EXHIBIT 4.5
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[NAME OF SERVICER],
as Servicer,
and
CITIGROUP COMMERCIAL MORTGAGE SECURITIES INC.
as Company
-----------------------------
SERVICING AGREEMENT
Dated as of _______________
-----------------------------
________________Mortgage Loans
CITIGROUP MBN Trust Series 20__-__
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TABLE OF CONTENTS
ARTICLE I DEFINITIONS............................................................................................ 1
SECTION 1.01. Definitions........................................................................... 1
SECTION 1.02. Other Definitional Provisons.......................................................... 2
SECTION 1.03. Interest Calculations................................................................. 2
ARTICLE II REPRESENTATIONS AND WARRANTIES........................................................................ 2
SECTION 2.01. Representations and Warranties Regarding the Servicer................................. 2
SECTION 2.02. Representations and Warranties of the Company......................................... 3
SECTION 2.03. Enforcement of Representations and Warranties......................................... 4
ARTICLE III ADMINISTRATION AND SERVICING OF MORTGAGE LOANS....................................................... 5
SECTION 3.01. The Servicers......................................................................... 5
SECTION 3.02. Collection of Certain Mortgage Loan Payments.......................................... 7
SECTION 3.03. Withdrawals From the Collection Account............................................... 9
SECTION 3.04. Maintenance of Hazard Insurance; Property Protection Expenses......................... 10
SECTION 3.05. Modification Agreements............................................................... 11
SECTION 3.06. Trust Estate; Related Documents....................................................... 11
SECTION 3.07. Realization Upon Defaulted Mortgage Loans............................................. 12
SECTION 3.08. Company and Indenture Trustee to Cooperate............................................ 13
SECTION 3.09. Servicing Compensation; Payment of Certain Expenses by Servicer....................... 15
SECTION 3.10. Annual Statement as to Compliance..................................................... 15
SECTION 3.11. ANNUAL SERVICING REPORT............................................................... 15
SECTION 3.12. Access to Certain Documentation and Information Regarding the Mortgage Loans.......... 16
SECTION 3.13. Maintenance of Certain Servicing Insurance Policies................................... 16
SECTION 3.14. Information Required by the Internal Revenue Service Generally and Reports of
Foreclosures and Abandonments of Mortgaged Property................................... 16
SECTION 3.15. Optional Repurchase of Defaulted Mortgage Loans....................................... 17
ARTICLE IV SERVICING CERTIFICATE................................................................................. 17
SECTION 4.01. Statements to Securityholders......................................................... 17
ARTICLE V DISTRIBUTION AND PAYMENT ACCOUNTS...................................................................... 19
SECTION 5.01. Distribution Account.................................................................. 19
SECTION 5.02. Payment Account....................................................................... 19
ARTICLE VI THE SERVICER.......................................................................................... 20
SECTION 6.01. Liability of the Servicer............................................................. 20
SECTION 6.02. Merger of Consolidation of, or Assumption of the Obligations of, the Servicer......... 20
SECTION 6.03. Limitation on Liability of the Servicer and Others.................................... 21
SECTION 6.04. Servicer Not to Resign................................................................ 21
SECTION 6.05. Delegation of Duties.................................................................. 22
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SECTION 6.06. Servicer to Pay Indenture Trustee's and Owner Trustee's Fees and
Expenses; Indemnification............................................................. 22
ARTICLE VII DEFAULT.............................................................................................. 23
SECTION 7.01. Servicing Default..................................................................... 23
SECTION 7.02. Indenture Trustee to Act; Appointment of Successor.................................... 26
SECTION 7.03. Notification to Securityholders....................................................... 27
ARTICLE VIII MISCELLANEOUS PROVISIONS............................................................................ 27
SECTION 8.01. Amendment............................................................................. 27
SECTION 8.02. GOVERNING LAW......................................................................... 27
SECTION 8.03. Notices............................................................................... 27
SECTION 8.04. Severability of Provisions............................................................ 28
SECTION 8.05. Third-Party Beneficiaries............................................................. 28
SECTION 8.06. Counterparts.......................................................................... 28
SECTION 8.07. Effect of Headings and Table of Contents.............................................. 28
SECTION 8.08. Termination Upon Purchase by the Servicer or Liquidation of All Mortgage Loans........ 28
SECTION 8.09. Certain Matters Affecting the Indenture Trustee....................................... 29
SECTION 8.10. Authority of the Administrator........................................................ 29
Schedule 1 - Mortgage Insurance Component Schedule............................................................ 1
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This Servicing Agreement, dated as of _______________, between [NAME OF
SERVICER], as Servicer (the "Servicer") and CITIGROUP COMMERCIAL MORTGAGE
SECURITIES INC., as Company (the "Company"),
W I T N E S S E T H
T H A T:
WHEREAS, Citigroup Commercial Mortgage Securities Inc., will create
Citigroup MBN Trust Series 20__-__, an owner trust (the "Issuer") under Delaware
law, and will transfer the Mortgage Loans and all of its rights under the
Mortgage Loan Purchase Agreement to the Issuer,;
WHEREAS, pursuant to the terms of a Trust Agreement dated as of
_______________ (the "Owner Trust Agreement") between the Company, as depositor,
and ______________________, as owner trustee (the "Owner Trustee"), the Company
will sell the Mortgage Collateral to Issuer in exchange for the cash proceeds of
the Securities;
WHEREAS, pursuant to the terms of the Trust Agreement between the
Depositor and the Owner Trustee, the Issuer will issue and transfer to or at the
direction of the Depositor, the Mortgage-Backed Certificates, Series 20__-__
(the "Certificates");
WHEREAS, pursuant to the terms of an Indenture dated as of
_______________ (the "Indenture") between the Issuer and the Indenture Trustee,
the Issuer will issue and transfer to or at the direction of the Purchaser the
Mortgage-Backed Notes, Series 20__-__ (the "Notes"), consisting of the Notes and
secured by the Mortgage Collateral;
WHEREAS, pursuant to the terms of the Mortgage Loan Purchase Agreement,
the Company will acquire the Initial Loans; and
WHEREAS, pursuant to the terms of this Servicing Agreement, the
Servicer will service the Mortgage Loans directly or through one or more
Subservicers;
NOW, THEREFORE, in consideration of the mutual covenants herein
contained, the parties hereto agree as follows:
ARTICLE I
DEFINITIONS
SECTION 1.01. Definitions.
For all purposes of this Servicing Agreement, except as
otherwise expressly provided herein or unless the context otherwise requires,
capitalized terms not otherwise defined herein shall have the meanings assigned
to such terms in the Definitions contained in Appendix A to the Indenture which
is incorporated by reference herein. All other capitalized terms used herein
shall have the meanings specified herein.
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SECTION 1.02. Other Definitional Provisons.
(a) All terms defined in this Servicing Agreement shall
have the defined meanings when used in any certificate or other document made or
delivered pursuant hereto unless otherwise defined therein.
(b) As used in this Servicing Agreement and in any
certificate or other document made or delivered pursuant hereto or thereto,
accounting terms not defined in this Servicing Agreement or in any such
certificate or other document, and accounting terms partly defined in this
Servicing Agreement or in any such certificate or other document, to the extent
not defined, shall have the respective meanings given to them under generally
accepted accounting principles. To the extent that the definitions of accounting
terms in this Servicing Agreement or in any such certificate or other document
are inconsistent with the meanings of such terms under generally accepted
accounting principles, the definitions contained in this Servicing Agreement or
in any such certificate or other document shall control.
(c) The words "hereof," "herein," "hereunder" and words
of similar import when used in this Servicing Agreement shall refer to this
Servicing Agreement as a whole and not to any particular provision of this
Servicing Agreement; Section and Exhibit references contained in this Servicing
Agreement are references to Sections and Exhibits in or to this Servicing
Agreement unless otherwise specified; and the term "including" shall mean
"including without limitation".
(d) The definitions contained in this Servicing Agreement
are applicable to the singular as well as the plural forms of such terms and to
the masculine as well as the feminine and neuter genders of such terms.
(e) Any agreement, instrument or statute defined or
referred to herein or in any instrument or certificate delivered in connection
herewith means such agreement, instrument or statute as from time to time
amended, modified or supplemented and includes (in the case of agreements or
instruments) references to all attachments thereto and instruments incorporated
therein; references to a Person are also to its permitted successors and
assigns.
SECTION 1.03. Interest Calculations.
All calculations of interest hereunder that are made in
respect of the Principal Balance of a Mortgage Loan shall be made on a daily
basis using a 365- day year. All calculations of interest on the Securities
shall be made on the basis of the actual number of days in an Interest Period
and a year assumed to consist of 360 days. The calculation of the Servicing Fee
shall be made on the basis of a 360-day year consisting of twelve 30-day months.
All dollar amounts calculated hereunder shall be rounded to the nearest ▇▇▇▇▇
with one-half of one ▇▇▇▇▇ being rounded down.
ARTICLE II
REPRESENTATIONS AND WARRANTIES
SECTION 2.01. Representations and Warranties Regarding the
Servicer.
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The Servicer represents and warrants to Company, the Issuer
and for the benefit of the Indenture Trustee, as pledgee of the Mortgage
Collateral, and the Securityholders, as of the Cut-Off Date, [the date of the
Servicing Agreement], the Closing Date [and any Deposit Date], that:
(i) The Servicer is a corporation duly organized, validly
existing and in good standing under the laws of the State of [_______]
and has the corporate power to own its assets and to transact the
business in which it is currently engaged. The Servicer is duly
qualified to do business as a foreign corporation and is in good
standing in each jurisdiction in which the character of the business
transacted by it or properties owned or leased by it requires such
qualification and in which the failure to so qualify would have a
material adverse effect on the business, properties, assets, or
condition (financial or other) of the Servicer;
(ii) The Servicer has the power and authority to make,
execute, deliver and perform this Servicing Agreement and all of the
transactions contemplated under this Servicing Agreement, and has taken
all necessary corporate action to authorize the execution, delivery and
performance of this Servicing Agreement. When executed and delivered,
this Servicing Agreement will constitute the legal, valid and binding
obligation of the Servicer enforceable in accordance with its terms,
except as enforcement of such terms may be limited by bankruptcy,
insolvency or similar laws affecting the enforcement of creditors'
rights generally and by the availability of equitable remedies;
(iii) The Servicer is not required to obtain the consent of
any other Person or any consent, license, approval or authorization
from, or registration or declaration with, any governmental authority,
bureau or agency in connection with the execution, delivery,
performance, validity or enforceability of this Servicing Agreement,
except for such consent, license, approval or authorization, or
registration or declaration, as shall have been obtained or filed, as
the case may be;
(iv) The execution and delivery of this Servicing
Agreement and the performance of the transactions contemplated hereby
by the Servicer will not violate any provision of any existing law or
regulation or any order or decree of any court applicable to the
Servicer or any provision of the Certificate of Incorporation or Bylaws
of the Servicer, or constitute a material breach of any mortgage,
indenture, contract or other agreement to which the Servicer is a party
or by which the Servicer may be bound; and
(v) No litigation or administrative proceeding of or
before any court, tribunal or governmental body is currently pending,
or to the knowledge of the Servicer threatened, against the Servicer or
any of its properties or with respect to this Servicing Agreement or
the Notes or the Certificates which in the opinion of the Servicer has
a reasonable likelihood of resulting in a material adverse effect on
the transactions contemplated by this Servicing Agreement. The
foregoing representations and warranties shall survive any termination
of the Servicer hereunder.
