under
such blanket policy. Upon the request of the Owner Trustee or the Trustee, the
Master Servicer shall cause to be delivered to the Owner Trustee or the Trustee
a certified true copy of such policy. In connection with its activities as
administrator and servicer of the Mortgage Loans, the Master Servicer agrees to
prepare and present, on behalf of itself, the Owner Trustee, the Trustee, the
Noteholders and the Certificateholders, claims under any such policy in a timely
fashion in accordance with the terms of such policy.
SECTION 3.6. FIDELITY BOND. The Master Servicer shall maintain with a
responsible company, and at its own expense, a blanket fidelity bond and an
errors and omissions insurance policy, in a minimum amount acceptable to ▇▇▇▇▇▇
▇▇▇ or ▇▇▇▇▇▇▇ Mac or otherwise in an amount as is commercially available at a
cost that is not generally regarded as excessive by industry standards, with
broad coverage on all officers, employees or other persons acting in any
capacity requiring such persons to handle funds, money, documents or papers
relating to the Mortgage Loans ("Master Servicer Employees"). Any such fidelity
bond and errors and omissions insurance shall protect and insure the Master
Servicer against losses, including losses resulting from forgery, theft,
embezzlement, fraud, errors and omissions and negligent acts of such Master
Servicer Employees. Such fidelity bond shall also protect and insure the Master
Servicer against losses in connection with the release or satisfaction of a
Mortgage Loan without having obtained payment in full of the indebtedness
secured thereby. No provision of this Section 3.6 requiring such fidelity bond
and errors and omissions insurance shall diminish or relieve the Master Servicer
from its duties and obligations as set forth in this Agreement. Upon the request
of the Owner Trustee or the Trustee, the Master Servicer shall cause to be
delivered to the Owner Trustee or the Trustee a certified true copy of such
fidelity bond and insurance policy.
SECTION 3.7. MANAGEMENT AND REALIZATION UPON DEFAULTED MORTGAGE LOANs.
On behalf of the Issuer, the Master Servicer shall manage, conserve, protect and
operate each REO Property for the Noteholders and the Certificateholders solely
for the purpose of its prudent and prompt disposition and sale. The Master
Servicer shall, either itself or through an agent selected by the Master
Servicer, manage, conserve, protect and operate the REO Property in the same
manner that it manages, conserves, protects and operates other foreclosed
property for its own account, and in the same manner that similar property in
the same locality as the REO Property is managed. The Master Servicer shall
attempt to sell the same (and may temporarily rent the same) on such terms and
conditions as the Master Servicer deems to be in the best interests of the
Noteholders and the Certificateholders. The Master Servicer shall cause to be
deposited, no later than ________ Business Days after the receipt thereof, in
the Collection Account, all revenues received with respect to the related REO
Property and shall retain, or cause the Trustee to withdraw therefrom funds
necessary for the proper operation, management and maintenance of the REO
Property and the fees of any managing agent acting on behalf of the Master
Servicer. The disposition of REO Property shall be carried out by the Master
Servicer for cash at such price, and upon such terms and conditions, as the
Master Servicer deems to be in the best interests of the Noteholders and the
Certificateholders and, as soon as practicable thereafter, the expenses of such
sale shall be paid. The cash proceeds of sale of the REO Property shall be
promptly deposited in the Collection Account, net of Foreclosure Profits and of
any related unreimbursed Servicing Advances, accrued and unpaid Servicing Fees
and unreimbursed Monthly Advances payable to the Master Servicer in accordance
with Section 3.3, for distribution to the Noteholders and the Certificateholders
in accordance with Section 4.5 hereof. The Master Servicer shall foreclose upon
or otherwise comparably convert to ownership Mortgaged Properties securing such
of the Mortgage Loans as come into and continue in default when no satisfactory
arrangements can be made for collection of delinquent payments pursuant to
Section 3.2. In the event that title to any Mortgaged Property is acquired in
foreclosure or by deed in lieu of foreclosure, the deed or certificate of sale
shall be issued to the Owner Trustee, or to its nominee on behalf of the
Noteholders and the Certificateholders.
SECTION 3.8. TRUSTEE TO COOPERATE. Upon payment in full of any
Mortgage Loan, the Master Servicer is authorized to execute, pursuant to the
authorization contained in Section 3.1, if the related Assignment of Mortgage
has been recorded as required hereunder, 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 is understood and agreed that no expenses incurred in
connection with such instrument of satisfaction or transfer shall be reimbursed
from amounts deposited in the Collection Account. If the Trustee is holding the
Mortgage Files, from time to time and as appropriate for the servicing or
foreclosure of any Mortgage Loan, the Trustee shall, upon request of the Master
Servicer and delivery to the Trustee of a Request for Release, in the form
approved by the Trustee signed by a Servicing Officer, release the related
Mortgage File to the Master Servicer, and the Trustee shall execute such
documents, in the forms provided by the Master Servicer, as shall be necessary
to the prosecution of any such proceedings or the taking of other servicing
actions. Such Request for Release shall obligate the Master Servicer to return
the Mortgage File to the Trustee when the need therefor by the Master Servicer
no longer exists unless the Mortgage Loan shall be liquidated, in which case,
upon receipt of a certificate of a Servicing Officer similar to that hereinabove
specified, the Request for Release shall be released by the Trustee to the
Master Servicer. In order to facilitate the foreclosure of the Mortgage securing
any Mortgage Loan that is in default following recordation of the related
Assignment of Mortgage in accordance with the provisions hereof, the Trustee
shall, if so requested in writing by the Master Servicer, execute an appropriate
assignment in the form provided to the Trustee by the Master Servicer to assign
such Mortgage Loan for the purpose of collection to the Master Servicer (any
such assignment shall unambiguously indicate that the assignment is for the
purpose of collection only), and, upon such assignment, such assignee for
collection will thereupon bring all required actions in its own name and
otherwise enforce the terms of the Mortgage Loan and deposit or credit the Net
Liquidation Proceeds, exclusive of Foreclosure Profits, received with respect
thereto in the Collection Account. In the event that all delinquent payments due
under any such Mortgage Loan are paid by the Mortgagor and any other defaults
are cured then the assignee for collection shall promptly reassign such Mortgage
Loan to the Trustee and return it to the place where the related Mortgage File
was being maintained.
SECTION 3.9. SERVICING FEE. The servicing fee for a Distribution Date
shall equal the product of (a) one-twelfth, (b) the Servicing Fee Rate and (c)
the Pool Balance as of the first day of the preceding Due Period (the "Servicing
Fee"). The Master Servicer shall also be entitled to all late payment charges
and other administrative fees or similar charges, including without limitation,
Foreclosure Profits, allowed by applicable law with respect to Mortgage Loans,
collected (from whatever source) on the Mortgage Loans (the "Supplemental
Servicing Fee"). The Master Servicer also shall be entitled to and may retain
from Collections the Servicing Fee, as provided herein. The Master Servicer, in
its discretion at its election, may defer receipt of all or any portion of the
Servicing Fee or Supplemental Servicing Fee for any Due Period to and until a
later Due Period for any reason, including in order to avoid a shortfall in any
payments due on any Notes or Certificates. Any such deferred amount shall be
payable to (or may be retained from subsequent collections by) the Master
Servicer on demand.
SECTION 3.10. MASTER SERVICER'S CERTIFICATE. On each Determination
Date, the Master Servicer shall deliver to the Owner Trustee, the Trustee and
the Seller, with a copy to the Rating Agencies, a Master Servicer's Certificate
containing all information necessary to make the distributions pursuant to
Sections 4.5 and 4.6 for the Due Period preceding the date of such Master
Servicer's Certificate. Mortgage Loans to be purchased by the Master Servicer or
to be repurchased by the Seller shall be identified by the Master Servicer by
account number with respect to such Mortgage Loan (as specified in Exhibit A).
SECTION 3.11 ANNUAL STATEMENT AS TO COMPLIANCE; NOTICE OF DEFAULT. (a)
The Master Servicer shall deliver to the Owner Trustee and the Trustee, on or
before of each year beginning _________, 199__, an Officers' Certificate, dated
as of December 31 of the preceding year, stating that (i) a review of the
activities of the Master Servicer during the preceding twelve-month period (or,
in the case of the first such report, during the period from the Closing Date to
December 31, 199__) and of its 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 Master Servicer has fulfilled all its
obligations under this Agreement throughout such year or, if there has been a
default in the fulfillment of any such obligation, specifying each such default
known to such officers and the nature and status thereof. The Trustee shall send
a copy of such certificate and the report referred to in Section 3.10 to the
Rating Agencies. A copy of such certificate and the report referred to in
Section 3.10 may be obtained by any Certificateholder by a request in writing to
the Owner Trustee addressed to the Corporate Trust Office (as defined in the
Trust Agreement) or by any Noteholder by a request in writing to the Trustee
addressed to the Corporate Trust Office. Upon the telephone request of the Owner
Trustee, the Trustee will promptly furnish the Owner Trustee a list of
Noteholders as of the date specified by the Owner Trustee.
(b) The Master Servicer shall deliver to the Owner Trustee, the
Trustee and the Rating Agencies, promptly after having obtained knowledge
thereof, but in no event later than _____ Business Days thereafter, written
notice in an Officers' Certificate of any event which with the giving of notice
or lapse of time, or both, would become a Servicer Default under Section 7.1(a)
or (b).
SECTION 3.12. ANNUAL INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS' REPORT.
The Master Servicer shall cause a firm of independent certified public
accountants, which may also render other services to the Master Servicer or the
Seller, to deliver to the Seller, the Owner Trustee and the Trustee on or before
of each year beginning __________, 199__, a letter addressed to the Master
Servicer, the Seller, the Owner Trustee and the Trustee and each Rating Agency,
to the effect that such firm has with respect to the Master Servicer's overall
servicing operations examined such operations in accordance with the
requirements of the Uniform Single Audit Program for Mortgage Bankers during the
preceding calendar year (or, in the case of the first such report, during the
period from the Closing Date to December 31, 199__), and stating such firm's
conclusions relating thereto. Such report will also indicate that the firm is
independent of the Master Servicer within the meaning of the Code of
Professional Ethics of the American Institute of Certified Public Accountants.
SECTION 3.13. ACCESS TO CERTAIN DOCUMENTATION AND INFORMATION
REGARDING MORTGAGE LOANS. The Master Servicer shall provide to the
Certificateholders and Noteholders access to the Mortgage Files in such cases
where the Certificateholders or Noteholders shall be required by applicable
statutes or regulations to review such documentation as demonstrated by evidence
satisfactory to the Master Servicer in its reasonable judgment. Access shall be
afforded without charge, but only upon reasonable request and during the normal
business hours at the respective offices of the Master Servicer. Nothing in this
Section 3.13 shall affect 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 to provide access to information as
provided in this Section 3.13 as a result of such obligation shall not
constitute a breach of this Section 3.13.
SECTION 3.14. MASTER SERVICER EXPENSES. The Master Servicer shall be
required to pay all expenses incurred by it in connection with its activities
hereunder, including fees and disbursements of independent accountants, taxes
imposed on the Master Servicer and expenses incurred in connection with
distributions and reports to Certificateholders and Noteholders.
