CITIGROUP MORTGAGE LOAN TRUST INC. as Depositor as Indenture Trustee CITIMORTGAGE, INC., as Master Servicer and Securities Administrator CITIBANK, N.A., as Note Registrar, Paying Agent and Authenticating Agent CSE Mortgage LLC as Sponsor and CS OT I...
CITIGROUP
MORTGAGE LOAN TRUST INC.
as
Depositor
U.S.
BANK
NATIONAL ASSOCIATION,
as
Indenture Trustee
CITIMORTGAGE,
INC.,
as
Master
Servicer and Securities Administrator
CITIBANK,
N.A.,
as
Note
Registrar, Paying Agent and Authenticating Agent
CSE
Mortgage LLC
as
Sponsor
and
CS
OT I
LLC,
as
Seller
____________________________
Dated
as
of February 1, 2006
____________________________
Mortgage-Backed
Notes, Series 2006-AR1
TABLE
OF
CONTENTS
|
ARTICLE
I
|
|
|
DEFINITIONS
|
|
|
Section
1.01
|
Definitions
|
|
Section
1.02
|
Other
Definitional Provisions
|
|
Section
1.03
|
Representations
and Warranties Regarding the Master Servicer
|
|
Section
1.04
|
Cure
of Breach
|
|
ARTICLE
II
|
|
|
ADMINISTRATION
AND SERVICING OF MORTGAGE LOANS
|
|
|
Section
2.01
|
Master
Servicer
|
|
Section
2.02
|
Sub-Servicing
Agreements Between the Master Servicer and Initial
Sub-Servicers
|
|
Section
2.03
|
Successor
Sub-Servicers
|
|
Section
2.04
|
Liability
of the Master Servicer
|
|
Section
2.05
|
No
Contractual Relationship Between Sub-Servicers and Indenture Trustee,
Securities Administrator or Noteholders
|
|
Section
2.06
|
Assumption
or Termination of Sub-Servicing Agreements by Indenture
Trustee
|
|
Section
2.07
|
Collection
of Certain Mortgage Loan Payments
|
|
Section
2.08
|
Sub-Servicing
Accounts
|
|
Section
2.09
|
Collection
of Taxes, Assessments and Similar Items; Servicing Accounts
|
|
Section
2.10
|
Collection
Account
|
|
Section
2.11
|
Withdrawals
from the Collection Account and Payment Account
|
|
Section
2.12
|
Investment
of Funds in the Collection Account
|
|
Section
2.13
|
Maintenance
of the Primary Mortgage Insurance Policies; Collections
Thereunder
|
|
Section
2.14
|
Maintenance
of Hazard Insurance and Errors and Omissions and Fidelity
Coverage
|
|
Section
2.15
|
Enforcement
of Due-On-Sale Clauses; Assumption Agreements
|
|
Section
2.16
|
Realization
Upon Defaulted Mortgage Loans
|
|
Section
2.17
|
Indenture
Trustee to Cooperate; Release of Mortgage Files
|
|
Section
2.18
|
Servicing
Compensation
|
|
Section
2.19
|
Reports
to the Securities Administrator; Collection Account
Statements
|
|
Section
2.20
|
Statement
as to Compliance.
|
|
Section
2.21
|
Assessments
of Compliance and Attestation Reports.
|
|
Section
2.22
|
Access
to Certain Documentation
|
|
Section
2.23
|
Title,
Management and Disposition of REO Property
|
|
Section
2.24
|
Obligations
of the Master Servicer in Respect of Prepayment Interest
Shortfalls
|
|
Section
2.25
|
Obligations
of the Master Servicer in Respect of Monthly Payments
|
|
Section
2.26
|
Foreclosure
Rights
|
|
ARTICLE
III
|
|
|
REMITTANCE
REPORTS; MONTHLY ADVANCES; COMMISSION REPORTING
|
|
|
Section
3.01
|
Remittance
Reports; Monthly Advances
|
|
Section
3.02
|
Commission
Reporting.
|
|
ARTICLE
IV
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|
|
THE
DEPOSITOR AND THE MASTER SERVICER
|
|
|
Section
4.01
|
Liability
of the Depositor and the Master Servicer
|
|
Section
4.02
|
Merger
or Consolidation of the Depositor or the Master Servicer
|
|
Section
4.03
|
Indemnification
of the Indenture Trustee, Owner Trustee, the Master Servicer and
the
Securities Administrator
|
|
Section
4.04
|
Limitation
on Liability of the Depositor, the Master Servicer and Others
|
|
Section
4.05
|
Limitation
on Resignation of the Master Servicer
|
|
Section
4.06
|
Rights
of the Depositor in Respect of the Master Servicer
|
|
ARTICLE
V
|
|
|
DEFAULT
|
|
|
Section
5.01
|
Master
Servicer Events of Default
|
|
Section
5.02
|
Indenture
Trustee to Act; Appointment of Successor
|
|
Section
5.03
|
Notification
to Noteholders
|
|
Section
5.04
|
Waiver
of Master Servicer Events of Default
|
|
ARTICLE
VI
|
|
|
MISCELLANEOUS
PROVISIONS
|
|
|
Section
6.01
|
Amendment
|
|
Section
6.02
|
Recordation
of Agreement
|
|
Section
6.03
|
GOVERNING
LAW
|
|
Section
6.04
|
Notices
|
|
Section
6.05
|
Severability
of Provisions
|
|
Section
6.06
|
Successors
and Assigns
|
|
Section
6.07
|
Article
and Section Headings
|
|
Section
6.08
|
Counterparts
|
|
Section
6.09
|
Notice
to Rating Agencies
|
|
Section
6.10
|
Termination
|
|
Section
6.11
|
No
Petition
|
|
Section
6.12
|
No
Recourse
|
|
Section
6.13
|
Additional
Terms Regarding Indenture
|
EXHIBITS
|
Exhibit
A
|
-
|
Mortgage
Loan Schedule
|
|
Exhibit
B
|
-
|
▇▇▇▇▇
Fargo Servicing Agreement
|
|
Exhibit
C
|
-
|
Assignment,
Assumption and Recognition Agreement
|
|
Exhibit
D
|
-
|
Form
of Request of Release
|
|
Exhibit
E
|
-
|
List
of Approved Appraisal Firms
|
|
Exhibit
F
|
-
|
Servicing
Criteria to Be Addressed in Assessment of Compliance
|
|
Exhibit
G
|
-
|
Form
10-D, Form 8-K and Form 10-K Reporting Responsibility
|
|
Exhibit
H
|
-
|
Form
of Master Servicer Certification
|
|
Exhibit
I
|
-
|
Form
of Securities Administrator Back-Up
Certification
|
Servicing
Agreement, dated as of February 1, 2006 (the “Agreement”), among Citigroup
Mortgage Loan Trust Inc. a Delaware corporation, as depositor (the “Depositor”),
U.S. Bank National Association, a national banking association, not in its
individual capacity but solely as indenture trustee (the “Indenture Trustee”),
CitiMortgage Inc., (“CitiMortgage”), as master servicer (in that capacity, the
“Master Servicer”) and as securities administrator (in that capacity, the
“Securities Administrator”), Citibank, N.A. as paying agent (the “Paying
Agent”), CS OT I LLC as seller (the “Seller”) and CSE Mortgage LLC, as Sponsor
(the “Sponsor”).
PRELIMINARY
STATEMENT
On
or
prior to the Closing Date, the Depositor acquired the Mortgage Loans from the
Seller pursuant to the Mortgage Loan Purchase Agreement. The Depositor will
establish Citigroup Mortgage Loan Trust 2006-AR1, a Delaware Statutory Trust
(the “Owner Trust”) pursuant to an Amended and Restated Trust Agreement, dated
as of February 27, 2006. The Depositor will deposit the Mortgage Loans into
the
Owner Trust in exchange for the Owner Trust Certificates, which will evidence
the entire beneficial ownership interest in the Mortgage Loans (such certificate
being referred to herein as the “Owner Trust Certificate”). Pursuant to the
Indenture, the Issuer will pledge all of its right, title and interest in and
to
the Mortgage Loans, the Owner Trust Certificate and other property acquired
from
the Depositor to the Indenture Trustee to secure the Notes issued pursuant
to
the Indenture. The Depositor will receive from the Issuer the Owner Trust
Certificates evidencing the entire beneficial ownership interest in the Issuer
and the Notes representing indebtedness of the Issuer.
In
consideration of the mutual agreements herein contained, each of the Depositor,
the Indenture Trustee, the Master Servicer and the Securities Administrator,
the
Paying Agent and the Seller undertakes and agrees to perform its duties
hereunder as follows:
ARTICLE
I
DEFINITIONS
Section
1.01 Definitions.
For all
purposes of this 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.
Section
1.02 Other
Definitional Provisions.
(a)
All
terms defined in this 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 Agreement and in any certificate or other document made or delivered
pursuant hereto or thereto, accounting terms not defined in this Agreement
or in
any such certificate or other document, and accounting terms partly defined
in
this 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 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 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
Agreement shall refer to this Agreement as a whole and not to any particular
provision of this Agreement; Section and Exhibit references contained in this
Agreement are references to Sections and Exhibits in or to this Agreement unless
otherwise specified; and the term “including” shall mean “including without
limitation”.
(d) The
definitions contained in this Agreement are applicable to the singular as well
as the plural forms of such terms and to the masculine as well as 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 Representations
and Warranties Regarding the Master Servicer.
The
Master Servicer represents and warrants to the Indenture Trustee, for the
benefit of the Noteholders, to the Issuer, as pledgee of the Mortgage Loans,
and
to the Owner Trustee, on behalf of the Holder of the Owner Trust Certificate,
as
of the Cut-off Date, as follows:
The
Master Servicer hereby represents, warrants and covenants to the parties hereto,
for the benefit of each of the parties hereto and the Noteholders that as of
the
Closing Date or as of such date specifically provided herein:
(i) The
Master Servicer is a corporation duly organized, validly existing and in good
standing under the laws of the State of New York and is duly authorized and
qualified to transact any and all business contemplated by this Agreement to
be
conducted by the Master Servicer in any state in which a Mortgaged Property
is
located or is otherwise not required under applicable law to effect such
qualification and, in any event, is in compliance with the doing business laws
of any such State, to the extent necessary to ensure its ability to enforce
each
Mortgage Loan and to service the Mortgage Loans in accordance with the terms
of
this Agreement;
(ii) The
Master Servicer has the full corporate power and authority to service each
Mortgage Loan, and to execute, deliver and perform, and to enter into and
consummate the transactions contemplated by this Agreement and has duly
authorized by all necessary corporate action on the part of the Master Servicer
the execution, delivery and performance of this Agreement; and this Agreement,
assuming the due authorization, execution and delivery thereof by the other
parties hereto, constitutes a legal, valid and binding obligation of the Master
Servicer, enforceable against the Master Servicer in accordance with its terms,
except to the extent that (a) the enforceability thereof may be limited by
bankruptcy, insolvency, moratorium, receivership and other similar laws relating
to creditors’ rights generally and (b) the remedy of specific performance and
injunctive and other forms of equitable relief may be subject to the equitable
defenses and to the discretion of the court before which any proceeding therefor
may be brought;
(iii) The
execution and delivery of this Agreement by the Master Servicer, the servicing
of the Mortgage Loans by the Master Servicer hereunder, the consummation of
any
other of the transactions herein contemplated, and the fulfillment of or
compliance with the terms hereof are in the ordinary course of business of
the
Master Servicer and will not (A) result in a breach of any term or provision
of
the charter or by-laws of the Master Servicer or (B) conflict with, result
in a
breach, violation or acceleration of, or result in a default under, the terms
of
any other material agreement or instrument to which the Master Servicer is
a
party or by which it may be bound, or any statute, order or regulation
applicable to the Master Servicer of any court, regulatory body, administrative
agency or governmental body having jurisdiction over the Master Servicer; and
the Master Servicer is not a party to, bound by, or in breach or violation
of
any indenture or other agreement or instrument, or subject to or in violation
of
any statute, order or regulation of any court, regulatory body, administrative
agency or governmental body having jurisdiction over it, which materially and
adversely affects or, to the Master Servicer’s knowledge, would in the future
materially and adversely affect, (x) the ability of the Master Servicer to
perform its obligations under this Agreement or (y) the business, operations,
financial condition, properties or assets of the Master Servicer taken as a
whole;
(iv) The
Master Servicer is an approved seller/servicer for ▇▇▇▇▇▇ Mae or ▇▇▇▇▇▇▇ Mac
in
good standing and is a HUD approved mortgagee pursuant to Section 203 of the
National Housing Act;
(v) No
litigation is pending against the Master Servicer that would materially and
adversely affect the execution, delivery or enforceability of this Agreement
or
the ability of the Master Servicer to service the Mortgage Loans or to perform
any of its other obligations hereunder in accordance with the terms
hereof;
(vi) No
consent, approval, authorization or order of any court or governmental agency
or
body is required for the execution, delivery and performance by the Master
Servicer of, or compliance by the Master Servicer with, this Agreement or the
consummation of the transactions contemplated by this Agreement, except for
such
consents, approvals, authorizations or orders, if any, that have been obtained
prior to the Closing Date;
(vii) The
Master Servicer covenants that its computer and other systems used in servicing
the Mortgage Loans operate in a manner such that the Master Servicer can service
the Mortgage Loans in accordance with the terms of this Agreement;
and
(viii) The
Master Servicer (or a Sub-Servicer servicing the Mortgage Loans on its behalf)
is a member of MERS in good standing, and will comply in all material respects
with the rules and procedures of MERS in connection with the servicing of the
Mortgage Loans that are registered with MERS.
(ix) The
Depositor, the Master Servicer and the Trustee agree that it is not intended
that any mortgage loan be included in the Trust that is either (i) a “High-Cost
Home Loan” as defined in the New Jersey Home Ownership Security Act effective
November 27, 2003, (ii) a “High-Cost Home Loan” as defined in the New Mexico
Home Loan Protection Act effective January 1, 2004, (iii) a “High Cost Home
Mortgage Loan” as defined in the Massachusetts Predatory Home Loan Practices Act
effective November 7, 2004 or (iv) a “High-Cost Home Loan” as defined in the
Indiana Home Loan Practices Act effective as of January 1, 2005.
Section
1.04 Cure
of Breach.
Within
90 days of the earlier of discovery by the Master Servicer or receipt of notice
by the Master Servicer of the breach of any representation, warranty or covenant
of the Master Servicer set forth in Section 1.03 which materially and adversely
affects the interests of the Noteholders in any Mortgage Loan, the Master
Servicer shall cure such breach in all material respects.
ARTICLE
II
ADMINISTRATION
AND SERVICING OF MORTGAGE LOANS
Section
2.01 Master
Servicer.
The
Master Servicer shall service and administer the Mortgage Loans on behalf of
the
Indenture Trustee and in the best interests of and for the benefit of the
Noteholders (as determined by the Master Servicer in its reasonable judgment)
in
accordance with the terms of this Agreement and the respective Mortgage Loans
and, to the extent consistent with such terms, in the same manner in which
it
services and administers similar mortgage loans for its own portfolio, giving
due consideration to customary and usual standards of practice of prudent
mortgage lenders and loan servicers administering similar mortgage loans but
without regard to:
(i) any
relationship that the Master Servicer, any Sub-Servicer or any Affiliate of
the
Master Servicer or any Sub-Servicer may have with the related
Mortgagor;
(ii) the
ownership of any Note by the Master Servicer or any Affiliate of the Master
Servicer;
(iii) the
Master Servicer’s obligation to make Monthly Advances or Servicing Advances;
or
(iv) the
Master Servicer’s or any Sub-Servicer’s right to receive compensation for its
services hereunder or with respect to any particular transaction.
To
the
extent consistent with the foregoing, the Master Servicer shall also seek to
maximize the timely and complete recovery of principal and interest on the
Mortgage Notes. Subject only to the above-described servicing standards and
the
terms of this Agreement and of the respective Mortgage Loans, the Master
Servicer shall have full power and authority, acting alone or through
Sub-Servicers as provided in Section 2.02, to do or cause to be done any and
all
things in connection with such servicing and administration which it may deem
necessary or desirable. Without limiting the generality of the foregoing, the
Master Servicer in its own name or in the name of a Sub-Servicer is hereby
authorized and empowered by the Indenture Trustee when the Master Servicer
believes it appropriate in its best judgment in accordance with the servicing
standards set forth above, to execute and deliver, on behalf of the Noteholders
and the Indenture Trustee, and upon notice to the Indenture Trustee, 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 the Mortgaged Properties and to institute foreclosure proceedings
or
obtain a deed-in-lieu of foreclosure so as to convert the ownership of such
properties, and to hold or cause to be held title to such properties, on behalf
of the Indenture Trustee and Noteholders. The Master Servicer shall service
and
administer the Mortgage Loans in accordance with applicable state and federal
law and shall provide to the Mortgagors any reports required to be provided
to
them thereby. The Master Servicer shall also comply in the performance of this
Agreement with all reasonable rules and requirements of each insurer under
each
Primary Mortgage Insurance Policy and any standard hazard insurance policy.
Subject to Section 2.17, the Indenture Trustee shall execute, at the written
request of the Master Servicer, and furnish to the Master Servicer and any
Sub-Servicer such documents as are necessary or appropriate to enable the Master
Servicer or any Sub-Servicer to carry out their servicing and administrative
duties hereunder, and the Indenture Trustee hereby grants to the Master Servicer
a power of attorney to carry out such duties. The Indenture Trustee shall not
be
liable for the actions of the Master Servicer or any Sub-Servicers under such
powers of attorney.
In
accordance with the standards of the preceding paragraph, the Master Servicer
shall advance or cause to be advanced funds as necessary for the purpose of
effecting the timely payment of taxes and assessments on the Mortgaged
Properties, which advances shall be Servicing Advances reimbursable in the
first
instance from related collections from the Mortgagors pursuant to Section 2.09,
and further as provided in Section 2.11. Any cost incurred by the Master
Servicer or by Sub-Servicers in effecting the timely payment of taxes and
assessments on a Mortgaged Property shall not, for the purpose of calculating
payments to Noteholders, be added to the unpaid principal balance of the related
Mortgage Loan, notwithstanding that the terms of such Mortgage Loan so
permit.
The
Master Servicer further is authorized and empowered by the Indenture Trustee,
on
behalf of the Noteholders and the Indenture Trustee, in its own name or in
the
name of the Sub-Servicer, when the Master Servicer or the Sub-Servicer, as
the
case may be, believes it is appropriate in its best judgment to register any
Mortgage Loan on the MERS System, or cause the removal from the registration
of
any Mortgage Loan on the MERS System, to execute and deliver, on behalf of
the
Indenture Trustee and the Noteholders or any of them, any and all instruments
of
assignment and other comparable instruments with respect to such assignment
or
re-recording of a Mortgage in the name of MERS, solely as nominee for the
Indenture Trustee and its successors and assigns. Any reasonable expenses (i)
incurred as a result of MERS discontinuing or becoming unable to continue
operations in connection with the MERS System or (ii) if the affected Mortgage
Loan is in default or, in the judgment of the Master Servicer, such default
is
reasonably foreseeable, incurred in connection with the actions described in
the
preceding sentence, shall be subject to withdrawal by the Master Servicer from
the Collection Account.
Notwithstanding
anything in this Agreement to the contrary, the Master Servicer may not make
any
future advances with respect to a Mortgage Loan (except as provided in Section
3.01) and the Master Servicer shall not (i) permit any modification with respect
to any Mortgage Loan (except with respect to a Mortgage Loan that is in default
or, in the judgment of the Master Servicer, such default is reasonably
foreseeable) that would change the Mortgage Interest Rate, reduce or increase
the principal balance (except for reductions resulting from actual payments
of
principal) or change the final maturity date on such Mortgage Loan or (ii)
permit any modification, waiver or amendment of any term of any Mortgage Loan
that would effect an exchange or reissuance of such Mortgage Loan under Section
1001 of the Code (or final, temporary or proposed Treasury regulations
promulgated thereunder).
The
Master Servicer may delegate its responsibilities under this Agreement;
provided, however, that no such delegation shall release the Master Servicer
from the responsibilities or liabilities arising under this
Agreement.
The
Master Servicer shall accurately and fully report (or cause each Sub-Servicer
to
accurately and fully report), its borrower credit files to each of the credit
repositories in a timely manner.
Section
2.02 Sub-Servicing
Agreements Between the Master Servicer and Initial Sub-Servicers.
(a)
The
Master Servicer may enter into Sub-Servicing Agreements (provided that such
agreements would not result in a withdrawal or a downgrading by the Rating
Agencies of the rating on any Class of Notes) with Sub-Servicers, for the
servicing and administration of the Mortgage Loans. As of the Cut-Off Date,
▇▇▇▇▇ Fargo is the Sub-Servicer with respect to the Mortgage Loans originated
by
▇▇▇▇▇ Fargo and in such capacity ▇▇▇▇▇ Fargo will be primarily responsible
for
the servicing of such Mortgage Loans.
(b) Each
Sub-Servicer shall be (i) authorized to transact business in the state or states
in which the related Mortgaged Properties it is to service are situated, if
and
to the extent required by applicable law to enable the Sub-Servicer to perform
its obligations hereunder and under the Sub-Servicing Agreement, (ii) an
institution approved as a mortgage loan originator by the Federal Housing
Administration or an institution the deposit accounts of which are insured
by
the FDIC and (iii) a ▇▇▇▇▇▇▇ Mac or ▇▇▇▇▇▇ ▇▇▇ approved mortgage servicer.
Each
Sub-Servicing Agreement must impose on the Sub-Servicer requirements conforming
to the provisions set forth in Section 2.08 and provide for servicing of the
Mortgage Loans consistent with the terms of this Agreement. The Master Servicer
will examine each Sub-Servicing Agreement and will be familiar with the terms
thereof. The terms of any Sub-Servicing Agreement will not be inconsistent
with
any of the provisions of this Agreement. The Master Servicer and the
Sub-Servicers may enter into and make amendments to the Sub-Servicing Agreements
or enter into different forms of Sub-Servicing Agreements; provided, however,
that any such amendments or different forms shall be consistent with and not
violate the provisions of this Agreement, and that no such amendment or
different form shall be made or entered into which could be reasonably expected
to be materially adverse to the interests of the Noteholders, without the
consent of the Holders of 66% of the aggregate Note Principal Balance of the
Notes. Any variation without the consent of the Holders of 66% of the aggregate
Note Principal Balance of the Notes from the provisions set forth in Section
2.08 relating to insurance or priority requirements of Sub-Servicing Accounts,
or credits and charges to the Sub-Servicing Accounts or the timing and amount
of
remittances by the Sub-Servicers to the Master Servicer, are conclusively deemed
to be inconsistent with this Agreement and therefore prohibited. The Master
Servicer shall deliver to the Indenture Trustee and the Securities Administrator
copies of all Sub-Servicing Agreements, and any amendments or modifications
thereof, promptly upon the Master Servicer’s execution and delivery of such
instruments.
(c) As
part
of its servicing activities hereunder, the Master Servicer (except as otherwise
provided in the last sentence of this paragraph), for the benefit of the
Indenture Trustee and the Noteholders, shall enforce the obligations of each
Sub-Servicer under the related Sub-Servicing Agreement, including, without
limitation, any obligation to make advances in respect of delinquent payments
as
required by a Sub-Servicing Agreement. Such enforcement, including, without
limitation, the legal prosecution of claims, termination of Sub-Servicing
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 Master Servicer,
in
its good faith business judgment, would require were it the owner of the related
Mortgage Loans. The Master 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 Loans,
or
(ii) from a specific recovery of costs, expenses or attorneys’ fees against the
party against whom such enforcement is directed.
Section
2.03 Successor
Sub-Servicers.
The
Master Servicer shall be entitled to terminate any Sub-Servicing Agreement
and
the rights and obligations of any Sub-Servicer pursuant to any Sub-Servicing
Agreement in accordance with the terms and conditions of such Sub-Servicing
Agreement. In the event of termination of any Sub-Servicer, all servicing
obligations of such Sub-Servicer shall be assumed simultaneously by the Master
Servicer without any act or deed on the part of such Sub-Servicer or the Master
Servicer, and the Master Servicer either shall service directly the related
Mortgage Loans or shall enter into a Sub-Servicing Agreement with a successor
Sub-Servicer which qualifies under Section 2.02.
Any
Sub-Servicing Agreement (other than any Initial Sub-Servicing Agreement) shall
include the provision that such agreement may be immediately terminated by
the
Indenture Trustee or the Securities Administrator without fee, in accordance
with the terms of this Agreement, in the event that the Master Servicer shall,
for any reason, no longer be the Master Servicer (including termination due
to a
Master Servicer Event of Default).
Section
2.04 Liability
of the Master Servicer.
Notwithstanding any Sub-Servicing Agreement, any of the provisions of this
Agreement relating to agreements or arrangements between the Master Servicer
and
a Sub-Servicer or reference to actions taken through a Sub-Servicer or
otherwise, the Master Servicer shall remain obligated and primarily liable
to
the Indenture Trustee and the Noteholders for the servicing and administering
of
the Mortgage Loans in accordance with the provisions of Section 2.01 without
diminution of such obligation or liability by virtue of such Sub-Servicing
Agreements or arrangements or by virtue of indemnification from the Sub-Servicer
and to the same extent and under the same terms and conditions as if the Master
Servicer alone were servicing and administering the Mortgage Loans. The Master
Servicer shall be entitled to enter into any agreement with a Sub-Servicer
for
indemnification of the Master Servicer by such Sub-Servicer and nothing
contained in this Agreement shall be deemed to limit or modify such
indemnification.
Section
2.05 No
Contractual Relationship Between Sub-Servicers and Indenture Trustee, Securities
Administrator or Noteholders.
Any
Sub-Servicing Agreement that may be entered into and any transactions or
services relating to the Mortgage Loans involving a Sub-Servicer in its capacity
as such shall be deemed to be between the Sub-Servicer and the Master Servicer
alone, and the Indenture Trustee, the Securities Administrator and the
Noteholders shall not be deemed parties thereto and shall have no claims,
rights, obligations, duties or liabilities with respect to the Sub-Servicer
except as set forth in Section 2.06. The Master Servicer shall be solely liable
for all fees owed by it to any Sub-Servicer, irrespective of whether the Master
Servicer’s compensation pursuant to this Agreement is sufficient to pay such
fees.
Section
2.06 Assumption
or Termination of Sub-Servicing Agreements by Indenture Trustee.
In the
event the Master Servicer shall for any reason no longer be the master servicer
(including by reason of the occurrence of a Master Servicer Event of Default),
the Indenture Trustee or its designee shall thereupon assume all of the rights
and obligations of the Master Servicer under each Sub-Servicing Agreement that
the Master Servicer may have entered into, unless the Indenture Trustee elects
to terminate any Sub-Servicing Agreement in accordance with its terms as
provided in Section 2.03. Upon such assumption, the Indenture Trustee, its
designee or the successor servicer for the Indenture Trustee appointed pursuant
to Section 5.02 shall be deemed, subject to Section 2.03, to have assumed all
of
the Master Servicer’s interest therein and to have replaced the Master Servicer
as a party to each Sub-Servicing Agreement to the same extent as if each
Sub-Servicing Agreement had been assigned to the assuming party, except that
(i)
the Master Servicer shall not thereby be relieved of any liability or
obligations under any Sub-Servicing Agreement and (ii) none of the Indenture
Trustee, its designee or any successor Master Servicer shall be deemed to have
assumed any liability or obligation of the Master Servicer that arose before
it
ceased to be the Master Servicer.
The
Master Servicer at its expense shall, upon request of the Indenture Trustee,
deliver to the assuming party all documents and records relating to each
Sub-Servicing Agreement and the Mortgage Loans then being serviced and an
accounting of amounts collected and held by or on behalf of it, and otherwise
use its best efforts to effect the orderly and efficient transfer of the
Sub-Servicing Agreements to the assuming party.
Section
2.07 Collection
of Certain Mortgage Loan Payments.
The
Master Servicer shall make reasonable efforts to collect all payments called
for
under the terms and provisions of the Mortgage Loans, and shall, to the extent
such procedures shall be consistent with this Agreement and the terms and
provisions of any related Primary Mortgage Insurance Policy and any other
applicable insurance policies, follow such collection procedures as it would
follow with respect to mortgage loans comparable to the Mortgage Loans and
held
for its own account. Consistent with the foregoing and the servicing standards
set forth in Section 2.01, the Master Servicer may in its discretion and subject
to Section 2.26 (i) waive any late payment charge or, if applicable, penalty
interest, only upon determining that the coverage of such Mortgage Loan by
the
related Primary Mortgage Insurance Policy, if any, will not be affected, or
(ii)
extend the due dates for Monthly Payments due on a Mortgage Note for a period
of
not greater than 180 days; provided that any extension pursuant to clause (ii)
above shall not affect the amortization schedule of any Mortgage Loan for
purposes of any computation hereunder, except as provided below. In the event
of
any such arrangement pursuant to clause (ii) above, the Master Servicer shall
make timely advances on such Mortgage Loan during such extension pursuant to
Section 3.01 and in accordance with the amortization schedule of such Mortgage
Loan without modification thereof by reason of such arrangements.
Notwithstanding the foregoing, in the event that any Mortgage Loan is in default
or, in the judgment of the Master Servicer, such default is reasonably
foreseeable, the Master Servicer, consistent with the standards set forth in
Section 2.01 and subject to Section 2.26, may waive, modify or vary any term
of
such Mortgage Loan (including modifications that change the Mortgage Interest
Rate, forgive the payment of principal or interest or extend the final maturity
date of such Mortgage Loan), accept payment from the related Mortgagor of an
amount less than the Scheduled Principal Balance in final satisfaction of such
Mortgage Loan (such payment, a “Short Pay-off”) or consent to the postponement
of strict compliance with any such term or otherwise grant indulgence to any
Mortgagor, if in the Master Servicer’s determination such waiver, modification,
postponement or indulgence is not materially adverse to the interests of the
Noteholders (taking into account any estimated Realized Loss that might result
absent such action).
Section
2.08 Sub-Servicing
Accounts.
In
those cases where a Sub-Servicer is servicing a Mortgage Loan pursuant to a
Sub-Servicing Agreement, the Sub-Servicer will be required to establish and
maintain one or more accounts (collectively, the “Sub-Servicing Account”). The
Sub-Servicing Account shall be an Eligible Account and shall comply with all
requirements of this Agreement relating to the Collection Account (provided,
however, that in the case of each Initial Sub-Servicing Agreement, the
applicable Sub-Servicing Account shall comply with all requirements of the
Initial Sub-Servicing Agreement relating to the custodial account provided
for
therein). The Sub-Servicer shall deposit in the clearing account (which account
must be an Eligible Account) in which it customarily deposits payments and
collections on mortgage loans in connection with its mortgage loan servicing
activities on a daily basis, and in no event more than two Business Days after
the Sub-Servicer’s receipt thereof, all proceeds of Mortgage Loans received by
the Sub-Servicer less its servicing compensation to the extent permitted by
the
Sub-Servicing Agreement, and shall thereafter deposit such amounts in the
Sub-Servicing Account, in no event more than one Business Day after the deposit
of such funds into the clearing account. The Sub-Servicer shall thereafter
remit
such proceeds to the Master Servicer for deposit in the Collection Account
not
later than two Business Days after the deposit of such amounts in the
Sub-Servicing Account (or, in the case of the Initial Sub-Servicing Agreement,
at such time as is required pursuant to the terms of the Initial Sub-Servicing
Agreement). For purposes of this Agreement, the Master Servicer shall be deemed
to have received payments on the Mortgage Loans when the Sub-Servicer receives
such payments.