SECTION 2.02. Representations and Warranties of the
Company.
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The Company hereby represents and warrants to the Servicer for
the benefit of the Indenture Trustee, as pledgee of the Mortgage Collateral, and
the Securityholders, as of the Cut-Off Date, the Closing Date and any Deposit
Date, that:
(i) The Company is a corporation in good standing under
the laws of the State of California;
(ii) The Company has full power, authority and legal right
to execute and deliver this Servicing Agreement and to perform its
obligations under this Servicing Agreement, and has taken all necessary
action to authorize the execution, delivery and performance by it of
this Servicing Agreement; and
(iii) The execution and delivery by the Company of this
Servicing Agreement and the performance by the Company of its
obligations under this Servicing Agreement will not violate any
provision of any law or regulation governing the Company or any order,
writ, judgment or decree of any court, arbitrator or governmental
authority or agency applicable to the Company or any of its assets.
Such execution, delivery, authentication and performance will not
require the authorization, consent or approval of, the giving of notice
to, the filing or registration with, or the taking of any other action
with respect to, any governmental authority or agency regulating the
activities of limited liability companies. Such execution, delivery,
authentication and performance will not conflict with, or result in a
breach or violation of, any mortgage, deed of trust, lease or other
agreement or instrument to which the Company is bound.
SECTION 2.03. Enforcement of Representations and
Warranties.
The Servicer, on behalf of and subject to the direction of the
Indenture Trustee, as pledgee of the Mortgage Collateral, or the Credit
Enhancer, shall enforce the representations and warranties of the Seller
pursuant to the Mortgage Loan Purchase Agreement. Upon the discovery by the
Seller, the Servicer, the Indenture Trustee, the Credit Enhancer, the Company or
any Custodian of a breach of any of the representations and warranties made in
the Mortgage Loan Purchase Agreement, in respect of any Mortgage Loan which
materially and adversely affects the interests of the Securityholders or the
Credit Enhancer, the party discovering such breach shall give prompt written
notice to the other parties (any Custodian being so obligated under a Custodial
Agreement). The Servicer shall promptly notify the Seller of such breach and
request that, pursuant to the terms of the Mortgage Loan Purchase Agreement, the
Seller either (i) cure such breach in all material respects within 45 days (with
respect to a breach of the representations and warranties contained in Section
3.1(a) of the Mortgage Loan Purchase Agreement) or 90 days (with respect to a
breach of the representations and warranties contained in Section 3.1(b) of the
Mortgage Loan Purchase Agreement) from the date the Seller was notified of such
breach or (ii) purchase such Mortgage Loan from the Company at the price and in
the manner set forth in Section 3.1(b) of the Mortgage Loan Purchase Agreement;
PROVIDED that the Seller shall, subject to the conditions set forth in the
Mortgage Loan Purchase Agreement, have the option to substitute an Eligible
Substitute Mortgage Loan or Loans for such Mortgage Loan. In the event that the
Seller elects to substitute one or more Eligible Substitute Mortgage Loans
pursuant to Section 3.1(b) of the Mortgage Loan Purchase Agreement, the Seller
shall deliver to the Company with respect to such Eligible Substitute
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Mortgage Loans, the original Mortgage Note, the Mortgage, and such other
documents and agreements as are required by the Mortgage Loan Purchase
Agreement. No substitution will be made in any calendar month after the
Determination Date for such month. Payments due with respect to Eligible
Substitute Mortgage Loans in the month of substitution shall not be transferred
to the Company and will be retained by the Servicer and remitted by the Servicer
to the Seller on the next succeeding Payment Date provided a payment has been
received by the Company for such month in respect of the Mortgage Loan to be
removed. The Servicer shall amend or cause to be amended the Mortgage Loan
Schedule to reflect the removal of such Mortgage Loan and the substitution of
the Eligible Substitute Mortgage Loans and the Servicer shall promptly deliver
the amended Mortgage Loan Schedule to the Owner Trustee and Indenture Trustee.
It is understood and agreed that the obligation of the Seller
to cure such breach or purchase or substitute for such Mortgage Loan as to which
such a breach has occurred and is continuing shall constitute the sole remedy
respecting such breach available to the Company and the Indenture Trustee, as
pledgee of the Mortgage Collateral, against the Seller. In connection with the
purchase of or substitution for any such Mortgage Loan by the Seller, the
Company shall assign to the Seller all of the right, title and interest in
respect of the Mortgage Loan Purchase Agreement applicable to such Mortgage
Loan. Upon receipt of the Repurchase Price, or upon completion of such
substitution, the applicable Custodian shall deliver the Mortgage Files to the
Servicer, together with all relevant endorsements and assignments.
ARTICLE III
ADMINISTRATION AND SERVICING OF MORTGAGE LOANS
SECTION 3.01. The Servicers.
(a) The Servicer shall service and administer the
Mortgage Loans in the same manner as would prudent institutional mortgage
lenders servicing comparable mortgage loans for their own account in the
jurisdictions where the related Mortgaged Properties are located and in a manner
consistent with the terms of this Servicing Agreement and which shall be normal
and usual in its general mortgage servicing activities and shall have full power
and authority, acting alone or through a subservicer, to do any and all things
in connection with such servicing and administration which it may deem necessary
or desirable, it being understood, how ever, that the Servicer shall at all
times remain responsible to the Company, the Indenture Trustee, as pledgee of
the Mortgage Collateral, and the Securityholders for the performance of its
duties and obligations hereunder in accordance with the terms hereof and the
servicing standard set forth above. Without limiting the generality of the
foregoing, the Servicer shall continue, and is hereby authorized and empowered
by the Company and the Indenture Trustee, as pledgee of the Mortgage Collateral,
to execute and deliver, on behalf of itself, the Company, the Securityholders
and the Indenture Trustee or any of them, any and all instruments of
satisfaction or cancellation, or of partial or full release or discharge and all
other comparable instruments with respect to the Mortgage Loans and with respect
to the Mortgaged Properties. The Company, the Indenture Trustee and the
Custodian, as applicable, shall furnish the Servicer with any powers of attorney
and other documents necessary or appropriate to enable the Servicer to carry
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out its servicing and administrative duties hereunder. On the Closing Date, the
Company shall deliver to the Servicer a power of attorney substantially in the
form of Exhibit B hereto.
If the Mortgage relating to a Mortgage Loan did not have a
lien senior on the related Mortgaged Property as of the Cut-Off Date, then the
Servicer, in such capacity, may not consent to the placing of a lien senior to
that of the Mortgage on the related Mortgaged Property. If the Mortgage relating
to a Mortgage Loan had a lien senior to the Mortgage Loan on the related
Mortgaged Property as of the Cut-Off Date, then the Servicer, in such capacity,
may consent to the refinancing of such senior lien; provided that (i) the
resulting Combined Loan-to-Value Ratio of such Mortgage Loan is no higher than
the Combined Loan-to-Value Ratio prior to such refinancing and (ii) the interest
rate for the loan evidencing the refinanced senior lien on the date of such
refinancing is no higher than the interest rate on the loan evidencing the
existing senior lien immediately prior to the date of such refinancing.
The relationship of the Servicer (and of any successor to the
Servicer as servicer under this Servicing Agreement) to the Company under this
Servicing Agreement is intended by the parties to be that of an independent
contractor and not that of a joint venturer, partner or agent.
(b) The Servicer has entered into Initial Subservicing
Agreements with the Initial Subservicers for the servicing and administration of
the Mortgage Loans and may enter into additional Sub servicing Agreements with
Subservicers for the servicing and administration of certain of the Mortgage
Loans. References in this Servicing Agreement to actions taken or to be taken by
the Servicer in servicing the Mortgage Loans include actions taken or to be
taken by a Subservicer on behalf of the Servicer and any amount received by such
Subservicer in respect of a Mortgage Loan shall be deemed to have been received
by the Servicer whether or not actually received by the Servicer. Each
Subservicing Agreement will be upon such terms and conditions as are not
inconsistent with this Servicing Agreement and as the Servicer and the
Subservicer have agreed. With the approval of the Servicer, a Subservicer may
delegate its servicing obligations to third-party servicers, but such
Subservicers will remain obligated under the related Subservicing Agreements.
The Servicer and the Subservicer may enter into amendments to the related
Subservicing Agreements; provided, however, that any such amendments shall be
consistent with and not violate the provisions of this Servicing Agreement. The
Servicer shall be entitled to terminate any Subservicing Agreement in accordance
with the terms and conditions thereof and without any limitation by virtue of
this Servicing Agreement; provided, however, that in the event of termination of
any Subservicing Agreement by the Servicer or the Subservicer, the Servicer
shall either act as servicer of the related Mortgage Loan or enter into a
Subservicing Agreement with a successor Subservicer which will be bound by the
terms of the related Subservicing Agreement. The Servicer shall be entitled to
enter into any agreement with a Subservicer for indemnification of the Servicer
and nothing contained in this Servicing Agreement shall be deemed to limit or
modify such indemnification.
In the event that the rights, duties and obligations of the
Servicer are terminated hereunder, any successor to the Servicer in its sole
discretion may, to the extent permitted by applicable law, terminate the
existing Subservicing Agreement with any Subservicer in accordance with the
terms of the applicable Subservicing Agreement or assume the terminated
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Servicer's rights and obligations under such subservicing arrangements which
termination or assumption will not violate the terms of such arrangements.
As part of its servicing activities hereunder, the Servicer,
for the benefit of the Company, shall use reasonable efforts to enforce the
obligations of each Subservicer under the related Subservicing Agreement, to the
extent that the non-performance of any such obligation would have material and
adverse effect on a Mortgage Loan. Such enforcement, including, without
limitation, the legal prosecution of claims, termination of Subservicing
Agreements and the pursuit of other appropriate remedies, shall be in such form
and carried out to such an extent and at such time as the Servicer, in its good
faith business judgment, would require were it the owner of the related Mortgage
Loans. The Servicer shall pay the costs of such enforcement at its own expense,
and shall be reimbursed therefor only (i) from a general recovery resulting from
such enforcement to the extent, if any, that such recovery exceeds all amounts
due in respect of the related Mortgage Loan or (ii) from a specific recovery of
costs, expenses or attorneys fees against the party against whom such
enforcement is directed.