SECTION 3.15. ADVANCES BY THE MASTER SERVICER. (a) Not later than the
close of business on the _______ Business Day preceding each Distribution Date,
the Master Servicer shall remit to the Trustee for deposit in the Collection
Account an amount, to be distributed on the related Distribution Date pursuant
to Section 4.5(d), equal to the sum of (a) the interest accrued on each Mortgage
Loan at the Mortgage Rate (or at such lower rate as may be in effect for such
Mortgage Loan pursuant to application of the Civil Relief Act and/or any Debt
Service Reduction) through the related Due Date, but not received as of the
close of business on the Determination Date for such Distribution Date (net of
the Servicing Fee) and (b) with respect to each REO Property which was acquired
during or prior to the related Due Period and as to which a final disposition
did not occur during the related Due Period, an amount equal to the excess, if
any, of interest on the Principal Balance of such REO Property at the Net Rate
for the most recently ended Due Period prior to the related Determination Date
for the related Mortgage Loan over the net income from the REO Property
transferred to the Collection Account for such Distribution Date pursuant to
Section 3.4; such sum being defined herein as the "Monthly Advance." The Master
Servicer may fund all or a portion of the Monthly Advance with respect to the
Mortgage Loans by instructing the Trustee on such Determination Date to use
funds deposited in the Collection Account which are not part of the Total
Distribution Amount for the related Distribution Date; provided that if such
funds are so used the Master Servicer shall replace such funds on or before any
subsequent Determination Date on which such funds are required to be part of the
Total Distribution Amount.
(b) Notwithstanding anything herein to the contrary, no Servicing
Advance or Monthly Advance shall be required to be made hereunder if the Master
Servicer determines that such Servicing Advance or Monthly Advance would, if
made, constitute a Nonrecoverable Advance.
SECTION 3.16. OPTIONAL PURCHASE OF DEFAULTED MORTGAGE Loans. The
Master Servicer, in its sole discretion, shall have the right to elect (by
written notice sent to the Seller, the Owner Trustee and the Trustee) to
purchase for its own account from the Issuer any Mortgage Loan which is 90 days
or more delinquent in the manner and at the price specified in Section 2.2. The
Purchase Price for any Mortgage Loan purchased hereunder shall be deposited in
the Collection Account and the Trustee, upon receipt of such deposit, shall
release or cause to be released to the Master Servicer or its designee the
related Mortgage File and shall execute and deliver such instruments of transfer
or assignment prepared by the purchaser of such Mortgage Loan, in each case
without recourse, as shall be necessary to vest in the purchaser of such
Mortgage Loan any Mortgage Loan released pursuant hereto and the purchaser of
such Mortgage Loan shall succeed to all the Issuer's right, title and interest
in and to such Mortgage Loan and all security and documents related thereto.
Such assignment shall be an assignment outright and not for security. The
purchaser of such Mortgage Loan shall thereupon own such Mortgage Loan, and all
security and documents, free of any further obligation to the Owner Trustee, the
Trustee, the Noteholders or the Certificateholders with respect thereto.
SECTION 3.16. SUPERIOR LIENS. The Master Servicer shall file (or cause
to be filed) of record a request for notice of any action by a superior
lienholder under a First Lien for the protection of the Issuer's interest, where
permitted by local law and whenever applicable state law does not require that a
junior lienholder be named as a party defendant in foreclosure proceedings in
order to foreclose such junior lienholder's equity of redemption. If the Master
Servicer is notified that any superior lienholder has accelerated or intends to
accelerate the obligations secured by the First Lien, or has declared or intends
to declare a default under the mortgage or the promissory note secured thereby,
or has filed or intends to file an election to have the Mortgaged Property sold
or foreclosed, the Master Servicer shall take, on behalf of the Trust, whatever
actions are necessary to protect the interests of the Noteholders and the
Certificateholders, and/or to preserve the security of the related Mortgage
Loan. The Master Servicer shall advance the necessary funds to cure the default
or reinstate the superior lien, if the Master Servicer reasonably believes such
advance is in the best interests of the Noteholders and the Certificateholders.
The Master Servicer shall not make such an advance except to the extent that it
determines in its reasonable good faith judgment that the advance would be
recoverable from Liquidation Proceeds on the related Mortgage Loan.
SECTION 3.17. PAYMENT OF TAXES, INSURANCE AND OTHER Charges. With
respect to each Mortgage Loan, the Master Servicer shall maintain accurate
records reflecting fire and hazard insurance coverage. With respect to each
Mortgage Loan as to which the Master Servicer maintains escrow accounts, the
Master Servicer shall maintain accurate records reflecting the status of ground
rents, taxes, assessments, water rates and other charges which are or may become
a lien upon the Mortgaged Property and the status of primary mortgage guaranty
insurance premiums, if any, and fire and hazard insurance coverage and shall
obtain, from time to time, all bills for the payment of such charges (including
renewal premiums) and shall effect payment thereof prior to the applicable
penalty or termination date and at a time appropriate for securing maximum
discounts allowable, employing for such purpose deposits of the Mortgagor in any
escrow account which shall have been estimated and accumulated by the Master
Servicer in amounts sufficient for such purposes, as allowed under the terms of
the Mortgage. To the extent that a Mortgage does not provide for escrow
payments, the Master Servicer shall, if it has received notice of a default or
deficiency, monitor such payments to determine if they are made by the
Mortgagor.
SECTION 3.18. APPOINTMENT OF SUB-SERVICER. The Master Servicer may at
any time appoint a sub-servicer to perform all or any portion of its obligations
as Master Servicer hereunder; provided, however, that the Rating Agency
Condition shall have been satisfied in connection therewith; provided further
that the Master Servicer shall remain obligated and be liable to the Issuer, the
Owner Trustee, the Trustee, the Certificateholders and the Noteholders for the
servicing and administering of the Mortgage Loans in accordance with the
provisions hereof without diminution of such obligation and liability by virtue
of the appointment of such sub-servicer and to the same extent and under the
same terms and conditions as if the Master Servicer alone were servicing and
administering the Mortgage Loans. The fees and expenses of the sub-servicer
shall be as agreed between the Master Servicer and its sub-servicer from time to
time and none of the Issuer, the Owner Trustee, the Trustee, the
Certificateholders or the Noteholders shall have any responsibility therefor.
ARTICLE IV
Distributions; Reserve Account; Statements to Certificateholders
and Noteholders
SECTION 4.1. ESTABLISHMENT OF TRUST ACCOUNTS. (a) (i) The Master
Servicer, for the benefit of the Noteholders, shall establish and maintain in
the name of the Trustee an Eligible Deposit Account (the "Note Distribution
Account"), bearing a designation clearly indicating that the funds deposited
therein are held for the benefit of the Noteholders. The Note Distribution
Account shall initially be established with the Trustee.
(ii) The Master Servicer, for the benefit of the
Noteholders and the Certificateholders, shall establish and maintain in the name
of the Trustee an Eligible Deposit Account (the "Reserve Account"), bearing a
designation clearly indicating that the funds deposited therein are held for the
benefit of the Noteholders and the Certificateholders. The Reserve Account shall
be maintained with the Trustee as long as the Trustee is an Eligible
Institution.
(b) Funds on deposit in the Collection Account, the Note
Distribution Account and the Reserve Account (collectively, the "Trust
Accounts") and the Certificate Distribution Account shall be invested by the
Trustee with respect to Trust Accounts and by the Owner Trustee with respect to
the Certificate Distribution Account (or any custodian with respect to funds on
deposit in any such account) in Eligible Investments selected in writing by the
Master Servicer (pursuant to standing instructions or otherwise); provided,
however, it is understood and agreed that neither the Trustee nor the Owner
Trustee shall be liable for any loss arising from such investment in Eligible
Investments. All such Eligible Investments shall be held by or on behalf of the
Trustee or the Owner Trustee, as applicable, for the benefit of the Noteholders
and the Certificateholders, the Noteholders or the Certificateholders, as
applicable; provided that on each Distribution Date all interest and other
investment income (net of losses and investment expenses) on funds on deposit
therein shall be deposited into the Collection Account and shall be deemed to
constitute a portion of the Interest Distribution Amount. Other than as
permitted by the Rating Agencies, funds on deposit in the Collection Account,
the Note Distribution Account, the Certificate Distribution Account and the
Reserve Account shall be invested in Eligible Investments that will mature so
that such funds will be available at the close of business on the Transfer Date
preceding the following Distribution Date. Funds deposited in a Trust Account or
the Certificate Distribution Account on a Transfer Date which immediately
precedes a Distribution Date upon the maturity of any Eligible Investments are
not required to be invested overnight.
(c) (i) The Trustee shall possess all right, title and interest
in all funds on deposit from time to time in the Trust Accounts and in all
proceeds thereof (including all income thereon) and all such funds, investments,
proceeds and income shall be part of the Owner Trust Estate. Except as otherwise
provided herein, the Trust Accounts shall be under the sole dominion and control
of the Trustee for the benefit of the Noteholders and the Certificateholders, or
the Noteholders, as the case may be. If, at any time, any of the Trust Accounts
or the Certificate Distribution Account ceases to be an Eligible Deposit
Account, the Trustee (or the Master Servicer on its behalf) or the Owner
Trustee, as applicable, shall within ____ Business Days (or such longer period
as to which each Rating Agency may consent) establish a new Trust Account or a
new Certificate Distribution Account, as applicable, as an Eligible Deposit
Account and shall transfer any cash and/or any investments to such new Trust
Account or a new Certificate Distribution Account, as applicable. In connection
with the foregoing, the Master Servicer agrees that, in the event that any of
the Trust Accounts are not accounts with the Trustee, the Master Servicer shall
notify the Trustee in writing promptly upon any of such Trust Accounts ceasing
to be an Eligible Deposit Account.
(iii) With respect to the Trust Account
Property, the Trustee, and with respect to the Certificate Distribution Account,
the Owner Trustee, agrees, by its respective acceptance hereof, that: (A) any
Trust Account Property or any property in the Certificate Distribution Account
that is held in deposit accounts shall be held solely in the Eligible Deposit
Accounts subject to the penultimate sentence of Section 4.1(c)(i); and, except
as otherwise provided herein, each such Eligible Deposit Account shall be
subject to the exclusive custody and control of the Trustee with respect to the
Trust Accounts and the Owner Trustee with respect to the Certificate
Distribution Account, and the Trustee or the Owner Trustee, as applicable, shall
have sole signature authority with respect thereto; (B) any Trust Account
Property that constitutes Physical Property shall be delivered to the Trustee in
accordance with paragraph (a) of the definition of "Delivery" and shall be held,
pending maturity or disposition, solely by the Trustee or a financial
intermediary (as such term is defined in Section 8-313(4) of the UCC) acting
solely for the Trustee; (C) any Trust Account Property that is a book-entry
security held through the Federal Reserve System pursuant to federal book-entry
regulations shall be delivered in accordance with paragraph (b) of the
definition of "Delivery" and shall be maintained by the Trustee, pending
maturity or disposition, through continued book-entry registration of such Trust
Account Property as described in such paragraph; and (D) any Trust Account
Property that is an "uncertificated security" under Article 8 of the UCC and
that is not governed by clause (C) above shall be delivered to the Trustee in
accordance with paragraph (c) of the definition of "Delivery" and shall be
maintained by the Trustee, pending maturity or disposition, through continued
registration of the Trustee's (or its nominee's) ownership of such security.