Section
2.09 Collection
of Taxes, Assessments and Similar Items; Servicing Accounts.
The
Master Servicer shall establish and maintain (or cause a Sub-Servicer to
establish and maintain) one or more accounts (the “Servicing Accounts”), into
which all collections from the Mortgagors (or related advances from
Sub-Servicers) for the payment of ground rents, taxes, assessments, fire and
hazard insurance premiums, Primary Mortgage Insurance Premiums, water charges,
sewer rents and comparable items for the account of the Mortgagors (“Escrow
Payments”) shall be deposited and retained. Servicing Accounts shall be Eligible
Accounts. The Master Servicer (or the applicable Sub-Servicer) shall deposit
in
the clearing account (which account must be an Eligible Account) in which it
customarily deposits payments and collections on mortgage loans in connection
with its mortgage loan servicing activities on a daily basis, and in no event
more than two Business Days after the Master Servicer’s (or the applicable
Sub-Servicer’s) receipt thereof, all Escrow Payments collected on account of the
Mortgage Loans and shall thereafter deposit such Escrow Payments in the
Servicing Accounts, in no event more than one Business Day after the deposit
of
such funds in the clearing account, for the purpose of effecting the payment
of
any such items as required under the terms of this Agreement. Withdrawals of
amounts from a Servicing Account may be made only to (i) effect payment of
Escrow Payments; (ii) reimburse the Master Servicer (or a Sub-Servicer to the
extent provided in the related Sub-Servicing Agreement) out of related
collections for any advances made pursuant to Section 2.01 (with respect to
taxes and assessments) and Section 2.14 (with respect to hazard insurance);
(iii) refund to Mortgagors any sums as may be determined to be overages; (iv)
pay interest, if required and as described below, to Mortgagors on balances
in
the Servicing Account; (v) clear and terminate the Servicing Account at the
termination of the Master Servicer’s obligations and responsibilities in respect
of the Mortgage Loans under this Agreement in accordance with Section 6.10;
or
(vi) recover amounts deposited in error. As part of its servicing duties, the
Master Servicer or Sub-Servicers shall pay to the Mortgagors interest on funds
in Servicing Accounts, to the extent required by law and, to the extent that
interest earned on funds in the Servicing Accounts is insufficient, to pay
such
interest from its or their own funds, without any reimbursement therefor. To
the
extent that a Mortgage does not provide for Escrow Payments, the Master Servicer
shall determine whether any such payments are made by the Mortgagor in a manner
and at a time that avoids the loss of the Mortgaged Property due to a tax sale
or the foreclosure of a tax lien. The Master Servicer assumes full
responsibility for the payment of all such bills and shall effect payments
of
all such bills irrespective of the Mortgagor’s faithful performance in the
payment of same or the making of the Escrow Payments and shall make advances
from its own funds to effect such payments.
Section
2.10 Collection
Account.
(a)
On
behalf of the Trust, the Master Servicer shall establish and maintain one or
more separate, segregated trust accounts (such account or accounts, the
“Collection Account”), held in trust for the benefit of the Indenture Trustee
and the Noteholders. On behalf of the Trust, the Master Servicer shall deposit
or cause to be deposited in the clearing account (which account must be an
Eligible Account) in which it customarily deposits payments and collections
on
mortgage loans in connection with its mortgage loan servicing activities on
a
daily basis, and in no event more than two Business Days after the Master
Servicer’s receipt thereof, and shall thereafter deposit in the Collection
Account, in no event more than one Business Day after the deposit of such funds
into the clearing account, as and when received or as otherwise required
hereunder, the following payments and collections received or made by it from
and after the Cut-off Date (other than in respect of principal or interest
on
the related Mortgage Loans due on or before the Cut-off Date), or payments
(other than Principal Prepayments) received by it on or prior to the Cut-off
Date but allocable to a Due Period subsequent thereto:
(i) all
payments on account of principal, including Principal Prepayments, on the
Mortgage Loans;
(ii) all
payments on account of interest (net of the related Servicing Fee and the
related Administration Fee) on each Mortgage Loan;
(iii) all
Insurance Proceeds, Subsequent Recoveries and Liquidation Proceeds (other than
proceeds collected in respect of any particular REO Property and amounts paid
in
connection with a redemption of the assets of the Trust Estate of Mortgage
Loans
and REO Properties pursuant to Section 8.06 of the Indenture;
(iv) any
amounts required to be deposited pursuant to Section 2.12 in connection with
any
losses realized on Permitted Investments with respect to funds held in the
Collection Account;
(v) any
amounts required to be deposited by the Master Servicer pursuant to the second
paragraph of Section 2.14(a) in respect of any blanket policy
deductibles;
(vi) all
proceeds of any Mortgage Loan repurchased or purchased in accordance with
Sections 1.07 and 2.26 hereof, Section 6 of the Mortgage Loan Purchase Agreement
or Section 8.06 of the Indenture; and
(vii) all
amounts required to be deposited in connection with shortfalls in principal
amount of Substitute Mortgage Loans pursuant to Section 1.07(d) hereof, Section
6 of the Mortgage Loan Purchase Agreement.
For
purposes of the immediately preceding sentence, the Cut-off Date with respect
to
any Qualified Substitute Mortgage Loan shall be deemed to be the date of
substitution.
The
foregoing requirements for deposit in the Collection Accounts shall be
exclusive, it being understood and agreed that, without limiting the generality
of the foregoing, payments in the nature of late payment charges or assumption
fees need not be deposited by the Master Servicer in the Collection Account.
In
the event the Master Servicer shall deposit in the Collection Account any amount
not required to be deposited therein, it may at any time withdraw such amount
from the Collection Account, any provision herein to the contrary
notwithstanding.
(b) [Reserved]
(c) Funds
in
the Collection Account may be invested in Permitted Investments in accordance
with the provisions set forth in Section 2.12. The Master Servicer shall give
notice to the Indenture Trustee, the Securities Administrator, the Paying Agent
and the Depositor of the location of the Collection Account maintained by it
when established and prior to any change thereof.
(d) Funds
held in the Collection Account at any time may be delivered by the Master
Servicer to the Paying Agent on behalf of the Securities Administrator for
deposit in an account (which may be the Payment Account and must satisfy the
standards for the Payment Account as set forth in the definition thereof) and
for all purposes of this Agreement shall be deemed to be a part of the
Collection Account; provided, however, that the Paying Agent shall have the
sole
authority to withdraw any funds held pursuant to this subsection (d). In the
event the Master Servicer shall deliver to the Paying Agent for deposit in
the
Payment Account any amount not required to be deposited therein, it may at
any
time request that the Paying Agent withdraw such amount from the Payment Account
and remit to it any such amount, any provision herein to the contrary
notwithstanding. In addition, the Master Servicer shall deliver to the Paying
Agent from time to time for deposit, and upon written notification from the
Master Servicer, the Paying Agent shall so deposit, in the Payment
Account:
(i) any
Monthly Advances, as required pursuant to Section 3.01;
(ii) any
amounts required to be deposited pursuant to Section 2.23(d) or (f) in
connection with any REO Property;
(iii) [Reserved];
(iv) any
amounts required to be deposited pursuant to Section 2.24 in connection with
any
Prepayment Interest Shortfalls; and
(e) [Reserved].
(f) The
Master Servicer shall deposit in the Collection Account any amounts required
to
be deposited pursuant to Section 2.12(b) in connection with losses realized
on
Permitted Investments with respect to funds held in the Collection
Account.
Section
2.11 Withdrawals
from the Collection Account and Payment Account.
(a)
The
Master Servicer shall, from time to time, make withdrawals from the Collection
Account for any of the following purposes or as described in Section
3.01:
(i) to
remit
to the Paying Agent for deposit in the Payment Account the amounts required
to
be so remitted pursuant to the first sentence of Section 2.10(d);
(ii) subject
to Section 2.16(d), to reimburse the Master Servicer for Monthly Advances,
but
only to the extent of amounts received which represent (net of the related
Servicing Fees and Administration Fees) of Monthly Payments on Mortgage Loans
with respect to which such Monthly Advances were made in accordance with the
provisions of Section 3.01;
(iii) subject
to Section 2.16(d), to pay the Master Servicer or any Sub-Servicer (A) any
unpaid Servicing Fees and unpaid Administration Fees, (B) any unreimbursed
Servicing Advances with respect to each Mortgage Loan, but only to the extent
of
any Liquidation Proceeds, Insurance Proceeds or other amounts as may be
collected by the Master Servicer from a Mortgagor, or otherwise received with
respect to such Mortgage Loan and (C) any nonrecoverable Servicing Advances
following the final liquidation of a Mortgage Loan, but only to the extent
that
Late Collections, Liquidation Proceeds and Insurance Proceeds received with
respect to such Mortgage Loan are insufficient to reimburse the Master Servicer
or any Sub-Servicer for such Servicing Advances;
(iv) to
pay to
the Master Servicer as servicing compensation (in addition to the Servicing
Fee
and the Administration Fee) on the Master Servicer Remittance Date any interest
or investment income earned on funds deposited in the Collection
Account;
(v) to
pay to
the Master Servicer, the Depositor, the Seller or the originator, as the case
may be, with respect to each Mortgage Loan that has previously been purchased
or
replaced pursuant to Sections 1.07 or 2.26 hereof, Section 6 of the Mortgage
Loan Purchase Agreement, all amounts received thereon subsequent to the date
of
purchase or substitution, as the case may be;
(vi) to
reimburse the Master Servicer for any Monthly Advance previously made which
the
Master Servicer has determined to be a Nonrecoverable Advance in accordance
with
the provisions of Section 3.01;
(vii) to
reimburse the Master Servicer or the Depositor for expenses incurred by or
reimbursable to the Master Servicer or the Depositor, as the case may be,
pursuant to Section 4.03;
(viii) to
reimburse the Master Servicer, the Securities Administrator, the Paying Agent
or
the Indenture Trustee, as the case may be, for expenses reasonably incurred
in
respect of the breach or defect giving rise to the purchase obligation under
Section 1.07 hereof, Section 6 of the Mortgage Loan Purchase Agreement including
any expenses arising out of the enforcement of the purchase
obligation;
(ix) to
pay,
or to reimburse the Master Servicer for advances in respect of expenses incurred
in connection with any Mortgage Loan pursuant to Section 2.16(b);
(x) [Reserved];
(xi) to
clear
and terminate the Collection Account pursuant to Section 6.10.
(xii) to
reimburse or pay the Owner Trustee any amounts due (including compensation)
or
expenses, costs and liabilities incurred by or reimbursable to it pursuant
to
this Agreement, the Indenture and the Trust Agreement, but only to the extent
such amounts (i) are not required to be paid by the Master Servicer pursuant
to
Section 7.01 of the Trust Agreement or (ii) are required to have been paid
by
the Master Servicer pursuant to Section 7.01 of the Trust Agreement but the
Master Servicer has defaulted in its obligation to pay;
(xiii) to
reimburse or pay the Indenture Trustee, the Paying Agent and the Securities
Administrator any amounts due (including compensation) or expenses, costs and
liabilities incurred by or reimbursable to it pursuant to this Agreement, the
Indenture and the Trust Agreement, to the extent such amounts have not already
been previously paid or reimbursed to such party from the Collection
Account;
(xiv) to
remove
amounts deposited in error; and
(xv) to
clear
and terminate the Payment Account pursuant to Section 6.10.
The
Master 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, to the extent held by or on behalf of it, pursuant to
subclauses (ii), (iii), (iv), (v), (vi), (viii) and (ix) above. The Master
Servicer shall provide written notification to the Indenture Trustee, the
Securities Administrator and the Paying Agent, on or prior to the next
succeeding Master Servicer Remittance Date, upon making any withdrawals from
the
Collection Account pursuant to subclause (vii) above.
Section
2.12 Investment
of Funds in the Collection Account.
(a)
The
Master Servicer may direct any depository institution maintaining the Collection
Account (for purposes of this Section 2.12, an “Investment Account”), to hold
the funds in such Investment Account uninvested or to invest the funds in such
Investment Account in one or more Permitted Investments specified in such
instruction bearing interest or sold at a discount, and maturing, unless payable
on demand, (i) no later than the Business Day immediately preceding the date
on
which such funds are required to be withdrawn from such account pursuant to
this
Agreement, if a Person other than the Paying Agent is the obligor thereon,
and
(ii) no later than the date on which such funds are required to be withdrawn
from such account pursuant to this Agreement, if the Paying Agent is the obligor
thereon. All such Permitted Investments shall be held to maturity, unless
payable on demand. Any investment of funds in an Investment Account shall be
made in the name of the Master Servicer (in its capacity as such) or in the
name
of a nominee of the Securities Administrator. The Securities Administrator
shall
be entitled to sole possession (except with respect to investment direction
of
funds held in the Collection Account and any income and gain realized thereon)
over each such investment, and any certificate or other instrument evidencing
any such investment shall be delivered directly to the Securities Administrator
or its agent, together with any document of transfer necessary to transfer
title
to such investment to the Securities Administrator or its nominee. In the event
amounts on deposit in an Investment Account are at any time invested in a
Permitted Investment payable on demand, the Securities Administrator
shall:
|
(x)
|
consistent
with any notice required to be given thereunder, demand that payment
thereon be made on the last day such Permitted Investment may otherwise
mature hereunder in an amount equal to the lesser of (1) all amounts
then
payable thereunder and (2) the amount required to be withdrawn on
such
date; and
|
|
(y)
|
demand
payment of all amounts due thereunder promptly upon determination
by a
Responsible Officer of the Securities Administrator that such Permitted
Investment would not constitute a Permitted Investment in respect
of funds
thereafter on deposit in the Investment
Account.
|
(b) All
income and gain realized from the investment of funds deposited in the
Collection Account held by or on behalf of the Master Servicer, shall be for
the
benefit of the Master Servicer and shall be subject to its withdrawal in
accordance with Section 2.11. The Master Servicer shall deposit in the
Collection Account the amount of any loss of principal incurred in respect
of
any such Permitted Investment made with funds in such accounts immediately
upon
realization of such loss.
Section
2.13 Maintenance
of the Primary Mortgage Insurance Policies; Collections
Thereunder.
The
Master Servicer will maintain or cause the related Sub-Servicer, if any, to
maintain in full force and effect, if required under the Mortgage Loan Purchase
Agreement and to the extent available, a Primary Mortgage Insurance Policy
with
respect to each Mortgage Loan so insured as of the Closing Date (or, in the
case
of a Substitute Mortgage Loan, on the date of substitution). Such coverage
will
be maintained with respect to each such Mortgage Loan for so long as it is
outstanding, subject to any applicable laws or until the related Loan-to-Value
Ratio is reduced to less than or equal to 80% based on Mortgagor payments.
The
Master Servicer shall cause the premium for each Primary Mortgage Insurance
Policy to be paid on a timely basis and shall pay such premium out of its own
funds if it is not otherwise paid. The Master Servicer or the related
Sub-Servicer, if any, will not cancel or refuse to renew any such Primary
Mortgage Insurance Policy in effect on the Closing Date (or, in the case of
a
Substitute Mortgage Loan, on the date of substitution) that is required to
be
kept in force under this Agreement unless a replacement Primary Mortgage
Insurance Policy for such canceled or non-renewed policy is obtained from and
maintained with a Qualified Insurer.
The
Master Servicer shall not take, or permit any Sub-Servicer to take, any action
which would result in non-coverage under any applicable Primary Mortgage
Insurance Policy of any loss which, but for the actions of the Master Servicer
or Sub-Servicer, would have been covered thereunder. The Master Servicer will
comply in the performance of this Agreement with all reasonable rules and
requirements of each insurer under each Primary Mortgage Insurance Policy.
In
connection with any assumption and modification agreement or substitution of
liability agreement entered into or to be entered into pursuant to Section
2.15,
the Master Servicer shall promptly notify the insurer under the related Primary
Mortgage Insurance Policy, if any, of such assumption in accordance with the
terms of such policies and shall take all actions which may be required by
such
insurer as a condition to the continuation of coverage under the Primary
Mortgage Insurance Policy. If any such Primary Mortgage Insurance Policy is
terminated as a result of such assumption, the Master Servicer or the related
Sub-Servicer shall obtain a replacement Primary Mortgage Insurance Policy as
provided above.
In
connection with its activities as administrator and servicer of the Mortgage
Loans, the Master Servicer agrees to prepare and present, on behalf of itself,
the Indenture Trustee and the Noteholders, claims to the insurer under any
Primary Mortgage Insurance Policy in a timely fashion in accordance with the
terms of such policies and, in this regard, to take such action as shall be
necessary to permit recovery under any Primary Mortgage Insurance Policy
respecting a defaulted Mortgage Loan. Any amounts collected by the Master
Servicer under any Primary Mortgage Insurance Policy shall be deposited in
the
Collection Account, subject to withdrawal pursuant to Section 2.11; and any
amounts collected by the Master Servicer under any Primary Mortgage Insurance
Policy in respect of any REO Property shall be deposited in the Collection
Account, subject to withdrawal pursuant to Section 2.23. In those cases in
which
a Mortgage Loan is serviced by a Sub-Servicer, the Sub-Servicer, on behalf
of
itself, the Indenture Trustee, and the Noteholders, will present claims to
the
insurer under any Primary Mortgage Insurance Policy and all collections
thereunder shall be deposited initially in the Sub-Servicing
Account.
Section
2.14 Maintenance
of Hazard Insurance and Errors and Omissions and Fidelity
Coverage.
(a)
The
Master Servicer shall cause to be maintained for each Mortgage Loan fire
insurance with extended coverage on the related Mortgaged Property in an amount
which is at least equal to the least of (i) the current principal balance of
such Mortgage Loan, (ii) the amount necessary to fully compensate for any damage
or loss to the improvements that are a part of such property on a replacement
cost basis and (iii) the maximum insurable value of the improvements which
are a
part of such Mortgaged Property, in each case in an amount not less than such
amount as is necessary to avoid the application of any coinsurance clause
contained in the related hazard insurance policy. The Master Servicer shall
also
cause to be maintained fire insurance with extended coverage on each REO
Property in an amount which is at least equal to the lesser of (i) the maximum
insurable value of the improvements which are a part of such property and (ii)
the outstanding principal balance of the related Mortgage Loan at the time
it
became an REO Property, plus accrued interest at the Mortgage Interest Rate
and
related Servicing Advances. The Master Servicer will comply in the performance
of this Agreement with all reasonable rules and requirements of each insurer
under any such hazard policies. Any amounts to be collected by the Master
Servicer under any such policies (other than amounts to be applied to the
restoration or repair of the property subject to the related Mortgage or amounts
to be released to the Mortgagor in accordance with the procedures that the
Master Servicer would follow in servicing loans held for its own account,
subject to the terms and conditions of the related Mortgage and Mortgage Note)
shall be deposited in the Collection Account, subject to withdrawal pursuant
to
Section 2.11, if received in respect of a Mortgage Loan, or in the REO Account,
subject to withdrawal pursuant to Section 2.23, if received in respect of an
REO
Property. Any cost incurred by the Master Servicer in maintaining any such
insurance shall not, for the purpose of calculating payments to Noteholders,
be
added to the unpaid principal balance of the related Mortgage Loan,
notwithstanding that the terms of such Mortgage Loan so permit. It is understood
and agreed that no earthquake or other additional insurance is to be required
of
any Mortgagor 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 Mortgaged Property or REO Property is at any time in an area identified
in
the Federal Register by the Federal Emergency Management Agency as having
special flood hazards, the Master Servicer will cause to be maintained a flood
insurance policy in respect thereof. Such flood insurance shall be in an amount
equal to the lesser of (i) the unpaid principal balance of the related Mortgage
Loan and (ii) the maximum amount of such insurance 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).
In
the
event that the Master Servicer shall obtain and maintain a blanket policy with
an insurer having a General Policy Rating of A:X or better in Best’s Key Rating
Guide (or such other rating that is comparable to such rating) 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 two sentences of this
Section 2.14, it being understood and agreed that such policy may contain a
deductible clause, in which case the Master Servicer shall, in the event that
there shall not have been maintained on the related Mortgaged Property or REO
Property a policy complying with the first two sentences of this Section 2.14,
and there shall have been one or more losses which would have been covered
by
such policy, deposit to the Collection Account from its own funds the amount
not
otherwise payable under the blanket policy because of such deductible clause.
In
connection with its activities as administrator and servicer of the Mortgage
Loans, the Master Servicer agrees to prepare and present, on behalf of itself,
the Indenture Trustee and the Noteholders, claims under any such blanket policy
in a timely fashion in accordance with the terms of such policy.
(b) The
Master Servicer shall keep in force during the term of this Agreement a policy
or policies of insurance covering errors and omissions for failure in the
performance of the Master Servicer’s obligations under this Agreement, which
policy or policies shall be in such form and amount that would meet the
requirements of ▇▇▇▇▇▇ ▇▇▇ or ▇▇▇▇▇▇▇ Mac if it were the purchaser of the
Mortgage Loans, unless the Master Servicer has obtained a waiver of such
requirements from ▇▇▇▇▇▇ Mae or ▇▇▇▇▇▇▇ Mac. The Master Servicer shall also
maintain a fidelity bond in the form and amount that would meet the requirements
of ▇▇▇▇▇▇ Mae or ▇▇▇▇▇▇▇ Mac, unless the Master Servicer has obtained a waiver
of such requirements from ▇▇▇▇▇▇ Mae or ▇▇▇▇▇▇▇ Mac. The Master Servicer shall
provide the Indenture Trustee (upon the Indenture Trustee’s reasonable request)
with copies of any such insurance policies and fidelity bond. The Master
Servicer shall be deemed to have complied with this provision if an Affiliate
of
the Master Servicer has such errors and omissions and fidelity bond coverage
and, by the terms of such insurance policy or fidelity bond, the coverage
afforded thereunder extends to the Master Servicer. Any such errors and
omissions policy and fidelity bond shall by its terms not be cancelable without
thirty days’ prior written notice to the Indenture Trustee. The Master Servicer
shall also cause each Sub-Servicer to maintain a policy of insurance covering
errors and omissions and a fidelity bond which would meet such
requirements.
Section
2.15 Enforcement
of Due-On-Sale Clauses; Assumption Agreements.
The
Master Servicer will, to the extent it has knowledge of any conveyance or
prospective conveyance of any Mortgaged Property by any Mortgagor (whether
by
absolute conveyance or by contract of sale, and whether or not the Mortgagor
remains or is to remain liable under the Mortgage Note and/or the Mortgage),
exercise its rights to accelerate the maturity of such Mortgage Loan under
the
“due-on-sale” clause, if any, applicable thereto; provided, however, that the
Master Servicer shall not exercise any such rights if prohibited by law from
doing so or if the exercise of such rights would impair or threaten to impair
any recovery under the related Primary Mortgage Insurance Policy, if any. If
the
Master Servicer reasonably believes it is unable under applicable law to enforce
such “due-on-sale” clause, or if any of the other conditions set forth in the
proviso to the preceding sentence apply, the Master Servicer will enter into
an
assumption and modification agreement from or with the person to whom such
property has been conveyed or is proposed to be conveyed, pursuant to which
such
person becomes liable under the Mortgage Note and, to the extent permitted
by
applicable state law, the Mortgagor remains liable thereon. The Master Servicer
is also authorized to enter into a substitution of liability agreement with
such
person, pursuant to which the original Mortgagor is released from liability
and
such person is substituted as the Mortgagor and becomes liable under the
Mortgage Note, provided that no such substitution shall be effective unless
such
person satisfies the underwriting criteria of the Master Servicer. In connection
with any assumption or substitution, the Master Servicer shall apply such
underwriting standards and follow such practices and procedures as shall be
normal and usual in its general mortgage servicing activities and as it applies
to other mortgage loans owned solely by it. The Master Servicer shall not take
or enter into any assumption and modification agreement, however, unless (to
the
extent practicable in the circumstances) it shall have received confirmation,
in
writing, of the continued effectiveness of any applicable Primary Mortgage
Insurance Policy or hazard insurance policy, or a new policy meeting the
requirements of this Section is obtained. Any fee collected by the Master
Servicer in respect of an assumption or substitution of liability agreement
will
be retained by the Master Servicer as additional servicing compensation. In
connection with any such assumption, no material term of the Mortgage Note
(including but not limited to the related Mortgage Interest Rate and the amount
of the Monthly Payment) may be amended or modified, except as otherwise required
pursuant to the terms thereof. The Master Servicer shall notify the Indenture
Trustee that any such substitution or assumption agreement has been completed
by
forwarding to the Custodian (with a copy to the Indenture Trustee) the executed
original of such substitution or assumption agreement, which document shall
be
added to the related Mortgage File and shall, for all purposes, be considered
a
part of such Mortgage File to the same extent as all other documents and
instruments constituting a part thereof.
Notwithstanding
the foregoing paragraph or any other provision of this Agreement, the Master
Servicer shall not be deemed to be in default, breach or any other violation
of
its obligations hereunder by reason of any assumption of a Mortgage Loan by
operation of law or by the terms of the Mortgage Note or any assumption which
the Master Servicer may be restricted by law from preventing, for any reason
whatever. For purposes of this Section 2.15, the term “assumption” is deemed to
also include a sale (of the Mortgaged Property) subject to the Mortgage that
is
not accompanied by an assumption or substitution of liability
agreement.
Section
2.16 Realization
Upon Defaulted Mortgage Loans.
(a)
The
Master Servicer shall, consistent with the servicing standard set forth in
Section 2.01 and the provisions of Section 2.26, foreclose upon or otherwise
comparably convert the ownership of properties securing such of the Mortgage
Loans as come into and continue in default and as to which no satisfactory
arrangements can be made for collection of delinquent payments pursuant to
Section 2.07. Notwithstanding the foregoing, the Master Servicer shall provide
written notice to the Certificateholder that it intends to proceeds with
foreclosure. The Master Servicer shall be responsible for all costs and expenses
incurred by it in any such proceedings; provided, however, that such costs
and
expenses will be recoverable as Servicing Advances by the Master Servicer as
contemplated in Section 2.11 and Section 2.23. The foregoing is subject to
the
provision that, in any case in which Mortgaged Property shall have suffered
damage from an Uninsured Cause, the Master Servicer shall not be required to
expend its own funds toward the restoration of such property unless it shall
determine in its discretion that such restoration will increase the proceeds
of
liquidation of the related Mortgage Loan after reimbursement to itself for
such
expenses.
In
addition the Master Servicer may also, in its discretion, as an alternative
to
foreclosure, sell defaulted mortgage loans at fair market value to
third-parties, if the related Initial Sub-Servicer reasonably believes that
such
sale would maximize proceeds to the Noteholders in the aggregate (on a present
value basis) with respect to that mortgage loan.
Notwithstanding
the foregoing provisions of this Section 2.16 or any other provision of this
Agreement, with respect to any Mortgage Loan as to which the Master Servicer
has
received actual notice of, or has actual knowledge of, the presence of any
toxic
or hazardous substance on the related Mortgaged Property, the Master Servicer
shall not, on behalf of the Indenture Trustee, either (i) obtain title to such
Mortgaged Property as a result of or in lieu of foreclosure or otherwise, or
(ii) otherwise acquire possession of, or take any other action with respect
to,
such Mortgaged Property, if, as a result of any such action, the Indenture
Trustee, the Trust Estate, the Securities Administrator, the Master Servicer
or
the Noteholders would be considered to hold title to, to be a “mortgagee-in-
possession” of, or to be an “owner” or “operator” of such Mortgaged Property
within the meaning of the Comprehensive Environmental Response, Compensation
and
Liability Act of 1980, as amended from time to time, or any comparable law,
unless the Master Servicer has also previously determined, based on its
reasonable judgment and a report prepared by a Person who regularly conducts
environmental audits using customary industry standards, that:
(i) such
Mortgaged Property is in compliance with applicable environmental laws or,
if
not, that it would be in the best economic interest of the Trust to take such
actions as are necessary to bring the Mortgaged Property into compliance
therewith; and
(ii) there
are
no circumstances present at such Mortgaged Property relating to the use,
management or disposal of any hazardous substances, hazardous materials,
hazardous wastes, or petroleum-based materials for which investigation, testing,
monitoring, containment, clean-up or remediation could be required under any
federal, state or local law or regulation, or that if any such materials are
present for which such action could be required, that it would be in the best
economic interest of the Trust to take such actions with respect to the affected
Mortgaged Property.
The
cost
of the environmental audit report contemplated by this Section 2.23 shall be
advanced by the Master Servicer, subject to the Master Servicer’s right to be
reimbursed therefor from the Collection Account as provided in Section
2.11(a)(ix), such right of reimbursement being prior to the rights of
Noteholders to receive any amount in the Collection Account received in respect
of the affected Mortgage Loan or other Mortgage Loans.
If
the
Master Servicer determines, as described above, that it is in the best economic
interest of the Trust to take such actions as are necessary to bring any such
Mortgaged Property into compliance with applicable environmental laws, or to
take such action with respect to the containment, clean-up or remediation of
hazardous substances, hazardous materials, hazardous wastes or petroleum-based
materials affecting any such Mortgaged Property, then the Master Servicer shall
take such action as it deems to be in the best economic interest of the Trust.
The cost of any such compliance, containment, cleanup or remediation shall
be
advanced by the Master Servicer, subject to the Master Servicer’s right to be
reimbursed therefor from the Collection Account as provided in Section
2.11(a)(ix), such right of reimbursement being prior to the rights of
Noteholders to receive any amount in the Collection Account received in respect
of the affected Mortgage Loan or other Mortgage Loans.
Proceeds
received in connection with any Final Recovery Determination, as well as any
recovery resulting from a partial collection of Insurance Proceeds or
Liquidation Proceeds, in respect of any Mortgage Loan, will be applied in the
following order of priority: first, to reimburse the Master Servicer or any
Sub-Servicer for any related unreimbursed Servicing Advances and Monthly
Advances, pursuant to Section 2.11(a)(ii) or (a)(iii)(B); second, to accrued
and
unpaid interest on the Mortgage Loan, to the date of the Final Recovery
Determination, or to the Due Date prior to the Payment Date on which such
amounts are to be distributed if not in connection with a Final Recovery
Determination; and third, as a recovery of principal of the Mortgage Loan.
If
the amount of the recovery so allocated to interest is less than the full amount
of accrued and unpaid interest due on such Mortgage Loan, the amount of such
recovery will be allocated by the Master Servicer as follows: first, to unpaid
Servicing Fees and Administration Fees; and second, to the balance of the
interest then due and owing. The portion of the recovery so allocated to unpaid
Servicing Fees and unpaid Administration Fees shall be reimbursed to the Master
Servicer or any Sub-Servicer pursuant to Section 2.11(a)(iii)(A).
Section
2.17 Indenture
Trustee to Cooperate; Release of Mortgage Files.
(a)
Upon the
payment in full of any Mortgage Loan, or the receipt by the Master Servicer
of a
notification that payment in full shall be escrowed in a manner customary for
such purposes, the Master Servicer will immediately notify the Custodian, on
behalf of the Indenture Trustee, by a certification in the form of Exhibit
D
(which certification shall include a statement to the effect that all amounts
received or to be received in connection with such payment which are required
to
be deposited in the Collection Account pursuant to Section 2.10 have been or
will be so deposited) of a Servicing Officer and shall request that the
Custodian, on behalf of the Indenture Trustee, deliver to it the Mortgage File.