SECTION 3.02. Collection of Certain Mortgage Loan
Payments.
(a) The Servicer shall make reasonable efforts to collect
all payments called for under the terms and provisions of the ▇▇▇▇ ▇▇▇▇ Loans,
and shall, to the extent such procedures shall be consistent with this Servicing
Agreement, follow such collection procedures as shall be normal and usual in its
general mortgage servicing activities. Consistent with the foregoing, and
without limiting the generality of the foregoing, the Servicer may in its
discretion (i) waive any late payment charge, penalty interest or other fees
which may be collected in the ordinary course of servicing such Mortgage Loan
and (ii) arrange with a Mortgagor a schedule for the payment of principal and
interest due and unpaid; provided such arrangement is consistent with the
Servicer's policies with respect to home equity mortgage loans; provided,
further, that notwithstanding such arrangement such Mortgage Loans will be
included in the information regarding delinquent Mortgage Loans set forth in the
Servicing Certificate. The Servicer may also extend the Due Date for payment due
on a Mortgage Loan, provided, however, that the Servicer shall first determine
that any such waiver or extension will not adversely affect the lien of the
related Mortgage. Consistent with the terms of this Servicing Agreement, the
Servicer may also 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 Servicer's determination such
waiver, modification, postponement or indulgence is not materially adverse to
the interests of the Securityholders or the Credit Enhancer, provided, however,
that the Servicer may not modify or permit any Subservicer to modify any
Mortgage Loan (including without limitation any modification that would change
the Mortgage Rate, forgive the payment of any principal or interest (unless in
connection with the liquidation of the related Mortgage Loan) or extend the
final maturity date of such Mortgage Loan) unless such Mortgage Loan is in
default or, in the judgment of the Servicer, such default is reasonably
foreseeable.
(b) The Servicer shall establish an account (the
"Collection Account") in which the Servicer shall deposit or cause to be
deposited any amounts representing payments on and any collections in respect of
the Mortgage Loans received by it subsequent to the Cut-Off Date as to any
Initial Loan or the related Deposit Date as to any Additional Loan (other than
in
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respect of the payments referred to in the following paragraph) within __
Business Day[s] following receipt thereof (or otherwise on or prior to the
Closing Date), including the following payments and collections received or made
by it (without duplication):
(i) all payments of principal of or interest on the
Mortgage Loans received by the Servicer from the respective
Subservicer, net of any portion of the interest thereof retained by the
Subservicer as Subservicing Fees;
(ii) the aggregate Repurchase Price of the Mortgage Loans
purchased by the Servicer pursuant to Section 3.15;
(iii) Net Liquidation Proceeds net of any related
Foreclosure Profit;
(iv) all proceeds of any Mortgage Loans repurchased by the
Seller pursuant to the Mortgage Loan Purchase Agreement, and all
Substitution Adjustment Amounts required to be deposited in connection
with the substitution of an Eligible Substitute Mortgage Loan pursuant
to the Mortgage Loan Purchase Agreement;
(v) insurance proceeds, other than Net Liquidation
Proceeds, resulting from any insurance policy maintained on a Mortgaged
Property; and
(vi) amounts required to be paid by the Servicer pursuant
to Section 8.08.
Provided, however, that with respect to each Collection
Period, the Servicer shall be permitted to retain from payments in respect of
interest on the Mortgage Loans, the Servicing Fee for such Collection Period.
The foregoing requirements respecting deposits to the Collection Account are
exclusive, it being understood that, without limiting the generality of the
foregoing, the Servicer need not deposit in the Collection Account amounts
representing Foreclosure Profits, fees (including annual fees) or late charge
penalties, payable by Mortgagors, or amounts received by the Servicer for the
accounts of Mortgagors for application towards the payment of taxes, insurance
premiums, assessments and similar items. In the event any amount not required to
be deposited in the Collection Account is so deposited, the Servicer may at any
time withdraw such amount from the Collection Account, any provision herein to
the contrary notwithstanding. The Collection Account may contain funds that
belong to one or more trust funds created for the notes or certificates of other
series and may contain other funds respecting payments on mortgage loans
belonging to the Servicer or serviced or serviced by it on behalf of others.
Notwithstanding such commingling of funds, the Servicer shall keep records that
accurately reflect the funds on deposit in the Collection Account that have been
identified by it as being attributable to the Mortgage Loans and shall hold all
collections in the Collection Account to the extent they represent collections
on the Mortgage Loans for the benefit of the Company, the Indenture Trustee, the
Securityholders and the Credit Enhancer, as their interests may appear. The
Servicer shall remit all Foreclosure Profits to itself as additional servicing
compensation.
The Servicer may cause the institution maintaining the
Collection Account to invest any funds in the Collection Account in Eligible
Investments (including obligations of the Servicer or any of its Affiliates, if
such obligations otherwise qualify as Eligible Investments), which shall mature
not later than the Business Day next preceding the Payment Date and shall not be
sold or disposed of prior to its maturity. Except as provided above, all income
and gain
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realized from any such investment shall be for the benefit of the Servicer and
shall be subject to its withdrawal or order from time to time. The amount of any
losses incurred in respect of the principal amount of any such investments shall
be deposited in the Collection Account by the Servicer out of its own funds
immediately as realized.
(c) The Servicer will require each Subservicer to hold
all funds constituting collections on the Mortgage Loans, pending remittance
thereof to the Servicer, in one or more accounts meeting the requirements of an
Eligible Account, and invested in Eligible Investments, unless, all such
collections are remitted on a daily basis to the Servicer for deposit into the
Collection Account.
SECTION 3.03. Withdrawals From the Collection Account.
The Servicer shall, from time to time as provided herein, make
withdrawals from the Collection Account of amounts on deposit therein pursuant
to Section 3.02 that are attributable to the Mortgage Loans for the following
purposes:
(i) to deposit in the Distribution Account, on the
Business Day prior to each Payment Date, an amount equal to the
Security Collections required to be distributed on such Payment Date;
(ii) to the extent deposited to the Collection Account, to
reimburse itself or the related Subservicer for previously unreimbursed
expenses incurred in maintaining individual insurance policies pursuant
to Section 3.04, or Liquidation Expenses, paid pursuant to Section 3.07
or otherwise reimbursable pursuant to the terms of this Servicing
Agreement (to the extent not payable pursuant to Section 3.09), such
withdrawal right being limited to amounts received on particular
Mortgage Loans (other than any Repurchase Price in respect thereof)
which represent late recoveries of the payments for which such advances
were made, or from related Liquidation Proceeds or the proceeds of the
purchase of such Mortgage Loan;
(iii) to pay to itself out of each payment received on
account of interest on a Mortgage Loan as contemplated by Section 3.09,
an amount equal to the related Servicing Fee (to the extent not
retained pursuant to Section 3.02), and to pay to any Subservicer any
Subservicing Fees not previously withheld by the Subservicer;
(iv) to the extent deposited in the Collection Account to
pay to itself as additional servicing compensation any interest or
investment income earned on funds deposited in the Collection Account
and Payment Account that it is entitled to withdraw pursuant to
Sections 3.02(b) and 5.01;
(v) to the extent deposited in the Collection Account, to
pay to itself as additional servicing compensation any Foreclosure
Profits;
(vi) to pay to itself or the Seller, with respect to any
Mortgage Loan or property acquired in respect thereof that has been
purchased or otherwise transferred to the Seller, the Servicer or other
entity, all amounts received thereon and not required to
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be distributed to Securityholders as of the date on which the related
Purchase Price or Repurchase Price is determined;
(vii) to withdraw any other amount deposited in the
Collection Account that was not required to be deposited therein
pursuant to Section 3.02;
(viii) to pay to the Seller the amount, if any, deposited in
the Collection Account by the Indenture Trustee upon release thereof
from the Funding Account representing payments for Additional Loans;
and
(ix) after the occurrence of an Amortization Event, to pay
to the Seller, the Excluded Amount.
Since, in connection with withdrawals pursuant to clauses
(iii), (iv), (vi) and (vii), the Servicer's entitlement thereto is limited to
collections or other recoveries on the related Mortgage Loan, the Servicer shall
keep and maintain separate accounting, on a Mortgage Loan by Mortgage Loan
basis, for the purpose of justifying any withdrawal from the Collection Account
pursuant to such clauses. Notwithstanding any other provision of this Servicing
Agreement, the Servicer shall be entitled to reimburse itself for any previously
unreimbursed expenses incurred pursuant to Section 3.07 or otherwise
reimbursable pursuant to the terms of this Servicing Agreement that the Servicer
determines to be otherwise nonrecoverable (except with respect to any Mortgage
Loan as to which the Repurchase Price has been paid), by withdrawal from the
Collection Account of amounts on deposit therein attributable to the Mortgage
Loans on any Business Day prior to the Payment Date succeeding the date of such
determination.
SECTION 3.04. Maintenance of Hazard Insurance; Property
Protection Expenses.
The Servicer shall cause to be maintained for each Mortgage
Loan hazard insurance naming the Servicer or related Subservicer 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 or (ii) the combined principal balance owing on
such Mortgage Loan and any mortgage loan senior to such Mortgage Loan from time
to time. The Servicer shall also cause to be maintained on property acquired
upon foreclosure, or deed in lieu of foreclosure, of any Mortgage Loan, fire
insurance with extended coverage in an amount which is at least equal to the
amount necessary to avoid the application of any co-insurance clause contained
in the related hazard insurance policy. Amounts collected by the Servicer under
any such policies (other than amounts to be applied to the restoration or repair
of the related Mortgaged Property or property thus acquired or amounts released
to the Mortgagor in accordance with the Servicer's normal servicing procedures)
shall be deposited in the Collection Account to the extent called for by Section
3.02. In cases in which any Mortgaged Property is located at any time during the
life of a Mortgage Loan in a federally designated flood area, the hazard
insurance to be maintained for the related Mortgage Loan shall include flood
insurance (to the extent available). All such flood insurance shall be in
amounts equal to the lesser of (i) the amount required to compensate for any
loss or damage to the Mortgaged Property on a replacement cost basis and (ii)
the maximum amount of such insurance
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available for the related Mortgaged Property under the national flood insurance
program (assuming that the area in which such Mortgaged Property is located is
participating in such program). The 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. If the Servicer shall obtain and maintain a
blanket policy consistent with its general mortgage servicing activities
insuring against hazard losses on all of the Mortgage Loans, it shall
conclusively be deemed to have satisfied its obligations as set forth in the
first sentence of this Section 3.04, it being understood and agreed that such
policy may contain a deductible clause, in which case the Servicer shall, in the
event that there shall not have been maintained on the related Mortgaged
Property a policy complying with the first sentence of this Section 3.04 and
there shall have been a loss which would have been covered by such policy,
deposit in the Collection Account the amount not otherwise payable under the
blanket policy because of such deductible clause. Any such deposit by the
Servicer shall be made on the last Business Day of the Collection Period in the
month in which payments under any such policy would have been deposited in the
Collection Account. In connection with its activities as administrator and
servicer of the Mortgage Loans, the Servicer agrees to present, on behalf of
itself, the Company, the Issuer, the Indenture Trustee and the Securityholders,
claims under any such blanket policy.