(iv) The Master Servicer shall have the power,
revocable by the Trustee or by the Owner Trustee with the consent of the
Trustee, to instruct the Trustee to make withdrawals and payments from the Trust
Accounts for the purpose of permitting the Master Servicer or the Owner Trustee
to carry out its respective duties hereunder or permitting the Trustee to carry
out its duties under the Indenture.
SECTION 4.2. INTENTIONALLY OMITTED.
SECTION 4.3. APPLICATION OF COLLECTIONS. All collections for the Due
Period shall be applied by the Master Servicer to interest and then to
principal. All Liquidation Proceeds shall be applied to the related Mortgage
Loan in accordance with the Master Servicer's customary servicing procedures.
SECTION 4.4. ADDITIONAL DEPOSITS. The Master Servicer and the Seller
shall deposit or cause to be deposited in the Collection Account the aggregate
Purchase Price with respect to Purchased Mortgage Loans and the Seller shall
deposit therein all amounts to be paid under Section 8.1. The Master Servicer
will deposit the aggregate Purchase Price with respect to Purchased Mortgage
Loans within ________ Business Days after such obligations become due, unless
the Master Servicer shall not be required to make deposits within two Business
Days of receipt pursuant to Section 3.2(c) (in which case such deposit will be
made by the related Transfer Date). All such other deposits shall be made on the
Transfer Date following the end of the related Due Period.
SECTION 4.5. DISTRIBUTIONS. (a) On each Distribution Date, the Trustee
shall cause to be transferred to the Collection Account, in immediately
available funds, the aggregate prepayments for the related Due Period, pursuant
to Sections 4.3, and any additional amounts required by Section 4.4, in the
amounts set forth in the Master Servicer's Certificate for such Distribution
Date. A single, net transfer may be made.
(b) On each Determination Date, the Master Servicer shall
calculate all amounts required to determine the amounts to be deposited from the
Reserve Account into the Collection Account and from the Collection Account into
the Note Distribution Account and the Certificate Distribution Account.
(c) On or before each Distribution Date, the Master Servicer
shall instruct the Trustee (based on the information contained in the Master
Servicer's Certificate delivered on the related Determination Date pursuant to
Section 3.10) to withdraw from the Reserve Account and deposit in the Collection
Account and the Trustee shall so withdraw and deposit the Reserve Account
Transfer Amount for such Distribution Date.
(d) On each Distribution Date, the Master Servicer shall
instruct the Trustee (based on the information contained in the Master
Servicer's Certificate delivered on the related Determination Date pursuant to
Section 3.10) to make, and the Trustee shall make, the following deposits and
distributions from the Collection Account for deposit in the applicable Account
by ________ [A.M.][P.M.], to the extent of the Total Distribution Amount, in the
following order of priority: (i) to the Master Servicer, from the Total
Distribution Amount, the Total Servicing Fee; (ii) to the Note Distribution
Account, from the Total Distribution Amount remaining after the application of
clause (i), the Noteholders' Interest Distributable Amount; (iii) to the Owner
Trustee for deposit in the Certificate Distribution Account, from the Total
Distribution Amount remaining after the application of clause (i) and clause
(ii), the Certificateholders' Interest Distributable Amount; (iv) to the Note
Distribution Account, from the Total Distribution Amount remaining after the
application of clauses (i) through (iii), the Noteholders' Principal
Distributable Amount; and (v) to the Owner Trustee for deposit in the
Certificate Distribution Account, from the Total Distribution Amount remaining
after the application of clauses (i) through (iv), the Certificateholders'
Principal Distributable Amount; provided, however, that following the occurrence
of an Event of Default pursuant to Section 5.1(i), 5.1(ii), 5.1(iv) or 5.1(v) of
the Indenture, an acceleration of the Notes pursuant to Section 5.2 of the
Indenture or an Insolvency Event with respect to the holder of the GP Interest,
amounts on deposit in the Collection Account will be deposited in the Note
Distribution Account to the extent necessary to pay accrued and unpaid interest
on the Notes and then, to the extent funds are available therefore, principal on
the Notes until the principal balance of each class of Notes has been reduced to
zero, before any amounts are deposited in the Certificate Distribution Account.
Following the payment in full of the Notes, amounts on deposit in the Collection
Account will be deposited in the Certificate Distribution Account to the extent
necessary to pay accrued and unpaid interest on the Certificates and then, to
the extent funds are available therefore, principal on the Certificates until
the principal balance thereof has been reduced to zero. In the event that the
Collection Account is maintained with an institution other than the Trustee, the
Master Servicer shall instruct and cause such institution to make all deposits
and distributions pursuant to this Section 4.5(c) on the related Transfer Date.
SECTION 4.6. RESERVE ACCOUNT. (a) On the Closing Date, the Seller
shall deposit the Reserve Account Initial Deposit into the Reserve Account.
(b) If the amount on deposit in the Reserve Account on any
Distribution Date (after giving effect to any withdrawals therefrom on such
Distribution Date) is greater than the Specified Reserve Account Balance for
such Distribution Date, the Master Servicer shall instruct the Trustee to
distribute, and the Trustee shall distribute, the amount of the excess to the
Seller. Amounts properly distributed to the Seller pursuant to this Section
4.6(b) shall be deemed released from the Trust and the security interest therein
granted to the Trustee and the Seller shall in no event thereafter be required
to refund any such distributed amounts.
SECTION 4.7. INTENTIONALLY OMITTED .
SECTION 4.8. STATEMENTS TO CERTIFICATEHOLDERS AND NOTEHOLDERS. On each
Determination Date, the Master Servicer shall provide to the Trustee (with a
copy to the Rating Agencies) for the Trustee to forward to each Noteholder of
record, to each Paying Agent, if any, and to the Owner Trustee for the Owner
Trustee to forward to each Certificateholder of record, a statement setting
forth at least the following information as to the Notes and the Certificates to
the extent applicable: (i) the amount of such distribution allocable to
principal of each class of Notes and to the Certificate Balance of the
Certificates; (ii) the amount of such distribution allocable to interest on or
with respect to each class of Notes and to the Certificates; (iii) the aggregate
outstanding principal balance of each class of the Notes and the Certificate
Balance after giving effect to payments allocated to principal reported under
(i) above; (iv) the amount of the Total Servicing Fee paid to the Master
Servicer with respect to the related Due Period; (v) The amount of the Monthly
Advances payment to be made on the Determination Date; (vi) the amount of the
aggregate Realized Losses, if any, for such Due Period; (vii) the Reserve
Account Transfer Amount, if any, for such Distribution Date, the average of the
Charge-off Rates and the Delinquency Percentages for the three preceding Due
Periods, the Specified Reserve Account Balance for such Distribution Date, the
amount distributed to the Seller from the Reserve Account on such Distribution
Date, and the balance of the Reserve Account (if any) on such Distribution Date,
after giving effect to changes therein on such Distribution Date; (viii) the
Noteholders' Interest Carryover Shortfall, the Certificateholders' Interest
Carryover Shortfall, the Noteholders' Principal Carryover Shortfall, and the
Certificateholders' Principal Carryover Shortfall; (ix) the amounts which are
reimbursable to the Master Servicer for Reimbursable Amounts and Nonrecoverable
Advances; (x) the amount of Servicing Advances for the preceding Due Period; and
(xi) the aggregate Purchase Price paid by the Seller or the Master Servicer with
respect to the related Due Period. Each amount set forth pursuant to paragraph
(i), (ii), (vi) or (xi) above shall be expressed as a dollar amount per $1,000
of the initial principal balance of the Notes (or class thereof) or the initial
Certificate Balance, as applicable.
SECTION 4.9. NET DEPOSITS. As an administrative convenience, unless
the Master Servicer is required to remit collections within _____ Business Days
of receipt thereof, the Master Servicer will be permitted to make the deposit of
collections on the Mortgage Loans and Purchase Prices for or with respect to the
Due Period net of distributions to be made to the Master Servicer with respect
to the Due Period. The Master Servicer, however, will account to the Owner
Trustee, the Trustee, the Noteholders and the Certificateholders as if all
deposits, distributions and transfers were made individually.
ARTICLE V
The Seller
SECTION 5.1. REPRESENTATIONS OF SELLER. The Seller makes the following
representations on which the Issuer is deemed to have relied in acquiring the
Mortgage Loans. The representations speak as of the execution and delivery of
this Agreement and shall survive the sale of the Mortgage Loans to the Issuer
and the pledge thereof to the Trustee pursuant to the Indenture.
(a) ORGANIZATION AND GOOD STANDING. The Seller is duly
organized and validly existing as a corporation in good standing under the laws
of the State of New York with the corporate power and authority to own its
properties and to conduct its business as such properties are currently owned
and such business is presently conducted, and had at all relevant times, and
has, the power, authority and legal right to acquire and own the Mortgage Loans.
(b) DUE QUALIFICATION. The Seller is duly qualified to do
business as a foreign corporation in good standing, and has obtained all
necessary licenses and approvals in all jurisdictions in which the ownership or
lease of property or the conduct of its business shall require such
qualifications.
(c) POWER AND AUTHORITY OF THE SELLER. The Seller has the
corporate power and authority to execute and deliver this Agreement and to
perform its obligations under each of the Basic Documents to which the Seller is
a party; the Seller has full corporate power and authority to sell and assign
the property to be sold and assigned to and deposited with the Issuer and the
Seller has duly authorized such sale and assignment to the Issuer by all
necessary corporate action; and the execution, delivery and performance of each
of the Basic Documents to which the Seller is a party has been duly authorized
by the Seller by all necessary corporate action.
(d) BINDING OBLIGATION. This Agreement and each of the Basic
Documents to which the Seller is a party constitute legal, valid and binding
obligations of the Seller, enforceable in accordance with its terms, subject to
applicable bankruptcy, insolvency, moratorium, fraudulent conveyance,
reorganization and similar laws now or hereafter in effect relating to
creditors' rights generally and subject to general principles of equity (whether
applied in a proceeding at law or in equity).
(e) NO VIOLATION. The consummation of the transactions
contemplated by this Agreement and the fulfillment of the terms hereof do not
result in any breach of any of the terms and provisions of, or constitute (with
or without notice or lapse of time or both) a default under, the certificate of
incorporation or by-laws of the Seller, or any material indenture, agreement or
other instrument to which the Seller is a party or by which it shall be bound;
or result in the creation or imposition of any Lien upon any of its properties
pursuant to the terms of any such indenture, agreement or other instrument
(other than pursuant to the Basic Documents); or violate any law or, to the best
of its knowledge, any order, rule or regulation applicable to the Seller of any
court or of any federal or state regulatory body, administrative agency or other
governmental instrumentality having jurisdiction over the Seller or its
properties.