Upon receipt of such certification and request, the Custodian, on behalf of
the
Indenture Trustee, shall promptly release the related Mortgage File to the
Master Servicer, and the Master Servicer is authorized to cause the removal
from
the registration on the MERS® System of any such Mortgage, if applicable, and to
execute and deliver, on behalf of the Indenture Trustee and the Noteholders
or
any of them, any and all instruments of satisfaction or cancellation or of
partial or full release. No expenses incurred in connection with any instrument
of satisfaction or deed of reconveyance shall be chargeable to the Collection
Account or the Payment Account.
(b) The
Indenture Trustee (or a Custodian on its behalf) shall, at the written request
and expense of any Noteholder, provide a written report to such Noteholder
of
all Mortgage Files released to the Master Servicer for servicing
purposes.
(c) From
time
to time and as appropriate for the servicing or foreclosure of any Mortgage
Loan, including, for this purpose, collection under any Primary Mortgage
Insurance Policy or any other insurance policy relating to the Mortgage Loans,
the Custodian, on behalf of the Indenture Trustee, shall, upon request of the
Master Servicer and delivery to the Custodian and the Indenture Trustee of
a
Request for Release in the form of Exhibit D, release the related Mortgage
File
to the Master Servicer, and the Custodian, on behalf of the Indenture Trustee,
shall, at the direction of the Master Servicer, execute such documents as shall
be necessary to the prosecution of any such proceedings. Such Request for
Release shall obligate the Master Servicer to return each and every document
previously requested from the Mortgage File to the Custodian when the need
therefor by the Master Servicer no longer exists, unless the Mortgage Loan
has
been liquidated and the Liquidation Proceeds relating to the Mortgage Loan
have
been deposited in the Collection Account or the Mortgage File or such document
has been delivered to an attorney, or to a public trustee or other public
official as required by law, for purposes of initiating or pursuing legal action
or other proceedings for the foreclosure of the Mortgaged Property either
judicially or non-judicially, and the Master Servicer has delivered to the
Custodian, on behalf of the Indenture Trustee, a certificate of a Servicing
Officer certifying as to the name and address of the Person to which such
Mortgage File or such document was delivered and the purpose or purposes of
such
delivery. Upon receipt of a certificate of a Servicing Officer stating that
such
Mortgage Loan was liquidated and that all amounts received or to be received
in
connection with such liquidation that are required to be deposited into the
Collection Account have been so deposited, or that such Mortgage Loan has become
an REO Property, a copy of the Request for Release shall be released by the
Custodian, on behalf of the Indenture Trustee, to the Master
Servicer.
Upon
written certification of a Servicing Officer, the Indenture Trustee shall
execute and deliver to the Master Servicer any court pleadings, requests for
trustee’s sale or other documents reasonably necessary to the foreclosure or
trustee’s sale in respect of a Mortgaged Property or to any legal action brought
to obtain judgment against any Mortgagor on the Mortgage Note or Mortgage or
to
obtain a deficiency judgment, or to enforce any other remedies or rights
provided by the Mortgage Note or Mortgage or otherwise available at law or
in
equity. Each such certification shall include a request that such pleadings
or
documents be executed by the Indenture Trustee and a statement as to the reason
such documents or pleadings are required and that the execution and delivery
thereof by the Indenture Trustee will not invalidate or otherwise affect the
lien of the Mortgage, except for the termination of such a lien upon completion
of the foreclosure or trustee’s sale.
Section
2.18 Servicing
Compensation.
As
compensation for the activities of the Master Servicer hereunder, the Master
Servicer shall be entitled to the Servicing Fee and the Administration Fee
with
respect to each Mortgage Loan payable solely from payments of interest in
respect of such Mortgage Loan, subject to Section 2.24. In addition, the Master
Servicer shall be entitled to recover unpaid Servicing Fees and unpaid
Administration Fees out of Insurance Proceeds or Liquidation Proceeds to the
extent permitted by Section 2.11(a)(iii)(A) and out of amounts derived from
the
operation and sale of an REO Property to the extent permitted by Section 2.23.
The right to receive the Servicing Fee and the Administration Fee may not be
transferred in whole or in part except in connection with the transfer of all
of
the Master Servicer’s responsibilities and obligations under this
Agreement.
Additional
servicing compensation in the form of assumption fees, late payment charges
and
other similar fees and charges shall be retained by the Master Servicer (subject
to Section 2.24) only to the extent such fees or charges are received by the
Master Servicer. The Master Servicer shall also be entitled pursuant to Section
2.11(a)(iv) to withdraw from the Collection Account, and pursuant to Section
2.23(b) to withdraw from any REO Account, as additional servicing compensation,
interest or other income earned on deposits therein, subject to Section 2.12
and
Section 2.24. The Master Servicer shall be required to pay all expenses incurred
by it in connection with its servicing activities hereunder (including premiums
due under the Primary Insurance Policies, if any, premiums for the insurance
required by Section 2.14, to the extent such premiums are not paid by the
related Mortgagors or by a Sub-Servicer, servicing compensation of each
Sub-Servicer, and to the extent provided herein in Section 6.08 of the
Indenture, the fees and expenses of the Indenture Trustee and the Securities
Administrator) and shall not be entitled to reimbursement therefor except as
specifically provided herein.
Section
2.19 Reports
to the Securities Administrator; Collection Account Statements.
Not
later than fifteen days after each Payment Date, the Master Servicer shall
forward to the Securities Administrator and the Indenture Trustee, upon the
request of the Securities Administrator or the Indenture Trustee, a statement
prepared by the Master Servicer setting forth the status of the Collection
Account as of the close of business on the last day of the calendar month
relating to such Payment Date and showing, for the period covered by such
statement, the aggregate amount of deposits into and withdrawals from the
Collection Account of each category of deposit specified in Section 2.10(a)
and
each category of withdrawal specified in Section 2.11. Such statement may be
in
the form of the then current ▇▇▇▇▇▇ ▇▇▇ Monthly Accounting Report for its
Guaranteed Mortgage Pass-Through Program with appropriate additions and changes,
and shall also include information as to the aggregate of the outstanding
principal balances of all of the Mortgage Loans as of the last day of the
calendar month immediately preceding such Payment Date. Copies of such statement
shall be provided by the Securities Administrator to the Note Registrar, and
the
Note Registrar shall provide the same to any Noteholder and to any Person
identified to the Note Registrar as a prospective transferee of a Note, upon
the
request and at the expense of the requesting party, provided such statement
is
delivered by the Master Servicer to the Securities Administrator and by the
Securities Administrator to the Note Registrar.
Section
2.20 Statement
as to Compliance.
The
Master Servicer shall deliver to the Depositor and the Securities Administrator,
on or before March 15th of each calendar year beginning in 2007, an Officers’
Certificate (an “Annual Statement of Compliance”) stating, as to each signatory
thereof, that (i) a review of the activities of the Master Servicer during
the
preceding calendar year and of performance under this Agreement has been made
under such officers’ supervision and (ii) to the best of such officers’
knowledge, based on such review, the Master Servicer has fulfilled all of its
obligations under this Agreement in all material respects throughout such year,
or, if there has been a failure to fulfill any such obligation in any material
respect, specifying each such failure known to such officer and the nature
and
status of cure provisions thereof. The Master Servicer shall deliver, or cause
any Sub-Servicer to deliver, a similar Annual Statement of Compliance by any
Sub-Servicer to which any servicing responsibilities have been delegated with
respect to the Mortgage Loans, to the Depositor and the Securities Administrator
as described above as and when required with respect to the Master
Servicer.
If
the
Master Servicer cannot deliver the related Annual Statement of Compliance by
March 15th of such year, the Indenture Trustee, at the direction of the
Depositor, may permit a cure period for the Master Servicer to deliver such
Annual Statement of Compliance, but in no event later than March 18th of such
year.
Failure
of the Master Servicer to comply with this Section 2.20 shall be deemed a Master
Servicer Event of Default and the Indenture Trustee at the direction of the
Depositor shall, in addition to whatever rights the Indenture Trustee may have
under this Agreement and at law or equity or to damages, including injunctive
relief and specific performance, upon notice immediately terminate all of the
rights and obligations of the Master Servicer under this Agreement and in and
to
the Mortgage Loans and the proceeds thereof without compensating the Master
Servicer for the same. This paragraph shall supersede any other provision in
this Agreement or any other agreement to the contrary.
The
Master Servicer shall indemnify and hold harmless the Depositor and its
officers, directors and Affiliates from and against any actual losses, damages,
penalties, fines, forfeitures, reasonable and necessary legal fees and related
costs, judgments and other costs and expenses that such Person may sustain
based
upon a breach of the Master Servicer’s obligations under this Section
2.20.
Section
2.21 Assessments
of Compliance and Attestation Reports.
(a) The
Master Servicer shall service and administer the Mortgage Loans in accordance
with all applicable requirements of the Servicing Criteria (as set forth in
Exhibit F hereto). The Master Servicer shall deliver to the Depositor and the
Securities Administrator or cause to be delivered to the Depositor and the
Securities Administrator, on or before March 1st of each calendar year beginning
in 2007, the following:
(i) a
report
(an “Assessment of Compliance”) regarding the Master Servicer’s assessment of
compliance with the Servicing Criteria during the immediately preceding calendar
year, as required under Rules 13a-18 and 15d-18 of the Exchange Act and Item
1122 of Regulation AB. Such report shall be signed by an authorized officer
of
the Master Servicer, and shall address each of the Servicing Criteria set forth
in Exhibit F hereto;
(ii) a
report
(an “Attestation Report”) of a registered public accounting firm reasonably
acceptable to the Depositor that attests to, and reports on, the assessment
of
compliance made by the Master Servicer and delivered pursuant to the preceding
paragraph. Such attestation shall be in accordance with Rules 1-02(a)(3) and
2-02(g) of Regulation S-X under the Securities Act and the Exchange
Act;
(iii) from
each
Sub-Servicer, and each subcontractor determined by the Master Servicer to be
“participating in the servicing function” within the meaning of Item 1122 of
Regulation AB, an Assessment of Compliance and Attestation Report as and when
provided in paragraphs (i) and (ii) of this Section 2.21(a); and
(iv) a
statement as to which of the Servicing Criteria, if any, are not applicable
to
the Master Servicer, which statement shall be based on the activities it
performs with respect to asset-backed securities transactions taken as a whole
involving the Master Servicer, that are backed by the same asset type as the
Mortgage Loans.
(b) As
provided in 2.21(a)(iii) above, the Master Servicer shall, or shall cause any
Sub-Servicer and each subcontractor determined by the Master Servicer to be
“participating in the servicing function” within the meaning of Item 1122 of
Regulation AB to, deliver to the Securities Administrator and the Depositor
an
Assessment of Compliance and Attestation Report as and when provided
above.
Such
Assessment of Compliance, as to any Sub-Servicer, shall at a minimum address
each of the Servicing Criteria specified on Exhibit F hereto which are indicated
as applicable to any “primary servicer.” Notwithstanding the foregoing, as to
any subcontractor, an Assessment of Compliance is not required to be delivered
unless it is required as part of a Form 10-K with respect to the Trust
Fund.
If
the
Master Servicer cannot deliver any Assessment of Compliance or Attestation
Report by March 1st of such year, the Indenture Trustee, at the direction of
the
Depositor, may permit a cure period for the Master Servicer to deliver such
Assessment of Compliance or Attestation Report, but in no event later than
March
15th of such year.
Failure
of the Master Servicer to timely comply with this Section 2.21 shall be deemed
a
Master Servicer Event of Default, and upon the receipt of written notice from
the Indenture Trustee of such Event of Default, the Indenture Trustee at the
direction of the Depositor may, in addition to whatever rights the Indenture
Trustee may have under this Agreement and at law or equity or to damages,
including injunctive relief and specific performance, upon notice immediately
terminate all the rights and obligations of the Master Servicer under this
Agreement and in and to the Mortgage Loans and the proceeds thereof without
compensating the Master Servicer for the same. This paragraph shall supercede
any other provision in this Agreement or any other agreement to the
contrary.
The
Securities Administrator shall also provide an Assessment of Compliance and
Attestation Report, as and when provided above, which shall at a minimum address
each of the Servicing Criteria specified on Exhibit F hereto which are indicated
as applicable to the Securities Administrator. The Paying Agent, Certificate
Registrar and Authenticating Agent shall also provide an Assessment of
Compliance and Attestation Report, as and when provided above, which shall
at a
minimum address each of the Servicing Criteria specified on Exhibit F hereto
which are indicated as applicable to the Paying Agent, Certificate Registrar
and
Authenticating Agent. The Master Servicer shall on behalf of the Indenture
Trustee enforce the obligations of the Custodian under the Custodial Agreement
to provide an Assessment of Compliance and Attestation Report, as, when and
to
the extent set forth in the Custodial Agreement.
The
Master Servicer shall indemnify and hold harmless the Depositor and its
officers, directors and Affiliates from and against any actual losses, damages,
penalties, fines, forfeitures, reasonable and necessary legal fees and related
costs, judgments and other costs and expenses that such Person may sustain
based
upon a breach of the Master Servicer’s obligations, as applicable, under this
Section 2.21. The Securities Administrator shall indemnify and hold harmless
the
Depositor and its officers, directors and Affiliates from and against any actual
losses, damages, penalties, fines, forfeitures, reasonable and necessary legal
fees and related costs, judgments and other costs and expenses that such Person
may sustain based upon any failure of the Securities Administrator to deliver
when required its Assessment of Compliance and Attestation Report. The Paying
Agent, Certificate Registrar and Authenticating Agent shall indemnify and hold
harmless the Depositor and its officers, directors and Affiliates from and
against any actual losses, damages, penalties, fines, forfeitures, reasonable
and necessary legal fees and related costs, judgments and other costs and
expenses that such Person may sustain based upon any failure of the Paying
Agent, Certificate Registrar and Authenticating Agent to deliver when required
its Assessment of Compliance.
Section
2.22 Access
to Certain Documentation.
The
Master Servicer shall provide to the Office of the Controller of the Currency,
the Office of Thrift Supervision, the FDIC, and any other federal or state
banking or insurance regulatory authority that may exercise authority over
any
Noteholder, access to the documentation regarding the Mortgage Loans required
by
applicable laws and regulations. Such access shall be afforded without charge,
but only upon reasonable request and during normal business hours at the offices
of the Master Servicer designated by it. Payments on the Mortgage Loans,
including any Principal Prepayments in full, made in accordance with the related
Mortgage File will be entered into the Master Servicer’s set of records no more
than two Business Days after receipt, and allocated to principal or interest
as
specified in the related Mortgage File. In addition, access to the documentation
regarding the Mortgage Loans required by applicable laws and regulations will
be
provided to such Noteholder, the Indenture Trustee, the Securities Administrator
and to any Person identified to the Master Servicer as a prospective transferee
of a Note, upon reasonable request during normal business hours at the offices
of the Master Servicer designated by it at the expense of the Person requesting
such access.
Section
2.23 Title,
Management and Disposition of REO Property.
(a)
The deed
or certificate of sale of any REO Property shall be taken in the name of the
Indenture Trustee, or its nominee, in trust for the benefit of the Noteholders.
The Master Servicer, on behalf of the Trust, shall either sell any REO Property
before the close of the third taxable year following the year the Trust Estate
acquires ownership of such REO Property for purposes of Section 856(e) of the
Code or request from the Internal Revenue Service, no later than 60 days before
the day on which the above three-year grace period would otherwise expire,
an
extension of the above three-year grace period or any such grace period under
Section 856(e) of the Code, as amended. The Master Servicer shall manage,
conserve, protect and operate each REO Property for the Noteholders solely
for
the purpose of its prompt disposition and sale in a manner which does not cause
such REO Property to fail to qualify as “foreclosure property” within the
meaning of Section 856(e) of the Code.
(b) The
Master Servicer shall segregate and hold all funds collected and received in
connection with the operation of any REO Property separate and apart from its
own funds and general assets and shall establish and maintain with respect
to
REO Properties an account held in trust for the Indenture Trustee for the
benefit of the Noteholders (the “REO Account”), which shall be an Eligible
Account. The Master Servicer shall be permitted to allow the Collection Account
to serve as the REO Account, subject to separate ledgers for each REO Property.
The Master Servicer shall be entitled to retain or withdraw any interest income
paid on funds deposited in the REO Account.
(c) The
Master Servicer shall have full power and authority, subject only to the
specific requirements and prohibitions of this Agreement, to do any and all
things in connection with any REO Property as are consistent with the manner
in
which the Master Servicer manages and operates similar property owned by the
Master Servicer or any of its Affiliates, all on such terms and for such period
as the Master Servicer deems to be in the best interests of Noteholders. In
connection therewith, the Master Servicer shall deposit, or cause to be
deposited in the clearing account (which account must be an Eligible Account)
in
which it customarily deposits payments and collections on mortgage loans in
connection with its mortgage loan servicing activities on a daily basis, and
in
no event more than two Business Days after the Master Servicer’s receipt
thereof, and shall thereafter deposit in the REO Account, in no event more
than
one Business Day after the deposit of such funds into the clearing account,
all
revenues received by it with respect to an REO Property and shall withdraw
therefrom funds necessary for the proper operation, management and maintenance
of such REO Property including, without limitation:
(i) all
insurance premiums due and payable in respect of such REO Property;
(ii) all
real
estate taxes and assessments in respect of such REO Property that may result
in
the imposition of a lien thereon; and
(iii) all
costs
and expenses necessary to maintain such REO Property.
To
the
extent that amounts on deposit in the REO Account with respect to an REO
Property are insufficient for the purposes set forth in clauses (i) through
(iii) above with respect to such REO Property, the Master Servicer shall advance
from its own funds such amount as is necessary for such purposes if, but only
if, the Master Servicer would make such advances if the Master Servicer owned
the REO Property and if in the Master Servicer’s judgment, the payment of such
amounts will be recoverable from the rental or sale of the REO
Property.
Notwithstanding
the foregoing, none of the Master Servicer, the Securities Administrator or
the
Indenture Trustee shall:
(i) authorize
the Trust to enter into, renew or extend any New Lease with respect to any
REO
Property, if the New Lease by its terms will give rise to any income that does
not constitute Rents from Real Property;
(ii) authorize
any amount to be received or accrued under any New Lease other than amounts
that
will constitute Rents from Real Property;
(iii) authorize
any construction on any REO Property, other than the completion of a building
or
other improvement thereon, and then only if more than ten percent of the
construction of such building or other improvement was completed before default
on the related Mortgage Loan became imminent, all within the meaning of Section
856(e)(4)(B) of the Code; or
(iv) authorize
any Person to Directly Operate any REO Property on any date more than 90 days
after its date of acquisition by the Trust;
unless,
in any such case, the Master Servicer has obtained an Opinion of Counsel,
provided to the Securities Administrator and the Indenture Trustee, to the
effect that such action will not cause such REO Property to fail to qualify
as
“foreclosure property” within the meaning of Section 856(e) of the Code at any
time that it is held by the Trust Estate, in which case the Master Servicer
may
take such actions as are specified in such Opinion of Counsel.
The
Master Servicer may contract with any Independent Contractor for the operation
and management of any REO Property, provided that:
(i) the
terms
and conditions of any such contract shall not be inconsistent
herewith;
(ii) any
such
contract shall require, or shall be administered to require, that the
Independent Contractor pay all costs and expenses incurred in connection with
the operation and management of such REO Property, including those listed above
and remit all related revenues (net of such costs and expenses) to the Master
Servicer as soon as practicable, but in no event later than thirty days
following the receipt thereof by such Independent Contractor;
(iii) none
of
the provisions of this Section 2.23(c) relating to any such contract or to
actions taken through any such Independent Contractor shall be deemed to relieve
the Master Servicer of any of its duties and obligations to the Indenture
Trustee on behalf of the Noteholders with respect to the operation and
management of any such REO Property; and
(iv) the
Master Servicer shall be obligated with respect thereto to the same extent
as if
it alone were performing all duties and obligations in connection with the
operation and management of such REO Property.
The
Master Servicer shall be entitled to enter into any agreement with any
Independent Contractor performing services for it related to its duties and
obligations hereunder for indemnification of the Master Servicer by such
Independent Contractor, and nothing in this Agreement shall be deemed to limit
or modify such indemnification. The Master Servicer shall be solely liable
for
all fees owed by it to any such Independent Contractor, irrespective of whether
the Master Servicer’s compensation pursuant to Section 2.18 is sufficient to pay
such fees.
(d) In
addition to the withdrawals permitted under Section 2.23(c), the Master Servicer
may from time to time make withdrawals from the REO Account for any REO
Property: (i) to pay itself or any Sub-Servicer unpaid Servicing Fees and
Administration Fees in respect of the related Mortgage Loan; and (ii) to
reimburse itself or any Sub-Servicer for unreimbursed Servicing Advances and
Monthly Advances made in respect of such REO Property or the related Mortgage
Loan. Any income from the related REO Property received during any calendar
months prior to a Final Recovery Determination, net of any withdrawals made
pursuant to Section 2.23(c) or this Section 2.23(d), shall be withdrawn by
the
Master Servicer from each REO Account maintained by it and remitted to the
Paying Agent for deposit into the Payment Account in accordance with Section
2.10(d)(ii) on the Master Servicer Remittance Date relating to a Final Recovery
Determination with respect to such Mortgage Loan, for payment on the related
Payment Date in accordance with the Indenture.
(e) Subject
to the time constraints set forth in Section 2.23(a), and further subject to
obtaining the approval of the insurer under any related Primary Mortgage
Insurance Policy (if and to the extent that such approvals are necessary to
make
claims under such policies in respect of the affected REO Property), each REO
Disposition shall be carried out by the Master Servicer at such price and upon
such terms and conditions as the Master Servicer shall deem necessary or
advisable, as shall be normal and usual in its general servicing activities
for
similar properties.
(f) The
proceeds from the REO Disposition, net of any amount required by law to be
remitted to the Mortgagor under the related Mortgage Loan and net of any payment
or reimbursement to the Master Servicer or any Sub-Servicer as provided above,
shall be remitted to the Paying Agent for deposit in the Payment Account in
accordance with Section 2.10(d)(ii) on the Master Servicer Remittance Date
in
the month following the receipt thereof for payment on the related Payment
Date
in accordance with the Indenture. Any REO Disposition shall be for cash
only.
(g) The
Master Servicer shall file information returns with respect to the receipt
of
mortgage interest received in a trade or business, reports of foreclosures
and
abandonments of any Mortgaged Property and cancellation of indebtedness income
with respect to any Mortgaged Property as required by Sections 6050H, 6050J
and
6050P of the Code, respectively. Such reports shall be in form and substance
sufficient to meet the reporting requirements imposed by such Sections 6050H,
6050J and 6050P of the Code.
Section
2.24 Obligations
of the Master Servicer in Respect of Prepayment Interest
Shortfalls.
The
Master Servicer shall deliver to the Paying Agent for deposit into the Payment
Account on or before 12:00 p.m. New York time on the Master Servicer Remittance
Date from its own funds (or from a Sub-Servicer’s own funds received by the
Master Servicer in respect of Compensating Interests) an amount equal to the
lesser of (i) the aggregate of the Prepayment Interest Shortfalls for the
related Payment Date resulting from full or partial Principal Prepayments during
the related Prepayment Period and not paid by the related Initial Sub-Servicer
pursuant to the ▇▇▇▇▇ Fargo Servicing Agreement and (ii) the aggregate Master
Servicing compensation for such Payment Date (the “Compensating
Interest”).
Section
2.25 Obligations
of the Master Servicer in Respect of Monthly Payments.
In the
event that a shortfall in any collection on or liability with respect to any
Mortgage Loan results from or is attributable to adjustments to Scheduled
Principal Balances that were made by the Master Servicer in a manner not
consistent with the terms of the related Mortgage Note and this Agreement,
the
Master Servicer, upon discovery or receipt of notice thereof, immediately shall
deliver to the Paying Agent for deposit in the Payment Account from its own
funds the amount of any such shortfall and shall indemnify and hold harmless
the
Trust, the Indenture Trustee, the Securities Administrator, the Depositor and
any successor master servicer in respect of any such liability. Such indemnities
shall survive the termination or discharge of this Agreement. If amounts paid
by
the Master Servicer with respect to any Mortgage Loan pursuant to this Section
2.25 are subsequently recovered from the related Mortgagor, the Master Servicer
shall be permitted to reimburse itself for such amounts paid by it pursuant
to
this Section 2.25 from such recoveries.
Section
2.26 Foreclosure
Rights.
(a)
For so
long as the Certificateholder also holds all of the Subordinate Notes and has
not previously breached its obligation to purchase a Mortgage Loan as set forth
herein, neither of the Initial Sub-Servicers shall commence foreclosure
proceedings with respect to a Mortgage Loan unless (i) no later than five
Business Days prior to its commencement of such foreclosure proceedings, it
notifies the Master Servicer of its intention to do so, and (ii) the
Certificateholder, either directly or through the Master Servicer, does not,
within such five-Business-Day period, affirmatively object to such
action.
(b) In
addition, for so long as the Certificateholder also holds all of the Subordinate
Notes and has not previously breached its obligation to purchase a Mortgage
Loan
as set forth herein, in the event that the related Initial Sub-Servicer
determines not to proceed with foreclosure proceedings with respect to a
Mortgage Loan that becomes 60 days or more delinquent and such Initial
Sub-Servicer has determined that it is unable to collect payments due under
such
Mortgage Loan in accordance with Accepted Servicing Practices, such Initial
Sub-Servicer shall, prior to taking any action with respect to such Mortgage
Loan, promptly provide the Master Servicer with notice of such determination
and
a description of such other action as it intends to take with respect to such
Mortgage Loan; provided, that the related Initial Sub-Servicer shall not be
permitted to proceed with any such action unless the Certificateholder, either
directly or through the Master Servicer, does not, within five Business Days
following such notice, affirmatively object to such Initial Sub-Servicer taking
such action.
(c) If
the
Certificateholder timely and affirmatively objects to an action or contemplated
action of the related Initial Sub-Servicer pursuant to either (a) or (b) above,
then the Certificateholder shall instruct the Master Servicer to hire, at the
Certificateholder’s sole cost and expense, three appraisal firms, selected by
the Master Servicer in its sole and absolute discretion from the list of
appraisal firms attached as Exhibit E, to compute the fair value of the
Mortgaged Property relating to the related Mortgage Loan utilizing the ▇▇▇▇▇▇
Mae Form 2055 Exterior-Only Inspection Residential Appraisal Report (each such
appraisal-firm computation, a “Fair Value Price”), in each case (other than as
set forth in (d) below) no later than 30 days from the date of such
Certificateholder objection. If the Master Servicer shall have received three
Fair Value Prices by the end of such 30-day period, then the Certificateholder
shall, no later than 5 days after the expiration of such 30-day period, purchase
such Mortgage Loan and the related Mortgaged Property at an amount equal to
the
sum of (i) accrued and unpaid interest on such Mortgage Loan as of such purchase
date (“Accrued Interest”) and (ii) the highest of such three Fair Value Prices
respectively determined by such appraisal firms, and shall promptly deliver
such
amount to the related Initial Sub-Servicer for deposit into the Custodian
Account. All costs relating to the computation of the related Fair Value Prices
shall be for the account of the Certificateholder and shall be paid by the
Certificateholder at the time of such Mortgage Loan and the related Mortgaged
Property are purchased by the Certificateholder.
(d) If
the
Master Servicer shall not have received three Fair Value Prices at the end
of
the 30-day period set forth in (c) above, then:
(i) The
Master Servicer shall obtain such three Fair Value Prices no later than 15
days
after the end of such 30-day period.
(ii) If
the
Master Servicer shall have only received two Fair Value Prices at the end of
such 15-day extension period, then the Master Servicer will determine, in its
sole and absolute discretion, the fair value of the Mortgaged Property relating
to such Mortgage Loan, related Insurance Proceeds and the current delinquency
status of such Mortgage Loan) (such fair value, the “Master Servicer Fair Value
Price”), and the Certificateholder shall, no later than 5 days after the
expiration of such 15-day extension period, purchase (and deliver to the related
Initial Sub-Servicer the purchase price for) such Mortgage Loan and the related
Mortgaged Property at an amount equal to the sum of (A) Accrued Interest thereon
and (B) the higher of (1) the highest of such two Fair Value Prices determined
by such appraisal firms and (2) the Master Servicer Fair Value
Price.
(iii) If
the
Master Servicer shall have received only one Fair Value Price at the end of
such
15-day extension period, then the Master Servicer will determine, in its sole
and absolute discretion, the Master Servicer Fair Value Price of the Mortgaged
Property related to such Mortgage Loan, and:
(A) if
such
Master Servicer Fair Value Price is equal to or greater than the unpaid
principal balance of the related Mortgage Loan as of such date (the “Unpaid
Principal Balance”), then the Certificateholder shall, no later than 5 days
after the expiration of such 15-day extension period, purchase (and deliver
to
the related Initial Sub-Servicer the purchase price for) such Mortgage Loan
and
the related Mortgaged Property at an amount equal to the sum of (1) Accrued
Interest thereon and (2) such Master Servicer Fair Value Price; and
(B) if
such
Master Servicer Fair Value Price is less than the related Unpaid Principal
Balance, then the Certificateholder shall, no later than 5 days after the
expiration of such 15-day extension period, purchase (and deliver to the related
Initial Sub-Servicer the purchase price for) such Mortgage Loan and the related
Mortgaged Property at an amount equal to the sum of (1) Accrued Interest thereon
and (2) the related Unpaid Principal Balance (such sum, the “Preliminary
Purchase Price”); provided, that the provisions of clause (d)(iv) shall
thereafter apply.
(iv) Following
the payment by the Certificateholder of the Preliminary Purchase Price, the
Master Servicer shall continue to hire appraisal firms at the
Certificateholder’s sole cost and expense to compute the Fair Value Price of the
Mortgaged Property related to such Mortgage Loan, and at such time as two such
Fair Value Prices shall have been obtained:
(A) if
the
sum of (1) Accrued Interest on the related Mortgage Loan and (2) the higher
of
(x) the highest of such two Fair Value Prices determined by such appraisal
firms
and (y) the Master Servicer’s Fair Value Price of the Mortgaged Property related
to such Mortgage Loan (such sum, the “Revised Fair Value Price”) is greater than
such Preliminary Purchase Price, then the Master Servicer shall promptly notify
the Certificateholder and the related Initial Sub-Servicer of such calculation,
and the Certificateholder shall, no later than 5 days after such notice, remit
to the related Initial Sub-Servicer, for deposit into the Custodian Account,
the
difference between such Revised Fair Value Price and such Preliminary Purchase
Price; and
(B) if
such
Preliminary Purchase Price is greater than such Revised Fair Value Price, then
the Master Servicer shall promptly notify the Certificateholder and the related
Initial Sub-Servicer of such calculation, and the related Initial Sub-Servicer
shall, no later than 5 days after such notice, remit to the Certificateholder,
from funds then on deposit in the Custodian Account, the difference between
such
Preliminary Purchase Price and such Revised Fair Value Price.