SECTION 3.05. Modification Agreements.
The Servicer or the related Subservicer, as the case may be,
shall be entitled to (A) execute assumption agreements, substitution agreements,
and instruments of satisfaction or cancellation or of partial or full release or
discharge, or any other document contemplated by this Servicing Agreement and
other comparable instruments with respect to the Mortgage Loans and with respect
to the Mortgaged Properties subject to the Mortgages (and the Company shall
promptly execute any such documents on request of the Servicer) and (B) approve
the granting of an easement thereon in favor of another Person, any alteration
or demolition of the related Mortgaged Property or other similar matters, if it
has determined, exercising its good faith business judgment in the same manner
as it would if it were the owner of the related Mortgage Loan, that the security
for, and the timely and full collectability of, such Mortgage Loan would not be
adversely affected thereby. A partial release pursuant to this Section 3.05
shall be permitted only if the Combined Loan-to-Value Ratio for such Mortgage
Loan after such partial release does not exceed the Combined Loan-to-Value Ratio
for such Mortgage Loan as of the Cut-Off Date. Any fee collected by the Servicer
or the related Sub servicer for processing such request will be retained by the
Servicer or such Subservicer as additional servicing compensation.
SECTION 3.06. Trust Estate; Related Documents.
(a) When required by the provisions of this Servicing
Agreement, the Company shall execute instruments to release property from the
terms of this Servicing Agreement, or convey the Company's interest in the same,
in a manner and under circumstances which are not inconsistent with the
provisions of this Servicing Agreement. No party relying upon an instrument
executed by the Company as provided in this Article III shall be bound to
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ascertain the Company's authority, inquire into the satisfaction of any
conditions precedent or see to the application of any moneys.
(b) If from time to time the Servicer shall deliver to
the Company or the related Custodian copies of any written assurance, assumption
agreement or substitution agreement or other similar agreement pursuant to
Section 3.05, the Company or the related Custodian shall check that each of such
documents purports to be an original executed copy (or a copy of the original
executed document if the original executed copy has been submitted for recording
and has not yet been returned) and, if so, shall file such documents, and upon
receipt of the original executed copy from the applicable recording office or
receipt of a copy thereof certified by the applicable recording office shall
file such originals or certified copies with the Related Documents. If any such
documents submitted by the Servicer do not meet the above qualifications, such
documents shall promptly be returned by the Company or the related Custodian to
the Servicer, with a direction to the Servicer to forward the correct
documentation.
(c) Upon Company Request accompanied by an Officers'
Certificate of the Servicer pursuant to Section 3.09 of this Servicing Agreement
to the effect that a Mortgage Loan has been the subject of a final payment or a
prepayment in full and the related Mortgage Loan has been terminated or that
substantially all Liquidation Proceeds which have been determined by the
Servicer in its reasonable judgment to be finally recoverable have been
recovered, and upon deposit to the Collection Account of such final monthly
payment, prepayment in full together with accrued and unpaid interest to the
date of such payment with respect to such Mortgage Loan or, if applicable,
Liquidation Proceeds, the Company shall promptly release the Related Documents
to the Servicer, along with such documents as the Servicer or the Mortgagor may
request as contemplated by the Servicing Agreement to evidence satisfaction and
discharge of such Mortgage Loan. If from time to time and as appropriate for the
servicing or foreclosure of any Mortgage Loan, the Servicer requests the Company
or the related Custodian to release the Related Documents and delivers to the
Company or the related Custodian a trust receipt reasonably satisfactory to the
Company or the related Custodian and signed by a Responsible Officer of the
Servicer, the Company or the related Custodian shall release the Related
Documents to the Servicer. If such Mortgage Loans shall be liquidated and the
Company or the related Custodian receives a certificate from the Servicer as
provided above, then, upon request of the Company or the related Custodian shall
release the trust receipt to the Servicer.
SECTION 3.07. Realization Upon Defaulted Mortgage Loans.
With respect to such of the Mortgage Loans as come into and
continue in default, the Servicer will decide whether to foreclose upon the
Mortgaged Properties securing such Mortgage Loans or write off the unpaid
principal balance of the Mortgage Loans as bad debt; provided that if the
Servicer has actual knowledge that any Mortgaged Property is affected by
hazardous or toxic wastes or substances and that the acquisition of such
Mortgaged Property would not be commercially reasonable, then the Servicer will
not cause the Company to acquire title to such Mortgaged Property in a
foreclosure or similar proceeding. In connection with such foreclosure or other
conversion, the Servicer shall follow such practices (including, in the case of
any default on a related senior mortgage loan, the advancing of funds to correct
such default) and procedures as it shall deem necessary or advisable and as
shall be normal and usual in its general mortgage servicing activities; provided
that the Servicer shall not be liable in any respect
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hereunder if the Servicer is acting in connection with any such foreclosure or
attempted foreclosure which is not completed or other conversion in a manner
that is consistent with the provisions of this Servicing Agreement. The
foregoing is subject to the proviso that the Servicer shall not be required to
expend its own funds in connection with any fore closure or attempted
foreclosure which is not completed or towards the correction of any default on a
related senior mortgage loan or restoration of any property unless it shall
determine that such expenditure will increase Net Liquidation Proceeds. In the
event of a determination by the Servicer that any such expenditure previously
made pursuant to this Section 3.07 will not be reimbursable from Net Liquidation
Proceeds, the Servicer shall be entitled to reimbursement of its funds so
expended pursuant to Section 3.03.
Notwithstanding any provision of this Servicing Agreement, a
Mortgage Loan may be deemed to be finally liquidated if substantially all
amounts expected by the Servicer to be received in connection with the related
defaulted Mortgage Loan have been received; provided, however, any subsequent
collections with respect to any such Mortgage Loan shall be deposited to the
Collection Account. For purposes of determining the amount of any Liquidation
Proceeds or Insurance Proceeds, or other unscheduled collections, the Servicer
may take into account minimal amounts of additional receipts expected to be
received or any estimated additional liquidation expenses expected to be
incurred in connection with the related defaulted Mortgage Loan.
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 Company and the Indenture Trustee as their interests
may appear, or to their respective nominee on behalf of Securityholders.
Notwithstanding any such acquisition of title and cancellation of the related
Mortgage Loan, such Mortgaged Property shall (except as otherwise expressly
provided herein) be considered to be an outstanding Mortgage Loan held as an
asset of the Company until such time as such property shall be sold. Consistent
with the foregoing for purposes of all calculations hereunder, so long as such
Mortgaged Property shall be considered to be an outstanding Mortgage Loan it
shall be assumed that, notwithstanding that the indebtedness evidenced by the
related Mortgage Note shall have been discharged, such Mortgage Note in effect
at the time of any such acquisition of title before any adjustment thereto by
reason of any bankruptcy or similar proceeding or any moratorium or similar
waiver or grace period will remain in effect.
Any proceeds from foreclosure proceedings or the purchase or
repurchase of any Mortgage Loan pursuant to the terms of this Servicing
Agreement, as well as any recovery resulting from a collection of Liquidation
Proceeds or Insurance Proceeds, will be applied in the following order of
priority: first, to reimburse the Servicer or the related Subservicer in
accordance with Section 3.07; second, to all Servicing Fees payable therefrom;
third, to the extent of accrued and unpaid interest on the related Mortgage
Loan, at the Net Mortgage Rate to the Due Date prior to the Payment Date on
which such amounts are to be deposited in the Payment Account; fourth, as a
recovery of principal on the Mortgage Loan; and fifth, to Foreclosure Profits.
SECTION 3.08. Company and Indenture Trustee to Cooperate.
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On or before each Payment Date, the Servicer will notify the
Indenture Trustee or the relevant Custodian, with a copy to the Company, of the
termination of or the payment in full and the termination of any Mortgage Loan
during the preceding Collection Period, which notification shall be by a
certification in substantially the form attached hereto as Exhibit C (which
certification shall include a statement to the effect that all amounts received
in connection with such payment which are required to be deposited in the
Collection Account pursuant to Section 3.02 have been so deposited or credited)
of a Servicing Officer. Upon receipt of payment in full, the Servicer is
authorized to execute, pursuant to the authorization contained in Section 3.01,
if the assignments of Mortgage have been recorded as required under the Mortgage
Loan Purchase Agreement, an instrument of satisfaction regarding the related
Mortgage, which instrument of satisfaction shall be recorded by the Servicer if
required by applicable law and be delivered to the Person entitled thereto. It
is understood and agreed that any expenses incurred in connection with such
instrument of satisfaction or transfer shall be reimbursed from amounts
deposited in the Collection Account. From time to time and as appropriate for
the servicing or foreclosure of any Mortgage Loan, the Indenture Trustee or the
relevant Custodian shall, upon request of the Servicer and delivery to the
Indenture Trustee or relevant Custodian, with a copy to the Company, of a
Request for Release, in the form annexed hereto as Exhibit D, signed by a
Servicing Officer, release or cause to be released the related Mortgage File to
the Servicer and the Company and Indenture Trustee shall promptly execute such
documents, in the forms provided by the Servicer, as shall be necessary for the
prosecution of any such proceedings or the taking of other servicing actions.
Such trust receipt shall obligate the Servicer to return the Mortgage File to
the Indenture Trustee or the related Custodian (as specified in such receipt)
when the need therefor by the 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 trust receipt shall be
released to the Servicer.
In order to facilitate the foreclosure of the Mortgage
securing any Mortgage Loan that is in default following recordation of the
assignments of Mortgage in accordance with the provisions of the Mortgage Loan
Purchase Agreement, the Company shall, if so requested in writing by the
Servicer, promptly execute an appropriate assignment in the form provided by the
Servicer to assign such Mortgage Loan for the purpose of collection to the
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 Company and return all Related Documents to the place where the
related Mortgage File was being maintained.
In connection with the Company's obligation to cooperate as
provided in this Section 3.08 and all other provisions of this Servicing
Agreement requiring the Company to authorize or permit any actions to be taken
with respect to the Mortgage Loans, the Indenture Trustee, as pledgee of the
Mortgage Collateral in the Company, expressly agrees, on behalf of the Company,
to take all such actions on behalf of the Company and to promptly execute and
return all instruments reasonably required by the Servicer in connection
therewith; PROVIDED that if the Servicer shall request a signature of the
Indenture Trustee, on behalf of the Company,
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the Servicer will deliver to the Indenture Trustee an Officer's Certificate
stating that such signature is necessary or appropriate to enable the Servicer
to carry out its servicing and administrative duties under this Servicing
Agreement.