(f) NO PROCEEDINGS. There are no proceedings or investigations
pending against the Seller or, to its best knowledge, threatened against the
Seller, before any court, regulatory body, administrative agency or other
governmental instrumentality having jurisdiction over the Seller or its
properties: (i) asserting the invalidity of this Agreement or any of the Basic
Documents, the Notes or the Certificates, (ii) seeking to prevent the issuance
of the Notes or the Certificates or the consummation of any of the transactions
contemplated by this Agreement or any of the Basic Documents, (iii) seeking any
determination or ruling that could reasonably be expected to have a material and
adverse effect on the performance by the Seller of its obligations under, or the
validity or enforceability of the Basic Documents, the Notes or the Certificates
or (iv) seeking to affect adversely the federal or state income tax or ERISA
attributes of the Issuer, the Notes or the Certificates.
(g) ALL CONSENTS. All authorizations, consents, orders or
approvals of or registrations or declarations with any court, regulatory body,
administrative agency or other government instrumentality required to be
obtained, effected or given by the Seller in connection with the execution and
delivery by the Seller of this Agreement or any of the Basic Documents to which
it is a party and the performance by the Seller of the transactions contemplated
by this Agreement or any of the Basic Documents to which it is a party, have
been duly obtained, effected or given and are in full force and effect, except
where failure to obtain the same would not have a material adverse effect upon
the rights of the Issuer, the Noteholders or the Certificateholders.
SECTION 5.2. CORPORATE EXISTENCE. (a) During the term of this
Agreement, the Seller will keep in full force and effect its existence, rights
and franchises as a corporation under the laws of the jurisdiction of its
incorporation and will obtain and preserve its qualification to do business in
each jurisdiction in which such qualification is or shall be necessary to
protect the validity and enforceability of this Agreement, the Basic Documents
and each other instrument or agreement necessary or appropriate to the proper
administration of this Agreement and the transactions contemplated hereby.
(b) During the term of this Agreement, the Seller shall
observe the applicable legal requirements for the recognition of the Seller as a
legal entity separate and apart from its Affiliates, including as follows: (i)
the Seller shall maintain corporate records and books of account separate from
those of its Affiliates; (ii) except as otherwise provided in this Agreement,
the Seller shall not commingle its assets and funds with those of its
Affiliates; (iii) the Seller shall hold such appropriate meetings of its Board
of Directors as are necessary to authorize all the Seller's corporate actions
required by law to be authorized by the Board of Directors, shall keep minutes
of such meetings and of meetings of its stockholder(s) and observe all other
customary corporate formalities (and any successor Seller not a corporation
shall observe similar procedures in accordance with its governing documents and
applicable law); and (iv) the Seller shall at all times hold itself out to the
public under the Seller's own name as a legal entity separate and distinct from
its Affiliates.
SECTION 5.3 LIABILITY OF SELLER; INDEMNITIES. The Seller shall be
liable in accordance herewith only to the extent of the obligations specifically
undertaken by the Seller under this Agreement.
(a) The Seller shall indemnify, defend and hold harmless the
Issuer, the Owner Trustee and the Trustee and their respective officers,
directors, employees and agents from and against any taxes that may at any time
be asserted against any such Person with respect to the transactions
contemplated in this Agreement and any of the Basic Documents (except any income
taxes arising out of fees paid to the Owner Trustee or the Trustee and except
any taxes to which the Owner Trustee or the Trustee may otherwise be subject
to), including any sales, gross receipts, general corporation, tangible personal
property, privilege or license taxes (but, in the case of the Issuer, not
including any taxes asserted with respect to, and as of the date of, the sale of
the Mortgage Loans to the Owner Trustee on behalf of the Issuer or the issuance
and original sale of the Certificates and the Notes, or asserted with respect to
ownership of the Mortgage Loans or federal or other income taxes arising out of
distributions on the Certificates and the Notes) and costs and expenses in
defending against the same or in connection with any application relating to the
Notes or Certificates under any state securities laws.
(b) The Seller shall indemnify, defend and hold harmless the
Issuer, the Owner Trustee, the Trustee, the Certificateholders and the
Noteholders and the officers, directors, employees and agents of the Issuer, the
Owner Trustee and the Trustee from and against any and all costs, expenses,
losses, claims, damages and liabilities to the extent arising out of, or imposed
upon such Person through (i) the Seller's willful misfeasance, bad faith or
negligence in the performance of its duties under this Agreement, or by reason
of reckless disregard of its obligations and duties under this Agreement and
(ii) the Seller's or the Issuer's violation of federal or state securities laws
in connection with the offering and sale of the Notes and the Certificates or in
connection with any application relating to the Notes or Certificates under any
state securities laws.
(c) The Seller shall be liable as primary obligor for, and
shall indemnify, defend and hold harmless the Owner Trustee and its officers,
directors, employees and agents from and against any and all costs, expenses,
losses, claims, damages and liabilities arising out of, or incurred in
connection with, this Agreement or any of the Basic Documents, the Owner Trust
Estate, the acceptance or performance of the trusts and duties set forth herein
and in the Trust Agreement or the action or the inaction of the Owner Trustee
hereunder and under the Trust Agreement, except to the extent that such cost,
expense, loss, claim, damage or liability: (i) shall be due to the willful
misfeasance, bad faith or negligence of the Owner Trustee, (ii) shall arise from
any breach by the Owner Trustee of its covenants under this Agreement or any of
the Basic Documents; or (iii) shall arise from the breach by the Owner Trustee
of any of its representations or warranties set forth in Section 7.3 of the
Trust Agreement. Such liability shall survive the termination of the Trust. In
the event of any claim, action or proceeding for which indemnity will be sought
pursuant to this paragraph, the Owner Trustee's choice of legal counsel shall be
subject to the approval of the Seller, which approval shall not be unreasonably
withheld.
(d) The Seller shall pay any and all taxes levied or assessed
upon all or any part of the Trust Estate (other than those taxes expressly
excluded from the Seller's responsibilities pursuant to the parentheticals in
paragraph (a) above). Indemnification under this Section shall survive the
resignation or removal of the Owner Trustee or the Trustee and the termination
of this Agreement or the Indenture or the Trust Agreement, as applicable, and
shall include reasonable fees and expenses of counsel and other expenses of
litigation. If the Seller shall have made any indemnity payments pursuant to
this Section and the Person to or on behalf of whom such payments are made
thereafter shall collect any of such amounts from others, such Person shall
promptly repay such amounts to the Seller, without interest.
SECTION 5.4. MERGER OR CONSOLIDATION OF, OR ASSUMPTION OF THE
OBLIGATIONS OF, SELLER. Any Person (a) into which the Seller may be merged or
consolidated, (b) which may result from any merger or consolidation to which the
Seller shall be a party or (c) which may succeed to the properties and assets of
the Seller substantially as a whole, shall be the successor to the Seller
without the execution or filing of any document or any further act by any of the
parties to this Agreement; provided, however, that the Seller hereby covenants
that it will not consummate any of the foregoing transactions except upon
satisfaction of the following: (i) the surviving Seller (if other than
Structured Asset Mortgage Investments Inc.) executes an agreement of assumption
to perform every obligation of the Seller under this Agreement, (ii) immediately
after giving effect to such transaction, no representation or warranty made
pursuant to Section 2.4 or 5.1 shall have been breached, (iii) the Seller shall
have delivered to the Owner Trustee and the Trustee an Officers' Certificate and
an Opinion of Counsel each stating that such consolidation, merger or succession
and such agreement of assumption comply with this Section and that all
conditions precedent, if any, provided for in this Agreement relating to such
transaction have been complied with, and that the Rating Agency Condition shall
have been satisfied with respect to such transaction, (iv) the surviving Seller
shall have a consolidated net worth at least equal to that of the predecessor
Seller, (v) such transaction will not result in a material adverse federal or
state tax consequence to the Issuer, the Noteholders or the Certificateholders
and (vi) unless Delta Funding Corporation, is the surviving entity, the Seller
shall have delivered to the Owner Trustee and the Trustee an Opinion of Counsel
either (A) stating that, in the opinion of such counsel, all financing
statements and continuation statements and amendments thereto have been executed
and filed that are necessary fully to preserve and protect the interest of the
Owner Trustee and Trustee, respectively, in the Mortgage Loans and reciting the
details of such filings, or (B) stating that, in the opinion of such counsel, no
such action shall be necessary to preserve and protect such interests.
SECTION 5.5. LIMITATION ON LIABILITY OF SELLER AND OTHERS. The Seller
and any director or officer or employee or agent of the Seller may rely in good
faith on the advice of counsel or on any document of any kind, prima facie
properly executed and submitted by any Person respecting any matters arising
under any Basic Document (provided that such reliance shall not limit in any way
the Seller's obligations under Sections 2.2 and 2.5). The Seller shall not be
under any obligation to appear in, prosecute or defend any legal action that
shall not be incidental to its obligations under this Agreement, and that in its
opinion may involve it in any expense or liability.
SECTION 5.6. SELLER MAY OWN CERTIFICATES OR NOTES. The Seller and any
Affiliate thereof may in its individual or any other capacity become the owner
or pledgee of Certificates or Notes with the same rights as it would have if it
were not the Seller or an Affiliate thereof, except as expressly provided herein
or in any Basic Document.
ARTICLE VI
The Master Servicer
SECTION 6.1. REPRESENTATIONS OF MASTER SERVICER. The Master Servicer
makes the following representations on which the Issuer is deemed to have relied
in acquiring the Mortgage Loans. The representations speak as of the execution
and delivery of the Agreement and shall survive the sale of the Mortgage Loans
to the Issuer and the pledge thereof to the Trustee pursuant to the Indenture.
(a) ORGANIZATION AND GOOD STANDING. The Master Servicer is
duly organized and validly existing as a corporation in good standing under the
laws of the State of __________ with the corporate power and authority to own
its properties and to conduct its business as such properties are currently
owned and such business is presently conducted, and had at all relevant times,
and has, the power, authority and legal right to service the Mortgage Loans.
(b) DUE QUALIFICATION. The Master Servicer is duly qualified
to do business and has obtained all necessary licenses and approvals in all
jurisdictions in which the ownership or lease of property or the conduct of its
business (including the servicing of the Mortgage Loans as required by this
Agreement) shall require such qualifications.
(c) POWER AND AUTHORITY OF THE MASTER SERVICER. The Master
Servicer has the corporate power and authority to execute and deliver this
Agreement and to perform its obligations hereunder, and the execution, delivery
and performance of this Agreement have been duly authorized by the Master
Servicer by all necessary corporate action. All authorizations, consents, orders
or approvals of or registrations or declarations with any court, regulatory
body, administrative agency or other government instrumentality required to be
obtained, effected or given by the Master Servicer in connection with the
execution and delivery by the Master Servicer of this Agreement or any of the
Basic Documents to which it is a party and the performance by the Master
Servicer of the transactions contemplated by this Agreement or any of the Basic
Documents to which it is a party, have been duly obtained, effected or given and
are in full force and effect, except where failure to obtain the same would not
have a material adverse effect upon the rights of the Seller, the Issuer, the
Noteholders or the Certificateholders.