(e) Notwithstanding
anything herein to the contrary, the Certificateholder shall not be entitled
to
any of its rights set forth herein with respect to a Mortgage Loan following
its
failure to purchase such Mortgage Loan and the related Mortgaged Property,
at
the related purchase price set forth in this Section 2.26 within the timeframe
set forth in this Section 2.26 following the Certificateholder’s objection to an
action of the related Initial Sub-Servicer, and such Initial Sub-Servicer shall
provide the Master Servicer written notice of such failure. Moreover, the
Certificateholder shall not be entitled to any of the rights in this Section
2.26 if any of the Subordinate Notes are held by entities that are unaffiliated
with such Certificateholder.
(f) Any
notice, confirmation, instruction or objection pursuant to paragraphs (a),
(b),
(c) and (d) above may be delivered via facsimile or other written or electronic
communication as the parties hereto and the Certificateholder may agree to
from
time to time.
(g) For
the
avoidance of doubt, the Certificateholder’s rights set forth in this Section
2.26 are intended to provide the Certificateholder, for so long as it owns
100%
of the Privately Offered Notes and the Trust Certificates (each, as defined
in
Appendix A of the Indenture) and has not forfeited its right under this Section
2.26 as set forth in clause (e) above, with the unilateral right to control
foreclosure decisions in respect of delinquent and defaulted Mortgage Loans,
and
certain exclusive purchase rights so as to maximize the recovery value on
delinquent and defaulted Mortgage Loans.
To
the
extent that the Certificateholder purchases any Mortgage Loan pursuant to this
Section 2.26, the related Initial Sub-Servicer will continue to service such
Mortgage Loan in accordance with this Agreement. The parties acknowledge that,
in such event, the Master Servicer will have no duty or responsibility to master
service any such Mortgage Loan.”
(h) Subject
to the conditions set forth herein, once the Certificateholder no longer holds
all of the Subordinate Notes, or following the forfeiture of such Holder's
rights as set forth in this Section 2.26, the Seller may, at its option,
purchase from the Trust any Mortgage Loan which has been delinquent for at
least
91 days. That purchase shall be at a purchase price equal to the Repurchase
Price.
ARTICLE
III
REMITTANCE
REPORTS; MONTHLY ADVANCES; COMMISSION REPORTING
Section
3.01 Remittance
Reports; Monthly Advances.
(a)
On the
second Business Day prior to the related Payment Date, the Master Servicer
shall
deliver to the Securities Administrator, the Paying Agent and the Indenture
Trustee by telecopy (or by such other means as the Master Servicer, the Paying
Agent, the Securities Administrator and the Indenture Trustee may agree from
time to time) a Remittance Report with respect to the related Payment Date.
Such
Remittance Report will include (i) the amount of Monthly Advances to be made
by
the Master Servicer in respect of the related Payment Date, the aggregate amount
of Monthly Advances outstanding after giving effect to such Monthly Advances,
and the aggregate amount of Nonrecoverable Advances in respect of such Payment
Date and (ii) such other information with respect to the Mortgage Loans as
the
Securities Administrator or the Paying Agent may reasonably require to perform
the calculations necessary for the Paying Agent to make the payments
contemplated by Section 3.03 of the Indenture and for the Securities
Administrator to prepare the statements to Noteholders contemplated by Section
7.04 of the Indenture; provided, however, that if the Master Servicer is not
the
Securities Administrator, the Master Servicer will forward to the successor
Securities Administrator the information set forth in clause (i) above on the
next Business Day following the latest related Determination Date and the
information set forth in clause (ii) above on the fifth Business Day following
the last day of the related calendar month. Neither the Indenture Trustee,
the
Paying Agent nor the Securities Administrator shall be responsible to recompute,
recalculate or verify any information provided to it by the Master
Servicer.
(b) The
amount of Monthly Advances to be made by the Master Servicer for any Payment
Date shall equal, subject to Section 3.01(d), the sum of (i) the aggregate
amount of Monthly Payments (with each interest portion thereof net of the
related Servicing Fee and the related Administration Fee), due on the related
Due Date in respect of the Mortgage Loans, which Monthly Payments were
delinquent as of the close of business on the related Determination Date and
(ii) with respect to each REO Property, which REO Property was acquired during
or prior to the related Prepayment Period and as to which such REO Property
an
REO Disposition did not occur during the related Prepayment Period, an amount
equal to the Monthly Payments (with each interest portion thereof net of the
related Servicing Fee and the related Administration Fee) that would have been
due on the related Due Date in respect of the related Mortgage
Loans.
On
or
before 12:00 p.m. New York time on the Master Servicer Remittance Date, the
Master Servicer shall remit in immediately available funds to the Paying Agent
for deposit in the Payment Account an amount equal to the aggregate amount
of
Monthly Advances, if any, to be made in respect of the Mortgage Loans and REO
Properties for the related Payment Date either (i) from its own funds or, if
received from a Sub-Servicer, from funds remitted by a Sub-Servicer in payment
of required Monthly Advances or (ii) from the Collection Account, to the extent
of funds held therein for future payment (in which case, it will cause to be
made an appropriate entry in the records of Collection Account that amounts
held
for future payment have been, as permitted by this Section 3.01, used by the
Master Servicer in discharge of any such Monthly Advance) or (iii) in the form
of any combination of (i) and (ii) aggregating the total amount of Monthly
Advances to be made by the Master Servicer with respect to the Mortgage Loans
and REO Properties. Any amounts held for future payment and so used shall be
appropriately reflected in the Master Servicer’s records and replaced by the
Master Servicer by deposit in the Collection Account on or before any future
Master Servicer Remittance Date to the extent that the Available Funds for
the
related Payment Date (determined without regard to Monthly Advances to be made
on the Master Servicer Remittance Date) shall be less than the total amount
that
would be paid to the Classes of Noteholders pursuant to Section 3.03 of the
Indenture on such Payment Date if such amounts held for future payments had
not
been so used to make Monthly Advances. The Securities Administrator will provide
notice to the Master Servicer by telecopy by the close of business on the Master
Servicer Remittance Date in the event that the amount remitted by the Master
Servicer to the Securities Administrator on such Master Servicer Remittance
Date
is less than the Monthly Advances required to be made by the Master Servicer
for
the related Payment Date.
(c) The
obligation of the Master Servicer to make such Monthly Advances is mandatory,
notwithstanding any other provision of this Agreement but subject to (d) below,
and, with respect to any Mortgage Loan or REO Property, shall continue until
a
Final Recovery Determination in connection therewith or the removal thereof
from
the Trust Estate except as otherwise provided in this Section.
(d) Notwithstanding
anything herein to the contrary, no Monthly Advance shall be required to be
made
hereunder by the Master Servicer if such Monthly Advance would, if made,
constitute a Nonrecoverable Advance. The determination by the Master Servicer
that it has made a Nonrecoverable Advance or that any proposed Monthly Advance,
if made, would constitute a Nonrecoverable Advance, shall be evidenced by an
Officers’ Certificate of the Master Servicer delivered to the Depositor, the
Securities Administrator, the Paying Agent and the Indenture
Trustee.
(e) If
the
Master Servicer shall fail to make any Monthly Advance on any Master Servicer
Remittance Date required to be made from its own funds pursuant to this Section
3.01, then the Paying Agent, by not later than 1:00 p.m. on the related Payment
Date, shall make such Monthly Advance from its own funds by depositing the
amount of such advance into the Payment Account, and the Securities
Administrator and the Paying Agent shall include the amount so advanced by
the
Paying Agent in the Available Funds paid on such Payment Date.
Section
3.02 Commission
Reporting.
(a) (i)
Within 15 calendar days after each Distribution Date, the Securities
Administrator shall, in accordance with industry standards, file with the
Commission via the Electronic Data Gathering and Retrieval System (“▇▇▇▇▇”), a
distribution report on Form 10-D, signed by the Master Servicer, with a copy
of
the monthly statement to be furnished by the Securities Administrator to the
Noteholders for such Distribution Date. Any disclosure in addition to the
monthly statement required to be included on the Form 10-D (“Additional Form
10-D Disclosure”) shall be determined and prepared by the entity that is
indicated in Exhibit G as the responsible party for providing that information,
and shall be reported by such entity to the Depositor and the Securities
Administrator and approved by the Depositor. The Securities Administrator shall
have no duty or liability for any failure hereunder to determine or prepare
any
Additional Form 10-D Disclosure absent such reporting (other than in the case
where the Securities Administrator is the reporting party as set forth in
Exhibit G) and approval, and the Securities Administrator will have no duty
or
liability to verify the accuracy or sufficiency of any such Additional Form
10-D
Disclosure (except in any case where the Securities Administrator is the
responsible party for providing that information pursuant to Exhibit
G).
Within
5
calendar days after the related Distribution Date (or if not a Business Day,
the
immediately preceding Business Day), each entity that is indicated in Exhibit
G
as the responsible party for providing Additional Form 10-D Disclosure shall
be
required to provide to the Securities Administrator and the Depositor, to the
extent known, in ▇▇▇▇▇-compatible format, or in such other form as otherwise
agreed upon by the Securities Administrator and the Depositor and such party,
and clearly identifying which item of Form 10-D the information relates to,
any
Additional Form 10-D Disclosure, if applicable. The Securities Administrator
shall compile the information provided to it, prepare the Form 10-D and forward
the Form 10-D to the Depositor. The Depositor will approve, as to form and
substance, or disapprove, as the case may be, the Additional Form 10-D
Disclosure.
After
preparing the Form 10-D, the Securities Administrator shall forward
electronically a copy of the Form 10-D to the Depositor (in every case where
the
Form 10-D includes Additional 10-D Disclosure and otherwise if requested by
the
Depositor) and the Master Servicer for review. Within two Business Days after
receipt of such copy, but no later than the 12th calendar day after the
Distribution Date (provided that, the Securities Administrator shall have
forwarded a copy of the Form 10-D no later than the 10th calendar after the
Distribution Date), the Depositor shall notify the Securities Administrator
in
writing (which may be furnished electronically) of any changes to or approval
of
such Form 10-D. In the absence of receipt of any written changes or approval,
the Securities Administrator shall be entitled to assume that such Form 10-D
is
in final form and the Securities Administrator may proceed with arrangements
for
the execution of, and filing of, the Form 10-D. No later than 2 Business Days
prior to the 15th calendar day after the related Distribution Date, a duly
authorized officer of the Master Servicer shall sign the Form 10-D and return
an
electronic or fax copy of such signed Form 10-D (with an original executed
hard
copy to follow by overnight mail) to the Securities Administrator. If a Form
10-D cannot be filed on time or if a previously filed Form 10-D needs to be
amended, the Securities Administrator shall follow the procedures set forth
in
Section 3.02(a)(vi). Once the Form 10-D has been filed with the SEC it will
be
available through ▇▇▇▇▇ at ▇▇▇.▇▇▇.▇▇▇. The Securities Administrator will
provide copies of the report to investors, free of charge upon request. The
parties to this Agreement acknowledge that the performance by the Master
Servicer and the Securities Administrator of their respective duties under
Sections 3.02(a)(i) and (vi) related to the timely preparation, execution and
filing of Form 10-D is contingent upon such parties strictly observing all
applicable deadlines in the performance of their duties under such Sections.
Neither the Master Servicer nor the Securities Administrator shall have any
liability for any loss, expense, damage, claim arising out of or with respect
to
any failure to properly prepare, execute and/or timely file such Form 10-D,
where such failure results from the Master Servicer’s or the Securities
Administrator’s inability or failure to receive, on a timely basis, any
information from any other party hereto needed to prepare, arrange for execution
or file such Form 10-D, not resulting from its own negligence, bad faith or
willful misconduct.
(ii) Within
4
Business Days after the occurrence of an event requiring disclosure on Form
8-K
(each such event, a “Reportable Event”), the Securities Administrator shall
prepare and file, at the direction of the Depositor, on behalf of the Trust,
any
Form 8-K, as required by the Exchange Act; provided that, the Depositor shall
file the initial Form 8-K in connection with the issuance of the Certificates.
Any disclosure or information related to a Reportable Event or that is otherwise
required to be included on Form 8-K (“Form 8-K Disclosure Information”) shall
be, pursuant to the paragraph immediately below, reported by the responsible
parties set forth on Exhibit G to the Securities Administrator and the Depositor
and approved by the Depositor, and the Securities Administrator will have no
duty or liability for any failure hereunder to determine or prepare any Form
8-K
absent such reporting (other than in the case where the Securities Administrator
is the reporting party as set forth in Exhibit G) and approval.
For
so
long as the Trust is subject to the Exchange Act reporting requirements, no
later than 5:00 p.m. New York City time on the 2nd Business Day after the
occurrence of a Reportable Event (i) the responsible parties set forth in
Exhibit G shall be required pursuant to Section 3.02(a)(v) below to provide
to
the Securities Administrator and the Depositor, to the extent known by a
responsible officer thereof, in ▇▇▇▇▇-compatible format, or in such other form
as otherwise agreed upon by the Securities Administrator and the Depositor
and
such party, the form and substance of any Form 8-K Disclosure Information,
if
applicable, and (ii) the Depositor shall approve, as to form and substance,
or
disapprove, as the case may be, the inclusion of the Form 8-K Disclosure
Information on Form 8-K.
After
preparing the Form 8-K, the Securities Administrator shall forward
electronically a copy of the Form 8-K to the Depositor and the Master Servicer
for review. No later than the close of business New York City time on the 3rd
Business Day after the Reportable Event, an officer of the Master Servicer
shall
sign the Form 8-K and, return an electronic or fax copy of such signed Form
8-K
(with an original executed hard copy to follow by overnight mail) to the
Securities Administrator. Promptly, but no later than the close of business
on
the 3rd Business Day after the Reportable Event (provided that, the Securities
Administrator shall have forwarded a copy of the Form 8-K no later than the
2nd
Business Day after the Reportable Event), the Depositor shall notify the
Securities Administrator in writing (which may be furnished electronically)
of
any changes to or approval of such Form 8-K. In the absence of receipt of any
written changes or approval, the Securities Administrator shall be entitled
to
assume that such Form 8-K is in final form and the Securities Administrator
may
proceed with arrangements for the execution of, and filing of, the Form 8-K.
If
a Form 8-K cannot be filed on time or if a previously filed Form 8-K needs
to be
amended, the Securities Administrator shall follow the procedures set forth
in
Section 3.02(a)(vi). Once the Form 8-K has been filed with the SEC it will
be
available through ▇▇▇▇▇ at ▇▇▇.▇▇▇.▇▇▇. The Securities Administrator will
provide copies of the report to investors, free of charge upon request. The
parties to this Agreement acknowledge that the performance by Master Servicer
and the Securities Administrator of their respective duties under this Section
3.02(a)(ii) related to the timely preparation, execution and filing of Form
8-K
is contingent upon such parties strictly observing all applicable deadlines
in
the performance of their duties under this Section 3.02(a)(ii). Neither the
Master Servicer nor the Securities Administrator shall have any liability for
any loss, expense, damage, claim arising out of or with respect to any failure
to properly prepare, execute and/or timely file such Form 8-K, where such
failure results from the Master Servicer’s or the Securities Administrator’s
inability or failure to receive, on a timely basis, any information from any
other party hereto needed to prepare, arrange for execution or file such Form
8-K, not resulting from its own negligence, bad faith or willful
misconduct.
(iii) Within
90
days after the end of each fiscal year of the Trust or such earlier date as
may
be required by the Exchange Act (the “10-K Filing Deadline”) (it being
understood that the fiscal year for the Trust ends on December 31st of each
year), commencing in March 2007, the Securities Administrator shall prepare
and
file on behalf of the Trust a Form 10-K, in form and substance as required
by
the Exchange Act. Each such Form 10-K shall include the following items, in
each
case to the extent they have been delivered to the Securities Administrator
within the applicable time frames set forth in this Agreement, (I) an Annual
Statement of Compliance for the Master Servicer and any Sub-servicer, as
provided under Section 2.20, (II)(A) the Assessments of Compliance for the
Master Servicer, each Sub-servicer and subcontractor participating in the
servicing function, the Securities Administrator, the Paying Agent and the
Custodian, as provided under Section 2.21, and (B) if the Master Servicer’s, any
Sub-servicer’s or subcontractor’s participating in the servicing function, the
Securities Administrator’s, the Paying Agent’s or the Custodian’s Assessments of
Compliance identifies any material instance of noncompliance, disclosure
identifying such instance of noncompliance, or if the Master Servicer’s, any
Sub-servicer’s or subcontractor’s participating in the servicing function, the
Securities Administrator’s, the Paying Agent’s or the Custodian’s Assessments of
Compliance is not included as an exhibit to such Form 10-K, disclosure that
such
report is not included and an explanation why such report is not included,
(III)(A) the Attestation Report for the Master Servicer, each Sub-servicer
and
subcontractor participating in the servicing function, the Securities
Administrator, the Paying Agent and the Custodian, as provided under Section
2.21, and (B) if any Attestation Report rendered as contemplated under Section
2.21 identifies any material instance of noncompliance, disclosure identifying
such instance of noncompliance, or if any such Attestation Report is not
included as an exhibit to such Form 10-K, disclosure that such report is not
included and an explanation why such report is not included, and (IV) a Master
Servicer Certification in the form prescribed by Exhibit H (provided, however,
that the Securities Administrator, at its discretion, may omit from the Form
10-K any annual compliance statement, assessment of compliance or attestation
report that is not required to be filed with such Form 10-K pursuant to
Regulation AB). Any disclosure or information in addition to (I) through (IV)
above that is required to be included on Form 10-K (“Additional Form 10-K
Disclosure”) shall be, pursuant to the paragraph immediately below, reported by
the responsible parties set forth on Exhibit G to the Securities Administrator
and the Depositor and approved by the Depositor, and the Securities
Administrator will have no duty or liability for any failure hereunder to
determine or prepare any Additional Form 10-K Disclosure absent such reporting
(other than in the case where the Securities Administrator is the reporting
party as set forth in Exhibit G) and approval.
No
later
than March 15th of each year that the Trust is subject to the Exchange Act
reporting requirements, commencing in 2007, (A) the responsible parties set
forth in Exhibit G shall be required to provide pursuant to Section 3.02(a)(v)
below to the Securities Administrator and the Depositor, to the extent known
by
a responsible officer thereof, in ▇▇▇▇▇-compatible format, or in such other
form
as otherwise agreed upon by the Securities Administrator and the Depositor
and
such party, the form and substance of any Additional Form 10-K Disclosure,
if
applicable, and (ii) the Depositor will approve, as to form and substance,
or
disapprove, as the case may be, the inclusion of the Additional Form 10-K
Disclosure on Form 10-K.
After
preparing the Form 10-K, the Securities Administrator shall forward
electronically a copy of the Form 10-K to the Depositor and the Master Servicer
for review. Within 3 Business Days after receipt of such copy, but no later
than
March 25th (provided that, the Securities Administrator forwards a copy of
the
Form 10-K no later than the 3rd Business Day prior to March 25th), the Depositor
shall notify the Securities Administrator in writing (which may be furnished
electronically) of any changes to or approval of such Form 10-K. In the absence
of receipt of any written changes or approval, the Securities Administrator
shall be entitled to assume that such Form 10-K is in final form and the
Securities Administrator may proceed with the execution and filing of the Form
10-K. No later than 12:00 p.m. Eastern Standard time on the 4th Business Day
prior to the 10-K Filing Deadline, an officer of the Master Servicer in charge
of the master servicing function shall sign the Form 10-K and return an
electronic or fax copy of such signed Form 10-K (with an original executed
hard
copy to follow by overnight mail) to the Securities Administrator. If a Form
10-K cannot be filed on time or if a previously filed Form 10-K needs to be
amended, the Securities Administrator will follow the procedures set forth
in
Section 3.02(a)(vi). Once the Form 10-K has been filed with the SEC it will
be
available through ▇▇▇▇▇ at ▇▇▇.▇▇▇.▇▇▇. The Securities Administrator will
provide copies of the report to investors, free of charge upon request. The
parties to this Agreement acknowledge that the performance by the Master
Servicer and the Securities Administrator of their respective duties under
Sections 3.02(a)(iv) and (vi) related to the timely preparation, execution
and
filing of Form 10-K is contingent upon such parties strictly observing all
applicable deadlines in the performance of their duties under such Sections
and
Sections 2.20 and Section 2.21. Neither the Master Servicer nor the Securities
Administrator shall have any liability for any loss, expense, damage, claim
arising out of or with respect to any failure to properly prepare, execute
and/or timely file such Form 10-K, where such failure results from the Master
Servicer’s or the Securities Administrator’s inability or failure to receive, on
a timely basis, any information from any other party hereto needed to prepare,
arrange for execution or file such Form 10-K, not resulting from its own
negligence, bad faith or willful misconduct.
The
Master Servicer shall deliver the Master Servicer Certification, executed by
an
officer of the Master Servicer in charge of the master servicing function,
to
the Securities Administrator not later than March 15th of each year in which
the
Trust is subject to the reporting requirements of the Exchange Act. In
connection with the filing of any 10-K hereunder, in the case where the Master
Servicer and Securities Administrator are not affiliated, the Securities
Administrator shall sign a Back-Up Certification substantially in the form
of
Exhibit I; provided, however, that the Securities Administrator shall not be
required to undertake an analysis of any accountant’s report attached as an
exhibit to the Form 10-K.
(iv)
With
respect to any Additional Form 10-D Disclosure, Additional Form 10-K Disclosure
or any Form 8-K Disclosure Information (collectively, the “Additional
Disclosure”) relating to the Trust Fund, the Securities Administrator’s
obligation to include such Additional Disclosure in the applicable Exchange
Act
report is subject to receipt from the entity that is indicated in Exhibit G
as
the responsible party for providing that information, if other than the
Securities Administrator, as and when required as described in Section
3.02(a)(i) through (iv) above. Each of the Master Servicer, Sponsor, Securities
Administrator and Depositor hereby agrees to notify and provide to the extent
known to the Master Servicer, the Sponsor, the Securities Administrator and
the
Depositor all Additional Disclosure relating to the Trust Fund, with respect
to
which such party is indicated in Exhibit G as the responsible party for
providing that information.
So
long
as the Depositor is subject to the filing requirements of the Exchange Act
with
respect to the Trust Fund, the Indenture Trustee shall notify the Securities
Administrator and the Depositor of any bankruptcy or receivership with respect
to the Indenture Trustee or of any proceedings of the type described under
Item
1117 of Regulation AB that have occurred as of the related Due Period, together
with a description thereof, no later than the date on which such information
is
required of other parties hereto as set forth under this Section 3.02. In
addition, the Indenture Trustee shall notify the Securities Administrator and
the Depositor of any affiliations or relationships that develop after the
Closing Date between the Indenture Trustee and the Depositor, the Sponsor,
the
Securities Administrator, the Master Servicer or the Custodian of the type
described under Item 1119 of Regulation AB, together with a description thereof,
no later than the date on which such information is required of other parties
hereto as set forth under this Section 3.02.
The
Master Servicer shall be responsible for determining the pool concentration
applicable to any Sub-Servicer to which any of the Master Servicer’s
responsibilities with respect to the Mortgage Loans have been delegated at
any
time, for purposes of disclosure as required by Items 1117 and 1119 of
Regulation AB. The Securities Administrator will provide electronic or paper
copies of all Form 10-D, 8-K and 10-K filings free of charge to any Noteholder
upon written request. Any expenses incurred by the Securities Administrator
in
connection with the previous sentence shall be reimbursable to the Securities
Administrator out of the Trust Fund.
(v) On
or
prior to January 30th of the first year in which the Securities Administrator
is
able to do so under applicable law, the Securities Administrator shall prepare
and file a Form 15 relating to the automatic suspension of reporting in respect
of the Trust under the Exchange Act.
In
the
event that the Securities Administrator is unable to timely file with the
Commission all or any required portion of any Form 8-K, 10-D or 10-K required
to
be filed by this Agreement because required disclosure information was either
not delivered to it or delivered to it after the delivery deadlines set forth
in
this Agreement or for any other reason, the Securities Administrator shall
promptly notify the Depositor and the Master Servicer. In the case of Form
10-D
and 10-K, the Depositor, the Master Servicer and the Securities Administrator
shall cooperate to prepare and file a Form 12b-25 and a 10-DA and 10-KA as
applicable, pursuant to Rule 12b-25 of the Exchange Act. In the case of Form
8-K, the Securities Administrator will, upon receipt of all required Form 8-K
Disclosure Information and upon the approval and direction of the Depositor,
include such disclosure information on the next Form 10-D. In the event that
any
previously filed Form 8-K, 10-D or 10-K needs to be amended, and such amendment
relates to any Additional Disclosure, the Securities Administrator shall notify
the Depositor and the parties affected thereby and such parties will cooperate
to prepare any necessary Form 8-KA, 10-DA or 10-KA. Any Form 15, Form 12b-25
or
any amendment to Form 8-K, 10-D or 10-K shall be signed by a duly authorized
officer of the Master Servicer, the Depositor, or the Securities Administrator
as applicable. The parties hereto acknowledge that the performance by the Master
Servicer and the Securities Administrator of their respective duties under
this
Section 3.02(a)(v) related to the timely preparation, execution and filing
of
Form 15, a Form 12b-25 or any amendment to Form 8-K, 10-D or 10-K is contingent
upon the Master Servicer and the Depositor timely performing their duties under
this Section. Neither the Master Servicer nor the Securities Administrator
shall
have any liability for any loss, expense, damage, claim arising out of or with
respect to any failure to properly prepare, execute and/or timely file any
such
Form 15, Form 12b-25 or any amendments to Form 8-K, 10-D or 10-K, where such
failure results from the Master Servicer’s or the Securities Administrator’s
inability or failure to receive, on a timely basis, any information from any
other party hereto needed to prepare, arrange for execution or file such Form
15, Form 12b-25 or any amendments to Form 8-K, 10-D or 10-K, not resulting
from
its own negligence, bad faith or willful misconduct.
The
Depositor agrees to promptly furnish to the Securities Administrator, from
time
to time upon request, such further information, reports and financial statements
within its control related to this Agreement or the Mortgage Loans as the
Securities Administrator reasonably deems appropriate to prepare and file all
necessary reports with the Commission. The Securities Administrator shall have
no responsibility to file any items other than those specified in this Section
3.02; provided, however, the Securities Administrator shall cooperate with
the
Depositor in connection with any additional filings with respect to the Trust
Fund as the Depositor deems necessary under the Exchange Act. Fees and expenses
incurred by the Securities Administrator in connection with this Section 3.02
shall not be reimbursable from the Trust Fund.
(b) Without
limiting any other indemnification provided pursuant to any other Section of
this Agreement, the Securities Administrator shall indemnify and hold harmless,
the Depositor and the Master Servicer and each of their respective officers,
directors and affiliates from and against any losses, damages, penalties, fines,
forfeitures, reasonable and necessary legal fees and related costs, judgments
and other costs and expenses arising out of or based upon a breach of the
Securities Administrator’s obligations under Sections 2.21 or 3.02 or the
Securities Administrator’s negligence, bad faith or willful misconduct in
connection therewith. In addition, the Securities Administrator shall indemnify
and hold harmless the Depositor and each of its officers, directors and
affiliates and the Master Servicer from and against any losses, damages,
penalties, fines, forfeitures, reasonable and necessary legal fees and related
costs, judgments and other costs and expenses that (i) arise out of or are
based
upon any untrue statement or alleged untrue statement of any material fact
contained in any Back-Up Certification, the Assessment of Compliance, any
Additional Disclosure or other information provided by the Securities
Administrator pursuant to Section 2.21 or 3.02 (the “Securities Administrator
Information”), or (ii) arise out of or are based upon the omission or alleged
omission to state therein a material fact required to be stated therein or
necessary to make the statements therein, in light of the circumstances in
which
they were made, not misleading; provided, by way of clarification, that clause
(ii) of this paragraph shall be construed solely by reference to the Securities
Administrator Information and not to any other information communicated in
connection with the Certificates, without regard to whether the Securities
Administrator Information or any portion thereof is presented together with
or
separately from such other information.
Without
limiting any other indemnification provided pursuant to any other Section of
this Agreement, the Master Servicer shall indemnify and hold harmless the
Securities Administrator and the Depositor and each of its respective officers,
directors and affiliates from and against any losses, damages, penalties, fines,
forfeitures, reasonable and necessary legal fees and related costs, judgments
and other costs and expenses arising out of or based upon a breach of the
obligations of the Master Servicer under Sections 2.20, 2.21 and 3.02 or the
Master Servicer’s negligence, bad faith or willful misconduct in connection
therewith. In addition, the Master Servicer shall indemnify and hold harmless
the Depositor and each of its officers, directors and affiliates from and
against any losses, damages, penalties, fines, forfeitures, reasonable and
necessary legal fees and related costs, judgments and other costs and expenses
arising out of or based upon (i) arise out of or are based upon any untrue
statement or alleged untrue statement of any material fact contained in the
Master Servicer Certification, the Annual Statement of Compliance, the
Assessment of Compliance, any Additional Disclosure or other information
provided by the Master Servicer pursuant to Section 2.20, 2.21 or 3.02 (the
“Master Servicer Information”), or (ii) arise out of or are based upon the
omission or alleged omission to state therein a material fact required to be
stated therein or necessary to make the statements therein, in light of the
circumstances in which they were made, not misleading; provided, by way of
clarification, that clause (ii) of this paragraph shall be construed solely
by
reference to the Master Servicer Information and not to any other information
communicated in connection with the Certificates, without regard to whether
the
Master Servicer Information or any portion thereof is presented together with
or
separately from such other information.
In
addition, without limiting any other indemnification provided pursuant to any
other Section of this Agreement, the Paying Agent shall indemnify and hold
harmless the Depositor and its officers, directors and Affiliates from and
against any actual losses, damages, penalties, fines, forfeitures, reasonable
and necessary legal fees and related costs, judgments and other costs and
expenses arising out of third party claims based upon a breach of the Paying
Agent’s obligations under this Section 3.02. If the indemnification provided for
under this paragraph is unavailable or insufficient to hold harmless the
Depositor, then the Paying Agent agrees that it shall contribute to the amount
paid or payable by the Depositor as a result of the losses, claims, damages
or
liabilities of the Depositor in such proportion as is appropriate to reflect
the
relative fault of the Depositor on the one hand and the Paying Agent on the
other. Notwithstanding the foregoing, in no event shall the Paying Agent be
liable under this paragraph for any consequential, indirect or punitive
damages.
ARTICLE
IV
THE
DEPOSITOR AND THE MASTER SERVICER
Section
4.01 Liability
of the Depositor and the Master Servicer.
The
Depositor and the Master Servicer each shall be liable in accordance herewith
only to the extent of the obligations specifically imposed by this Agreement
and
undertaken hereunder by the Depositor and the Master Servicer
herein.
Section
4.02 Merger
or Consolidation of the Depositor or the Master Servicer.
Subject
to the following paragraph, the Depositor will keep in full effect its
existence, rights and franchises as a corporation under the laws of the
jurisdiction of its incorporation. Subject to the following paragraph, the
Master Servicer will keep in full effect its existence, rights and franchises
as
a corporation under the laws of the jurisdiction of its incorporation and its
qualification as an approved conventional seller/servicer for ▇▇▇▇▇▇ ▇▇▇ or
▇▇▇▇▇▇▇ Mac in good standing. The Depositor and the Master Servicer each will
obtain and preserve its qualification to do business as a foreign corporation
in
each jurisdiction in which such qualification is or shall be necessary to
protect the validity and enforceability of this Agreement, the Notes or any
of
the Mortgage Loans and to perform its respective duties under this
Agreement.