SECTION 3.09. Servicing Compensation; Payment of Certain
Expenses by Servicer.
The Servicer shall be entitled to receive the Servicing Fee in
accordance with Section 3.03 as compensation for its services in connection with
servicing the Mortgage Loans. Moreover, additional servicing compensation in the
form of late payment charges and certain other receipts not required to be
deposited in the Collection Account as specified in Section 3.02 shall be
retained by the Servicer. The Servicer shall be required to pay all expenses
incurred by it in connection with its activities hereunder (including payment of
all other fees and expenses not expressly stated hereunder to be for the account
of the Securityholders, including, without limitation, the fees and expenses of
the Administrator, Owner Trustee, Indenture Trustee and any Custodian) and shall
not be entitled to reimbursement therefor except as specifically provided
herein.
SECTION 3.10. Annual Statement as to Compliance.
(a) The Servicer will deliver to the Company, the Issuer
and the Indenture Trustee, with a copy to the Credit Enhancer, on or before
________ of each year, beginning ________, ____, an Officer's Certificate
stating that (i) a review of the activities of the Servicer during the preceding
fiscal year and of its performance under this Servicing Agreement has been made
under such officer's supervision, (ii) to the best of such officer's knowledge,
based on such review, the Servicer has fulfilled all its material obligations
under this Servicing Agreement in all material respects throughout such fiscal
year, or, if there has been a material default in the fulfillment of any such
obligation, specifying each such default known to such officer and the nature
and status thereof and (iii) to the best of such officer's knowledge, based on
consultation with counsel, any continuation Uniform Commercial Code financing
statement or other Uniform Commercial Code financing statement during the
preceding fiscal year which the Servicer determined was necessary to be filed
was filed in order to continue protection of the interest of the Company in the
Mortgage Loans. In addition, the Servicer shall deliver or cause each
Subservicer to deliver to the Indenture Trustee, the Company, the Issuer, the
Depositor and the Credit Enhancer a copy of each certification, accountant's
report or other document upon which the foregoing Officer's Certificate is based
with respect to such Subservicer's performance.
(b) The Servicer shall deliver to the Company, the Issuer
and the Indenture Trustee, with a copy to the Credit Enhancer, promptly after
having obtained knowledge thereof, but in no event later than five Business Days
thereafter, written notice by means of an Officer's Certificate of any event
which with the giving of notice or the lapse of time or both, would become a
Servicer of Default.
SECTION 3.11. ANNUAL SERVICING REPORT.
On or before ________ of each year, beginning ________, ____,
the Servicer at its expense shall cause a firm of nationally recognized
independent public accountants (who may
15
also render other services to the Servicer) to furnish a report to the Company,
the Issuer, the Indenture Trustee, the Depositor, the Credit Enhancer and each
Rating Agency to the effect that such firm has examined certain documents and
records relating to the servicing of mortgage loans by the Servicer during the
most recent calendar year then ended under servicing agreements (including this
Servicing Agreement) substantially similar to this Servicing Agreement and that
such examination, which has been conducted substantially in compliance with the
audit guide for audits of non-supervised mortgagees approved by the Department
of Housing and Urban Development for use by independent public accountants (to
the extent that the procedures in such audit guide are applicable to the
servicing obligations set forth in such agreements), has disclosed no items of
noncompliance with the provisions of this Servicing Agreement which, in the
opinion of such firm, are material, except for such items of non compliance as
shall be set forth in such report. In rendering such statement, such firm may
rely, as to matters relating to direct servicing of mortgage loans by
Subservicers, upon comparable statements for examinations conducted
substantially in the manner described above (rendered within one year of such
statement) of independent public accountants with respect to the related
Subservicer. For purposes of such statement, such firm may conclusively assume
that all servicing agreements among the Company and the Servicer relating to
home equity mortgage loans are substantially similar one to another except for
any such servicing agreement which, by its terms, specifically states otherwise.
SECTION 3.12. Access to Certain Documentation and
Information Regarding the Mortgage Loans.
Whenever required by statute or regulation, the Servicer shall
provide to the Credit Enhancer, any Securityholder upon reasonable request (or a
regulator for a Securityholder) or the Indenture Trustee, reasonable access to
the documentation regarding the Mortgage Loans such access being afforded
without charge but only upon reasonable request and during normal business hours
at the offices of the Servicer. Nothing in this Section 3.12 shall derogate from
the obligation of the Servicer to observe any applicable law prohibiting
disclosure of information regarding the Mortgagors and the failure of the
Servicer to provide access as provided in this Section 3.12 as a result of such
obligation shall not constitute a breach of this Section 3.12.
SECTION 3.13. Maintenance of Certain Servicing Insurance
Policies.
The Servicer shall during the term of its service as servicer
maintain in force (i) a policy or policies of insurance covering errors and
omissions in the performance of its obligations as servicer hereunder and (ii) a
fidelity bond in respect of its officers, employees or agents. Each such policy
or policies and bond shall be at least equal to the coverage that would be
required by FNMA or FHLMC, whichever is greater, for Persons performing
servicing for mortgage loans purchased by such entity.
SECTION 3.14. Information Required by the Internal Revenue
Service Generally and Reports of Foreclosures and Abandonments of Mortgaged
Property.
The Servicer shall prepare and deliver all federal and state
information reports when and as required by all applicable state and federal
income tax laws. In particular, with
16
respect to the requirement under Section 6050J of the Code to the effect that
the Servicer or Subservicer shall make reports of foreclosures and abandonments
of any mortgaged property for each year beginning in ____, the Servicer or
Subservicer shall file reports relating to each instance occurring during the
previous calendar year in which the Servicer (i) on behalf of the Company,
acquires an interest in any Mortgaged Property through foreclosure or other
comparable conversion in full or partial satisfaction of a Mortgage Loan, or
(ii) knows or has reason to know that any Mortgaged Property has been abandoned.
The reports from the Servicer or Subservicer shall be in form and substance
sufficient to meet the reporting requirements imposed by Section 6050J and
Section 6050H (reports relating to mortgage interest received) of the Code.
SECTION 3.15. Optional Repurchase of Defaulted Mortgage
Loans.
Notwithstanding any provision in Section 3.07 to the contrary,
the Servicer may repurchase any Mortgage Loan delinquent in payment for a period
of 60 days or longer for a price equal to the Repurchase Price.
ARTICLE IV
SERVICING CERTIFICATE
SECTION 4.01. Statements to Securityholders.
(a) With respect to each Payment Date, the Servicer shall
forward to the Indenture Trustee and the Indenture Trustee pursuant to Section
3.26 of the Indenture shall forward or cause to be forwarded by mail to each
Certificateholder, Noteholder, the Credit Enhancer, the Depositor, the Owner
Trustee, the Certificate Paying Agent and each Rating Agency, a statement
setting forth the following information as to the Notes and Certificates, to the
extent applicable:
(i) the aggregate amount of (a) Security Interest
Collections with respect to the Notes and the Certificates, (b)
aggregate Security Principal Collections with respect to the Notes and
the Certificates and (c) Security Collections for the related
Collection Period with respect to the Notes and the Certificates;
(ii) the amount of such distribution to the
Securityholders of the Notes and the Certificates applied to reduce the
principal balance thereof and separately stating the portion thereof in
respect of the Accelerated Principal Distribution Amount and the amount
to be deposited in the Funding Account on such Payment Date;
(iii) the amount of such distribution to the
Securityholders of the Notes and the Certificates allocable to interest
and separately stating the portion thereof in respect of overdue
accrued interest;
(iv) the Credit Enhancement Draw Amount, if any, for such
Payment Date and the aggregate amount of prior draws thereunder not yet
reimbursed;
17
(v) the aggregate Principal Balance of (a) the ________
Loans, (b) the ______ Loans, (c) the _________ Loans, as of the end of
the preceding Collection Period and (d) all of the Mortgage Loans;
(vi) the number and aggregate Principal Balances of
Mortgage Loans (a) as to which the Minimum Monthly Payment is
delinquent for 30-59 days, 60-89 days, 90-179 days and 180 or more
days, respectively and (b) that have become REO, in each case as of the
end of the preceding Collection Period; provided, however, that such
information will not be provided on the statements relating to the
first Payment Date;
(vii) the Weighted Average Net Mortgage Rate for the
related Collection Period and the Weighted Average Net Mortgage Rate
for (a) the ________ Loans, (b) the _______Loans and (c) the _________
Loans for the related Collection Period;
(viii) the Special Capital Distribution Amount and the
Required Special Capital Distribution Amount, in each case as the end
of the related Collection Period; and
(ix) the aggregate amount of Additional Loans acquired
during the previous Collection Period with amounts in respect of Net
Principal Collections from the Funding Account;
(x) the aggregate Liquidation Loss Amounts with respect
to the related Collection Period, the amount of any remaining Carryover
Loss Amount with respect to the Notes and Certificates, respectively,
and the aggregate of the Liquidation Loss Amounts from all Collection
Periods to date expressed as a percentage of the sum of (a) the Cut-Off
Date Pool Balance and (b) the amount by which the Pool Balance as of
the latest date that the Additional Loans have been transferred to the
Company exceeds the Cut-Off Date Pool Balance;
(xi) any unpaid interest on the Notes and Certificates,
respectively, after such Distribution Date;
(xii) the aggregate Principal Balance of each Class of
Notes and of the Certificates after giving effect to the distribution
of principal on such Payment Date;
(xiii) the respective Security Percentage applicable to the
Notes and Certificates, after application of payments made on such
Payment Date; and
(xiv) the amount distributed pursuant to Section
3.05(a)(xi) of the Indenture on such Payment Date.
In the case of information furnished pursuant to clauses (ii)
and (iii) above, the amounts shall be expressed as an aggregate dollar amount
per Note or Certificate with a $1,000 denomination.
Prior to the close of business on the Business Day next
succeeding each Determination Date, the Servicer shall furnish a written
statement to the Company, the Owner Trustee, the Depositor, the Certificate
Paying Agent and the Indenture Trustee setting forth (i) all
18
the foregoing information, (ii) the aggregate amounts required to be withdrawn
from the Collection Account and deposited into the Payment Account on the
Business Day preceding the Payment Date pursuant to Section 3.03 and (iii) the
amounts (A) withdrawn from the Payment Account and deposited to the Funding
Account pursuant to Section 8.02(b) of the Indenture and (B) withdrawn from the
Funding Account and deposited to the Collection Account pursuant to Section
8.02(c)(i) of the Indenture. The determination by the Servicer of such amounts
shall, in the absence of obvious error, be presumptively deemed to be correct
for all purposes hereunder and the Owner Trustee and Indenture Trustee shall be
protected in relying upon the same without any independent check or
verification. In addition, upon the Company's written request, the Servicer
shall promptly furnish information reasonably requested by the Company that is
reasonably available to the Servicer to enable the Company to perform its
federal and state income tax reporting obligations.