(d) BINDING OBLIGATION. This Agreement constitutes a legal,
valid and binding obligation of the Master Servicer, enforceable in accordance
with its terms, subject to applicable bankruptcy, insolvency, moratorium,
fraudulent conveyance, reorganization and similar laws now or hereafter in
effect relating to creditors' rights generally, and subject to general
principles of equity (whether applied in a proceeding of law or in equity).
(e) NO VIOLATION. The consummation of the transactions
contemplated by this Agreement and the fulfillment of the terms hereof do not
result in any breach of any of the terms and provisions of, or constitute (with
or without notice or lapse of time or both) a default under its charter document
or by-laws of the Master Servicer, or any material indenture, agreement or other
instrument to which the Master Servicer is a party or by which it shall be
bound; nor result in the creation or imposition of any Lien upon any of its
properties pursuant to the terms of any such indenture, agreement or other
instrument (other than pursuant to the Basic Documents); or violate any law or,
to the best of its knowledge, any order, rule or regulation applicable to the
Master Servicer of any court or of any federal or state regulatory body,
administrative agency or other governmental instrumentality having jurisdiction
over the Master Servicer or its properties.
(f) NO PROCEEDINGS. There are no proceedings or investigations
pending against the Master Servicer, or, to its best knowledge, threatened
against the Master Servicer, before any court, regulatory body, administrative
agency or other governmental instrumentality having jurisdiction over the Master
Servicer or its properties: (i) asserting the invalidity of this Agreement or
any of the Basic Documents, the Notes or the Certificates, (ii) seeking to
prevent the issuance of the Notes or the Certificates or the consummation of any
of the transactions contemplated by this Agreement or any of the Basic
Documents, (iii) seeking any determination or ruling that could reasonably be
expected to have a material and adverse effect on the performance by the Master
Servicer of its obligations under, or the validity or enforceability of this
Agreement or any of the Basic Documents, the Notes or the Certificates or (iv)
seeking to affect adversely the federal or state income tax or ERISA attributes
of the Issuer, the Notes or the Certificates.
(g) NO AMENDMENT OR WAIVER. No provision of any Mortgage Loan
has been waived, altered or modified in any respect, except pursuant to a
document, instrument or writing included in the relevant Mortgage File, and no
such amendment, waiver, alteration or modification causes such Mortgage Loan not
to conform to the other warranties contained in this Section or those of the
Seller contained in Section 2.4.
SECTION 6.2. INDEMNITIES OF MASTER SERVICER. (a) The Master Servicer
shall be liable in accordance herewith only to the extent of the obligations
specifically undertaken by the Master Servicer under this Agreement. The Master
Servicer shall indemnify, defend and hold harmless the Issuer, the Owner
Trustee, the Trustee, the Seller, the Certificateholders and the Noteholders and
any of the officers, directors, employees and agents of the Issuer, the Owner
Trustee, the Trustee or the Seller from any and all costs, expenses, losses,
claims, damages and liabilities (including reasonable attorneys' fees and
expenses) to the extent arising out of, or imposed upon any such Person through,
the negligence, willful misfeasance or bad faith of the Master Servicer in the
performance of its obligations and duties under this Agreement or in the
performance of the obligations and duties of any sub-servicer under any
sub-servicing agreement or by reason of the reckless disregard of its
obligations and duties under this Agreement or by reason of the reckless
disregard of the obligations of any sub-servicer under any sub-servicing
agreement, where the final determination that any such cost, expense, loss,
claim, damage or liability arose out of, or was imposed upon any such Person
through, any such negligence, willful misfeasance, bad faith or recklessness on
the part of the Master Servicer or any sub-servicer, is established by a court
of law, by an arbitrator or by way of settlement agreed to by the Master
Servicer. Notwithstanding the foregoing, if the Master Servicer is rendered
unable, in whole or in part, by virtue of an act of God, act of war, fires,
earthquake or other natural disasters, to satisfy its obligations under this
Agreement, the Master Servicer shall not be deemed to have breached any such
obligation upon the sending of written notice of such event to the other parties
hereto, for so long as the Master Servicer remains unable to perform such
obligation as a result of such event. This provision shall not be construed to
limit the Master Servicer's or any other party's rights, obligations,
liabilities, claims or defenses which arise as a matter of law or pursuant to
any other provision of this Agreement. The Master Servicer shall indemnify,
defend and hold harmless the Issuer, the Owner Trustee, the Trustee, the Seller,
the Certificateholders and the Noteholders or any of the officers, directors,
employees and agents of the Issuer, the Owner Trustee, the Trustee or the Seller
from any and all costs, expenses, losses, claims, damages and liabilities
(including reasonable attorneys' fees and expenses) to the extent arising out of
or imposed upon any such Person as a result of any compensation payable to any
sub-servicer (including any fees payable in connection with the termination of
the servicing activities of such sub-servicer with respect to any Mortgage Loan)
whether pursuant to the terms of any sub-servicing agreement or otherwise.
SECTION 6.3. MERGER OR CONSOLIDATION OF, OR ASSUMPTION OF THE
OBLIGATIONS OF, MASTER SERVICER. Any Person (a) into which the Master Servicer
may be merged or consolidated, (b) which may result from any merger or
consolidation to which the Master Servicer shall be a party or (c) which may
succeed to the properties and assets of the Master Servicer, substantially as a
whole, shall be the successor to the Master Servicer without the execution or
filing of any document or any further act by any of the parties to this
Agreement; provided, however, that the Master Servicer hereby covenants that it
will not consummate any of the foregoing transactions except upon satisfaction
of the following: (i) the surviving Master Servicer (if other than
_____________) executes an agreement of assumption to perform every obligation
of the Master Servicer under this Agreement, (ii) immediately after giving
effect to such transaction, no representation or warranty made pursuant to
Section 6.1 shall have been breached and no Servicer Default, and no event that,
after notice or lapse of time, or both, would become a Servicer Default shall
have occurred and be continuing, (iii) the Master Servicer shall have delivered
to the Owner Trustee and the Trustee an Officers' Certificate and an Opinion of
Counsel each stating that such consolidation, merger or succession and such
agreement of assumption comply with this Section and that all conditions
precedent, if any, provided for in this Agreement relating to such transaction
have been complied with, and that the Rating Agency Condition shall have been
satisfied with respect to such transaction, (iv) the surviving Master Servicer
shall have a consolidated net worth at least equal to that of the predecessor
Master Servicer, and (v) such transaction will not result in a material adverse
federal or state tax consequence to the Issuer, the Noteholders or the
Certificateholders.
SECTION 6.4. LIMITATION ON LIABILITY OF MASTER SERVICER AND OTHERS.
Neither the Master Servicer nor any of its directors, officers, employees or
agents shall be under any liability to the Issuer, the Noteholders or the
Certificateholders, except as provided under this Agreement, for any action
taken or for refraining from the taking of any action by the Master Servicer or
any sub-servicer pursuant to this Agreement or for errors in judgment; provided,
however, that this provision shall not protect the Master Servicer or any such
person against any liability that would otherwise be imposed by reason of
willful misfeasance, bad faith or negligence in the performance of duties or by
reason of reckless disregard of obligations and duties under this Agreement. The
Master Servicer or any sub-servicer and any of their respective directors,
officers, employees or agents may rely in good faith on any document of any kind
prima facie properly executed and submitted by any Person respecting any matters
arising under this Agreement. Except as provided in this Agreement the Master
Servicer shall not be under any obligation to appear in, prosecute or defend any
legal action that shall be incidental to its duties to service the Mortgage
Loans in accordance with this Agreement, and that in its opinion may involve it
in any expense or liability; provided, however, that the Master Servicer, may
(but shall not be required to) undertake any reasonable action that it may deem
necessary or desirable in respect of the Basic Documents to protect the
interests of the Certificateholders under this Agreement and the Noteholders
under the Indenture.
SECTION 6.5. ______________ NOT TO RESIGN AS MASTER SERVICER. Subject
to the provisions of Section 6.3, ____________________, hereby agrees not to
resign from the obligations and duties hereby imposed on it as Master Servicer
under this Agreement except upon determination that the performance of its
duties hereunder shall no longer be permissible under applicable law or if such
resignation is required by regulatory authorities. Notice of any such
determination permitting the resignation of ____________________, as Master
Servicer shall be communicated to the Owner Trustee and the Trustee at the
earliest practicable time (and, if such communication is not in writing, shall
be confirmed in writing at the earliest practicable time) and any such
determination shall be evidenced by an Opinion of Counsel to such effect
delivered to the Owner Trustee and the Trustee concurrently with or promptly
after such notice. No such resignation shall become effective until the earlier
of the Trustee or a successor Master Servicer having assumed the
responsibilities and obligations of the resigning Master Servicer in accordance
with Section 7.2 or the date upon which any regulatory authority requires such
resignation.
ARTICLE VII
Default
SECTION 7.1. SERVICER DEFAULT. If any one of the following events (a
"Servicer Default") shall occur and be continuing: (a) any failure by the Master
Servicer to deliver to the Trustee for deposit in any of the Trust Accounts or
the Certificate Distribution Account any required payment or to direct the
Trustee to make any required distributions therefrom (other than a Monthly
Advance required to be made from its own funds) that shall continue unremedied
for a period of ______ Business Days after written notice of such failure is
received by the Master Servicer from the Owner Trustee or the Trustee or after
discovery of such failure by an Authorized Officer of the Master Servicer; or
(b) failure by the Master Servicer to make any required Servicing Advance which
failure continues unremedied for a period of ____ days, or failure on the part
of the Master Servicer duly to observe or to perform in any material respect any
other covenants or agreements of the Master Servicer set forth in this Agreement
or any other Basic Document, which failure shall (i) materially and adversely
affect the rights of either the Certificateholders or Noteholders and (ii)
continue 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
(A) to the Master Servicer by the Owner Trustee or the Trustee or (B) to the
Master Servicer and to the Owner Trustee and the Trustee by the Holders of Notes
evidencing not less than ____% of the Current Principal Amount of the Notes or
Holders of Certificates evidencing not less than ____% of the outstanding
Certificate Balance, as applicable (or for such longer period, not in excess of
____ days, as may be reasonably necessary to remedy such default; provided that
such default is capable of remedy within _____ days and the Master Servicer
delivers an Officers' Certificate to the Owner Trustee and the Trustee to such
effect and to the effect that the Master Servicer has commenced or will promptly
commence, and will diligently pursue, all reasonable efforts to remedy such
default); or (c) any failure of the Master Servicer to pay any Monthly Advance
required to be made from its own funds pursuant to Section 3.15 that continues
unremedied for a period of one Business Day; or (d) an Insolvency Event occurs
with respect to the Master Servicer or any successor; then, and in each and
every case, so long as the Servicer Default shall not have been remedied, either
the Trustee, or the Holders of Notes evidencing not less than ____% of the
Current Principal Amount of the Notes, by notice then given in writing to the
Master Servicer and the Owner Trustee (and to the Trustee if given by the
Noteholders) may terminate all the rights and obligations (other than the
obligations set forth in Section 6.2) of the Master Servicer under this
Agreement. On or after the receipt by the Master Servicer of such written
notice, all authority and power of the Master Servicer under this Agreement,
whether with respect to the Notes, the Certificates or the Mortgage Loans or
otherwise, shall, without further action, pass to and be vested in the Trustee
or such successor Master Servicer as may be appointed under Section 7.2; and,
without limitation, the Trustee and the Owner Trustee are hereby authorized and
empowered to execute and deliver, on behalf of the predecessor 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 the Mortgage Loans and related documents, or
otherwise. The predecessor Master Servicer shall cooperate with the successor
Master Servicer, the Trustee and the Owner Trustee in effecting the termination
of the responsibilities and rights of the predecessor Master Servicer under this
Agreement, including the transfer to the successor Master Servicer for
administration by it of all cash amounts that shall at the time be held by the
predecessor Master Servicer for deposit, or shall thereafter be received by it
with respect to a Mortgage Loan. All reasonable costs and expenses (including
attorneys' fees) incurred in connection with transferring the Mortgage Files to
the successor Master Servicer and amending this Agreement to reflect such
succession as Master Servicer pursuant to this Section shall be paid by the
predecessor Master Servicer upon presentation of reasonable documentation of
such costs and expenses. Upon receipt of notice of the occurrence of a Servicer
Default, the Owner Trustee shall give notice thereof to the Rating Agencies.