The
Depositor or the Master Servicer may be merged or consolidated with or into
any
Person, or transfer all or substantially all of its assets to any Person, in
which case any Person resulting from any merger or consolidation to which the
Depositor or the Master Servicer shall be a party, or any Person succeeding
to
the business of the Depositor or the Master Servicer, shall be the successor
of
the Depositor or the Master Servicer, as the case may be, 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; provided,
however, that the successor or surviving Person to the Master Servicer shall
be
qualified to service mortgage loans on behalf of ▇▇▇▇▇▇ Mae or ▇▇▇▇▇▇▇ Mac;
and
provided further that the Rating Agencies’ ratings of the Notes rated thereby
and in effect immediately prior to such merger or consolidation will not be
qualified, reduced or withdrawn as a result thereof (as evidenced by a letter
to
such effect from the Rating Agencies).
Section
4.03 Indemnification
of the Indenture Trustee, Owner Trustee, the Master Servicer and the Securities
Administrator.
The
Master Servicer agrees to indemnify the Indenture Trustee, Owner Trustee, the
Securities Administrator, the Paying Agent, the Certificate Registrar, the
Authenticating Agent and any Custodian from, and hold each harmless against,
any
loss, liability or expense resulting from a breach of the Master Servicer’s
obligations and duties under this Agreement, the Indenture, the Assignment
Agreement and the Notes. Such indemnity shall survive the termination or
discharge of this Agreement and the Indenture and the resignation or removal
of
the Indenture Trustee, Owner Trustee, the Securities Administrator, the Paying
Agent, the Certificate Registrar, the Authenticating Agent or such Custodian,
as
the case may be. Any payment hereunder made by the Master Servicer to the
Indenture Trustee, Owner Trustee, the Securities Administrator, the Paying
Agent, the Certificate Registrar, the Authenticating Agent or such Custodian
shall be from the Master Servicer’s own funds, without reimbursement from the
Trust Fund therefore.
Section
4.04 Limitation
on Liability of the Depositor, the Master Servicer and Others.
None of
the Depositor, the Master Servicer or any of the directors, officers, employees
or agents of the Depositor or the Master Servicer shall be under any liability
to the Trust or the Noteholders for any action taken or for refraining from
the
taking of any action in good faith pursuant to this Agreement, or for errors
in
judgment; provided, however, that this provision shall not protect the
Depositor, the Master Servicer or any such person against any breach of
warranties, representations or covenants made herein, or against any specific
liability imposed on the Master Servicer pursuant hereto, or against any
liability which would otherwise be imposed by reason of willful misfeasance,
bad
faith or negligence in the performance of duties or by reason of reckless
disregard of obligations and duties hereunder. The Depositor, the Master
Servicer and any director, officer, employee or agent of the Depositor or the
Master Servicer may rely in good faith on any document of any kind which, prima
facie, is properly executed and submitted by any Person respecting any matters
arising hereunder. The Depositor, the Master Servicer and any director, officer,
employee or agent of the Depositor or the Master Servicer shall be indemnified
and held harmless by the Trust against any loss, liability or expense incurred
in connection with any legal action relating to this Agreement or the Notes,
other than any loss, liability or expense to any specific Mortgage Loan or
Mortgage Loans (except as any such loss, liability or expense shall be otherwise
reimbursable pursuant to this Agreement) or any loss, liability or expense
incurred by reason of willful misfeasance, bad faith or negligence in the
performance of duties hereunder or by reason of reckless disregard of
obligations and duties hereunder. Neither the Depositor nor the Master Servicer
shall be under any obligation to appear in, prosecute or defend any legal action
unless such action is related to its respective duties under this Agreement
and,
in its opinion, does not involve it in any expense or liability; provided,
however, that each of the Depositor and the Master Servicer may in its
discretion undertake any such action which it may deem necessary or desirable
with respect to this Agreement and the rights and duties of the parties hereto
and the interests of the Noteholders hereunder. In such event, unless the
Depositor or the Master Servicer acts without the consent of Holders of 51%
of
the aggregate Note Principal Balance of the Notes (which consent shall not
be
necessary in the case of litigation or other legal action by either to enforce
their respective rights or defend themselves hereunder), the legal expenses
and
costs of such action and any liability resulting therefrom (except any loss,
liability or expense incurred by reason of willful misfeasance, bad faith or
negligence in the performance of duties hereunder or by reason of reckless
disregard of obligations and duties hereunder) shall be expenses, costs and
liabilities of the Trust, and the Depositor (subject to the limitations set
forth above) and the Master Servicer shall be entitled to be reimbursed therefor
from the Collection Account as and to the extent provided in Section 2.11,
any
such right of reimbursement being prior to the rights of the Noteholders to
receive any amount in the Collection Account.
Section
4.05 Limitation
on Resignation of the Master Servicer.
The
Master Servicer shall not resign from the obligations and duties hereby imposed
on it except (i) upon determination that its duties hereunder are no longer
permissible under applicable law or (ii) with the written consent of the
Indenture Trustee and the Securities Administrator, which consent may not be
unreasonably withheld, with written confirmation from the Rating Agencies (which
confirmation shall be furnished to the Depositor, the Indenture Trustee and
the
Securities Administrator) that such resignation will not cause the Rating
Agencies to reduce the then current rating of the Class A Notes and provided
that a qualified successor has agreed to assume the duties and obligations
of
the Master Servicer hereunder. Any such determination pursuant to clause (i)
of
the preceding sentence permitting the resignation of the Master Servicer shall
be evidenced by an Opinion of Counsel to such effect obtained at the expense
of
the Master Servicer and delivered to the Indenture Trustee and the Securities
Administrator. No resignation of the Master Servicer shall become effective
until the Indenture Trustee or a successor servicer shall have assumed the
Master Servicer’s responsibilities, duties, liabilities (other than those
liabilities arising prior to the appointment of such successor) and obligations
under this Agreement.
Except
as
expressly provided herein, the Master Servicer shall not assign nor transfer
any
of its rights, benefits or privileges hereunder to any other Person, nor
delegate to or subcontract with, nor authorize or appoint any other Person
to
perform any of the duties, covenants or obligations to be performed by the
Master Servicer hereunder. If, pursuant to any provision hereof, the duties
of
the Master Servicer are transferred to a successor master servicer, the entire
amount of the Servicing Fee, the Administration Fee and other compensation
payable to the Master Servicer pursuant hereto shall thereafter be payable
to
such successor master servicer.
Section
4.06 Rights
of the Depositor in Respect of the Master Servicer.
The
Master Servicer shall afford (and any Sub-Servicing Agreement shall provide
that
each Sub-Servicer shall afford) the Depositor, the Indenture Trustee and the
Securities Administrator, upon reasonable notice, during normal business hours,
access to all records maintained by the Master Servicer (and any such
Sub-Servicer) in respect of the Master Servicer’s rights and obligations
hereunder and access to officers of the Master Servicer (and those of any such
Sub-Servicer) responsible for such obligations. Upon request, the Master
Servicer shall furnish to the Depositor, the Indenture Trustee and the
Securities Administrator its (and any such Sub-Servicer’s) most recent financial
statements of the parent company of the Master Servicer and such other
information relating to the Master Servicer’s capacity to perform its
obligations under this Agreement that it possesses. Notwithstanding the
foregoing, in the case of the Initial Sub-Servicer, such access and information
described in the preceding two sentences shall be required to be provided only
to the extent provided in the Sub-Servicing Agreement. To the extent such
information is not otherwise available to the public, the Depositor, the
Indenture Trustee and the Securities Administrator shall not disseminate any
information obtained pursuant to the preceding two sentences without the Master
Servicer’s written consent, except as required pursuant to this Agreement or to
the extent that it is appropriate to do so (i) in working with legal counsel,
auditors, taxing authorities or other governmental agencies, rating agencies
or
reinsurers or (ii) pursuant to any law, rule, regulation, order, judgment,
writ,
injunction or decree of any court or governmental authority having jurisdiction
over the Depositor, the Indenture Trustee, the Securities Administrator or
the
Trust Estate, and in either case, the Depositor, the Indenture Trustee or the
Securities Administrator, as the case may be, shall use its best efforts to
assure the confidentiality of any such disseminated non-public information.
The
Depositor may, but is not obligated to, enforce the obligations of the Master
Servicer under this Agreement and may, but is not obligated to, perform, or
cause a designee to perform, any defaulted obligation of the Master Servicer
under this Agreement or exercise the rights of the Master Servicer under this
Agreement; provided that the Master Servicer shall not be relieved of any of
its
obligations under this Agreement by virtue of such performance by the Depositor
or its designee. The Depositor shall not have any responsibility or liability
for any action or failure to act by the Master Servicer and is not obligated
to
supervise the performance of the Master Servicer under this Agreement or
otherwise.
ARTICLE
V
DEFAULT
Section
5.01 Master
Servicer Events of Default.
“Master
Servicer Event of Default,” wherever used herein, means any one of the following
events:
(i) any
failure by the Master Servicer to remit to the Paying Agent for payment to
the
Noteholders any payment (other than a Monthly Advance required to be made from
its own funds on any Master Servicer Remittance Date pursuant to Section 3.01)
required to be made under the terms of the Notes and this Agreement which
continues unremedied for a period of one Business Day after the date upon which
written notice of such failure, requiring the same to be remedied, shall have
been given to the Master Servicer (with a copy to the Paying Agent) by the
Depositor, the Securities Administrator or the Indenture Trustee (in which
case
notice shall be provided by telecopy), or to the Master Servicer, the Depositor,
the Securities Administrator, the Paying Agent and the Indenture Trustee by
the
Holders of 25% of the aggregate Note Principal Balance of the Notes;
or
(ii) any
failure on the part of the Master Servicer duly to observe or perform in any
material respect any of the covenants or agreements on the part of the Master
Servicer contained in the Notes or in this Agreement which continues unremedied
for a period of 30 days after the earlier of (i) the date on which written
notice of such failure, requiring the same to be remedied, shall have been
given
to the Master Servicer by the Depositor, the Securities Administrator or the
Indenture Trustee, or to the Master Servicer, the Depositor, the Securities
Administrator and the Indenture Trustee by the Holders of 25% of the aggregate
Note Principal Balance of the Notes and (ii) actual knowledge of such failure
by
a Servicing Officer of the Master Servicer; or
(iii) a
decree
or order of a court or agency or supervisory authority having jurisdiction
in
the premises in an involuntary case under any present or future federal or
state
bankruptcy, insolvency or similar law or the appointment of a conservator or
receiver or liquidator in any insolvency, readjustment of debt, marshalling
of
assets and liabilities or similar proceeding, or for the winding-up or
liquidation of its affairs, shall have been entered against the Master Servicer
and if such proceeding is being contested by the Master Servicer in good faith
such decree or order shall have remained in force undischarged or unstayed
for a
period of 60 consecutive days or results in the entry of an order for relief
or
any such adjudication or appointment; or
(iv) the
Master Servicer shall consent to the appointment of a conservator or receiver
or
liquidator in any insolvency, readjustment of debt, marshalling of assets and
liabilities or similar proceedings of or relating to the Master Servicer or
of
or relating to all or substantially all of its property; or
(v) the
Master Servicer shall admit in writing its inability to pay its debts generally
as they become due, file a petition to take advantage of any applicable
insolvency or reorganization statute, make an assignment for the benefit of
its
creditors, or voluntarily suspend payment of its obligations; or
(vi) any
failure of the Master Servicer to make, or of the Paying Agent to make on behalf
of the Master Servicer, any Monthly Advance on any Master Servicer Remittance
Date required to be made from its own funds pursuant to Section
3.01.
If
a
Master Servicer Event of Default described in clauses (i) through (v) of this
Section shall occur, then, and in each and every such case, so long as such
Master Servicer Event of Default shall not have been remedied, the
Certificateholder or the Indenture Trustee may, and at the written direction
of
the Holders of Notes entitled to at least 51% of Voting Rights, the Indenture
Trustee shall, by notice in writing to the Master Servicer (and to the
Certificateholder if given by the Indenture Trustee or to the Indenture Trustee
if given by the Certificateholder), terminate all of the rights and obligations
of the Master Servicer in its capacity as a Master Servicer under this
Agreement, to the extent permitted by law, and in and to the Mortgage Loans
and
the proceeds thereof. If a Master Servicer Event of Default described in clause
(vi) hereof shall occur and shall not have been remedied by 1:00 p.m. on the
related Payment Date, the Paying Agent shall notify the Indenture Trustee of
the
same, and the Indenture Trustee shall be obligated to make such Monthly Advance
and, then so long as such Master Servicer Event of Default shall not have been
remedied during the applicable time period set forth in clause (vi) above
(including the reimbursement to the Indenture Trustee by the Master Servicer,
with interest thereon at the Prime Rate, for any Monthly Advance made), the
Indenture Trustee shall, by notice in writing to the Master Servicer and the
Certificateholder terminate all of the rights and obligations of the Master
Servicer in its capacity as a Master Servicer under this Agreement and in and
to
the Mortgage Loans and the proceeds thereof. On or after the receipt by the
Master Servicer of such written notice, all authority and power of the Master
Servicer under this Agreement, whether with respect to the Notes (other than
as
a Holder of any Note) or the Mortgage Loans or otherwise, shall pass to and
be
vested in the Indenture Trustee pursuant to and under this Section and, without
limitation, the Indenture Trustee is hereby authorized and empowered, as
attorney-in-fact or otherwise, to execute and deliver on behalf of and at the
expense of the Master Servicer, 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 or assignment of the Mortgage Loans and related documents, or
otherwise. The Master Servicer agrees, at its sole cost and expense, promptly
(and in any event no later than ten Business Days subsequent to such notice)
to
provide the Indenture Trustee with all documents and records requested by it
to
enable it to assume the Master Servicer’s functions under this Agreement, and to
cooperate with the Indenture Trustee in effecting the termination of the Master
Servicer’s responsibilities and rights under this Agreement, including, without
limitation, the transfer within one Business Day to the Indenture Trustee for
administration by it of all cash amounts which at the time shall be or should
have been credited by the Master Servicer to the Collection Account held by
or
on behalf of the Master Servicer, the Payment Account or any REO Account or
Servicing Account held by or on behalf of the Master Servicer or thereafter
be
received with respect to the Mortgage Loans or any REO Property serviced by
the
Master Servicer (provided, however, that the Master Servicer shall continue
to
be entitled to receive all amounts accrued or owing to it under this Agreement
on or prior to the date of such termination, whether in respect of Monthly
Advances or otherwise, and shall continue to be entitled to the benefits of
Section 4.03, notwithstanding any such termination, with respect to events
occurring prior to such termination). For purposes of this Section 5.01, the
Indenture Trustee shall not be deemed to have knowledge of a Master Servicer
Event of Default unless a Responsible Officer of the Indenture Trustee assigned
to and working in the Indenture Trustee’s Corporate Trust Office has actual
knowledge thereof or unless written notice of any event which is in fact such
a
Master Servicer Event of Default is received by the Indenture Trustee and such
notice references the Notes, the Trust or this Agreement.
Section
5.02 Indenture
Trustee to Act; Appointment of Successor.
(a)
On and
after the time the Master Servicer receives a notice of termination, the
Indenture Trustee shall be the successor in all respects to the Master Servicer
in its capacity as Master Servicer under this Agreement, the Master Servicer
shall not have the right to withdraw any funds from the Collection Account
without the consent of the Indenture Trustee and the transactions set forth
or
provided for herein and shall be subject to all the responsibilities, duties
and
liabilities relating thereto and arising thereafter placed on the Master
Servicer (except for any representations or warranties of the Master Servicer
under this Agreement and its obligation to deposit amounts in respect of losses
pursuant to Section 2.12) by the terms and provisions hereof including, without
limitation, the Master Servicer’s obligations to make Monthly Advances pursuant
to Section 3.01; provided, however, that if the Indenture Trustee is prohibited
by law or regulation from obligating itself to make advances regarding
delinquent mortgage loans, then the Indenture Trustee shall not be obligated
to
make Monthly Advances pursuant to Section 3.01; and provided further, that
any
failure to perform such duties or responsibilities caused by the Master
Servicer’s failure to provide information required by Section 5.01 shall not be
considered a default by the Indenture Trustee as successor to the Master
Servicer hereunder. As compensation therefor, the Indenture Trustee shall be
entitled to the Servicing Fees and Administration Fees and all funds relating
to
the Mortgage Loans to which the Master Servicer would have been entitled if
it
had continued to act hereunder (other than amounts which were due or would
become due to the Master Servicer prior to its termination or resignation).
Notwithstanding the above, the Indenture Trustee may, if it shall be unwilling
to so act, or shall, if it is unable to so act or if it is prohibited by law
from making advances regarding delinquent mortgage loans, or if the Holders
of
51% of the aggregate Note Principal Balance of the Notes so request in writing
to the Indenture Trustee, promptly appoint or petition a court of competent
jurisdiction to appoint, an established mortgage loan servicing institution
acceptable to the Rating Agencies and having a net worth of not less than
$15,000,000 as the successor to the Master Servicer under this Agreement in
the
assumption of all or any part of the responsibilities, duties or liabilities
of
the Master Servicer under this Agreement. No appointment of a successor to
the
Master Servicer under this Agreement shall be effective until the assumption
by
the successor of all of the Master Servicer’s responsibilities, duties and
liabilities hereunder. In connection with such appointment and assumption
described herein, the Indenture Trustee may make such arrangements for the
compensation of such successor out of payments on Mortgage Loans as it and
such
successor shall agree; provided, however, that no such compensation shall be
in
excess of that permitted the Master Servicer as such hereunder. The Depositor,
the Indenture Trustee and such successor shall take such action, consistent
with
this Agreement, as shall be necessary to effectuate any such succession. Pending
appointment of a successor to the Master Servicer under this Agreement, the
Indenture Trustee shall act in such capacity as hereinabove
provided.
(b) In
connection with the termination or resignation of the Master Servicer hereunder,
either (i) the successor servicer, including the Indenture Trustee, if the
Indenture Trustee is acting as successor Master Servicer, shall represent and
warrant that it is a member of MERS in good standing and shall agree to comply
in all material respects with the rules and procedures of MERS in connection
with the servicing of the Mortgage Loans that are registered with MERS, in
which
case the predecessor Master Servicer shall cooperate with the successor Master
Servicer in causing MERS to revise its records to reflect the transfer of
servicing to the successor Master Servicer as necessary under MERS’ rules and
regulations, or (ii) the predecessor Master Servicer shall cooperate with the
successor Master Servicer in causing MERS to execute and deliver an Assignment
of Mortgage in recordable form to transfer the Mortgage from MERS to the
Indenture Trustee and to execute and deliver such other notices, documents
and
other instruments as may be necessary or desirable to effect a transfer of
such
Mortgage Loan or servicing of such Mortgage Loan on the MERS® System to the
successor Master Servicer. The predecessor Master Servicer shall file or cause
to be filed any such assignment in the appropriate recording office. The
predecessor Master Servicer shall bear any and all fees of MERS, costs of
preparing any assignments of Mortgage, and fees and costs of filing any
assignments of Mortgage that may be required under this Section
5.02(b).
Section
5.03 Notification
to Noteholders.
(a)
Upon any
termination of the Master Servicer pursuant to Section 5.01 above or any
appointment of a successor to the Master Servicer pursuant to Section 5.02
above, the Indenture Trustee shall give prompt written notice thereof to
Noteholders at their respective addresses appearing in the Note
Register.
(b) Not
later
than the later of 60 days after the occurrence of any event, which constitutes
or which, with notice or lapse of time or both, would constitute a Master
Servicer Event of Default or five days after a Responsible Officer of the
Indenture Trustee becomes aware of the occurrence of such an event, the
Indenture Trustee shall transmit by mail to all Holders of Notes notice of
each
such occurrence, unless such default or Master Servicer Event of Default shall
have been cured or waived.
Section
5.04 Waiver
of Master Servicer Events of Default.
Subject
to Section 1.06, the Holders of 51% of the aggregate Note Principal Balance
of
the Notes evidenced by all Classes of Notes affected by any default or Master
Servicer Event of Default hereunder may waive such default or Master Servicer
Event of Default; provided, however, that a default or Master Servicer Event
of
Default under clause (i) or (vi) of Section 5.01 may be waived only by all
of
the Holders of the Notes. Upon any such waiver of a default or Master Servicer
Event of Default, such default or Master Servicer Event of Default shall cease
to exist and shall be deemed to have been remedied for every purpose hereunder.
No such waiver shall extend to any subsequent or other default or Master
Servicer Event of Default or impair any right consequent thereon except to
the
extent expressly so waived.
ARTICLE
VI
MISCELLANEOUS
PROVISIONS
Section
6.01 Amendment.
(a)
This
Agreement may be amended from time to time by the parties hereto to cure any
ambiguity, to correct or supplement any provisions herein or therein that may
be
defective or inconsistent with any other provisions herein or therein, to comply
with any changes in the Code or to make any other provisions with respect to
matters or questions arising under this Agreement which shall not be
inconsistent with the provisions of this Agreement.
(b) This
Agreement may also be amended from time to time by the parties hereto for the
purpose of adding any provisions to or changing in any manner or eliminating
any
of the provisions of this Agreement.
(c) [Reserved].
(d) [Reserved].
(e) Prior
to
the execution of any amendment to this Agreement, the Indenture Trustee shall
be
entitled to receive and rely upon an Opinion of Counsel addressed to the
Indenture Trustee stating that the execution of such amendment is authorized or
permitted by this Agreement. The Indenture Trustee, the Master Servicer, the
Securities Administrator and the Paying Agent may, but shall not be obligated
to, enter into any such amendment which affects its own respective rights,
duties or immunities under this Agreement.
(f) Wilmington
Trust Company in its individual capacity and as Owner Trustee, shall be a third
party beneficiary of this Agreement. In no event shall this Agreement be amended
in a manner which adversely affects the rights of Wilmington Trust Company
or
the Owner Trustee without its prior written consent.
(g) CSE
Mortgage, LLC as Certificateholder, shall be a third party beneficiary of this
Agreement. In no event shall this Agreement be amended in a manner which
adversely affects the rights of the Certificateholder without its prior written
consent.
Section
6.02 Recordation
of Agreement.
To the
extent permitted by applicable law, this Agreement is subject to recordation
in
all appropriate public offices for real property records in all the counties
or
other comparable jurisdictions in which any or all of the Mortgaged Properties
are situated, and in any other appropriate public recording office or elsewhere.
The Certificateholder shall effect such recordation, at the expense of the
Trust
Estate.
Section
6.03 GOVERNING
LAW.
THIS
AGREEMENT SHALL BE CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW
YORK WITHOUT REFERENCE TO ITS CONFLICT OF LAWS RULES (OTHER THAN SECTION 5-1401
OF THE GENERAL OBLIGATIONS LAW, WHICH THE PARTIES HERETO EXPRESSLY RELY UPON
IN
THE CHOICE OF SUCH LAW AS THE GOVERNING LAW HEREUNDER) AND THE OBLIGATIONS,
RIGHTS AND REMEDIES OF THE PARTIES HEREUNDER SHALL BE DETERMINED IN ACCORDANCE
WITH SUCH LAWS.
Section
6.04 Notices.
All
demands and notices hereunder shall be in writing and shall be deemed given
when
delivered at (including delivery by facsimile) or mailed by registered mail,
return receipt requested, postage prepaid, or by recognized overnight courier,
to (i) in the case of the Depositor, ▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇
▇▇▇▇▇, or to such other address as may hereafter be furnished to the other
parties hereto in writing by the Depositor; (ii) in the case of the Indenture
Trustee, at the Corporate Trust Office or such other address as may hereafter
be
furnished to the other parties hereto in writing by the Indenture Trustee;
(iii)
in the case of the Seller, ▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇,
or to
such other address as may hereafter be furnished to the other parties hereto
in
writing by the Seller; (iv) in the case of the Master Servicer, Master Servicing
Division- MC: N3B-355M, ▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇., ▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇ (Attention:
Compliance Manager), facsimile no.: (▇▇▇) ▇▇▇-▇▇▇▇ (with a copy to, ▇▇▇▇
▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇’▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇, Attention: Chief Legal Counsel (facsimile
no.: (▇▇▇) ▇▇▇-▇▇▇▇)), or such other address or facsimile number as may
hereafter be furnished to the other parties hereto in writing by the Master
Servicer; (v) in the case of the Securities Administrator, 1000 Technology
Drive, M.S. 337, O’▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇, Attention: Mortgage Finance (telecopy
number (▇▇▇) ▇▇▇-▇▇▇▇), or to such other address as may hereafter be furnished
to the other parties hereto in writing by the Securities Administrator; (vi)
in
the case of the Issuer, to Citigroup Mortgage Loan Trust 2006-AR1 c/o Wilmington
Trust Company, ▇▇▇▇▇▇ Square North, ▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇,
▇▇▇▇▇▇▇▇ ▇▇▇▇▇, Attention: Corporate Trust Administration, or such other address
as may hereafter be furnished to the other parties hereto in writing by the
Issuer; (vii) in the case of the Owner Trustee, to Wilmington Trust Company,
▇▇▇▇▇▇ Square North, ▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇,
Attention: Corporate Trust Administration, or such other address as may
hereafter be furnished to the other parties hereto in writing by the Owner
Trustee; (viii) in the case of the Paying Agent, ▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇
▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇ (Attention: Citigroup Mortgage Loan Trust
2006-AR1) facsimile no.: (▇▇▇) ▇▇▇-▇▇▇▇, or such other address as may hereafter
be furnished to the other parties hereto in writing by the Paying Agent; and
(ix) in the case of the Rating Agencies, Standard & Poor’s, a division of
The ▇▇▇▇▇▇-▇▇▇▇ Companies, Inc., ▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇,
to
Fitch Ratings, ▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇ and to Moody’s
at ▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇ or such other addresses as the
Rating Agencies may designate in writing to the parties hereto. Any notice
delivered to the Depositor, the Master Servicer, the Indenture Trustee, the
Issuer, the Owner Trustee or the Paying Agent under this Agreement shall be
effective only upon receipt. Any notice so mailed within the time prescribed
in
this Agreement shall be conclusively presumed to have been duly given when
mailed.
Section
6.05 Severability
of Provisions.
If any
one or more of the covenants, agreements, provisions or terms of this Agreement
shall be for any reason whatsoever held invalid, then such covenants,
agreements, provisions or terms shall be deemed severed from the remaining
covenants, agreements, provisions or terms of this Agreement and shall in no
way
affect the validity or enforceability of the other provisions of this Agreement
or of the Notes thereof.
Section
6.06 Successors
and Assigns.
The
provisions of this Agreement shall be binding upon the parties hereto, and
their
respective successors and assigns.
Section
6.07 Article
and Section Headings.
The
article and section headings herein are for convenience of reference only,
and
shall not limit or otherwise affect the meaning hereof.
Section
6.08 Counterparts.
This
Agreement may be executed in two or more counterparts each of which when so
executed and delivered shall be an original but all of which together shall
constitute one and the same instrument.
Section
6.09 Notice
to Rating Agencies.
The
Indenture Trustee shall promptly provide notice to each Rating Agency with
respect to each of the following of which a Responsible Officer of the Indenture
Trustee has actual knowledge or written notice:
1. Any
material change or amendment to this Agreement;
2. The
occurrence of any Master Servicer Event of Default that has not been
cured;
3. The
resignation or termination of the Master Servicer, the Indenture Trustee or
the
Securities Administrator ; and
4. Any
change in the location of the Collection Account.
Section
6.10 Termination.
The
respective obligations and responsibilities of the parties hereto created hereby
shall terminate upon the satisfaction and discharge of the Indenture pursuant
to
Section 4.10 thereof and, if applicable, the optional redemption of the Notes
pursuant to Section 8.06 thereof. Upon the presentation and surrender of the
Notes, the Securities Administrator shall distribute to the remaining
Securityholders, in accordance with their respective interests, all
distributable amounts remaining in the Payment Account. Following such final
Payment Date, the Indenture Trustee shall, or shall cause the Custodian to,
release promptly to the Certificateholder or its designee the Mortgage Files
for
the remaining Mortgage Loans, and the Collection Account and Payment Account
shall terminate, subject to the Securities Administrator’s obligation to hold
any amounts payable to the Securityholders in trust without interest pending
final distributions pursuant to the Indenture.
Section
6.11 No
Petition.
Each
party to this Agreement (and with respect to CitiMortgage, Inc., solely in
its
capacities as Master Servicer and Securities Administrator and not in its
individual or corporate capacity) by entering into this Agreement, hereby
covenants and agrees that it will not at any time institute against the Issuer,
or join in any institution against the Issuer, any bankruptcy proceedings under
any United States federal or state bankruptcy or similar law in connection
with
any obligations of the Issuer. This section shall survive the termination of
this Agreement by one year.
Section
6.12 No
Recourse.
The
Master Servicer acknowledges that no recourse may be had against the Issuer,
except as may be expressly set forth in this Agreement.
Section
6.13 Additional
Terms Regarding Indenture.
The
Indenture Trustee shall have only such duties and obligations under this
Agreement as are expressly set forth herein, and no implied duties on its part
shall be read into this Agreement. In entering into and acting under this
Agreement.
IN
WITNESS WHEREOF, the Depositor, Master Servicer, the Securities Administrator,
the Seller and the Paying Agent have caused their names to be signed hereto
by
their respective officers thereunto duly authorized as of the day and year
first
above written.
|
CITIGROUP
MORTGAGE LOAN TRUST INC., as Depositor
|
|
|
By:
/s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
|
|
|
Name:
▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
|
|
|
Title:
Vice President
|
|
|
U.S.
BANK NATIONAL ASSOCIATION,
|
|
|
as
Indenture Trustee
|
|
|
By:
/s/ ▇▇▇▇▇ ▇. ▇’▇▇▇▇▇
|
|
|
Name:
▇▇▇▇▇ ▇. ▇’▇▇▇▇▇
|
|
|
Title:
Vice President
|
|
|
CITIMORTGAGE,
INC., as Master Servicer and Securities Administrator
|
|
|
By:
/s/ ▇▇▇▇▇ ▇▇▇▇▇▇
|
|
|
Name:
▇▇▇▇▇ ▇▇▇▇▇▇
|
|
|
Title:
Sr. Vice President
|
|
|
CITIBANK,
N.A., as Paying Agent
|
|
|
By:
/s/ ▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
|
|
|
Name:
▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
|
|
|
Title:
Vice President
|
|
|
CS
OT I LLC, as Seller
|
|
|
By:
/s/ ▇▇▇▇▇ ▇▇▇▇▇▇
|
|
|
Name:
▇▇▇▇▇ ▇▇▇▇▇▇
|
|
|
Title:
Authorized Agent
|
|
|
CSE
Mortgage LLC, as Sponsor
|
|
|
By:
/s/ ▇▇▇▇▇ ▇▇▇▇▇▇
|
|
|
Name:
▇▇▇▇▇ ▇▇▇▇▇▇
|
|
|
Title:
Authorized Agent
|
On
the __
th day of February, 2006 before me, a notary public in and for said State,
personally appeared _____________________, known to me to be a Vice President
of
Citigroup Mortgage Loan Trust Inc., the corporation that executed the within
instrument, and also known to me to be the person who executed it on behalf
of
said corporation, and acknowledged to me that such corporation executed the
within instrument.
IN
WITNESS WHEREOF, I have hereunto set my hand and affixed my official seal the
day and year in this certificate first above written.