ARTICLE V
DISTRIBUTION AND PAYMENT ACCOUNTS
SECTION 5.01. Distribution Account.
The Servicer shall establish and maintain a separate trust
account (the "Distribution Account") titled "Citigroup MBN Trust Series 20__-__,
[for the benefit of the Noteholders, the Certificateholders and the Credit
Enhancer pursuant to the Indenture, dated as of _______________, between
Citigroup MBN Trust Series 20__-__ and [Name of Indenture Trustee]. The
Distribution Account shall be an Eligible Account. On the Business Day prior to
each Payment Date, (i) amounts deposited into the Distribution Account pursuant
to Section 3.03(i) hereof will be distributed by the Servicer in accordance with
Section ____ of the [Trust] Agreement, and (ii) the portion of such amounts then
distributable with respect to the Mortgage Collateral shall be deposited into
the Payment Account. [The Servicer shall invest or cause the institution
maintaining the Distribution Account to invest the funds in the Distribution
Account in Eligible Investments designated in the name of the [Servicer], which
shall mature not later than the Business Day next preceding the Payment Date
next following the date of such investment (except that (i) any investment in
the institution with which the Distribution Account is maintained may mature on
such Payment Date and (ii) any other investment may mature on such Payment Date
if the Servicer shall advance funds on such Payment Date to the Payment Account
in the amount payable on such investment on such Payment Date, pending receipt
thereof to the extent necessary to make distributions on the Securities) and
shall not be sold or disposed of prior to maturity. All income and gain realized
from any such investment shall be for the benefit of the Servicer and shall be
subject to its withdrawal or order from time to time. The amount of any losses
incurred in respect of any such investments shall be deposited in the
Distribution Account by the Servicer out of its own funds immediately as
realized.]
SECTION 5.02. Payment Account.
The Indenture Trustee shall establish and maintain a separate
trust account (the "Payment Account") titled "___________________________, as
Indenture Trustee, for the benefit of the Noteholders, the Certificate Paying
Agent and the Credit Enhancer pursuant to the Indenture, dated as of
_______________, between Citigroup MBN Trust Series 20__-___
19
and __________________________________". The Payment Account shall be an
Eligible Account. On each Payment Date, amounts on deposit in the Payment
Account will be distributed by the Indenture Trustee in accordance with Section
3.05 of the Indenture. The Indenture Trustee shall, upon written request from
the Servicer, invest or cause the institution maintaining the Payment Account to
invest the funds in the Payment Account in Eligible Investments designated in
the name of the Indenture Trustee, which shall mature not later than the
Business Day next preceding the Payment Date next following the date of such
investment (except that (i) any investment in the institution with which the
Payment Account is maintained may mature on such Payment Date and (ii) any other
investment may mature on such Payment Date if the Indenture Trustee shall
advance funds on such Payment Date to the Payment Account in the amount payable
on such investment on such Payment Date, pending receipt thereof to the extent
necessary to make distributions on the Securities) and shall not be sold or
disposed of prior to maturity. All income and gain realized from any such
investment shall be for the benefit of the Servicer and shall be subject to its
withdrawal or order from time to time. The amount of any losses incurred in
respect of any such investments shall be deposited in the Payment Account by the
Servicer out of its own funds immediately as realized.
ARTICLE VI
THE SERVICER
SECTION 6.01. Liability of the Servicer.
The Servicer shall be liable in accordance herewith only to
the extent of the obligations specifically imposed upon and undertaken by the
Servicer herein.
SECTION 6.02. Merger of Consolidation of, or Assumption of
the Obligations of, the Servicer.
Any corporation into which the Servicer may be merged or
converted or with which it may be consolidated, or any corporation resulting
from any merger, conversion or consolidation to which the Servicer shall be a
party, or any corporation succeeding to the business of the Servicer, shall be
the successor of the Servicer, hereunder, without the execution or filing of any
paper or any further act on the part of any of the parties hereto, anything
herein to the contrary notwithstanding.
The Servicer may assign its rights and delegate its duties and
obligations under this Servicing Agreement; provided that the Person accepting
such assignment or delegation shall be a Person which is qualified to service
mortgage loans on behalf of FNMA or FHLMC, is reasonably satisfactory to the
Indenture Trustee (as pledgee of the Mortgage Collateral), the Company and the
Credit Enhancer, is willing to service the Mortgage Loans and executes and
delivers to the Indenture Trustee and the Company an agreement, in form and
substance reason ably satisfactory to the Credit Enhancer, the Indenture Trustee
and the Company, which contains an assumption by such Person of the due and
punctual performance and observance of each covenant and condition to be
performed or observed by the Servicer under this Servicing Agreement; PROVIDED
further that each Rating Agency's rating of the Securities in effect immediately
prior to such assignment and delegation will not be qualified, reduced, or
20
withdrawn as a result of such assignment and delegation (as evidenced by a
letter to such effect from each Rating Agency) or considered to be below
investment grade without taking into account the Credit Enhancement Instrument.
SECTION 6.03. Limitation on Liability of the Servicer and
Others.
Neither the Servicer nor any of the directors or officers or
employees or agents of the Servicer shall be under any liability to the Company,
the Issuer, the Owner Trustee, the Indenture Trustee or the Securityholders for
any action taken or for refraining from the taking of any action in good faith
pursuant to this Servicing Agreement, Provided, however, that this provision
shall not protect the Servicer or any such Person against any liability which
would otherwise be imposed by reason of its willful misfeasance, bad faith or
gross negligence in the performance of its duties hereunder or by reason of its
reckless disregard of its obligations and duties hereunder. The Servicer and any
director or officer or employee or agent of the Servicer may rely in good faith
on any document of any kind Prima Facie properly executed and submitted by any
Person respecting any matters arising hereunder. The Servicer and any director
or officer or employee or agent of the Servicer shall be indemnified by the
Company and held harmless against any loss, liability or expense incurred in
connection with any legal action relating to this Servicing Agreement or the
Securities, including any amount paid to the Owner Trustee or the Indenture
Trustee pursuant to Section 6.06(b), other than any loss, liability or expense
related to any specific Mortgage Loan or Mortgage Loans (except as any such
loss, liability or expense shall be otherwise reimbursable pursuant to this
Servicing Agreement) and any loss, liability or expense incurred by reason of
its willful misfeasance, bad faith or gross negligence in the performance of its
duties hereunder or by reason of its reckless disregard of its obligations and
duties hereunder. The Servicer shall not be under any obligation to appear in,
prosecute or defend any legal action which is not incidental to its duties to
service the Mortgage Loans in accordance with this Servicing Agreement, and
which in its opinion may involve it in any expense or liability; provided,
however, that the Servicer may in its sole discretion undertake any such action
which it may deem necessary or desirable in respect of this Servicing Agreement,
and the rights and duties of the parties hereto and the interests of the
Securityholders hereunder. In such event, the reasonable legal expenses and
costs of such action and any liability resulting therefrom shall be expenses,
costs and liabilities of the Company, and the Servicer shall be entitled to be
reimbursed therefor. The Servicer's right to indemnity or reimbursement pursuant
to this Section 6.03 shall survive any resignation or termination of the
Servicer pursuant to Section 6.04 or 7.01 with respect to any losses, expenses,
costs or liabilities arising prior to such resignation or termination (or
arising from events that occurred prior to such resignation or termination).
SECTION 6.04. Servicer Not to Resign.
Subject to the provisions of Section 6.02, the Servicer shall
not resign from the obligations and duties hereby imposed on it except (i) upon
determination that the performance of its obligations or duties hereunder are no
longer permissible under applicable law or are in material conflict by reason of
applicable law with any other activities carried on by it or its subsidiaries or
Affiliates, the other activities of the Servicer so causing such a conflict
being of a type and nature carried on by the Servicer or its subsidiaries or
Affiliates at the date of this Servicing Agreement or (ii) upon satisfaction of
the following conditions: (a) the Servicer has
21
proposed a successor servicer to the Company, the Administrator and the
Indenture Trustee in writing and such proposed successor servicer is reasonably
acceptable to the Company, the Administrator, the Indenture Trustee and the
Credit Enhancer; (b) each Rating Agency shall have delivered a letter to the
Company, the Credit Enhancer and the Indenture Trustee prior to the appointment
of the successor servicer stating that the proposed appointment of such
successor servicer as Servicer hereunder will not result in the reduction or
withdrawal of the then current rating of the Securities; and (c) such proposed
successor servicer is reasonably acceptable to the Credit Enhancer, as evidenced
by a letter to the Company and the Indenture Trustee; provided, however, that no
such resignation by the Servicer shall become effective until such successor
servicer or, in the case of (i) above, the Indenture Trustee, as pledgee of the
Mortgage Collateral, shall have assumed the Servicer's responsibilities and
obligations hereunder or the Indenture Trustee, as pledgee of the Mortgage
Collateral, shall have designated a successor servicer in accordance with
Section 7.02. Any such resignation shall not relieve the Servicer of
responsibility for any of the obligations specified in Sections 7.01 and 7.02 as
obligations that survive the resignation or termination of the Servicer. The
Servicer shall have no claim (whether by subrogation or otherwise) or other
action against any Securityholder or the Credit Enhancer for any amounts paid by
the Servicer pursuant to any provision of this Servicing Agreement. Any such
determination permitting the resignation of the Servicer shall be evidenced by
an Opinion of Counsel to such effect delivered to the Indenture Trustee and the
Credit Enhancer.
SECTION 6.05. Delegation of Duties.
In the ordinary course of business, the Servicer at any time
may delegate any of its duties hereunder to any Person, including any of its
Affiliates, who agrees to conduct such duties in accordance with standards
comparable to those with which the Servicer complies pursuant to Section 3.01.
Such delegation shall not relieve the Servicer of its liabilities and
responsibilities with respect to such duties and shall not constitute a
resignation within the meaning of Section 6.04.
SECTION 6.06. Servicer to Pay Indenture Trustee's and
Owner Trustee's Fees and Expenses; Indemnification.
(a) The Servicer covenants and agrees to pay to the Owner
Trustee, the Indenture Trustee and any co-trustee of the Indenture Trustee from
time to time, and the Owner Trustee, the Indenture Trustee and any such
co-trustee shall be entitled to, reasonable compensation (which shall not be
limited by any provision of law in regard to the compensation of a trustee of an
express trust) for all services rendered by each of them in the execution of the
trusts created under the Trust Agreement and the Indenture and in the exercise
and performance of any of the powers and duties under the Trust Agreement or the
Indenture, as the case may be, of the Owner Trustee, the Indenture Trustee and
any co-trustee, and the Servicer will pay or reimburse the Indenture Trustee and
any co-trustee upon request for all reasonable expenses, disbursements and
advances incurred or made by the Indenture Trustee or any co-trustee in
accordance with any of the provisions of this Servicing Agreement except any
such expense, disbursement or advance as may arise from its negligence or bad
faith.