SECTION 7.2. APPOINTMENT OF SUCCESSOR. (a) Upon the Master Servicer's
receipt of notice of termination, pursuant to Section 7.1 or the Master
Servicer's resignation in accordance with the terms of this Agreement, the
predecessor Master Servicer shall continue to perform its functions as Master
Servicer under this Agreement, in the case of termination, only until the date
specified in such termination notice or, if no such date is specified in a
notice of termination, until receipt of such notice and, in the case of
resignation, until the earlier of (x) the date _____ days from the delivery to
the Owner Trustee and the Trustee of written notice of such resignation (or
written confirmation of such notice) in accordance with the terms of this
Agreement and (y) the date upon which the predecessor Master Servicer shall
become unable to act as Master Servicer, as specified in the notice of
resignation and accompanying Opinion of Counsel. In the event of the Master
Servicer's termination hereunder, the Trustee shall appoint a successor Master
Servicer, and the successor Master Servicer shall accept its appointment by a
written assumption in form acceptable to the Owner Trustee and the Trustee. In
the event that a successor Master Servicer has not been appointed at the time
when the predecessor Master Servicer has ceased to act as Master Servicer in
accordance with this Section, the Trustee without further action shall
automatically be appointed the successor Master Servicer and the Trustee shall
be entitled to the Servicing Fee. Notwithstanding the above, the Trustee shall,
if it shall be unwilling or unable so to act, appoint or petition a court of
competent jurisdiction to appoint, any established institution, having a net
worth of not less than $_____________ and whose regular business shall include
the servicing of Mortgage Loans and REO Property, as the successor to the Master
Servicer under this Agreement.
(b) Upon appointment, the successor Master Servicer (including
the Trustee acting as successor Master Servicer) shall be the successor in all
respects to the predecessor Master Servicer and shall be subject to all the
responsibilities, duties and liabilities arising thereafter relating thereto
placed on the predecessor Master Servicer and shall be entitled to the Servicing
Fee and all the rights granted to the predecessor Master Servicer by the terms
and provisions of this Agreement. No successor Master Servicer shall be liable
for any acts or omissions of any predecessor Master Servicer.
(c) The Master Servicer may not resign unless it is prohibited
from serving as such by law or by requirement of any regulatory authority.
SECTION 7.3. PAYMENT OF SERVICING FEE. If the Master Servicer shall
change, the predecessor Master Servicer shall be entitled to receive any accrued
and unpaid Servicing Fees through the date of the successor Master Servicer's
acceptance hereunder in accordance with Section 3.9.
SECTION 7.4. NOTIFICATION TO NOTEHOLDERS AND CERTIFICATEHOLDERS. Upon
any termination of, or appointment of a successor to, the Master Servicer
pursuant to this Article VII, the Owner Trustee shall give prompt written notice
thereof to Certificateholders and the Trustee shall give prompt written notice
thereof to Noteholders subject to the Rating Agency Condition.
SECTION 7.5. WAIVER OF PAST DEFAULTS. The Holders of Notes evidencing
not less than a majority of the Current Principal Amount of the Notes (or the
Holders (as defined in the Trust Agreement) of Certificates evidencing not less
than a majority of the outstanding Certificate Balance, as applicable, in the
case of any default which does not adversely affect the Trustee or the
Noteholders) may, on behalf of all Noteholders and Certificateholders, waive in
writing 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 any of the Trust Accounts in accordance with this Agreement.
Upon any such waiver of a past default, such default shall cease to exist, and
any Servicer 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 thereto.
ARTICLE VIII
Termination
SECTION 8.1. OPTIONAL PURCHASE OF ALL MORTGAGE Loans. (a) On the last
day of any Due Period immediately preceding a Determination Date as of which the
then outstanding Pool Balance is _____% or less of the Original Pool Balance,
the Seller shall have the option to purchase the Owner Trust Estate, other than
the Trust Accounts and the Certificate Distribution Account. To exercise such
option, the Seller shall deposit pursuant to Section 4.4 in the Collection
Account an amount which, when added to the amounts on deposit in the Collection
Account for such Distribution Date, equals the sum of (a) the unpaid principal
amount of the then outstanding Class __ Notes, plus accrued and unpaid interest
thereon, plus (b) the Certificate Balance plus accrued and unpaid interest
thereon. The Class ___ Notes and the Certificates will be redeemed concurrently
therewith.
(b) Upon any sale of the assets of the Trust pursuant to
Section 9.2 of the Trust Agreement, the Master Servicer shall instruct the
Trustee to deposit the proceeds from such sale after all payments and reserves
therefrom (including the expenses of such sale) have been made (the "Insolvency
Proceeds") in the Collection Account. On the Distribution Date on which the
Insolvency Proceeds are deposited in the Collection Account (or, if such
proceeds are not so deposited on a Distribution Date, on the Distribution Date
immediately following such deposit), the Master Servicer shall instruct the
Trustee to make, and the Trustee shall make, the following deposits and
distributions (after the application on such Distribution Date of the Total
Distribution Amount pursuant to Section 4.5) from the Insolvency Proceeds and
any funds remaining on deposit in the Reserve Account (including the proceeds of
any sale of investments therein): (i) to the Note Distribution Account, any
portion of the Noteholders' Interest Distributable Amount not otherwise
deposited into the Note Distribution Account on such Distribution Date; (ii) to
the Note Distribution Account, the outstanding principal balance of the Notes
(after giving effect to the reduction in the outstanding principal balance of
the Notes to result from the deposits made in the Note Distribution Account on
such Distribution Date); (iii) to the Owner Trustee for deposit in the
Certificate Distribution Account, any portion of the Certificateholders'
Interest Distributable Amount not otherwise deposited into the Certificate
Distribution Account on such Distribution Date; and (iv) to the Owner Trustee
for deposit in the Certificate Distribution Account, the Certificate Balance and
any Certificateholders' Principal Carryover Shortfall Amount (after giving
effect to the reduction in the Certificate Balance to result from the deposits
made in the Certificate Distribution Account on such Distribution Date). Any
Insolvency Proceeds remaining after the deposits described above shall be paid
to the GP Holder.
(c) Notice of any termination of the Trust shall be given by
the Master Servicer to the Owner Trustee, the Trustee and the Rating Agencies as
soon as practicable after the Master Servicer has received notice thereof.
(d) Following the satisfaction and discharge of the Indenture
and the payment in full of the principal of and interest on the Notes, the
Certificateholders will succeed to the rights of the Noteholders hereunder and
the Owner Trustee will succeed to the rights of, and assume the obligations of,
the Trustee pursuant to this Agreement.
ARTICLE IX
Administrative Duties of the Master Servicer
SECTION 9.1. ADMINISTRATIVE DUTIES. (a) DUTIES WITH RESPECT TO THE
INDENTURE AND DEPOSITORY AGREEMENTS. The Master Servicer shall perform all its
duties and the duties of the Issuer under the Depository Agreements. In
addition, the Master Servicer shall consult with the Owner Trustee as the Master
Servicer deems appropriate regarding the duties of the Issuer under the
Indenture and the Depository Agreements. The Master Servicer shall monitor the
performance of the Issuer and shall advise the Owner Trustee when action is
necessary to comply with the Issuer's duties under the Indenture and the
Depository Agreements. The Master Servicer shall prepare for execution by the
Issuer or shall cause the preparation by other appropriate Persons of all such
documents, reports, filings, instruments, certificates and opinions as it shall
be the duty of the Issuer to prepare, file or deliver pursuant to the Indenture
and the Depository Agreements. In furtherance of the foregoing, the Master
Servicer shall take all appropriate action that is the duty of the Issuer to
take pursuant to the Indenture.
(b) DUTIES WITH RESPECT TO THE ISSUER. (i) In addition to the
duties of the Master Servicer set forth in this Agreement or any of the Basic
Documents, the Master Servicer shall perform such calculations and shall prepare
for execution by the Issuer or the Owner Trustee or shall cause the preparation
by other appropriate Persons of all such documents, reports, filings,
instruments, certificates and opinions as it shall be the duty of the Issuer or
the Owner Trustee to prepare, file or deliver pursuant to this Agreement or any
of the Basic Documents, and at the request of the Owner Trustee shall take all
appropriate action that it is the duty of the Issuer to take pursuant to this
Agreement or any of the Basic Documents. In accordance with the directions of
the Owner Trustee, the Master Servicer shall administer, perform or supervise
the performance of such other activities in connection with the Collateral
(including the Basic Documents) as are not covered by any of the foregoing
provisions and as are expressly requested by the Owner Trustee and are
reasonably within the capability of the Master Servicer.
(ii) Notwithstanding anything in this Agreement
or any of the Basic Documents to the contrary, the Master Servicer shall be
responsible for promptly notifying the Owner Trustee in the event that any
withholding tax is imposed on the Issuer's payments (or allocations of income)
to an Owner (as defined in the Trust Agreement) as contemplated in Section
5.2(c) of the Trust Agreement. Any such notice shall specify the amount of any
withholding tax required to be withheld by the Owner Trustee pursuant to such
provision.
(iii) Notwithstanding anything in this
Agreement or the Basic Documents to the contrary, the Master Servicer shall be
responsible for performance of the duties of the Owner Trustee and the holder of
the GP Interest set forth in Section 5.6(a), (b), (c) and (d) of the Trust
Agreement with respect to, among other things, accounting and reports to Owners
(as defined in the Trust Agreement); provided, however, that the Owner Trustee
shall retain responsibility for the distribution of the Schedule K necessary to
enable each Certificateholder to prepare its federal and state income tax
returns.
(iv) The Master Servicer shall perform the duties
of the Master Servicer specified in Section 10.2 of the Trust Agreement required
to be performed in connection with the resignation or removal of the Owner
Trustee, and any other duties expressly required to be performed by the Master
Servicer under this Agreement or any of the Basic Documents.
(v) In carrying out the foregoing duties or any of its
other obligations under this Agreement, the Master Servicer may enter into
transactions with or otherwise deal with any of its Affiliates; provided,
however, that the terms of any such transactions or dealings shall be in
accordance with any directions received from the Issuer and shall be, in the
Master Servicer's opinion, no less favorable to the Issuer in any material
respect.