/s/_________________________________
Notary
Public
[Notarial
Seal]
|
STATE
OF _____________
|
)
|
|
|
)
|
ss.:
|
|
|
COUNTY
OF ____________
|
)
|
On
the
__th day of February, 2006 before me, a notary public in and for said State,
personally appeared _______________________, known to me to be a Vice President
of U.S. Bank National Association, the corporation that executed the within
instrument, and also known to me to be the person who executed it on behalf
of
said corporation, and acknowledged to me that such corporation executed the
within instrument.
IN
WITNESS WHEREOF, I have hereunto set my hand and affixed my official seal the
day and year in this certificate first above written.
/s/_____________________________
Notary
Public
[Notarial
Seal]
|
STATE
OF TEXAS
|
)
|
|
|
)
|
ss.:
|
|
|
COUNTY
OF DALLAS
|
)
|
On
the
__th day of February, 2006 before me, a notary public in and for said State,
personally appeared __________________________, known to me to be a Senior
Vice
President of CitiMortgage, Inc., the corporation that executed the within
instrument, and also known to me to be the person who executed it on behalf
of
said corporation, and acknowledged to me that such corporation executed the
within instrument.
IN
WITNESS WHEREOF, I have hereunto set my hand and affixed my official seal the
day and year in this certificate first above written.
/s/
_______________________________
Notary
Public
[Notarial
Seal]
|
STATE
OF NEW YORK
|
)
|
|
|
)
|
ss.:
|
|
|
COUNTY
OF KINGS
|
)
|
On
the
__th day of February, 2006 before me, a notary public in and for said State,
personally appeared _____________________, known to me to be a Assistant Vice
President of Citibank, N.A., the corporation that executed the within
instrument, and also known to me to be the person who executed it on behalf
of
said corporation, and acknowledged to me that such corporation executed the
within instrument.
IN
WITNESS WHEREOF, I have hereunto set my hand and affixed my official seal the
day and year in this certificate first above written.
/s/
__________________________________
Notary
Public
[Notarial
Seal]
|
[STATE
OF NEW YORK]
|
)
|
|
|
)
|
ss.:
|
|
|
[COUNTY
OF NEW YORK]
|
)
|
On
the
__th day of February, 2006 before me, a notary public in and for said State,
personally appeared __________________________________, known to me to be a
Authorized Agent of CS OT I LLC the entity that executed the within instrument,
and also known to me to be the person who executed it on behalf of said entity,
and acknowledged to me that such entity executed the within
instrument.
IN
WITNESS WHEREOF, I have hereunto set my hand and affixed my official seal the
day and year in this certificate first above written.
/s/
_______________________________
Notary
Public
[Notarial
Seal]
|
[STATE
OF NEW YORK]
|
)
|
|
|
)
|
ss.:
|
|
|
[COUNTY
OF NEW YORK]
|
)
|
On
the
__th day of February, 2006 before me, a notary public in and for said State,
personally appeared __________________________________, known to me to be a
Authorized Agent of CSE MORTGAGE LLC the entity that executed the within
instrument, and also known to me to be the person who executed it on behalf
of
said entity, and acknowledged to me that such entity executed the within
instrument.
IN
WITNESS WHEREOF, I have hereunto set my hand and affixed my official seal the
day and year in this certificate first above written.
/s/
_______________________________
Notary
Public
[Notarial
Seal]
EXHIBIT
A
MORTGAGE
LOAN SCHEDULE
[Provided
Upon Request]
EXHIBIT
B
▇▇▇▇▇
FARGO SERVICING AGREEMENT
CITIGROUP
GLOBAL MARKETS REALTY CORP.
Purchaser
and
▇▇▇▇▇
FARGO BANK, N.A.
Seller
______________________________________
MASTER
MORTGAGE LOAN PURCHASE AGREEMENT
Dated
as of November 1, 2005
______________________________________
Fixed
and Adjustable Rate
First
and Second Lien Mortgage Loans
Execution
Copy
11/22/2005
EXHIBITS
|
Exhibit
A
|
Form
of Assignment and Conveyance Agreement
|
|
|
Exhibit
B
|
Contents
of Data File
|
|
|
Exhibit
C
|
Form
of Opinion of Counsel
|
This
is a
Master Mortgage Loan Purchase Agreement (the "Agreement"), dated as of November
1, 2005, by and between Citigroup Global Markets Realty Corp., having an
office
at ▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇
▇▇▇▇▇,
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇ (the "Purchaser") and ▇▇▇▇▇ Fargo Bank, N.A., having
an
▇▇▇▇▇▇ ▇▇ ▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇-▇▇▇▇ (the
"Seller").
W I T N E S S E T H
WHEREAS,
the Seller agrees to sell to the Purchaser, and the Purchaser agrees to purchase
from the Seller, from time to time (each a “Transaction”) on a servicing
retained basis, certain first and second lien fixed and adjustable rate
residential mortgage loans (the "Mortgage Loans") which shall be delivered
as
whole loans (each a “Loan Package”) on various dates (each a “Closing Date”) as
provided for in certain Assignment and Conveyance Agreements (as defined
below)
by and between the Purchaser and Seller as executed in conjunction with each
Transaction; and
WHEREAS,
the parties intend hereby to set forth the terms and conditions upon which
the
proposed Transactions will be effected.
NOW
THEREFORE, in consideration of the promises and the mutual agreements set
forth
herein, the parties hereto agree as follows:
SECTION
1. Definitions.
All
capitalized terms not otherwise defined herein have the respective meanings
set
forth in the Flow Servicing Agreement between the parties hereto, dated as
of
November 1, 2005 (the "Servicing Agreement"). The following terms are defined
as
follows (except as otherwise agreed by the parties):
ALTA:
The
American Land Title Association or any successor thereto.
Appraised
Value:
With
respect to any Mortgage Loan, the lesser of (i) the value set forth on the
appraisal made in connection with the origination of the related Mortgage
Loan
as the value of the related Mortgaged Property, or (ii) the purchase price
paid
for the Mortgaged Property, provided, however, that in the case of a refinanced
Mortgage Loan, such value shall be based solely on the appraisal made in
connection with the origination of such Mortgage Loan.
Assignment
and Conveyance Agreement:
The
agreement substantially in the form of Exhibit
A
attached
hereto.
Covered
Loan:
A
Mortgage Loan categorized as “Covered” pursuant to the Standard & Poor’s
Glossary for File Format for LEVELS® Version 5.6, Appendix E, as revised from
time to time and in effect on each related Closing Date (excluding New Jersey
“Covered Home Loans” as that term is defined in clause (1) of the definition of
that term in the New Jersey Home Ownership Security Act of 2002).
Data
File:
The
electronic data file prepared by the Seller and delivered to the Purchaser
including the data fields set forth on Exhibit
B
with
respect to each Mortgage Loan.
Deleted
Mortgage Loan:
A
Mortgage Loan which is repurchased by the Seller in accordance with the terms
of
this Agreement and which is, in the case of a substitution pursuant to Section
4(b), replaced or to be replaced with a Qualified Substitute Mortgage
Loan.
Gross
Margin:
With
respect to each adjustable rate Mortgage Loan, the fixed percentage amount
set
forth in the related Mortgage Note which is added to the Index in order to
determine the related Mortgage Interest Rate, as set forth in the related
Mortgage Loan Schedule.
High
Cost Loan:
A
Mortgage Loan classified as (a) a “high cost” loan under the Home Ownership and
Equity Protection Act of 1994, (b) a “high cost home,” “threshold,” “covered,”
(excluding New Jersey “Covered Home Loans” as that term is defined in clause (1)
of the definition of that term in the New Jersey Home Ownership Security
Act of
2002), “high risk home,” “predatory” or similar loan under any other applicable
state, federal or local law or (c) a Mortgage Loan categorized as “High Cost”
pursuant to the Standard & Poor’s Glossary for File Format for LEVELS®
Version 5.6, Appendix E, as revised from time to time and in effect on each
related Closing Date.
Index:
With
respect to any adjustable rate Mortgage Loan, the index identified on the
related Mortgage Loan Schedule and set forth in the related Mortgage Note
for
the purpose of calculating the interest thereon.
Mortgage
Loan Schedule:
With
respect to each Transaction, a schedule of Mortgage Loans setting forth the
following information with respect to each Mortgage Loan: (1) the Seller’s
Mortgage Loan number; (2) the city state and zip code of the Mortgaged Property;
(3) a code indicating whether the Mortgaged Property is a single family
residence, two-family residence, three-family residence, four-family residence,
planned unit development or condominium; (4) the current Mortgage Interest
Rate;
(5) the current net Mortgage Interest Rate; (6) the current Monthly Payment;
(7)
the Gross Margin; (8) the original term to maturity; (9) the scheduled maturity
date; (10) the principal balance of the Mortgage Loan as of the Cut-off Date
after deduction of payments of principal due on or before the Cut-off Date
whether or not collected; (11) the Loan-to-Value Ratio; (12) the next Adjustment
Date; (13) the lifetime Mortgage Interest Rate cap; (14) a code indicating
whether the Mortgage Loan is a Cooperative Loan; (15) a code indicating the
mortgage guaranty insurance company; (16) a code indicating whether the Mortgage
Loan is an Interest Only Mortgage Loan; (17) a code indicating whether the
Mortgage Loan is a Buydown Mortgage Loan; (18) the Servicing Fee Rate; (19)
a
code indicating whether the loan is subject to LPMI; and (20) a code indicating
a Time$aver® Mortgage Loan.
Qualified
Substitute Mortgage Loan:
A
mortgage loan eligible to be substituted by the Seller for a Deleted Mortgage
Loan which must, on the date of such substitution, (i) have an outstanding
principal balance, after deduction of all scheduled payments due in the month
of
substitution (or in the case of a substitution of more than one mortgage
loan
for a Deleted Mortgage Loan, an aggregate principal balance), not in excess
of
the Stated Principal Balance of the Deleted Mortgage Loan; (ii) have a Mortgage
Loan Remittance Rate not less than, and not more than two percent (2%) greater,
than the Mortgage Loan Remittance Rate of the Deleted Mortgage Loan; (iii)
have
a remaining term to maturity not greater than and not more than one year
less
than that of the Deleted Mortgage Loan; (iv) be of the same type of Mortgage
Loan as the Deleted Mortgage Loan and (v) comply with each representation
and
warranty set forth in Section 6(b).
Underwriting
FICO Score:
The
FICO score of a Mortgagor, used
in
the loan approval
process
with respect to each Mortgage Loan, as set forth on the related Data File.
Underwriting
Guidelines:
The
underwriting guidelines of the Seller.
SECTION
2. Agreement
to Purchase.
The
Seller agrees to sell, and the Purchaser agrees to purchase from time to
time,
Mortgage Loans in Loan Packages having aggregate principal balances on the
related Cut-off Date in an amount as set forth in the respective Commitment
Letter, or in such other amounts as agreed by the Purchaser and the Seller
as
evidenced by the actual aggregate principal balance of the Mortgage Loans
in the
related Loan Package accepted by the Purchaser on the related Closing Date.
The
Mortgage Loans will be delivered pursuant to this Agreement and the Servicing
Agreement.
SECTION
3. Mortgage
Loan Schedule.
The
Seller will provide the Purchaser with certain information constituting a
listing of the Mortgage Loans to be purchased under this Agreement for each
Transaction (the "Mortgage Loan Schedule"). Each Mortgage Loan Schedule shall
conform to the definition of "Mortgage Loan Schedule" as set forth in this
Agreement.
SECTION
4.
(a) Purchase
Price.
The
purchase price for each Loan Package (the "Purchase Price") shall be the
percentage of par as stated in the related Commitment Letter, multiplied
by the
aggregate scheduled principal balance, as of the related Cut-off Date, of
the
Mortgage Loans in the related Loan Package, after application of scheduled
payments of principal for such related Loan Package due on or before such
Cut-off Date whether or not collected. The Purchase Price for a Loan Package
may
be adjusted as stated in the related Commitment Letter.
In
addition to the Purchase Price, the Purchaser shall pay to the Seller, at
closing, accrued interest on the aggregate scheduled principal amount of
the
related Mortgage Loans at the weighted average Mortgage Loan Remittance Rate
for
each Loan Package from the related Cut-off Date through the day prior to
the
related Closing Date, inclusive.
With
respect to each Loan Package, the Purchaser shall be entitled to (1) all
scheduled principal due after the Cut-off Date, (2) all other recoveries
of
principal collected after the related Cut-off Date (provided, however, that
all
scheduled payments of principal due on or before the related Cut-off Date
and
collected by the Seller after the related Cut-off Date shall belong to the
Seller), and (3) all payments of interest on the Mortgage Loans at the Mortgage
Loan Remittance Rate (minus that portion of any such payment which is allocable
to the period prior to the related Cut-off Date). The principal balance of
each
Mortgage Loan as of the related Cut-off Date is determined after application
of
payments of principal due on or before the related Cut-off Date whether or
not
collected. Therefore, payments of scheduled principal and interest prepaid
for a
Due Date beyond the related Cut-off Date shall not be applied to the principal
balance as of the related Cut-off Date. Such prepaid amounts (minus interest
at
the Servicing Fee Rate) shall be the property of the Purchaser. The Seller
shall
deposit any such prepaid amounts into the Custodial Account, which account
is
established for the benefit of the Purchaser for subsequent remittance by
the
Seller to the Purchaser.
(b) Repurchase
Price.
It
is
understood and agreed that the representations and warranties set forth in
Section 6 of this Agreement and Section 3.01 of the Servicing Agreement shall
survive the sale of the Mortgage Loans to the Purchaser and the delivery
of the
respective Mortgage Loan Documents to the Custodian and shall inure to the
benefit of the Purchaser, notwithstanding any restrictive or qualified
endorsement on any Mortgage Note or Assignment of Mortgage or the examination
or
failure to examine any Mortgage File. Upon discovery by either the Seller
or the
Purchaser of a breach of any of the foregoing representations and warranties
which materially and adversely affects the value of the Mortgage Loans or
the
interest of the Purchaser (or which materially and adversely affects the
interests of Purchaser in the related Mortgage Loan in the case of a
representation and warranty relating to a particular Mortgage Loan), the
party
discovering such breach shall give prompt written notice to the
other.
Within
ninety (90) days after the earlier of either discovery by or notice to the
Seller of any breach of a representation or warranty which materially and
adversely affects the value of the Mortgage Loans, the Seller shall use its
best
efforts promptly to cure such breach in all material respects and, if such
breach cannot be cured, the Seller shall, at the Purchaser's option, repurchase
such Mortgage Loan at the Repurchase Price. In the event that a breach shall
involve any representation or warranty set forth in Section 3.01 of the
Servicing Agreement, and such breach cannot be cured within ninety (90) days
after the earlier of either discovery by or notice to the Seller of such
breach,
all of the Mortgage Loans shall, at the Purchaser's option, be repurchased
by
the Seller at the Repurchase Price. However, if the breach shall involve
a
representation or warranty set forth in Section 6 hereof and the Seller
discovers or receives notice of any such breach within 120 days of the related
Closing Date, the Seller shall, if the breach cannot be cured, at the
Purchaser's option and provided that the Seller has a Qualified Substitute
Mortgage Loan, rather than repurchase the Mortgage Loan as provided above,
remove such Mortgage Loan (a "Deleted Mortgage Loan") and substitute in its
place a Qualified Substitute Mortgage Loan or Loans, provided that any such
substitution shall be effected not later than 120 days after the related
Closing
Date. If the Seller has no Qualified Substitute Mortgage Loan, it shall
repurchase the deficient Mortgage Loan within ninety (90) days of the written
notice of the breach or the failure to cure, whichever is later. Any repurchase
of a Mortgage Loan or Loans pursuant to the foregoing provisions of this
Section
4(b) shall be accomplished by deposit in the Custodial Account of the amount
of
the Repurchase Price for distribution to Purchaser on the next scheduled
Remittance Date, after deducting therefrom any amount received in respect
of
such repurchased Mortgage Loan or Loans and being held in the Custodial Account
for future distribution.
At
the
time of repurchase or substitution, the Purchaser and the Seller shall arrange
for the reassignment of the Deleted Mortgage Loan to the Seller and the delivery
to the Seller of any documents held by the Custodian relating to the Deleted
Mortgage Loan. If
the
Seller repurchases a Mortgage Loan that is a MERS Mortgage Loan, the Seller
shall cause MERS to designate on the MERS® System to remove the Purchaser as the
beneficial holder with respect to such Mortgage Loan. In
the
event of a repurchase or substitution, the Seller shall, simultaneously with
such reassignment, give written notice to the Purchaser that such repurchase
or
substitution has taken place, amend the related Mortgage Loan Schedule to
reflect the withdrawal of the Deleted Mortgage Loan from this Agreement,
and, in
the case of substitution, identify a Qualified Substitute Mortgage Loan and
amend the related Mortgage Loan Schedule to reflect the addition of such
Qualified Substitute Mortgage Loan to this Agreement. In connection with
any
such substitution, the Seller shall be deemed to have made as to such Qualified
Substitute Mortgage Loan the representations and warranties set forth in
this
Agreement except that all such representations and warranties set forth in
this
Agreement shall be deemed made as of the date of such substitution. The Seller
shall effect such substitution by delivering to the Custodian for such Qualified
Substitute Mortgage Loan the documents required by Section 5(d) of this
Agreement and Section 2.03 of the Servicing Agreement, with the Mortgage
Note
endorsed as required by such Section 2.03. No substitution will be made in
any
calendar month after the Determination Date for such month. The Seller shall
deposit in the Custodial Account the Monthly Payment less the Servicing Fee
due
on such Qualified Substitute Mortgage Loan or Loans in the month following
the
date of such substitution. Monthly Payments due with respect to Qualified
Substitute Mortgage Loans in the month of substitution shall be retained
by the
Seller. With respect to any Deleted Mortgage Loan, distributions to Purchaser
shall include the Monthly Payment due on any Deleted Mortgage Loan in the
month
of substitution, and the Seller shall thereafter be entitled to retain all
amounts subsequently received by the Seller in respect of such Deleted Mortgage
Loan.
For
any
month in which the Seller substitutes a Qualified Substitute Mortgage Loan
for a
Deleted Mortgage Loan, the Seller shall determine the amount (if any) by
which
the aggregate principal balance of all Qualified Substitute Mortgage Loans
as of
the date of substitution is less than the aggregate Stated Principal Balance
of
all Deleted Mortgage Loans (after application of scheduled principal payments
due in the month of substitution). The amount of such shortfall shall be
distributed by the Seller in the month of substitution pursuant to Section
5.01
of the Servicing Agreement. Accordingly, on the date of such substitution,
the
Seller shall deposit from its own funds into the Custodial Account an amount
equal to the amount of such shortfall.
In
addition to such repurchase or substitution obligation, the Seller shall
indemnify the Purchaser and hold it harmless against any losses, damages,
penalties, fines, forfeitures, reasonable and necessary legal fees and related
costs, judgments, and other costs and expenses resulting from any claim,
demand,
defense or assertion based on or grounded upon, or resulting from, a breach
of
the representations and warranties contained in this Agreement. It is understood
and agreed that the obligations of the Seller set forth in this Section 4(b) to
cure, substitute for or repurchase a defective Mortgage Loan and to indemnify
the Purchaser as provided in this Section 4(b) constitute the sole remedies
of
the Purchaser respecting a breach of the foregoing representations and
warranties.
Any
cause
of action against the Seller relating to or arising out of the breach of
any
representations and warranties made in Section 6 hereof and Section 3.01
of the
Servicing Agreement shall accrue as to any Mortgage Loan upon (i) discovery
of
such breach by the Purchaser or notice thereof by the Seller to the Purchaser,
(ii) failures by the Seller to cure such breach or repurchase such Mortgage
Loan
as specified above, and (iii) demand upon the Seller by the Purchaser for
compliance with this Agreement.
SECTION
5.
(a) Examination
of Mortgage Files.
Prior to
the related Closing Date, the Seller shall (a) deliver to the Purchaser in
escrow, for examination, the Mortgage File for each Mortgage Loan, including
a
copy of the Assignment of Mortgage, pertaining to each Mortgage Loan, or
(b)
make the Mortgage Files available to the Purchaser for examination at the
Seller's offices or such other location as shall otherwise be agreed upon
by the
Purchaser and the Seller. Such examination may be made by the Purchaser at
any
time before or after the Closing Date or by any prospective purchaser of
the
Mortgage Loans from the Purchaser, at any time after the Closing Date upon
prior
reasonable notice to the Seller. The fact that the Purchaser or any prospective
purchaser of the Mortgage Loans has conducted or has failed to conduct any
partial or complete examination of the Mortgage Files shall not affect the
Purchaser's (or any of its successor's) rights to demand repurchase,
substitution or other relief or remedy as provided under the Servicing
Agreement.
(b) Conveyance
of Mortgage Loans. Pursuant
to each Assignment and Conveyance Agreement, on the related Closing Date,
the
Seller, simultaneously with the payment of the Purchase Price by the Purchaser,
shall thereby sell, transfer, assign, set over and convey to the Purchaser,
without recourse, but subject to the terms of this Agreement and the related
Assignment and Conveyance Agreement, all the right, title and interest of
the
Seller in and to the Mortgage Loans listed on the respective Mortgage Loan
Schedule annexed to such Assignment and Conveyance Agreement, together with
the
Mortgage File and all rights and obligations arising under the documents
contained therein. The Company shall deliver the related Mortgage Loan Schedule
and the related Data File to the Purchaser at least two (2) Business Days
before
the Closing Date. Pursuant to Section 5(d) of this Agreement and Section
2.03 of
the Servicing Agreement, the Company shall deliver the Mortgage File for
each
Mortgage Loan comprising the related Loan Package to the Custodian.
(c) Books
and Records.
The sale
of each Mortgage Loan shall be reflected on the Seller’s balance sheet and other
financial statements as a sale of assets by the Seller. The Seller shall
be
responsible for maintaining, and shall maintain, a complete set of books
and
records for each Mortgage Loan which shall be marked clearly to reflect the
ownership of each Mortgage Loan by the Purchaser. In particular, the Seller
shall maintain in its possession, available for inspection by the Purchaser,
or
its designee, and shall deliver to the Purchaser upon demand, evidence of
compliance with all federal, state and local laws, rules and regulations,
and
requirements of ▇▇▇▇▇▇ ▇▇▇ or ▇▇▇▇▇▇▇ Mac, including but not limited to
documentation as to the method used in determining the applicability of the
provisions of the Flood Disaster Protection Act of 1973, as amended, to the
Mortgaged Property, documentation evidencing insurance coverage and eligibility
of any condominium project for approval by ▇▇▇▇▇▇ Mae or ▇▇▇▇▇▇▇ Mac and
records
of periodic inspections required by Section 4.13 of the Servicing Agreement.
To
the extent that original documents are not required for purposes of realization
of Liquidation Proceeds or Insurance Proceeds, documents maintained by the
Seller may be in the form of microfilm or microfiche or such other reliable
means of recreating original documents, including but not limited to, optical
imagery techniques so long as the Seller complies with the requirements of
the
▇▇▇▇▇▇ Mae Selling and Servicing Guide, as amended from time to
time.
(d) Delivery
of Mortgage Loan Documents.
On each
Closing Date with respect to each Mortgage Loan comprising the related Loan
Package, the Seller shall have delivered to the Custodian those Mortgage
Loan
Documents contained in the Mortgage File pursuant to this Agreement with
respect
to each Mortgage Loan. In addition, in connection with the assignment of
any
MERS Mortgage Loan, the Seller agrees that it will cause, at its own expense,
the MERS System to indicate that the related Mortgage Loans have been assigned
by the Seller to the Purchaser in accordance with this Agreement by entering
in
the MERS System the information required by the MERS System to identify the
Purchaser as owner of such Mortgage Loans. The Seller further agrees that
it
will not alter the information referenced in this paragraph with respect
to any
Mortgage Loan during the term of this Agreement unless and until such Mortgage
Loan is repurchased in accordance with the terms of this Agreement or unless
otherwise directed by the Purchaser.
The
Custodian shall certify its receipt of all such Mortgage Loan Documents in
each
Mortgage File required to be delivered pursuant to this Agreement, as evidenced
by the Initial Certification of the Custodian in the forms annexed to the
Custodial Agreement. The Purchaser will be responsible for the fees and expenses
of the Custodian.
The
contents of each Servicing File are and shall be held in trust by the Seller
as
servicer for the benefit of the Purchaser as the owner thereof. The possession
of each Servicing File by the Seller is at the will of the Purchaser for
the
sole purpose of servicing the related Mortgage Loan pursuant to the Servicing
Agreement, and such retention and possession by the Seller is in a custodial
capacity only. Upon the sale of the Mortgage Loans the ownership of each
Mortgage Note, the related Mortgage and the related Mortgage File and Servicing
File shall vest immediately in the Purchaser, and the ownership of all records
and documents with respect to the related Mortgage Loan prepared by or which
come into the possession of the Seller shall vest immediately in the Purchaser
and shall be retained and maintained by the Seller, in trust, at the will
of the
Purchaser and only in such custodial capacity.
SECTION
6. Representations,
Warranties and Agreements of Seller.
The
Seller agrees and acknowledges that it shall, as a condition to the consummation
of the transactions contemplated hereby, make the representations and warranties
specified in this Section 6 and in Section 3.01 of the Servicing Agreement,
as
of the related Closing Date. The meaning of the term "Agreement" as used
in
Section 3.01 of the Servicing Agreement shall include this Agreement. The
Seller, without conceding that the Mortgage Loans are securities, hereby
makes
the following additional representations, warranties and agreements which
shall
be deemed to have been made as of the related Closing Date:
| a) |
With
respect to the Seller:
|
| (i) |
Securities
Act of 1933.
|
Neither
the Seller nor anyone acting on its behalf has offered, transferred, pledged,
sold or otherwise disposed of any Mortgage Loans, any interest in any Mortgage
Loans or any other similar security to, or solicited any offer to buy or
accept
a transfer, pledge or other disposition of any Mortgage Loans, any interest
in
any Mortgage Loans or any other similar security from, or otherwise approached
or negotiated with respect to any Mortgage Loans, any interest in any Mortgage
Loans or any other similar security with, any Person in any manner, or made
any
general solicitation by means of general advertising or in any other manner,
or
taken any other action which would constitute a distribution of the Mortgage
Loans under the Securities Act of 1933 (the "1933 Act") or which would render
the disposition of any Mortgage Loans a violation of Section 5 of the 1933
Act
or require registration pursuant thereto, nor will it act, nor has it authorized
or will it authorize any Person to act, in such manner with respect to the
Mortgage Loans;
| (ii) |
Broker/Agent.
|
The
Seller has not dealt with any broker or agent or anyone else who might be
entitled to a fee or commission in connection with this transaction other
than
the Purchaser;
|
(iii)
|
No
Conflicts.
|
Neither
the execution and delivery of this Agreement, the acquisition of the Mortgage
Loans by the Seller, the sale of the Mortgage Loans to the Purchaser or the
transactions contemplated hereby, nor the fulfillment of or compliance with
the
terms and conditions of this Agreement will conflict with or result in a
breach
of any of the terms, articles of incorporation or by-laws or any legal
restriction or any agreement or instrument to which the Seller is now a party
or
by which it is bound, or constitute a default or result in the violation
of any
law, rule, regulation, order, judgment or decree to which the Seller or its
property is subject, or impair the ability of the Purchaser to realize on
the
Mortgage Loans, or impair the value of the Mortgage Loans;
|
(iv)
|
Ability
to Perform.
|
The
Seller does not believe, nor does it have any reason or cause to believe,
that
it cannot perform each and every covenant contained in this Agreement. The
Seller is solvent and the sale of the Mortgage Loans will not cause the Seller
to become insolvent. The sale of the Mortgage Loans is not undertaken to
hinder,
delay or defraud any of the Seller’s creditors;
|
(v)
|
No
Litigation Pending.
|
There
is
no action, suit, proceeding or investigation pending or threatened against
the
Seller which, either in any one instance or in the aggregate, may result
in any
material adverse change in the business, operations, financial condition,
properties or assets of the Seller, or in any material impairment of the
right
or ability of the Seller to carry on its business substantially as now
conducted, or in any material liability on the part of the Seller, or which
would draw into question the validity of this Agreement or the Mortgage Loans
or
of any action taken or to be contemplated herein, or which would be likely
to
impair materially the ability of the Seller to perform under the terms of
this
Agreement;
|
(vi)
|
Selection
Process.
|
The
Mortgage Loans were selected from among the outstanding fixed rate and
adjustable rate one- to four-family mortgage loans in the Seller's mortgage
banking portfolio at the Closing Date as to which the representations and
warranties set forth in Section 6(b) could be made and such selection was
not
made in a manner so as to affect adversely the interests of the Purchaser;
and
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(vii)
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Sale
Treatment.
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The
Seller has determined that the disposition of the Mortgage Loans pursuant
to
this Agreement will be afforded sale treatment for accounting and tax purposes.
(b) With
respect to each Mortgage Loan:
(i)
Mortgage
Loans as Described.
The
information set forth in the respective Mortgage Loan Schedule and the
information contained on the Data File, delivered to the Purchaser is true
and
correct;
(ii) Payments
Current.
All
payments required to be made up to the related Cut-off Date for the Mortgage
Loan under the terms of the Mortgage Note have been made and credited. No
payment under any Mortgage Loan has been 30 days delinquent more than one
time
within twelve (12) months prior to the related Closing Date;
(iii) No
Outstanding Charges.
There
are
no defaults in complying with the terms of the Mortgages, and all taxes,
governmental assessments, insurance premiums, leasehold payments, water,
sewer
and municipal charges, which previously became due and owing have been paid,
or
an escrow of funds has been established in an amount sufficient to pay for
every
such item which remains unpaid and which has been assessed but is not yet
due
and payable. The Seller has not advanced funds, or induced, or solicited
directly or indirectly, the payment of any amount required under the Mortgage
Loan, except for interest accruing from the date of the Mortgage Note or
date of
disbursement of the Mortgage Loan proceeds, whichever is later, to the day
which
precedes by one month the Due Date of the first installment of principal
and
interest;
(iv) Original
Terms Unmodified.
The
terms
of the Mortgage Note and Mortgage have not been impaired, waived, altered
or
modified in any respect, except by a written instrument which has been recorded
or registered with the MERS System, if necessary, to protect the interests
of
the Purchaser and which has been delivered to the Custodian. The substance
of
any such waiver, alteration or modification has been approved by the issuer
of
any related PMI Policy and the title insurer, to the extent required by the
policy, and its terms are reflected on the related Mortgage Loan Schedule.
No
Mortgagor has been released, in whole or in part, except in connection with
an
assumption agreement approved by the issuer of any related PMI Policy and
the
title insurer, to the extent required by the policy, and which assumption
agreement is part of the Mortgage File delivered to the Custodian and the
terms
of which are reflected in the related Mortgage Loan Schedule;
(v) No
Defenses.
The
Mortgage Loan is not subject to any right of rescission, set-off, counterclaim
or defense, including without limitation the defense of usury, nor will the
operation of any of the terms of the Mortgage Note or the Mortgage, or the
exercise of any right thereunder, render either the Mortgage Note or the
Mortgage unenforceable, in whole or in part, or subject to any right of
rescission, set-off, counterclaim or defense, including without limitation
the
defense of usury, and no such right of rescission, set-off, counterclaim
or
defense has been asserted with respect thereto;
(vi) No
Satisfaction of Mortgage.