(b) The Servicer agrees to indemnify the Indenture
Trustee and the Owner Trustee for, and to hold the Indenture Trustee and the
Owner Trustee, as the case may be,
22
harmless against, any loss, liability or expense incurred without negligence or
willful misconduct on its part, arising out of, or in connection with, the
acceptance and administration of the Company and the assets thereof, including
the costs and expenses (including reasonable legal fees and expenses) of
defending itself against any claim in connection with the exercise or
performance of any of its powers or duties under any Basic Document, provided
that:
(i) with respect to any such claim, the Indenture Trustee
or Owner Trustee, as the case may be, shall have given the Servicer
written notice thereof promptly after the Indenture Trustee or Owner
Trustee, as the case may be, shall have actual knowledge thereof;
(ii) while maintaining control over its own defense, the
Company, the Indenture Trustee or Owner Trustee, as the case may be,
shall cooperate and consult fully with the Servicer in preparing such
defense; and
(iii) notwithstanding anything in this Servicing Agreement
to the contrary, the Servicer shall not be liable for settlement of any
claim by the Indenture Trustee or the Owner Trustee, as the case may
be, entered into without the prior consent of the Servicer, which
consent shall not be unreasonably withheld.
No termination of this Servicing Agreement shall affect the
obligations created by this Section 6.06 of the Servicer to indemnify the
Indenture Trustee and the Owner Trustee under the conditions and to the extent
set forth herein.
Notwithstanding the foregoing, the indemnification provided by
the Servicer in this Section 6.06(b) shall not pertain to any loss, liability or
expense of the Indenture Trustee or the Owner Trustee, including the costs and
expenses of defending itself against any claim, incurred in connection with any
actions taken by the Indenture Trustee or the Owner Trustee at the direction of
the Noteholders or Certificateholders, as the case may be, pursuant to the terms
of this Servicing Agreement.
ARTICLE VII
DEFAULT
SECTION 7.01. Servicing Default.
If any one of the following events ("Servicing Default") hall
occur and be continuing:
(i) Any failure by the Servicer to deposit in the
Collection Account, the Funding Account or Payment Account any deposit
required to be made under the terms of this Servicing Agreement which
continues unremedied for a period of five Business Days after the date
upon which written notice of such failure shall have been given to the
Servicer by the Company, the Issuer or the Indenture Trustee or to the
Servicer, the Company, the Issuer and the Indenture Trustee by the
Credit Enhancer; or
23
(ii) Failure on the part of the Servicer duly to observe
or perform in any material respect any other covenants or agreements of
the Servicer set forth in the Securities or in this Servicing
Agreement, which failure, in each case, materially and adversely
affects the interests of Securityholders or the Credit Enhancer and
which continues unremedied for a period of 45 days after the date on
which written notice of such failure, requiring the same to be
remedied, and stating that such notice is a "Notice of Default"
hereunder, shall have been given to the Servicer by the Company, the
Issuer or the Indenture Trustee or to the Servicer, the Company, the
Issuer and the Indenture Trustee by the Credit Enhancer; or
(iii) The entry against the Servicer of a decree or order
by a court or agency or supervisory authority having jurisdiction in
the premises for the appointment of a trustee, conservator, receiver or
liquidator in any insolvency, conservatorship, receivership,
readjustment of debt, marshalling of assets and liabilities or similar
proceedings, or for the winding up or liquidation of its affairs, and
the continuance of any such decree or order unstayed and in effect for
a period of 60 consecutive days; or
(iv) The Servicer shall voluntarily go into liquidation,
consent to the appointment of a conservator, receiver, liquidator or
similar person in any insolvency, readjustment of debt, marshalling of
assets and liabilities or similar proceedings of or relating to the
Servicer or of or relating to all or substantially all of its property,
or a decree or order of a court, agency or supervisory authority having
jurisdiction in the premises for the appointment of a conservator,
receiver, liquidator or similar person in any insolvency, readjustment
of debt, marshalling of assets and liabilities or similar proceedings,
or for the winding-up or liquidation of its affairs, shall have been
entered against the Servicer and such decree or order shall have
remained in force undischarged, unbonded or unstayed for a period of 60
days; or the Servicer shall admit in writing its inability to pay its
debts generally as they become due, file a petition to take advantage
of any applicable insolvency or reorganization statute, make an
assignment for the benefit of its creditors or voluntarily suspend
payment of its obligations; or
(v) Any failure by the Seller (so long as the Seller is
the Servicer) or the Servicer, as the case may be, to pay when due any
amount payable by it under the terms of the Insurance Agreement which
continues unremedied for a period of three (3) Business Days after the
date upon which written notice of such failure shall have been given to
the Seller (so long as the Seller is the Servicer) or the Servicer, as
the case may be; or
(vi) Failure on the part of the Seller or the Servicer to
duly perform in any material respect any covenant or agreement set
forth in the Insurance Agreement, which failure in each case materially
and adversely affects the interests of the Credit Enhancer and
continues unremedied for a period of 60 days after the date on which
written notice of such failure, requiring the same to be remedied,
shall have been given to the Depositor, the Indenture Trustee, the
Seller or the Servicer, as the case may be, by the Credit Enhancer.
Then, and in every such case, other than that set forth in (vi) hereof,
so long as a Servicing Default shall not have been remedied by the
Servicer, either the Company, subject to the direction of the Indenture
Trustee as pledgee of the Mortgage Collateral,
24
with the consent of the Credit Enhancer, or the Credit Enhancer, by
notice then given in writing to the Servicer (and to the Company and
the Issuer if given by the Credit Enhancer) and in the case of the
event set forth in (vi) hereof, the Credit Enhancer with the consent of
Securityholders at least 51% of the aggregate Principal Balance of the
Notes and the Certificates may terminate all of the rights and
obligations of the Servicer as servicer under this Servicing Agreement
other than its right to receive servicing compensation and expenses for
servicing the Mortgage Loans hereunder during any period prior to the
date of such termination and the Company, subject to the direction of
the Indenture Trustee as pledgee of the Mortgage Collateral, with the
consent of the Credit Enhancer, or the Credit Enhancer may exercise any
and all other remedies available at law or equity. Any such notice to
the Servicer shall also be given to each Rating Agency, the Credit
Enhancer, the Company and the Issuer. On or after the receipt by the
Servicer of such written notice, all authority and power of the
Servicer under this Servicing Agreement, whether with respect to the
Securities or the Mortgage Loans or otherwise, shall pass to and be
vested in the Company, subject to the direction of the Indenture
Trustee as pledgee of the Mortgage Collateral, pursuant to and under
this Section 7.01; and, without limitation, the Company is hereby
authorized and empowered to execute and deliver, on behalf of the
Servicer, as attorney-in-fact or otherwise, any and all documents and
other instruments, and to do or accomplish all other acts or things
necessary or appropriate to effect the purposes of such notice of
termination, whether to complete the transfer and endorsement of each
Mortgage Loan and related documents, or otherwise. The Servicer agrees
to cooperate with the Company in effecting the termination of the
responsibilities and rights of the Servicer hereunder, including,
without limitation, the transfer to the Indenture Trustee for the
administration by it of all cash amounts relating to the Mortgage Loans
that shall at the time be held by the Servicer and to be deposited by
it in the Collection Account, or that have been deposited by the
Servicer in the Collection Account or thereafter received by the
Servicer with respect to the Mortgage Loans. All reasonable costs and
expenses (including, but not limited to, attorneys' fees) incurred in
connection with amending this Servicing Agreement to reflect such
succession as Servicer pursuant to this Section 7.01 shall be paid by
the predecessor Servicer (or if the predecessor Servicer is the
Indenture Trustee, the initial Servicer) upon presentation of
reasonable documentation of such costs and expenses.
Notwithstanding any termination of the activities of the
Servicer hereunder, the Servicer shall be entitled to receive, out of any late
collection of a payment on a Mortgage Loan which was due prior to the notice
terminating the Servicer's rights and obligations hereunder and received after
such notice, that portion to which the Servicer would have been entitled
pursuant to Sections 3.03 and 3.09 as well as its Servicing Fee in respect
thereof, and any other amounts payable to the Servicer hereunder the entitlement
to which arose prior to the termination of its activities hereunder.
Notwithstanding the foregoing, a delay in or failure of
performance under Section 7.01(i) or under Section 7.01(ii) after the applicable
grace periods specified in such Sections, shall not constitute a Servicer
Default if such delay or failure could not be prevented by the exercise of
reasonable diligence by the Servicer and such delay or failure was caused by an
act of God or the public enemy, acts of declared or undeclared war, public
disorder, rebellion or sabotage, epidemics, landslides, lightning, fire,
hurricanes, earthquakes, floods or similar causes.
25
The pre ceding sentence shall not relieve the Servicer from using reasonable
efforts to perform its respective obligations in a timely manner in accordance
with the terms of this Servicing Agreement and the Servicer shall provide the
Indenture Trustee, the Credit Enhancer and the Securityholders with notice of
such failure or delay by it, together with a description of its efforts to so
perform its obligations. The Servicer shall immediately notify the Indenture
Trustee, the Credit Enhancer and the Owner Trustee in writing of any Servicer
Default.
SECTION 7.02. Indenture Trustee to Act; Appointment of
Successor.