(c) TAX MATTERS. The Master Servicer shall prepare and file,
on behalf of the holder of the GP Interest, all tax returns, tax elections,
financial statements and such annual or other reports of the Issuer as are
necessary for preparation of tax reports as provided in Article V of the Trust
Agreement, including without limitation forms 1099 and 1066. All tax returns
will be signed by the holder of the GP Interest.
(d) NON-MINISTERIAL MATTERS. With respect to matters that in
the reasonable judgment of the Master Servicer are non-ministerial, the Master
Servicer shall not take any action pursuant to this Article X unless within a
reasonable time before the taking of such action, the Master Servicer shall have
notified the Owner Trustee and the Trustee of the proposed action and the Owner
Trustee and, with respect to items (A), (B), (C) and (D) below, the Trustee
shall not have withheld consent or provided an alternative direction. For the
purpose of the preceding sentence, "non-ministerial matters" shall include: (A)
the amendment of or any supplement to the Indenture; (B) the initiation of any
claim or lawsuit by the Issuer and the compromise of any action, claim or
lawsuit brought by or against the Issuer (other than in connection with the
collection of the Mortgage Loans); (C) the amendment, change or modification of
this Agreement or any of the Basic Documents; (D) the appointment of successor
Note Registrars, successor Paying Agents and successor Trustees pursuant to the
Indenture or the appointment of successor Master Servicers or the consent to the
assignment by the Note Registrar, Paying Agent or Trustee of its obligations
under the Indenture; and (E) the removal of the Trustee.
(e) EXCEPTIONS. Notwithstanding anything to the contrary in
this Agreement, except as expressly provided herein or in the other Basic
Documents, the Master Servicer, in its capacity hereunder, shall not be
obligated to, and shall not, (1) make any payments to the Noteholders or
Certificateholders under the Basic Documents, (2) sell the Indenture Trust
Estate pursuant to Section 5.4 of the Indenture, (3) take any other action that
the Issuer directs the Master Servicer not to take on its behalf or (4) in
connection with its duties hereunder assume any indemnification obligation of
any other Person.
SECTION 9.2. RECORDS. The Master Servicer shall maintain appropriate
books of account and records relating to services performed under this
Agreement, which books of account and records shall be accessible for inspection
by the Issuer at any time during normal business hours.
SECTION 9.3. ADDITIONAL INFORMATION TO BE FURNISHED TO THE ISSUER. The
Master Servicer shall furnish to the Issuer from time to time such additional
information regarding the Collateral as the Issuer shall reasonably request.
ARTICLE X
Miscellaneous Provisions
SECTION 10.1. AMENDMENT. This Agreement may be amended by the Seller,
the Master Servicer and the Owner Trustee, with the consent of the Trustee
(which consent may not be unreasonably withheld), but without the consent of any
of the Noteholders or the Certificateholders, to cure any ambiguity or defect,
to correct or supplement any provisions in this Agreement or for the purpose of
adding any provisions to or changing in any manner or eliminating any of the
provisions in this Agreement or of modifying in any manner the rights of the
Noteholders or the Certificateholders; provided, however, that such action shall
not, as evidenced by an Opinion of Counsel delivered to the Owner Trustee and
the Trustee, adversely affect in any material respect the interests of any
Noteholder or Certificateholder. This Agreement may also be amended from time to
time by the Seller, the Master Servicer and the Owner Trustee, with the consent
of the Trustee, the consent of the Holders of Notes evidencing not less than a
majority of the Current Principal Amount of the Notes and the consent of the
Holders (as defined in the Trust Agreement) of Certificates evidencing not less
than a majority of the Certificate Balance for the purpose of adding any
provisions to or changing in any manner or eliminating any of the provisions of
this Agreement or of modifying in any manner the rights of the Noteholders or
the Certificateholders; provided, however, that no such amendment shall (a)
increase or reduce in any manner the amount of, or accelerate or delay the
timing of, collections of payments on Mortgage Loans or distributions that shall
be required to be made for the benefit of the Noteholders or the
Certificateholders or (b) reduce the aforesaid percentage of the Current
Principal Amount of the Notes and the Certificate Balance, the Holders of which
are required to consent to any such amendment, without the consent of the
Holders of all the outstanding Notes and the Holders (as defined in the Trust
Agreement) of all the outstanding Certificates of each class affected thereby.
Prior to the execution of any such amendment or consent, the Owner Trustee shall
furnish written notification of the substance of such amendment or consent to
the Rating Agencies. Promptly after the execution of any such amendment or
consent, the Owner Trustee shall furnish written notification of the substance
of such amendment or consent to each Certificateholder and the Trustee. It shall
not be necessary for the consent of Certificateholders or Noteholders pursuant
to this Section to approve the particular form of any proposed amendment or
consent, but it shall be sufficient if such consent shall approve the substance
thereof. Prior to the execution of any amendment to this Agreement, the Owner
Trustee and the Trustee shall be entitled to receive and rely upon an Opinion of
Counsel stating that the execution of such amendment is authorized or permitted
by this Agreement and that all conditions precedent to the execution and
delivery of such amendment have been satisfied and the Opinion of Counsel
referred to in Section 10.2(i)(1) has been delivered. The Owner Trustee and the
Trustee may, but shall not be obligated to, enter into any such amendment which
affects the Owner Trustee's or the Trustee's, as applicable, own rights, duties
or immunities under this Agreement or otherwise.
SECTION 10.2. PROTECTION OF TITLE TO TRUST. (a) The Seller shall
execute and file such financing statements and cause to be executed and filed
such continuation statements, all in such manner and in such places as may be
required by law fully to preserve, maintain and protect the interest of the
Issuer and the interests of the Trustee in the Mortgage Loans and in the
proceeds thereof. The Seller shall deliver (or cause to be delivered) to the
Owner Trustee and the Trustee file-stamped copies of, or filing receipts for,
any document filed as provided above, as soon as available following such
filing.
(b) Neither the Seller nor the Master Servicer shall change
its name, identity or corporate structure in any manner that would, could or
might make any financing statement or continuation statement filed in accordance
with paragraph (a) above seriously misleading within the meaning of Section
9-402(7) of the UCC, unless it shall have given the Owner Trustee and the
Trustee at least ________ days' prior written notice thereof and shall have
promptly filed appropriate amendments to all previously filed financing
statements or continuation statements.
(c) Each of the Seller and the Master Servicer shall have an
obligation to give the Owner Trustee and the Trustee at least _____ days' prior
written notice of any relocation of its principal executive office if, as a
result of such relocation, the applicable provisions of the UCC would require
the filing of any amendment of any previously filed financing or continuation
statement or of any new financing statement and shall promptly file any such
amendment. The Master Servicer shall at all times maintain each office from
which it shall service Mortgage Loans, and its principal executive office,
within the United States of America.
(d) The Master Servicer shall maintain accounts and records as
to each Mortgage Loan accurately and in sufficient detail to permit (i) the
reader thereof to know at any time the status of such Mortgage Loan, including
payments and recoveries made and payments owing (and the nature of each) and
(ii) reconciliation between payments or recoveries on (or with respect to) each
Mortgage Loan and the amounts from time to time deposited in the Collection
Account in respect of such Mortgage Loan.
(e) The Master Servicer shall maintain its computer systems so
that, from and after the time of sale under this Agreement of the Mortgage
Loans, the Master Servicer's master computer records (including any backup
archives) that refer to a Mortgage Loan shall indicate clearly the interest of
the Issuer and the Trustee in such Mortgage Loan and that such Mortgage Loan is
owned by the Issuer and has been pledged to the Trustee. Indication of the
Issuer's and the Trustee's interest in a Mortgage Loan shall be deleted from or
modified on the Master Servicer's computer systems when, and only when, the
related Mortgage Loan shall have been paid in full or repurchased by the Seller
or purchased by the Master Servicer.
(f) If at any time the Seller or the Master Servicer shall
propose to sell, grant a security interest in or otherwise transfer any interest
in mortgage loans to any prospective purchaser, lender or other transferee, the
Master Servicer shall give to such prospective purchaser, lender or other
transferee computer tapes, records or printouts (including any restored from
backup archives) that, if they shall refer in any manner whatsoever to any
Mortgage Loan, shall indicate clearly that such Mortgage Loan has been sold and
is owned by the Issuer and has been pledged to the Trustee.
(g) The Master Servicer shall permit the Trustee and its
agents at any time during normal business hours to inspect, audit and make
copies of and abstracts from the Master Servicer's records regarding any
Mortgage Loan.
(h) Upon request at any time the Owner Trustee or the Trustee
shall have reasonable grounds to believe that such request is necessary in
connection with the performance of its duties under this Agreement or any of the
Basic Documents, the Master Servicer shall furnish to the Owner Trustee or to
the Trustee, within _____ Business Days, a list of all Mortgage Loans (by
contract number and name of Mortgagor) then held as part of the Trust, together
with a reconciliation of such list to the Mortgage Loan Schedule and to each of
the Master Servicer's Certificates furnished before such request indicating
removal of Mortgage Loans from the Trust.
(i) The Master Servicer shall deliver to the
Owner Trustee and the Trustee: (1) promptly after the execution and delivery of
this Agreement and of each amendment thereto, an Opinion of Counsel either (A)
stating that, in the opinion of such counsel, all financing statements and
continuation statements have been executed and filed that are necessary fully to
preserve and protect the interest of the Owner Trustee and the Trustee in the
Mortgage Loans, and reciting the details of such filings or referring to prior
Opinions of Counsel in which such details are given, or (B) stating that, in the
opinion of such counsel, no such action shall be necessary to preserve and
protect such interest; and (2) within _____ days after the beginning of each
calendar year beginning with the first calendar year beginning more than three
months after the Cut-off Date, an Opinion of Counsel, dated as of a date during
such _____-day period, either (A) stating that, in the opinion of such counsel,
all financing statements and continuation statements have been executed and
filed that are necessary fully to preserve and protect the interest of the Owner
Trustee and the Trustee in the Mortgage Loans, and reciting the details of such
filings or referring to prior Opinions of Counsel in which such details are
given, or (B) stating that, in the opinion of such counsel, no such action shall
be necessary to preserve and protect such interest. Each Opinion of Counsel
referred to in clause (l) or (2) above shall specify any action necessary (as of
the date of such opinion) to be taken in the following year to preserve and
protect such interest.
(i) The Seller shall, to the extent required by applicable
law, cause the Certificates and the Notes to be registered with the Commission
pursuant to Section 12(b) or Section 12(g) of the Exchange Act within the time
periods specified in such sections.
SECTION 10.3. NOTICES. All demands, notices and communications upon or
to the Seller, the Master Servicer, the Owner Trustee, the Trustee or the Rating
Agencies under this Agreement shall be in writing, personally delivered, sent by
overnight courier or mailed by certified mail, return receipt requested, and
shall be deemed to have been duly given upon receipt (a) in the case of the
Seller to Structured Asset Mortgage Investments Inc., ▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇,
▇▇▇ ▇▇▇▇ ▇▇▇▇▇, Attention: __________, (b) in the case of the Master Servicer to
__________________, Attention: ___________, (c) in the case of the Issuer or the
Owner Trustee, at the Corporate Trust Office (as defined in the Trust
Agreement), (c) in the case of the Trustee, at _____________________, (d) in the
case of the Rating Agencies to __________________, Attention: ________________.