The
Mortgage has not been satisfied, canceled, subordinated or rescinded, in
whole
or in part, and the Mortgaged Property has not been released from the lien
of
the Mortgage, in whole or in part, nor has any instrument been executed that
would effect any such satisfaction, release, cancellation, subordination
or
rescission;
(vii) Validity
of Mortgage Documents.
The
Mortgage Note and the Mortgage and related documents are genuine, and each
is
the legal, valid and binding obligation of the maker thereof enforceable
in
accordance with its terms. All parties to the Mortgage Note and the Mortgage
had
legal capacity to enter into the Mortgage Loan and to execute and deliver
the
Mortgage Note and the Mortgage, and the Mortgage Note and the Mortgage have
been
duly and properly executed by such parties.
With
respect to each Cooperative Loan, the Mortgage Note, the Mortgage, the Pledge
Agreement, and related documents are genuine, and each is the legal, valid
and
binding obligation of the maker thereof enforceable in accordance with its
terms. All parties to the Mortgage Note, the Mortgage, the Pledge Agreement,
the
Proprietary Lease, the Stock Power, Recognition Agreement and the Assignment
of
Proprietary Lease had legal capacity to enter into the Mortgage Loan and
to
execute and deliver such documents, and such documents have been duly and
properly executed by such parties;
(viii) No
Fraud.
No
error,
omission, misrepresentation, negligence, fraud or similar occurrence with
respect to a Mortgage Loan has taken place on the part of the Seller, or
the
Mortgagor, or to the best of the Seller’s knowledge, any appraiser, any builder,
or any developer, or any other party involved in the origination of the Mortgage
Loan or in the application of any insurance in relation to such Mortgage
Loan;
(ix) Compliance
with Applicable Laws.
Any
and
all requirements of any federal, state or local law including, without
limitation, usury, truth-in-lending, real estate settlement procedures, consumer
credit protection, equal credit opportunity, disclosure or predatory and
abusive
lending laws applicable to the Mortgage Loan have been complied with. All
inspections, licenses and certificates required to be made or issued with
respect to all occupied portions of the Mortgaged Property and, with respect
to
the use and occupancy of the same, including, but not limited to, certificates
of occupancy and fire underwriting certificates, have been made or obtained
from
the appropriate authorities;
(x) Location
and Type of Mortgaged Property.
The
Mortgaged Property is located in the state identified in the related Mortgage
Loan Schedule and consists of a contiguous parcel of real property with a
detached single family residence erected thereon, or a two- to four-family
dwelling, or an individual condominium unit in a condominium project, or
an
individual unit in a planned unit development, or a townhouse, or a cooperative,
provided, however, that any condominium project or planned unit development
shall conform with the applicable ▇▇▇▇▇▇ ▇▇▇ or ▇▇▇▇▇▇▇ Mac requirements,
or the
Underwriting Guidelines, regarding such dwellings, and no residence or dwelling
is a mobile home. As of the respective appraisal date for each Mortgaged
Property, any Mortgaged Property being used for commercial purposes conforms
to
the Underwriting Guidelines and, to the best of the Seller’s knowledge, since
the date of such appraisal, no portion of the Mortgaged Property has been
used
for commercial purposes outside of the Underwriting Guidelines;
(xi) Valid
First Lien.
The
Mortgage is a valid, subsisting and enforceable first lien on the Mortgaged
Property, including all buildings on the Mortgaged Property and all
installations and mechanical, electrical, plumbing, heating and air conditioning
systems located in or annexed to such buildings, and all additions, alterations
and replacements made at any time with respect to the foregoing. The lien
of the
Mortgage is subject only to:
(1) the
lien
of current real property taxes and assessments not yet due and
payable;
(2) covenants,
conditions and restrictions, rights of way, easements and other matters of
the
public record as of the date of recording acceptable to mortgage lending
institutions generally and specifically referred to in the lender's title
insurance policy delivered to the originator of the Mortgage Loan and (i)
referred to or otherwise considered in the appraisal made for the originator
of
the Mortgage Loan and (ii) which do not adversely affect the Appraised Value
of
the Mortgaged Property set forth in such appraisal; and
(3) other
matters to which like properties are commonly subject which do not materially
interfere with the benefits of the security intended to be provided by the
mortgage or the use, enjoyment, value or marketability of the related Mortgaged
Property.
Any
security agreement, chattel mortgage or equivalent document related to and
delivered in connection with the Mortgage Loan establishes and creates a
valid,
subsisting and enforceable first lien and first priority security interest
on
the property described therein and the Seller has full right to sell and
assign
the same to the Purchaser.
With
respect to each Cooperative Loan, each Pledge Agreement creates a valid,
enforceable and subsisting first security interest in the Cooperative Shares
and
Proprietary Lease, subject only to (i) the lien of the related Cooperative
for
unpaid assessments representing the Mortgagor’s pro rata share of the
Cooperative’s payments for its blanket mortgage, current and future real
property taxes, insurance premiums, maintenance fees and other assessments
to
which like collateral is commonly subject and (ii) other matters to which
like
collateral is commonly subject which do not materially interfere with the
benefits of the security intended to be provided by the Pledge Agreement;
provided, however, that the appurtenant Proprietary Lease may be subordinated
or
otherwise subject to the lien of any mortgage on the Project;
(xii) Full
Disbursement of Proceeds.
The
proceeds of the Mortgage Loan have been fully disbursed, except for escrows
established or created due to seasonal weather conditions, and there is no
requirement for future advances thereunder. All costs, fees and expenses
incurred in making or closing the Mortgage Loan and the recording of the
Mortgage were paid, and the Mortgagor is not entitled to any refund of any
amounts paid or due under the Mortgage Note or Mortgage;
(xiii) Consolidation
of Future Advances.
Any
future advances made prior to the related Cut-off Date, have been consolidated
with the outstanding principal amount secured by the Mortgage, and the secured
principal amount, as consolidated, bears a single interest rate and single
repayment term reflected on the related Mortgage Loan Schedule. The lien
of the
Mortgage securing the consolidated principal amount is expressly insured
as
having first lien priority by a title insurance policy, an endorsement to
the
policy insuring the mortgagee’s consolidated interest or by other title evidence
acceptable to ▇▇▇▇▇▇ ▇▇▇ or ▇▇▇▇▇▇▇ Mac; the consolidated principal amount
does
not exceed the original principal amount of the Mortgage Loan; the Seller
shall
not make future advances after the related Cut-off Date;
(xiv) Ownership.
The
Seller is the sole owner of record and holder of the Mortgage Loans and the
related Mortgage Note and the Mortgage are not assigned or pledged, and the
Seller has good and marketable title thereto and has full right and authority
to
transfer and sell the Mortgage Loan to the Purchaser. The Seller is transferring
the Mortgage Loan free and clear of any and all encumbrances, liens, pledges,
equities, participation interests, claims, charges or security interests
of any
nature encumbering such Mortgage Loan;
(xv) Origination/Doing
Business.
The
Mortgage Loan was originated by a savings and loan association, a savings
bank,
a commercial bank, a credit union, an insurance company, or similar institution
that is supervised and examined by a federal or state authority or by a
mortgagee approved by the Secretary of Housing and Urban Development pursuant
to
Sections 203 and 211 of the National Housing Act. All parties which have
had any
interest in the Mortgage Loan, whether as mortgagee, assignee, pledgee or
otherwise, are (or, during the period in which they held and disposed of
such
interest, were) (1) in compliance with any and all applicable licensing
requirements of the laws of the state wherein the Mortgaged Property is located,
and (2) organized under the laws of such state, or (3) qualified to do business
in such state, or (4) federal savings and loan associations or national banks
having principal offices in such state, or (5) not doing business in such
state;
(xvi) LTV,
PMI Policy.
Each
Mortgage Loan has an LTV as specified on the related Mortgage Loan Schedule.
Except for Pledged Asset Mortgage Loans, if the LTV of the Mortgage Loan
was
greater than 80% at the time of origination, a portion of the unpaid principal
balance of the Mortgage Loan is and will be insured as to payment defaults
by a
PMI Policy. If the Mortgage Loan is insured by a PMI Policy for which the
Mortgagor pays all premiums, the coverage will remain in place until (i)
the LTV
decreases to 78% or (ii) the PMI Policy is otherwise terminated pursuant
to the
Homeowners Protection Act of 1998, 12 USC §4901, et seq. All provisions of such
PMI Policy or LPMI Policy have been and are being complied with, such policy
is
in full force and effect, and all premiums due thereunder have been paid.
The
Qualified Insurer has a claims paying ability acceptable to ▇▇▇▇▇▇ Mae or
▇▇▇▇▇▇▇ Mac. Any Mortgage Loan subject to a PMI Policy or LPMI Policy obligates
the Mortgagor or the Seller to maintain the PMI Policy or LPMI Policy and
to pay
all premiums and charges in connection therewith. The Mortgage Interest Rate
for
the Mortgage Loan as set forth on the related Mortgage Loan Schedule is net
of
any such insurance premium;
(xvii) Title
Insurance.
The
Mortgage Loan is covered by an ALTA lender's title insurance policy (or in
the
case of any Mortgage Loan secured by a Mortgaged Property located in a
jurisdiction where such policies are generally not available, an opinion
of
counsel of the type customarily rendered in such jurisdiction in lieu of
title
insurance) or other generally acceptable form of policy of insurance acceptable
to ▇▇▇▇▇▇ ▇▇▇ or ▇▇▇▇▇▇▇ Mac, issued by a title insurer acceptable to ▇▇▇▇▇▇
Mae
or ▇▇▇▇▇▇▇ Mac and qualified to do business in the jurisdiction where the
Mortgaged Property is located, insuring the Seller, its successors and assigns,
as to the first priority lien of the Mortgage in the original principal amount
of the Mortgage Loan, subject only to the exceptions contained in clauses
(1),
(2) and (3) of subsection (xi) of this Section 6(b), and against any loss
by
reason of the invalidity or unenforceability of the lien resulting from the
provisions of the Mortgage providing for adjustment to the Mortgage Interest
Rate and Monthly Payment. Additionally, such lender’s title insurance policy
includes no exceptions regarding ingress, egress or encroachments that impact
the value or the marketability of the Mortgaged Property. The Seller is the
sole
insured of such lender's title insurance policy, and such lender's title
insurance policy is in full force and effect and will be in force and effect
upon the consummation of the transactions contemplated by this Agreement.
No
claims have been made under such lender's title insurance policy, and no
prior
holder of the Mortgage, including the Seller, has done, by act or omission,
anything which would impair the coverage of such lender's title insurance
policy;
(xviii) No
Defaults.
There
is
no default, breach, violation or event of acceleration existing under the
Mortgage or the Mortgage Note and no event which, with the passage of time
or
with notice and the expiration of any grace or cure period, would constitute
a
default, breach, violation or event of acceleration, and neither the Seller
nor
its predecessors have waived any default, breach, violation or event of
acceleration;
(xix) No
Mechanics' Liens.
There
are
no mechanics' or similar liens or claims which have been filed for work,
labor
or material (and no rights are outstanding that under the law could give
rise to
such liens) affecting the related Mortgaged Property which are or may be
liens
prior to, or equal or coordinate with, the lien of the related Mortgage which
are not insured against by the title insurance policy referenced in Paragraph
(q) above;
(xx) Location
of Improvements; No Encroachments.
Except
as
insured against by the title insurance policy referenced in subsection (xvii)
above, all improvements which were considered in determining the Appraised
Value
of the Mortgaged Property lay wholly within the boundaries and building
restriction lines of the Mortgaged Property and no improvements on adjoining
properties encroach upon the Mortgaged Property. No improvement located on
or
being part of the Mortgaged Property is in violation of any applicable zoning
law or regulation;
(xxi) Payment
Terms.
Except
with respect to the Interest Only Mortgage Loans, principal payments commenced
no more than 60 days after the funds were disbursed to the Mortgagor in
connection with the Mortgage Loan. The Mortgage Loans have an original term
to
maturity of not more than 30 years, with interest payable in arrears on the
first day of each month. As to each adjustable rate Mortgage Loan on each
applicable Adjustment Date, the Mortgage Interest Rate will be adjusted to
equal
the sum of the Index plus the applicable Gross Margin, rounded up or down
to the
nearest multiple of 0.125% indicated by the Mortgage Note; provided that
the
Mortgage Interest Rate will not increase or decrease by more than the Periodic
Interest Rate Cap on any Adjustment Date, and will in no event exceed the
maximum Mortgage Interest Rate or be lower than the minimum Mortgage Interest
Rate listed on the related Mortgage Loan Schedule for such Mortgage Loan.
As to
each adjustable rate Mortgage Loan that is not an Interest Only Mortgage
Loan,
each Mortgage Note requires a monthly payment which is sufficient, during
the
period prior to the first adjustment to the Mortgage Interest Rate, to fully
amortize the outstanding principal balance as of the first day of such period
over the then remaining term of such Mortgage Note and to pay interest at
the
related Mortgage Interest Rate. As to each adjustable rate Mortgage Loan,
if the
related Mortgage Interest Rate changes on an Adjustment Date or, with respect
to
an Interest Only Mortgage Loan, on an Adjustment Date following the related
interest only period, the then outstanding principal balance will be reamortized
over the remaining life of such Mortgage Loan. No Mortgage Loan contains
terms
or provisions which would result in negative amortization;
(xxii) Customary
Provisions.
The
Mortgage and related Mortgage Note contain customary and enforceable provisions
such as to render the rights and remedies of the holder thereof adequate
for the
realization against the Mortgaged Property of the benefits of the security
provided thereby, including, (1) in the case of a Mortgage designated as
a deed
of trust, by trustee's sale, and (2) otherwise by judicial foreclosure. There
is
no homestead or other exemption available to a Mortgagor which would interfere
with the right to sell the Mortgaged Property at a trustee's sale or the
right
to foreclose the Mortgage;
(xxiii) Occupancy
of the Mortgaged Property.
As
of the
date of origination,
the
Mortgaged Property was in good repair and was lawfully occupied under applicable
law;
(xxiv) No
Additional Collateral.
Except
in
the case of a Pledged Asset Mortgage Loan and as indicated on the related
Data
File, the Mortgage Note is not and has not been secured by any collateral,
pledged account or other security except the lien of the corresponding Mortgage
and the security interest of any applicable security agreement or chattel
mortgage referred to in subsection (xi) above;
(xxv) Deeds
of Trust.
In
the
event the Mortgage constitutes a deed of trust, a trustee, duly qualified
under
applicable law to serve as such, has been properly designated and currently
so
serves and is named in the Mortgage, and no fees or expenses are or will
become
payable by the Mortgagee to the trustee under the deed of trust, except in
connection with a trustee's sale after default by the Mortgagor;
(xxvi) Acceptable
Investment.
The
Seller has no knowledge of any circumstances or conditions with respect to
the
Mortgage Loan, the Mortgaged Property, the Mortgagor or the Mortgagor's credit
standing that can reasonably be expected to cause private institutional
investors to regard the Mortgage Loan as an unacceptable investment, cause
the
Mortgage Loan to become delinquent, or adversely affect the value or
marketability of the Mortgage Loan;
(xxvii) Transfer
of Mortgage Loans.
If
the
Mortgage Loan is not a MERS Mortgage Loan, the Assignment of Mortgage, upon
the
insertion of the name of the assignee and recording information, is in
recordable form and is acceptable for recording under the laws of the
jurisdiction in which the Mortgaged Property is located;
(xxviii) Mortgaged
Property Undamaged.
The
Mortgaged Property is undamaged by waste, fire, earthquake or earth movement,
windstorm, flood, tornado or other casualty so as to affect adversely the
value
of the Mortgaged Property as security for the Mortgage Loan or the use for
which
the premises were intended;
(xxix) Collection
Practices; Escrow Deposits.
The
origination, servicing and collection practices used with respect to the
Mortgage Loan have been in accordance with Accepted Servicing Practices,
and
have been in all material respects legal and proper. With respect to escrow
deposits and Escrow Payments, all such payments are in the possession of
the
Seller and there exist no deficiencies in connection therewith for which
customary arrangements for repayment thereof have not been made. All Escrow
Payments have been collected in full compliance with state and federal law.
No
escrow deposits or Escrow Payments or other charges or payments due the Seller
have been capitalized under the Mortgage Note;
(xxx) No
Condemnation.
There
is
no proceeding pending or to the best of the Seller’s knowledge threatened for
the total or partial condemnation of the related Mortgaged
Property;
(xxxi) The
Appraisal.
The
Servicing File include an appraisal, with the exception of any Time$aver®
Mortgage Loan (which at the original origination were on form 1004 or form
2055
with interior inspections), of the related Mortgaged Property. The appraisal
was
conducted by an appraiser who had no interest, direct or indirect, in the
Mortgaged Property or in any loan made on the security thereof; and whose
compensation is not affected by the approval or disapproval of the Mortgage
Loan, and the appraisal and the appraiser both satisfy the applicable
requirements of Title XI of the Financial Institution Reform, Recovery, and
Enforcement Act of 1989 and the regulations promulgated thereunder, all as
in
effect on the date the Mortgage Loan was originated;
(xxxii) Insurance.
The
Mortgaged Property securing each Mortgage Loan is insured by an insurer
acceptable to ▇▇▇▇▇▇ ▇▇▇ or ▇▇▇▇▇▇▇ Mac against loss by fire and such hazards
as
are covered under a standard extended coverage endorsement and such other
hazards as are customary in the area where the Mortgaged Property is located
pursuant to insurance policies conforming to the requirements of Section
4.10 of
the Servicing Agreement, in an amount which is at least equal to the lesser
of
(1) 100% of the insurable value, on a replacement cost basis, of the
improvements on the related Mortgaged Property, or (2) the
greater of (x) the outstanding principal balance of the Mortgage Loan or
(y) an
amount such that the proceeds of such insurance shall be sufficient to avoid
the
application to the Mortgagor or loss payee of any coinsurance clause under
the
policy.
If the
Mortgaged Property is a condominium unit, it is included under the coverage
afforded by a blanket policy for the project. If the improvements on the
Mortgaged Property are in an area identified in the Federal Register by the
Federal Emergency Management Agency as having special flood hazards, a flood
insurance policy meeting the requirements of the current guidelines of the
Federal Insurance Administration is in effect with a generally acceptable
insurance carrier, in an amount representing coverage not less than the least
of
(a) the outstanding principal balance of the Mortgage Loan, (b) the
full insurable value and (c) the maximum amount of insurance which was
available under the Flood Disaster Protection Act of 1973, as amended. All
individual insurance policies contain a standard mortgagee clause naming
the
Seller and its successors and assigns as mortgagee, and all premiums thereon
have been paid. The Mortgage obligates the Mortgagor thereunder to maintain
a
hazard insurance policy at the Mortgagor's cost and expense, and on the
Mortgagor's failure to do so, authorizes the holder of the Mortgage to obtain
and maintain such insurance at such Mortgagor's cost and expense, and to
seek
reimbursement therefor from the Mortgagor. The hazard insurance policy is
the
valid and binding obligation of the insurer, is in full force and effect,
and
will be in full force and effect and inure to the benefit of the Purchaser
upon
the consummation of the transactions contemplated by this Agreement. The
Seller
has not acted or failed to act so as to impair the coverage of any such
insurance policy or the validity, binding effect and enforceability
thereof;
(xxxiii) Servicemembers
Civil Relief Act.
The
Mortgagor has not notified the Seller, and the Seller has no knowledge of
any
relief requested or allowed to the Mortgagor under the Servicemembers Civil
Relief Act, as amended;
(xxxiv) No
Balloon Payments, Graduated Payments or Contingent Interests.
The
Mortgage Loan is not a graduated payment mortgage loan and the Mortgage Loan
does not have a shared appreciation or other contingent interest feature.
No
Mortgage Loan has a balloon payment feature;
(xxxv) No
Construction Loans.
No
Mortgage Loan was made in connection with (1) the construction or rehabilitation
of a Mortgage Property or (2) facilitating the trade-in or exchange of a
Mortgaged Property other than a construction-to-permanent loan which has
converted to a permanent Mortgage Loan;
(xxxvi) Underwriting.
Each
Mortgage Loan was underwritten in accordance with the Underwriting Guidelines
of
the Seller; and the Mortgage Note and Mortgage are on forms acceptable to
▇▇▇▇▇▇▇ Mac or ▇▇▇▇▇▇ ▇▇▇;
(xxxvii) Buydown
Mortgage Loans.
With
respect to each Mortgage Loan that is a Buydown Mortgage Loan:
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(1)
|
On
or before the date of origination of such Mortgage Loan, the Seller
and
the Mortgagor, or the Seller, the Mortgagor and the seller of the
Mortgaged Property or a third party entered into a Buydown Agreement.
The
Buydown Agreement provides that the seller of the Mortgaged Property
(or
third party) shall deliver to the Seller temporary Buydown Funds
in an
amount equal to the aggregate undiscounted amount of payments that,
when
added to the amount the Mortgagor on such Mortgage Loan is obligated
to
pay on each Due Date in accordance with the terms of the Buydown
Agreement, is equal to the full scheduled Monthly Payment due on
such
Mortgage Loan. The temporary Buydown Funds enable the Mortgagor
to qualify
for the Buydown Mortgage Loan. The effective interest rate of a
Buydown
Mortgage Loan if less than the interest rate set forth in the related
Mortgage Note will increase within the Buydown Period as provided
in the
related Buydown Agreement so that the effective interest rate will
be
equal to the interest rate as set forth in the related Mortgage
Note. The
Buydown Mortgage Loan satisfies the requirements of the Underwriting
Guidelines;
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|
(2)
|
The
Mortgage and Mortgage Note reflect the permanent payment terms
rather than
the payment terms of the Buydown Agreement. The Buydown Agreement
provides
for the payment by the Mortgagor of the full amount of the Monthly
Payment
on any Due Date that the Buydown Funds are available. The Buydown
Funds
were not used to reduce the original principal balance of the Mortgage
Loan or to increase the Appraised Value of the Mortgage Property
when
calculating the Loan-to-Value Ratios for purposes of the Agreement
and, if
the Buydown Funds were provided by the Seller and if required under
Underwriting Guidelines, the terms of the Buydown Agreement were
disclosed
to the appraiser of the Mortgaged Property;
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|
(3)
|
The
Buydown Funds may not be refunded to the Mortgagor unless the Mortgagor
makes a principal payment for the outstanding balance of the Mortgage
Loan; and
|
|
(4)
|
As
of the date of origination of the Mortgage Loan, the provisions
of the
related Buydown Agreement complied with the requirements of ▇▇▇▇▇▇
Mae or
▇▇▇▇▇▇▇ Mac regarding buydown
agreements;
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(xxxviii)
|
Cooperative
Loans.
|
With
respect to each Cooperative Loan:
|
(1)
|
The
Cooperative Shares are held by a person as a tenant-stockholder
in a
Cooperative. Each original UCC financing statement, continuation
statement
or other governmental filing or recordation necessary to create
or
preserve the perfection and priority of the first lien and security
interest in the Cooperative Loan and Proprietary Lease has been
timely and
properly made. Any security agreement, chattel mortgage or equivalent
document related to the Cooperative Loan and delivered to Purchaser
or its
designee establishes in Purchaser a valid and subsisting perfected
first
lien on and security interest in the Mortgaged Property described
therein,
and Purchaser has full right to sell and assign the
same;
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|
(2)
|
A
Cooperative Lien Search has been made by a company competent to
make the
same which company is acceptable to ▇▇▇▇▇▇ Mae or ▇▇▇▇▇▇▇ Mac and
qualified to do business in the jurisdiction where the Cooperative
is
located;
|
|
(3)
|
(i)
The term of the related Proprietary Lease is not less than the
terms of
the Cooperative Loan; (ii) there is no provision in any Proprietary
Lease
which requires the Mortgagor to offer for sale the Cooperative
Shares
owned by such Mortgagor first to the Cooperative; (iii) there is
no
prohibition in any Proprietary Lease against pledging the Cooperative
Shares or assigning the Proprietary Lease; (iv) the Cooperative
has been
created and exists in full compliance with the requirements for
residential cooperatives in the jurisdiction in which the Project
is
located and qualifies as a cooperative housing corporation under
Section
210 of the Code; (v) the Recognition Agreement is on a form published
by
Aztech Document Services, Inc. or includes similar provisions;
and (vi)
the Cooperative has good and marketable title to the Project, and
owns the
Project either in fee simple; such title is free and clear of any
adverse
liens or encumbrances, except the lien of any blanket
mortgage;
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(4)
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The
Seller has the right under the terms of the Mortgage Note, Pledge
Agreement and Recognition Agreement to pay any maintenance charges
or
assessments owed by the Mortgagor; and
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(5)
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Each
Stock Power (i) has all signatures guaranteed or (ii) if all signatures
are not guaranteed, then such Cooperative Shares will be transferred
by
the stock transfer agent of the Cooperative if the Seller undertakes
to
convert the ownership of the collateral securing the related Cooperative
Loan.;
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(xxxix) HOEPA.
No
Mortgage Loan is a Covered Loan or a High Cost Loan (in the case of state
or
local law, as determined without giving effect to any available federal
preemption, other than any exemptions specifically provided for in the relevant
state or local law);
(xl) Anti-Money
Laundering Laws.
The
Seller has complied with all applicable anti-money laundering laws and
regulations, (the "Anti-Money Laundering Laws"), and has established an
anti-money laundering compliance program as required by the Anti-Money
Laundering Laws;
(xli) Bankruptcy.
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No
Mortgagor was a debtor in any state or federal bankruptcy or insolvency
proceeding as of the date the Mortgage Loan was closed and the
proceeds of
the Mortgage Loan were distributed;
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(xlii) Due
on
Sale.
The
Mortgage or Mortgage Note contains an enforceable provision, to the extent
not
prohibited by federal law, for the acceleration of the payment of the unpaid
principal balance of the Mortgage Loan in the event that the Mortgaged Property
is sold or transferred without the prior written consent of the Mortgagee
thereunder, provided that, with respect to Mortgage Notes which bear an
adjustable rate of interest, such provision shall not be enforceable if the
Mortgagor causes to be submitted to the Seller to evaluate the intended
transferee as if a new Mortgage Loan were being made to such transferee,
and the
Seller reasonably determines that the security will not be impaired by such
Mortgage Loan assumption and that the risk of breach of any covenant or
agreement in such Mortgage is acceptable to the Purchaser;
(xliii) Credit
Reporting.
With
respect to each Mortgage Loan, the Seller has furnished complete information
on
the related borrower credit files to Equifax, Experian and Trans Union Credit
Information Seller, in accordance with the Fair Credit Reporting Act and
its
implementing regulations;
(xliv) Delivery
of Mortgage Files.
The
Mortgage Loan Documents required to be delivered by the Seller have been
delivered to the Custodian. The Seller is in possession of a complete, true
and
accurate Mortgage File, except for such documents the originals of which
have
been delivered to the Custodian or for such documents where the originals
of
which have been sent for recordation;
(xlv) Single
Premium Credit Life Insurance.
No
Mortgagor has been offered or required to purchase single premium credit
insurance in connection with the origination of the Mortgage Loan;
(xlvi) Payment
in Full.
The
Seller had no knowledge, at the time of origination of the Mortgage Loan,
of any
fact that should have led it to expect that such Mortgage Loan would not
be paid
in full when due;
(xlvii) MERS
Mortgage Loans.
With
respect to each MERS Mortgage Loan, a MIN has been assigned to the Mortgage
Loan, the MIN appears on the Mortgage or related Assignment of Mortgage to
MERS,
the Mortgage or the related Assignment of Mortgage to MERS has been duly
and
properly recorded on MERS, and the transfer to the Purchaser has been properly
reflected in the MERS System pursuant to the Purchaser’s registration
instructions;
(xlviii) Leasehold
Estates.
No
Mortgage Loan is leasehold Mortgage Loan;
and
(xlix) Mixed-Use
Property.
No
Mortgaged Property shall be used solely for commercial purposes. With respect
to
any Mortgaged Property that is a mixed-use property (i) the Mortgaged Property
is a single family dwelling, (ii) any commercial use of the Mortgaged Property
represents a legal, permissible use of the Mortgaged Property under federal,
state and local laws and ordinances; (iii) the Mortgagor is both the owner
and
the operator of the business conducted on the Mortgaged Property; and (iv)
income from the business use of the Mortgaged Property was not taken into
account in determining the Appraised Value of the Mortgaged Property. The
Mortgaged Property with respect to each mixed-use property is,
to the
best of Company’s knowledge,
in
material compliance with all applicable environmental laws pertaining to
environmental hazards and neither the Company nor, to the Company’s knowledge,
the related Mortgagor, has received any notice of any violation or potential
violation of such law.
SECTION
7. Representation,
Warranties and Agreement of Purchaser.
The
Purchaser, without conceding that the Mortgage Loans are securities, hereby
makes the following representations, warranties and agreements, which shall
have
been deemed to have been made as of the related Closing Date.
a) the
Purchaser understands that the Mortgage Loans have not been registered under
the
1933 Act or the securities laws of any state;
b) except
as
contemplated under this Agreement or the Servicing Agreement, the Purchaser
is
acquiring the Mortgage Loans for its own account only and not for any other
Person;
c) the
Purchaser considers itself a substantial, sophisticated institutional investor
having such knowledge and experience in financial and business matters that
it
is capable of evaluating the merits and risks of investment in the Mortgage
Loans;
d) the
Purchaser has been furnished with all information regarding the Mortgage
Loans
which it has requested from the Seller; and
e) neither
the Purchaser nor anyone acting on its behalf offered, transferred, pledged,
sold or otherwise disposed of any Mortgage Loan, any interest in any Mortgage
Loan or any other similar security to, or solicited any offer to buy or accept
a
transfer, pledge or other disposition of any Mortgage Loan, any interest
in any
Mortgage Loan or any other similar security from, or otherwise approached
or
negotiated with respect to any Mortgage Loan, any interest in any Mortgage
Loan
or any other similar security with, any Person in any manner, or made any
general solicitation by means of general advertising or in any other manner,
or
taken any other action which would constitute a distribution of the Mortgage
Loans under the 1933 Act or which would render the disposition of any Mortgage
Loan a violation of Section 5 of the 1933 Act or require registration pursuant
thereto, nor will it act, nor has it authorized or will it authorize any
Person
to act, in such manner with respect to the Mortgage Loans.
SECTION
8. Closing.
The
closing for the purchase and sale of each Loan Package, shall take place
on the
related Closing Date. At the Purchaser's option, the closing shall be either:
by
telephone, confirmed by letter or wire as the parties shall agree; or conducted
in person, at such place as the parties shall agree.
The
closing shall be subject to each of the following conditions:
a) all
of
the representations and warranties of the Seller under this Agreement and
under
the Servicing Agreement shall be true and correct as of such related Closing
Date and no event shall have occurred which, with notice or the passage of
time,
would constitute a default under this Agreement or an Event of Default under
the
Servicing Agreement;
b) the
Purchaser shall have received, or the Purchaser's attorneys shall have received
in escrow, all closing documents as specified in Section 9 of this Agreement,
in
such forms as are agreed upon and acceptable to the Purchaser, duly executed
by
all signatories other than the Purchaser as required pursuant to the respective
terms thereof;
c) the
Seller shall have delivered to the Custodian under this Agreement or the
Servicing Agreement all documents required pursuant to the related Custodial
Agreement; and
d) all
other
terms and conditions of this Agreement and the Servicing Agreement shall
have
been complied with.