(a) On and after the time the Servicer receives a notice
of termination pursuant to Section 7.01 or sends a notice pursuant to Section
6.04, the Indenture Trustee on behalf of the Noteholders shall be the successor
in all respects to the Servicer in its capacity as servicer under this Servicing
Agreement and the transactions set forth or provided for herein and shall be
subject to all the responsibilities, duties and liabilities relating thereto
placed on the Servicer by the terms and provisions hereof. Nothing in this
Servicing Agreement or in the Trust Agreement shall be construed to permit or
require the Indenture Trustee to (i) succeed to the responsibilities, duties and
liabilities of the initial Servicer in its capacity as Seller under the Mortgage
Loan Purchase Agreement, (ii) be responsible or accountable for any act or
omission of the Servicer prior to the issuance of a notice of termination
hereunder, (iii) require or obligate the Indenture Trustee, in its capacity as
successor Servicer, to purchase, repurchase or substitute any Mortgage Loan,
(iv) fund any losses on any Eligible Investment directed by any other Servicer,
or (v) be responsible for the representations and warranties of the Servicer. As
compensation therefor, the Indenture Trustee shall be entitled to such
compensation as the Servicer would have been entitled to hereunder if no such
notice of termination had been given. Notwithstanding the above, (i) if the
Indenture Trustee is unwilling to act as successor Servicer, or (ii) if the
Indenture Trustee is legally unable so to act, the Indenture Trustee on behalf
of the Mortgage Collateral holders may (in the situation described in clause
(i)) or shall (in the situation described in clause (ii)) appoint or petition a
court of competent jurisdiction to appoint any established housing and home
finance institution, bank or other mortgage loan or home equity loan servicer
having a net worth of not less than $10,000,000 as the successor to the Servicer
hereunder in the assumption of all or any part of the responsibilities, duties
or liabilities of the Servicer hereunder; PROVIDED that any such successor
Servicer shall be acceptable to the Credit Enhancer, as evidenced by the Credit
Enhancer's prior written consent which consent shall not be unreasonably
withheld and provided further that the appointment of any such successor
Servicer will not result in the qualification, reduction or withdrawal of the
ratings assigned to the Securities by the Rating Agencies. Pending appointment
of a successor to the Servicer hereunder, unless the Indenture Trustee is
prohibited by law from so acting, the Indenture Trustee shall act in such
capacity as hereinabove provided. In connection with such appointment and
assumption, the successor shall be entitled to receive compensation out of
payments on Mortgage Loans in an amount equal to the compensation which the
Servicer would otherwise have received pursuant to Section 3.09 (or such lesser
compensation as the Indenture Trustee and such successor shall agree). The
appointment of a successor Servicer shall not affect any liability of the
predecessor Servicer which may have arisen under this Servicing Agreement prior
to its termination as Servicer (including, without limitation, the obligation to
purchase Mortgage Loans pursuant to Section 3.01, to pay any deductible under an
insurance policy pursuant to Section 3.04 or to indemnify the Indenture Trustee
pursuant to Section 6.06), nor shall any successor Servicer be liable for any
acts or omissions of the predecessor Servicer or for
26
any breach by such Servicer of any of its representations or warranties
contained herein or in any related document or agreement. The Indenture Trustee
and such successor shall take such action, consistent with this Servicing
Agreement, as shall be necessary to effectuate any such succession.
(b) Any successor, including the Indenture Trustee on
behalf of the Noteholders, to the Servicer as servicer shall during the term of
its service as servicer (i) continue to service and administer the Mortgage
Loans for the benefit of the Securityholders, (ii) maintain in force a policy or
policies of insurance covering errors and omissions in the performance of its
obligations as Servicer hereunder and a fidelity bond in respect of its
officers, employees and agents to the same extent as the Servicer is so required
pursuant to Section 3.13.
(c) Any successor Servicer, including the Indenture
Trustee on behalf of the Mortgage Collateral holders, shall not be deemed in
default or to have breached its duties hereunder if the predecessor Servicer
shall fail to deliver any required deposit to the Collection Account or
otherwise cooperate with any required servicing transfer or succession
hereunder.
SECTION 7.03. Notification to Securityholders.
Upon any termination or appointment of a successor to the
Servicer pursuant to this Article VII or Section 6.04, the Indenture Trustee
shall give prompt written notice thereof to the Securityholders, the Credit
Enhancer, the Company, the Issuer and each Rating Agency.
ARTICLE VIII
MISCELLANEOUS PROVISIONS
SECTION 8.01. Amendment.
This Servicing Agreement may be amended from time to time by
the parties hereto, provided that any amendment be accompanied by a letter from
the Rating Agencies that the amendment will not result in the downgrading or
withdrawal of the rating then assigned to the Securities and the consent of the
Credit Enhancer and the Indenture Trustee.
SECTION 8.02. GOVERNING LAW.
THIS SERVICING AGREEMENT SHALL BE CONSTRUED IN ACCORDANCE WITH
THE LAWS OF THE STATE OF NEW YORK AND THE OBLIGATIONS, RIGHTS AND REMEDIES OF
THE PARTIES HEREUNDER SHALL BE DETERMINED IN ACCORDANCE WITH SUCH LAWS.
SECTION 8.03. Notices.
All demands, notices and communications hereunder shall be in
writing and shall be deemed to have been duly given if personally delivered at
or mailed by certified mail, return receipt requested, to (a) in the case of the
Servicer, [Name and Address of Servicer], (b) in the case of the Credit
Enhancer, ________________, ________, ______________, Attention:
_________________, ___________________________, (c) in the case of [▇▇▇▇▇'▇,
27
___________, 4th Floor, ▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇], (d) in the
case of [Standard & Poor's, ▇▇ ▇▇▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇,
Attention: Residential Mortgage Surveillance Group], (e) in the case of the
Owner Trustee, the Corporate Trust Office, and (f) in the case of the Issuer, to
Citigroup MBN Trust Series 20__-___, c/o ______________________,
__________________, __________, ______________, Attention:
__________________________, with a copy to the Administrator at ______________
or, as to each party, at such other address as shall be designated by such party
in a written notice to each other party. [Any notice required or permitted to be
mailed to a Securityholder shall be given by first class mail, postage prepaid,
at the address of such Securityholder as shown in the Register. Any notice so
mailed within the time prescribed in this Servicing Agreement shall be
conclusively presumed to have been duly given, whether or not the Securityholder
receives such notice. Any notice or other document required to be delivered or
mailed by the Indenture Trustee to any Rating Agency shall be given on a
reasonable efforts basis and only as a matter of courtesy and accommodation and
the Indenture Trustee shall have no liability for failure to delivery such
notice or document to any Rating Agency.]
SECTION 8.04. Severability of Provisions.
If any one or more of the covenants, agreements, provisions or
terms of this Servicing Agreement shall be for any reason whatsoever held
invalid, then such covenants, agreements, provisions or terms shall be deemed
severable from the remaining covenants, agreements, provisions or terms of this
Servicing Agreement and shall in no way affect the validity or enforceability of
the other provisions of this Servicing Agreement or of the Securities or the
rights of the Securityholders thereof.
SECTION 8.05. Third-Party Beneficiaries.
This Servicing Agreement will inure to the benefit of and be
binding upon the parties hereto, the Securityholders, the Credit Enhancer, the
Owner Trustee, the Indenture Trustee and their respective successors and
permitted assigns. Except as otherwise provided in this Servicing Agreement, no
other Person will have any right or obligation hereunder.
SECTION 8.06. Counterparts.
This instrument may be executed in any number of counterparts,
each of which so executed shall be deemed to be an original, but all such
counterparts shall together constitute but one and the same instrument.
SECTION 8.07. Effect of Headings and Table of Contents.
The Article and Section headings herein and the Table of
Contents are for convenience only and shall not affect the construction hereof.
SECTION 8.08. Termination Upon Purchase by the Servicer or
Liquidation of All Mortgage Loans.
The respective obligations and responsibilities of the
Servicer and the Company created hereby shall terminate upon the last action
required to be taken by the Issuer pursuant to
28
the Trust Agreement and by the Indenture Trustee pursuant to the Indenture
following the earlier of:
(i) the date on or before which the Indenture or Trust
Agreement is terminated, or
(ii) the purchase by the Servicer from the Company of all
Mortgage Loans and all property acquired in respect of any Mortgage
Loan at a price equal to the greater of (a) 100% of the unpaid
Principal Balance of each Mortgage Loan, plus accrued and unpaid
interest thereon at the Weighted Average Net Mortgage Rate up to the
day preceding the Payment Date on which such amounts are to be
distributed to Securityholders, plus any amounts due and owing to the
Credit Enhancer under the Insurance Agreement and (b) the fair market
value of the Mortgage Loans as determined by two bids from competitive
participants in the adjustable home equity loan market.
The right of the Servicer to purchase the assets of the
Company pursuant to clause (ii) above is conditioned upon the Pool Balance as of
the Final Scheduled Payment Date being less than ten percent of the aggregate of
the Cut-Off Date Principal Balances of the Mortgage Loans. If such right is
exercised by the Servicer, the Servicer shall deposit the amount calculated
pursuant to clause (ii) above with the Indenture Trustee pursuant to Section
4.10 of the Indenture and, upon the receipt of such deposit, the Indenture
Trustee or relevant Custodian shall release to the Servicer, the files
pertaining to the Mortgage Loans being purchased.
The Servicer, at its expense, shall prepare and deliver to the
Indenture Trustee and the Owner Trustee for execution, at the time the Mortgage
Loans are to be released to the Servicer, appropriate documents assigning each
such Mortgage Loan from the Company to the Servicer or the appropriate party.
SECTION 8.09. Certain Matters Affecting the Indenture
Trustee.
For all purposes of this Servicing Agreement, in the
performance of any of its duties or in the exercise of any of its powers
hereunder, the Indenture Trustee shall be subject to and entitled to the
benefits of Article VI of the Indenture.
SECTION 8.10. Authority of the Administrator.
Each of the parties to this Agreement acknowledges that the
Issuer and the Owner Trustee have each appointed the Administrator to act as its
agent to perform the duties and obligations of the Issuer hereunder. Unless
otherwise instructed by the Issuer or the Owner Trustee, copies of all notices,
requests, demands and other documents to be delivered to the Issuer or the Owner
Trustee pursuant to the terms hereof shall be delivered to the Administrator.
Unless otherwise instructed by the Issuer or the Owner Trustee, all notices,
requests, demands and other documents to be executed or delivered, and any
action to be taken, by the Issuer or the Owner Trustee pursuant to the terms
hereof may be executed, delivered and/or taken by the Administrator pursuant to
the Administration Agreement.
29
IN WITNESS WHEREOF, the Servicer and the Company have caused
this Servicing Agreement to be duly executed by their respective officers or
representatives all as of the day and year first above written.
[NAME OF SERVICER], as Servicer
By: _____________________________ Title:
CITIGROUP COMMERCIAL MORTGAGE SECURITIES
INC. as Company
By: _____________________________ Title:
30
EXHIBIT D
FORM OF REQUEST FOR RELEASE
DATE:
TO:
RE: REQUEST FOR RELEASE OF DOCUMENTS
In connection with your administration of the Mortgage Collateral, we
request the release of the Mortgage File described below.
Servicing Agreement Dated: Series #: Account #: Pool #: Loan #:
Borrower Name(s): Reason for Document Request: (circle one) Mortgage Loan
Prepaid in Full Mortgage Loan Repurchased
"We hereby certify that all amounts received or to be received in
connection with such payments which are required to be deposited have been or
will be so deposited as provided in the Servicing Agreement."
__________________________________ [Name
of Servicer] Authorized Signature
******************************************************************
TO CUSTODIAN/INDENTURE TRUSTEE:
Please acknowledge this request, and check off documents being enclosed
with a copy of this form. You should retain this form for your files in
accordance with the terms of the Servicing Agreement. Enclosed Documents: [ ]
Promissory Note [ ] Primary Insurance Policy [ ] Mortgage or Deed of Trust [ ]
Assignment(s) of Mortgage or Deed of Trust [ ] Title Insurance Policy [ ] Other:
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Name
Title
Date
1