SECTION 10.4. ASSIGNMENT. Notwithstanding anything to the contrary
contained herein, except as provided in Sections 5.4 and 6.3 and as provided in
the provisions of this Agreement concerning the resignation of the Master
Servicer, this Agreement may not be assigned by the Seller or the Master
Servicer.
SECTION 10.5. LIMITATIONS ON RIGHTS OF OTHERS. The provisions of this
Agreement are solely for the benefit of the Seller, the Master Servicer, the
Issuer, the Owner Trustee and for the benefit of the Certificateholders
(including the holder of the GP Interest), the Trustee and the Noteholders, as
third-party beneficiaries, and nothing in this Agreement, whether express or
implied, shall be construed to give to any other Person any legal or equitable
right, remedy or claim in the Owner Trust Estate or under or in respect of this
Agreement or any covenants, conditions or provisions contained herein.
SECTION 10.6. SEVERABILITY. Any provision of this Agreement that is
prohibited or unenforceable in any jurisdiction shall, as to such jurisdiction,
be ineffective to the extent of such prohibition or unenforceability without
invalidating the remaining provisions hereof, and any such prohibition or
unenforceability in any jurisdiction shall not invalidate or render
unenforceable such provision in any other jurisdiction.
SECTION 10.7. SEPARATE COUNTERPARTS. This Agreement may be executed by
the parties hereto in separate counterparts, each of which when so executed and
delivered shall be an original, but all such counterparts shall together
constitute but one and the same instrument.
SECTION 10.8. HEADINGS. The headings of the various Articles and
Sections herein are for convenience of reference only and shall not define or
limit any of the terms or provisions hereof.
SECTION 10.9. GOVERNING LAW. THIS AGREEMENT SHALL BE CONSTRUED IN
ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK , WITHOUT REFERENCE TO
PRINCIPLES OF CONFLICTS OF LAW, AND THE OBLIGATIONS, RIGHTS AND REMEDIES OF THE
PARTIES HEREUNDER SHALL BE DETERMINED IN ACCORDANCE WITH SUCH LAWS.
SECTION 10.10. ASSIGNMENT TO TRUSTEE. The Seller hereby acknowledges
and consents to any mortgage, pledge, assignment and grant of a security
interest by the Issuer to the Trustee pursuant to the Indenture for the benefit
of the Noteholders of all right, title and interest of the Issuer in, to and
under the Mortgage Loans and/or the assignment of any or all of the Issuer's
rights and obligations hereunder to the Trustee.
SECTION 10.11. NONPETITION COVENANT. Notwithstanding any prior
termination of this Agreement, the Master Servicer and the Seller shall not,
prior to the date which is one year and one day after the termination of this
Agreement with respect to the Issuer, acquiesce, petition or otherwise invoke or
cause the Issuer to invoke the process of any court or government authority for
the purpose of commencing or sustaining a case against the Issuer under any
federal or state bankruptcy, insolvency or similar law or appointing a receiver,
liquidator, assignee, trustee, custodian, sequestrator or other similar official
of the Issuer or any substantial part of its property, or ordering the winding
up or liquidation of the affairs of the Issuer.
SECTION 10.12. LIMITATION OF LIABILITY OF OWNER TRUSTEE AND TRUSTEE.
(a) Notwithstanding anything contained herein to the contrary, this Agreement
has been countersigned by the Owner Trustee not in its individual capacity but
solely in its capacity as Owner Trustee of the Issuer and in no event shall the
Owner Trustee in its individual capacity or, except as expressly provided in the
Trust Agreement, as Owner Trustee have any liability for the representations,
warranties, covenants, agreements or other obligations of 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. For
all purposes of this 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 Articles VI, VII and VIII of the Trust
Agreement.
(b) Notwithstanding anything contained herein to the contrary,
this Agreement has been accepted by the Trustee not in its individual capacity
but solely as Trustee and in no event shall the Trustee have any liability for
the representations, warranties, covenants, agreements or other obligations of
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.
SECTION 10.13. INDEPENDENCE OF THE MASTER SERVICER. For all purposes
of this Agreement, the Master Servicer shall be an independent contractor and
shall not be subject to the supervision of the Issuer or the Owner Trustee with
respect to the manner in which it accomplishes the performance of its
obligations hereunder. Unless expressly authorized by the Issuer, the Master
Servicer shall have no authority to act for or represent the Issuer or the Owner
Trustee in any way and shall not otherwise be deemed an agent of the Issuer or
the Owner Trustee.
SECTION 10.14. NO JOINT VENTURE. Nothing contained in this Agreement
(i) shall constitute the Master Servicer and either of the Issuer or the Owner
Trustee as members of any partnership, joint venture, association, syndicate,
unincorporated business or other separate entity, (ii) shall be construed to
impose any liability as such on any of them or (iii) shall be deemed to confer
on any of them any express, implied or apparent authority to incur any
obligation or liability on behalf of the others.
WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed and delivered by their respective duly authorized officers as of
the day and year first above written.
STRUCTURED ASSET MORTGAGE
INVESTMENTS TRUST 199_-_
By:______________________________________,
not in its individual capacity but solely
as Owner Trustee on behalf of the Trust
By:________________________________________
Name:
Title:
STRUCTURED ASSET MORTGAGE
INVESTMENTS INC., Seller
By:_______________________________________
Name:
Title:
______________________________, Master Servicer
By:_______________________________________
Name:
Title:
Acknowledged and Accepted:
_______________ , not in its individual
capacity but solely as Trustee,
By: ______________________________
Name:
Title:
Acknowledged and Accepted:
_______________, not in its individual
capacity but solely as Owner Trustee,
By:_________________________________
Name:
Title:
_______________, 199_
EXHIBIT A
MORTGAGE LOAN SCHEDULE
UNITED STATES SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
-----------------------------
FORM T-1
STATEMENT OF ELIGIBILITY
UNDER THE TRUST INDENTURE ACT OF 1939 OF A
CORPORATION DESIGNATED TO ACT AS TRUSTEE
-----------------------------
CHECK IF AN APPLICATION TO DETERMINE ELIGIBILITY OF A
TRUSTEE PURSUANT TO SECTION 305(b) (2)
NORWEST BANK MINNESOTA, NATIONAL ASSOCIATION
(Exact name of trustee as specified in its charter)
A U.S. NATIONAL BANKING ASSOCIATION ▇▇-▇▇▇▇▇▇▇
(Jurisdiction of incorporation or (I.R.S. Employer
organization if not a U.S. national Identification No.)
bank)
▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇ (Zip code)
(Address of principal executive offices)
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇, General Counsel
NORWEST BANK MINNESOTA, NATIONAL ASSOCIATION
▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
(▇▇▇) ▇▇▇-▇▇▇▇
(Agent for Service)
-----------------------------
STRUCTURED ASSET MORTGAGE INVESTMENTS TRUST ____
(trust to be formed by registrant for each series of
Mortgage-Backed Notes)
(Exact name of obligor as specified in its charter)
DELAWARE NOT YET RECEIVED
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
C\O STRUCTURED ASSET MORTGAGE
INVESTMENTS INC. (REGISTRANT)
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
(Address of principal executive offices) (Zip code)
-----------------------------
STRUCTURED ASSET MORTGAGE INVESTMENTS TRUST
MORTGAGE-BACKED NOTES, SERIES ____
-----------------------------------------
(Title of the indenture securities)
Item 1. GENERAL INFORMATION. Furnish the following information as to
the trustee:
(a) Name and address of each examining or
supervising authority to which it is subject.
Comptroller of the Currency
Treasury Department
Washington, D.C.
Federal Deposit Insurance Corporation
Washington, D.C.
The Board of Governors of the Federal Reserve System
Washington, D.C.
(b) Whether it is authorized to exercise corporate trust
powers.
The trustee is authorized to exercise corporate trust
powers.
Item 2. AFFILIATIONS WITH OBLIGOR. If the obligor is an affiliate of
the trustee, describe each such affiliation.
None with respect to the trustee.
No responses are included for Items 3-14 of this Form T-1 because the obligor is
not in default as provided under Item 13.
Item 15. FOREIGN TRUSTEE. Not applicable.
Item 16. LIST OF EXHIBITS. List below all exhibits filed as a part of
this Statement of Eligibility. Trustee incorporates by reference into this Form
T-1 the exhibits attached hereto.
Exhibit 1. a. A copy of the Articles of Association of
the trustee now in effect.*
Exhibit 2. a. A copy of the certificate of authority
of the trustee to commence business
issued June 28, 1872, by the Comptroller
of the Currency to The Northwestern
National Bank of Minneapolis.*
b. A copy of the certificate of the
Comptroller of the Currency dated
January 2, 1934, approving the
consolidation of The Northwestern
National Bank of Minneapolis and The
Minnesota Loan and Trust Company of
Minneapolis, with the surviving entity
being titled Northwestern National Bank
and Trust Company of Minneapolis.*
c. A copy of the certificate of the Acting
Comptroller of the Currency dated
January 12, 1943, as to change of
corporate title of Northwestern National
Bank and Trust Company of Minneapolis to
Northwestern National Bank of
Minneapolis.*
d. A copy of the letter dated May 12, 1983
from the Regional Counsel, Comptroller
of the Currency, acknowledging receipt
of notice of name change effective May
1, 1983 from Northwestern National Bank
of Minneapolis to Norwest Bank
Minneapolis, National Association.*
e. A copy of the letter dated January 4,
1988 from the Administrator of National
Banks for the Comptroller of the
Currency certifying approval of
consolidation and merger effective
January 1, 1988 of Norwest Bank
Minneapolis, National Association with
various other banks under the title of
"Norwest Bank Minnesota, National
Association."*
Exhibit 3. A copy of the authorization of the
trustee to exercise corporate trust
powers issued January 2, 1934, by the
Federal Reserve Board.*
Exhibit 4. Copy of By-laws of the trustee as now
in effect.*
Exhibit 5. Not applicable.
Exhibit 6. The consent of the trustee required
by Section 321(b) of the Act.
Exhibit 7. A copy of the latest report of
condition of the trustee published
pursuant to law or the requirements of
its supervising or examining authority.
Exhibit 8. Not applicable.
Exhibit 9. Not applicable.
* Incorporated by reference to Exhibit 25 filed with
registration statement (number 33- 66026) of trustee's parent,
Norwest Corporation.
SIGNATURE
Pursuant to the requirements of the Trust Indenture Act of 1939, as amended, the
trustee, Norwest Bank Minnesota, National Association, a national banking
association organized and existing under the laws of the United States of
America, has duly caused this statement of eligibility to be signed on its
behalf by the undersigned, thereunto duly authorized, all in the City of
Minneapolis and State of Minnesota on the 16th day of June, 1998.
NORWEST BANK MINNESOTA,
NATIONAL ASSOCIATION
/s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
----------------------
Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Title: Asst. Vice President