Subject
to the foregoing conditions, the Purchaser shall pay to the Seller on such
related Closing Date the related Purchase Price, plus accrued interest pursuant
to Section 4 of this Agreement, by wire transfer of immediately available
funds
to the account designated by the Seller.
SECTION
9. Closing
Documents.
With
respect to the initial closing date, the closing documents shall consist
of
fully executed originals of the following documents:
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1.
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the
Servicing Agreement, dated as of November 1, 2005, in two
counterparts;
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2.
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this
Agreement in two counterparts;
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3.
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the
Custodial Agreement;
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4.
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the
Mortgage Loan Schedule for the related Loan Package, one copy of
each to
be attached to each counterpart of the related Assignment and Conveyance
Agreement, to each counterpart of the Custodial Agreement, as the
Mortgage
Loan Schedules thereto;
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5.
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a
Receipt and Certification, as required under the Custodial Agreement;
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6.
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an
Opinion of Counsel of the Seller, in the form of Exhibit C hereto;
and
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7.
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an
Assignment and Conveyance Agreement for the related Mortgage
Loans.
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On
each
subsequent Closing Date, the following documents:
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1.
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the
Mortgage Loan Schedule for the related Loan Package;
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2.
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an
Assignment and Conveyance Agreement for the related Loan Package;
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3.
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an
Initial Certification, as required under the Custodial Agreement;
and
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4.
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upon
the reasonable request of the Purchaser, an Opinion of Counsel
of the
Seller, in the form of Exhibit C
hereto.
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SECTION
10. Costs.
The
Purchaser shall pay any commissions due its salesmen, the legal fees and
expenses of its attorneys and the costs and expenses associated with the
Custodian. The Seller shall be responsible for reasonable costs and expenses
associated with any preparation and recording of the initial Assignments
of
Mortgage. All other costs and expenses incurred in connection with the transfer
and delivery of the Mortgage Loans, including fees for title policy endorsements
and continuations and the Seller's attorney fees, shall be paid by the
Seller.
SECTION
11. Servicing.
The
Mortgage Loans shall be serviced by the Seller in accordance with the terms
of
the Servicing Agreement. The Seller shall be entitled to servicing fees
calculated as provided therein, at the Servicing Fee Rate.
SECTION
12. Financial
Statements.
The
Seller understands that in connection with the Purchaser's marketing of the
Mortgage Loans, the Purchaser may request from Seller and make available
to
prospective purchasers a Consolidated Statement of Operations of the Seller
for
the most recently completed two (2) fiscal years respecting which such a
statement is available, as well as a Consolidated Statement of Condition
at the
end of the last two (2) fiscal years covered by such Consolidated Statement
of
Operations. The Purchaser, upon request, shall also make available any
comparable interim statements to the extent any such statements have been
prepared by the Seller in a format intended or otherwise suitable for the
public
at large. The Seller, upon request, agrees to furnish promptly to the Purchaser
copies of the statements specified above. The Seller shall also make available
information on its servicing performance with respect to loans in its own
portfolio and loans serviced for others (if any), including foreclosure and
delinquency ratios.
The
Seller also agrees to allow access to a knowledgeable (as shall be determined
by
the Seller) financial or accounting officer for the purpose of answering
questions asked by any prospective purchaser regarding recent developments
affecting the Seller or the financial statements of the Seller.
SECTION
13. Mandatory
Delivery.
The sale
and delivery on each Closing Date of the related Mortgage Loans described
on the
respective Mortgage Loan Schedules is mandatory, it being specifically
understood and agreed that each Mortgage Loan is unique and identifiable
on such
Closing Date and that an award of money damages would be insufficient to
compensate the Purchaser for the losses and damages incurred by the Purchaser
(including damages to prospective purchasers of the Mortgage Loans) in the
event
of the Seller's failure to deliver the Mortgage Loans on or before such Closing
Date. All rights and remedies of the Purchaser under this Agreement are distinct
from, and cumulative with, any other rights or remedies under this Agreement
or
afforded by law or equity and all such rights and remedies may be exercised
concurrently, independently or successively.
SECTION
14. Notices.
All
demands, notices and communications hereunder shall be in writing and shall
be
deemed to have been duly given if mailed, by registered or certified mail,
return receipt requested, or, if by other means, when received by the other
party at the address shown on the first page hereof, or such other address
as
may hereafter be furnished to the other party by like notice. Any such demand,
notice of communication hereunder shall be deemed to have been received on
the
date delivered to or received at the premises of the addressee (as evidenced,
in
the case of registered or certified mail, by the date noted on the return
receipt).
SECTION
15. Severability
Clause.
Any
part, provision, representation or warranty of this Agreement which is
prohibited or which is held to be void or unenforceable shall be ineffective
to
the extent of such prohibition or unenforceability without invalidating the
remaining provisions hereof. Any part, provision, representation or warranty
of
this Agreement which is prohibited or unenforceable or is held to be void
or
unenforceable in any jurisdiction shall be ineffective, as to such jurisdiction,
to the extent of such prohibition or unenforceability without invalidating
the
remaining provisions hereof, and any such prohibition or unenforceability
in any
jurisdiction as to any Mortgage Loan shall not invalidate or render
unenforceable such provision in any other jurisdiction. To the extent permitted
by applicable law, the parties hereto waive any provision of law which prohibits
or renders void or unenforceable any provision hereof. If the invalidity
of any
part, provision, representation or warranty of this Agreement shall deprive
any
party of the economic benefit intended to be conferred by this Agreement,
the
parties shall negotiate, in good-faith, to develop a structure the economic
effect of which is as close as possible to the economic effect of this Agreement
without regard to such invalidity.
SECTION
16. Counterparts.
This
Agreement may be executed simultaneously in any number of counterparts. Each
counterpart shall be deemed to be an original, and all such counterparts
shall
constitute one and the same instrument.
SECTION
17. Place
of Delivery and Governing Law.
This
Agreement shall be deemed in effect when a fully executed counterpart thereof
is
received by the Purchaser in the State of New York and shall be deemed to
have
been made in the State of New York. The 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
the
laws of the State of New York, except to the extent preempted by Federal
Law.
SECTION
18. Further
Agreements.
The
Purchaser and the Seller each agree to execute and deliver to the other such
additional documents, instruments or agreements as may be necessary or
appropriate to effectuate the purposes of this Agreement.
Without
limiting the generality of the foregoing, the Seller shall reasonably cooperate
with the Purchaser in connection with the initial resales of the Mortgage
Loans
by the Purchaser. In that connection, the Seller shall provide to the Purchaser:
(i) any and all information and appropriate verification of information,
whether
through letters of its auditors and counsel or otherwise, as the Purchaser
shall
reasonably request, and (ii) such additional representations, warranties,
covenants, opinions of counsel, letters from auditors and certificates of
public
officials or officers of the Seller as are reasonably believed necessary
by the
Purchaser in connection with such resales. Prior to incurring any out-of-pocket
expenses pursuant to this paragraph, the Seller shall notify the Purchaser
in
writing of the estimated amount of such expense. The Purchaser shall reimburse
the Seller for any such expense following its receipt of appropriate details
thereof.
SECTION
19. Intention
of the Parties.
It is
the intention of the parties that the Purchaser is purchasing, and the Seller
is
selling, an undivided 100% ownership interest in the Mortgage Loans and not
a
debt instrument of the Seller or another security. Accordingly, the parties
hereto each intend to treat the transaction for Federal income tax purposes
as a
sale by the Seller, and a purchase by the Purchaser, of the Mortgage Loans.
The
Purchaser shall have the right to review the Mortgage Loans and the related
Mortgage Files and Servicing Files to determine the characteristics of the
Mortgage Loans which shall affect the Federal income tax consequences of
owning
the Mortgage Loans and the Seller shall cooperate with all reasonable requests
made by the Purchaser in the course of such review.
SECTION
20. Successors
and Assigns; Assignment of Purchase Agreement.
This
Agreement shall bind and inure to the benefit of and be enforceable by the
Seller and the Purchaser and the respective successors and assigns of the
Seller
and the Purchaser. This Agreement shall not be assigned, pledged or hypothecated
by the Seller to a third party without the consent of the
Purchaser.
SECTION
21. Waivers;
Other Agreements.
No term
or provision of this Agreement may be waived or modified unless such waiver
or
modification is in writing and signed by the party against whom such waiver
or
modification is sought to be enforced.
SECTION
22. Exhibits.
The
exhibits to this Agreement are hereby incorporated and made a part hereof
and
are an integral part of this Agreement.
SECTION
23. General
Interpretive Principles.
For
purposes of this Agreement, except as otherwise expressly provided or unless
the
context otherwise requires:
a) the
terms
defined in this Agreement have the meanings assigned to them in this Agreement
and include the plural as well as the singular, and the use of any gender
herein
shall be deemed to include the other gender;
b) accounting
terms not otherwise defined herein have the meanings assigned to them in
accordance with generally accepted accounting principles;
c) references
herein to "Articles", "Sections", "Subsections", "Paragraphs", and other
subdivisions without reference to a document are to designated Articles,
Sections, Subsections, Paragraphs and other subdivisions of this
Agreement;
d) a
reference to a Subsection without further reference to a Section is a reference
to such Subsection as contained in the same Section in which the reference
appears, and this rule shall also apply to Paragraphs and other
subdivisions;
e) the
words
"herein", "hereof", "hereunder" and other words of similar import refer to
this
Agreement as a whole and not to any particular provision; and
f) the
term
"include" or "including" shall mean without limitation by reason of
enumeration.
SECTION
24. Reproduction
of Documents.
This
Agreement and all documents relating thereto, including, without limitation,
(a)
consents, waivers and modifications which may hereafter be executed, (b)
documents received by any party at the closing, and (c) financial statements,
certificates and other information previously or hereafter furnished, may
be
reproduced by any photographic, photostatic, microfilm, micro-card, miniature
photographic or other similar process. The parties agree that any such
reproduction shall be admissible in evidence as the original itself in any
judicial or administrative proceeding, whether or not the original is in
existence and whether or not such reproduction was made by a party in the
regular course of business, and that any enlargement, facsimile or further
reproduction of such reproduction shall likewise be admissible in
evidence.
[Signatures
Follow]
IN
WITNESS WHEREOF, the Seller and the Purchaser have caused their names to
be
signed hereto by their respective officers thereunto duly authorized as of
the
date first above written.
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CITIGROUP
GLOBAL MARKETS
REALTY
CORP.
(Purchaser)
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By:
|
/s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇ |
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Name:
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▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇ |
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Title:
|
Authorized Agent |
|
▇▇▇▇▇
FARGO BANK, N.A.
(Seller)
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By:
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/s/ ▇▇▇▇ ▇▇▇▇▇▇ |
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Name:
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▇▇▇▇ ▇▇▇▇▇▇ |
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Title:
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Assistant Vice President |
EXHIBIT
A
FORM
OF
ASSIGNMENT AND CONVEYANCE AGREEMENT
On
this
_____ day of __________ 20___, for
good
and valuable consideration, the receipt and sufficiency of which is hereby
acknowledged, ▇▇▇▇▇ Fargo Bank, N.A.
(the
“Seller”)
as the
Seller under that certain Master Mortgage Loan Purchase Agreement, (“Purchase
Agreement”) and as the Servicer under that certain Flow Servicing Agreement (the
“Servicing Agreement”) each dated as of November 1, 2005, (collectively, the
“Agreements”)
does
hereby sell, transfer, assign, set over and convey to Citigroup Global Markets
Realty Corp. as the Purchaser (the “Purchaser”)
under
the Purchase Agreement, and Purchaser hereby accepts from Seller, without
recourse, but subject to the terms of the Agreements, all right, title and
interest of, in and to each of the Mortgage Loans listed on the related Mortgage
Loan Schedule attached hereto as Schedule 1, together with the Mortgage Files
and all rights and obligations arising under the documents contained therein.
Pursuant to Section 5 of the Purchase Agreement or Section 2.03 of the Servicing
Agreement, the Seller has delivered to the Custodian the documents required
to be delivered under the Agreements
for each
Mortgage Loan to be purchased. The Servicing Files retained by the Seller
pursuant to Section 2.01 of the Servicing Agreement shall be appropriately
marked to clearly reflect the sale of the related Mortgage Loans to the
Purchaser.
Capitalized
terms used herein and not otherwise defined shall have the meanings set forth
in
the Agreements.
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REALTY
CORP.
Purchaser
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▇▇▇▇▇
FARGO BANK, N.A.
Seller
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By:
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By:
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|||
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Name:
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Name:
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Title:
|
Title:
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Schedule
I
Mortgage
Loan Schedule
EXHIBIT
B
CONTENTS
OF DATA FILE
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(1)
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the
street address of the Mortgaged Property including the city, state,
county
and zip code;
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(2)
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a
code indicating whether the Mortgaged Property is a single family
residence, a 2-4 family dwelling, a PUD, a cooperative, a townhouse,
manufactured housing or a unit in a condominium
project;
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(3)
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the
Mortgage Interest Rate as of the Cut-off Date;
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(4)
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the
current Monthly Payment;
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(5)
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loan
term, number of months;
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(6)
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the
stated maturity date;
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(7)
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the
Stated Principal Balance of the Mortgage Loan as of the close of
business
on the Cut-off Date, after deduction of payments of principal due
on or
before the Cut-off Date;
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(8)
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the
Loan-to-Value Ratio;
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(9)
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a
code indicating whether the Mortgage Loan is an Interest Only Mortgage
Loan;
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(10)
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a
code indicating whether the Mortgage Loan is a temporary buydown
(Y or
N);
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(11)
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the
Servicing Fee Rate;
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(12)
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a
code indicating whether the Mortgage Loan is covered by lender-paid
mortgage insurance (Y or N);
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(13)
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a
code indicating whether the Mortgage Loan is a Time$aver® Mortgage Loan (Y
or N);
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(14)
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the
Mortgagor's first and last name;
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(15)
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a
code indicating whether the Mortgaged Property is owner-occupied;
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(16)
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the
remaining months to maturity from the Cut-off Date, based on the
original
amortization schedule;
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(17)
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the
date on which the first Monthly Payment was due on the Mortgage
Loan;
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(18)
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the
last Due Date on which a Monthly Payment was actually applied to
the
actual principal balance;
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(19)
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the
original principal amount of the Mortgage Loan;
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(20)
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a
code indicating the purpose of the loan (i.e., purchase, financing,
rate/term refinancing, cash-out refinancing);
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(21)
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the
Mortgage Interest Rate at origination;
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(22)
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the
date on which the first Monthly Payment was due on the Mortgage
Loan;
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(23)
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a
code indicating the documentation style (i.e., full (providing
two years
employment verification - 2 years W-2’s and current pay stub or 2 years
1040’s for self employed borrowers), alternative or
reduced);
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(24)
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a
code indicating if the Mortgage Loan is subject to a PMI
Policy;
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(25)
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the
Appraised Value of the Mortgage Property;
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(26)
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the
sale price of the Mortgaged Property, if applicable;
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(27)
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the
Mortgagor’s Underwriting FICO Score;
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(28)
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term
of prepayment penalty in years;
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(29)
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a
code indicating the product type;
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(30)
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a
code indicating the credit grade of the Mortgage Loan;
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(31)
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the
unpaid balance of the Mortgage Loan as of the close of business
on the
Cut-off Date, after deduction of all payments of
principal;
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(32)
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the
Note date of the Mortgage Loan;
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(33)
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the
mortgage insurance certificate number and percentage of coverage,
if
applicable;
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(34)
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the
Mortgagor’s date of birth;
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(35)
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the
MIN Number for each Mortgage Loan, if applicable;
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(36)
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employer
name;
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(37)
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subsidy
program code;
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(38)
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servicer
name;
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(39)
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the
combined Loan-to-Value Ratio;
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(40)
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the
total Loan-to-Value Ratio;
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(41)
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whether
the Mortgage Loan is convertible (Y or N);
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(42)
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a
code indicating whether the Mortgage Loan is a relocation loan
(Y or
N);
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(43)
|
a
code indicating whether the Mortgage Loan is a leasehold loan (Y
or
N);
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(44)
|
a
code indicating whether the Mortgage Loan is an Alt A loan (Y or
N);
|
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(45)
|
a
code indicating whether the Mortgage Loan is a no ratio loan (Y
or N);
|
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(46)
|
a
code indicating whether the Mortgage Loan is a Pledged Asset Mortgage
Loan
(Y or N);
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(47)
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effective
LTV percentage for Pledged Asset Mortgage Loans;
|
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(48)
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citizenship
type code;
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(49)
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a
code indicating whether the Mortgage Loan is a conforming or
non-conforming loan, based on the original loan
balance;
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(50)
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the
name of the client for which the Mortgage Loan was
originated;
|
|
(51)
|
the
program code;
|
|
(52)
|
the
loan sub doc code;
|
|
(53)
|
the
remaining interest-only term for Interest Only Mortgage
Loans;
|
The
Company shall provide the following
For
the Home Mortgage Disclosure Act (HMDA):
|
(54)
|
the
Mortgagor’s and co-Mortgagor’s (if applicable)
ethnicity;
|
|
(55)
|
the
Mortgagor’s and co-Mortgagor’s (if applicable) race;
|
|
(56)
|
lien
status;
|
|
(57)
|
for
cash-out refinance loans, the cash purpose;
|
|
(58)
|
the
Mortgagor’s and co-Mortgagor’s (if applicable) gender;
|
|
(59)
|
the
Mortgagor’s and co-Mortgagor’s (if applicable) social security
numbers;
|
|
(60)
|
the
number of units for the property;
|
|
(61)
|
the
year in which the property was built;
|
|
(62)
|
the
qualifying monthly income of the Mortgagor;
|
|
(63)
|
the
number of bedrooms contained in the property;
|
|
(64)
|
a
code indicating first time buyer (Y or N);
|
|
(65)
|
the
total rental income, if any;
|
The
Seller shall provide the following
for
the adjustable rate Mortgage Loans (if applicable):
|
(66)
|
the
maximum Mortgage Interest Rate under the terms of the Mortgage
Note;
|
|
(67)
|
the
Periodic Interest Rate Cap;
|
|
(68)
|
the
Index;
|
|
(69)
|
the
next Adjustment Date;
|
|
(70)
|
the
Gross Margin; and
|
|
(71)
|
the
lifetime interest rate cap.
|
EXHIBIT
C
FORM
OF
OPINION OF COUNSEL
@
@
@
@
|
Re:
|
Mortgage
Loan Sale by ▇▇▇▇▇ Fargo Bank, N.A. (the “Seller”) to Citigroup Global
Markets Realty Corp. (the “Purchaser”) of fixed and adjustable rate, first
and second lien mortgage loans (the “Mortgage Loans”) pursuant to that
certain Master Mortgage Loan Purchase Agreement, dated as of November
1,
2005.
|
Dear
Sir/Madam:
I
am @ of
▇▇▇▇▇ Fargo Bank, N.A. and have acted as counsel to ▇▇▇▇▇ Fargo Bank, N.A.
(the
“Seller”), with respect to certain matters in connection with the sale by the
Seller of Mortgage Loans pursuant to that certain Master Mortgage Loan Purchase
Agreement by and between the Seller and Citigroup Global Markets Realty Corp.
(the “Purchaser”), dated as of November 1, 2005, (the “MLPA”), which sale is in
the form of whole Mortgage Loans. Such Mortgage Loans shall be serviced by
the
Seller in accordance with the Flow Servicing Agreement by and between the
Seller, as servicer, and the Purchaser, as owner, dated as of November 1,
2005
(the “Servicing Agreement” and together with the MLPA, the “Agreements”).
Capitalized terms not otherwise defined herein have the meanings set forth
in
the Agreements.
I
have
examined the following documents:
| 1. |
the
Master Mortgage Loan Purchase
Agreement;
|
| 2. |
the
Flow Servicing Agreement;
|
| 3. |
the
Custodial Agreement;
|
| 4. |
the
form of endorsement of the Mortgage Notes;
and
|
| 5. |
such
other documents, records and papers as I have deemed necessary
and
relevant as a basis for this
opinion.
|
To
the
extent I have deemed necessary and proper, I have relied upon the
representations and warranties of the Seller contained in the Agreements.
I have
assumed the authenticity of all documents submitted to me as originals, the
genuineness of all signatures, the legal capacity of natural persons and
the
conformity to the originals of all documents.
Based
upon the foregoing, it is my opinion that;
|
1.
|
The
Seller is a national banking association duly organized, validly
existing
and in good standing under the laws of the United States.
|
|
2.
|
The
Seller has the power to engage in the transactions contemplated
by the
Agreements, the Custodial Agreement and all requisite power, authority
and
legal right to execute and deliver the Agreements, the Custodial
Agreement
and the Mortgage Loans, and to perform and observe the terms and
conditions of such instruments.
|
|
3.
|
Each
person who, as an officer or attorney-in-fact of the Seller, signed
(a)
the Agreements, each dated as of November 1, 2005, by and between
the
Seller and the Purchaser, and (b) any other document delivered
prior
hereto or on the date hereof in connection with the sale and servicing
of
the Mortgage Loans in accordance with the Agreements was, at the
respective times of such signing and delivery, and is, as of the
date
hereof, duly elected or appointed, qualified and acting as such
officer or
attorney-in-fact, and the signatures of such persons appearing
on such
documents are their genuine signatures.
|
|
4.
|
Each
of the Agreements, the Custodial Agreement, and the Mortgage Loans,
has
been duly authorized, executed and delivered by the Seller and
is a legal,
valid and binding agreement enforceable in accordance with its
terms,
subject to the effect of insolvency, liquidation, conservatorship
and
other similar laws administered by the Federal Deposit Insurance
Corporation affecting the enforcement of contract obligations of
insured
banks and subject to the application of the rules of equity, including
those respecting the availability of specific performance, none
of which
will materially interfere with the realization of the benefits
provided
thereunder or with the Purchaser’s ownership of the Mortgage
Loans.
|
|
5.
|
The
Seller has been duly authorized to allow any of its officers to
execute
any and all documents by original or facsimile signature in order
to
complete the transactions contemplated by the Agreements and the
Custodial
Agreement and in order to execute the endorsements to the Mortgage
Notes
and the assignments of the Mortgages, and the original or facsimile
signature of the officer at the Seller executing the Agreements,
the
Custodial Agreement, the endorsements to the Mortgage Notes and
the
assignments of the Mortgages represents the legal and valid signature
of
said officer of the Seller.
|
|
6.
|
Either
(i) no consent, approval, authorization or order of any court or
governmental agency or body is required for the execution, delivery
and
performance by the Seller of or compliance by the Seller with the
Agreements, the Custodial Agreement or the sale and delivery of
the
Mortgage Loans or the consummation of the transactions contemplated
by the
Agreements and the Custodial Agreement; or (ii) any required consent,
approval, authorization or order has been obtained by the Seller.
|
|
7.
|
Neither
the consummation of the transactions contemplated by, nor the fulfillment
of the terms of the Agreements and the Custodial Agreement, will
conflict
with or results in or will result in a breach of or constitutes
or will
constitute a default under the charter or by-laws of the Seller,
the terms
of any indenture or other agreement or instrument to which the
Seller is a
party or by which it is bound or to which it is subject, or violates
any
statute or order, rule, regulations, writ, injunction or decree
of any
court, governmental authority or regulatory body to which the Seller
is
subject or by which it is bound.
|
|
8.
|
There
is no action, suit, proceeding or investigation pending or, to
the best of
my knowledge, threatened against the Seller which, in my opinion,
either
in any one instance or in the aggregate, may result in any material
adverse change in the business, operations, financial condition,
properties or assets of the Seller or in any material impairment
of the
right or ability of the Seller to carry on its business substantially
as
now conducted or in any material liability on the part of the Seller
or
which would draw into question the validity of the Agreements,
and the
Custodial Agreement, or of any action taken or to be taken in connection
with the transactions contemplated thereby, or which would be likely
to
impair materially the ability of the Seller to perform under the
terms of
the Agreements and the Custodial Agreement.
|
|
9.
|
For
purposes of the foregoing, I have not regarded any legal or governmental
actions, investigations or proceedings to be "threatened" unless
the
potential litigant or governmental authority has manifested to
the legal
department of the Seller or an employee of the Seller responsible
for the
receipt of process a present intention to initiate such proceedings;
nor
have I regarded any legal or governmental actions, investigations
or
proceedings as including those that are conducted by state or federal
authorities in connection with their routine regulatory activities.
The
sale of each Mortgage Note and Mortgage as and in the manner contemplated
by the Agreements is sufficient fully to transfer all right, title
and
interest of the Seller thereto as noteholder and mortgagee, apart
from the
rights to service the Mortgage Loans pursuant to the
Agreements.
|
|
10.
|
The
form of endorsement that is to be used with respect to the Mortgage
Loans
is legally valid and sufficient to duly endorse the Mortgage Notes
to the
Purchaser. Upon the completion of the endorsement of the Mortgage
Notes
and the completion of the assignments of the Mortgages, and the
recording
thereof, the endorsement of the Mortgage Notes, the delivery to
the
Custodian of the completed assignments of the Mortgages, and the
delivery
of the original endorsed Mortgage Notes to the Custodian would
be
sufficient to permit the entity to which such Mortgage Note is
initially
endorsed at the Purchaser’s direction, and to whom such assignment of
Mortgages is initially assigned at the Purchaser’s direction, to avail
itself of all protection available under applicable law against
the claims
of any present or future creditors of the Seller, and would be
sufficient
to prevent any other sale, transfer, assignment, pledge or hypothecation
of the Mortgages and the Mortgage Notes by the Seller from being
enforceable.
|
This
opinion is given to you for your sole benefit, and no other person or entity
is
entitled to rely hereon except that the purchaser or purchasers to which
you
initially and directly resell the Mortgage Loans may rely on this opinion
as if
it were addressed to them as of its date.
Sincerely,
EXHIBIT
C
ASSIGNMENT,
ASSUMPTION AND RECOGNITION AGREEMENT
February
27, 2006
ASSIGNMENT,
ASSUMPTION AND RECOGNITION AGREEMENT (the “AAR Agreement”), dated February 27,
2006 among Citigroup
Global Markets Realty Corp., a New York corporation
("Assignor"), U.S. Bank National Association having an office at ▇▇▇ ▇▇▇▇▇▇▇
▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇, as Indenture Trustee (in such capacity,
the
"Assignee"), and acknowledged by ▇▇▇▇▇ Fargo Bank, N.A., having an office
at 1
Home Campus, Des Moines, Iowa 50328 (the “Company”):
For
and
in consideration of the mutual covenants herein contained and for other valuable
consideration the receipt and sufficiency of which are hereby acknowledged,
the
parties hereto hereby agree as follows:
WHEREAS:
The Assignor conveyed the mortgage loans (the “Mortgage Loans”) to CS OT I LLC
(the “Seller”) pursuant to the Assignment and Conveyance Agreement dated as of
February 27, 2006 between the Assignor and the Seller;
WHEREAS:
The Seller conveyed the Mortgage Loans to the Depositor pursuant to the Mortgage
Loan Purchase Agreement (the “Purchase Agreement”) dated as of February
24, 2006,
among
the Seller, the Depositor and the Assignor;
WHEREAS:
The Depositor conveyed the Mortgage Loans to Citigroup Mortgage Loan Trust
2006-AR1 (the “Trust”) pursuant to the Amended and Restated Trust Agreement,
dated as of February 27, 2006 among the Depositor, Wilmington Trust Company
as
owner trustee (the “Owner Trustee”), CitiMortgage, Inc. in its capacity as
securities administrator (the “Securities Administrator”) and Citibank, N.A. in
its capacity as certificate registrar and certificate paying agent;
WHEREAS:
The Trust, in its capacity as issuer (the “Issuer”), pledged the Mortgage Loans
to the Assignee, as indenture trustee (the “Indenture Trustee”), pursuant to the
Indenture dated as of February 27, 2006 among the Issuer, the Securities
Administrator, the Indenture Trustee and Citibank, N.A. as note registrar,
paying agent and authenticating agent;
WHEREAS:
The Mortgage Loans will be serviced by CitiMortgage, Inc. as Master Servicer
(“Master Servicer”) pursuant to the Servicing Agreement (the “Servicing
Agreement”),
dated as
of February 27,
2006,
among
the
Master Servicer, the Securities Administrator,
the
Depositor, the Seller, the Indenture Trustee, Citibank, N.A. and CSE Mortgage
LLC, in its capacity as sponsor.
1. Assignment
and Assumption.
The
Assignor hereby grants, transfers and assigns to Assignee (a) all of the
right,
title and interest of Assignor, as to the extent of the Mortgage Loans, all
of
its right, title and interest in, the Flow Servicing Agreement, dated as
of
November 1, 2005, by and between the Assignor and the Company as modified
herein
(the “▇▇▇▇▇ Fargo Servicing Agreement”), provided, however, that with respect to
Section 4.02 of the ▇▇▇▇▇ Fargo Servicing Agreement, all of the rights and
benefits of the Purchaser as set forth in Section 4.02 shall be provided
to the
holder of the Owner Trust Certificates, whose name and address is: CSE Mortgage
LLC, ▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇, 12th
Floor
Chevy Chase, Maryland 20815, Attention: Chief Legal Officer; (b) all of the
right, title and interest of Assignor, as to the extent of the representations
and warranties made by the Company to the Assignor under Section 3.01 of
the
▇▇▇▇▇ Fargo Servicing Agreement and Section 6 of the Master Mortgage Loan
Purchase Agreement (the “Master Purchase Agreement”), dated as of November 1,
2005, by and between the Assignor and the Company; (c) all of the right,
title
and interest of Assignor, as to the extent of the remedies pursuant to Section
3.02 of the ▇▇▇▇▇ Fargo Servicing Agreement and Section 4(b) of the Master
Purchase Agreement against the Company in the event of a breach of
representation or warranty of the Company made under Section 6 of the Master
Purchase Agreement; and (d) all of the right, title and interest of Assignor,
as
to the extent of the indemnification provided by the Company to the Assignor
pursuant to Section 4(b) of the Master Purchase Agreement and Section 8.01
of
the ▇▇▇▇▇ Fargo Servicing Agreement, in the event of a breach of representation
or warranty of the Company under Section 6 of the Master Purchase Agreement.
Capitalized terms used herein but not defined shall have the meanings ascribed
to them in the ▇▇▇▇▇ Fargo Servicing Agreement, as applicable.
2. Representations
and Warranties of the Assignor.
The
Assignor warrants and represents to, and covenants with, the Assignee
that:
a. The
Assignor was the lawful owner of the Mortgage Loans with the full right to
transfer the Mortgage Loans free from any and all claims and encumbrances
whatsoever;
b. The
Assignor has not received notice of, and has no knowledge of, any offsets,
counterclaims or other defenses available to the Company with respect to
the
Purchase Agreement, the ▇▇▇▇▇ Fargo Servicing Agreement or the Mortgage
Loans;
c. The
Assignor has not waived or agreed to any waiver under, or agreed to any
amendment or other modification of, the Purchase Agreement, the ▇▇▇▇▇ Fargo
Servicing Agreement or the Mortgage Loans, including without limitation the
transfer of the servicing obligations under the Purchase Agreement or the
▇▇▇▇▇
Fargo Servicing Agreement. The Assignor has no knowledge of, and has not
received notice of, any waivers under or amendments or other modifications
of,
or assignments of rights or obligations under, the Purchase Agreement, the
▇▇▇▇▇
Fargo Servicing Agreement or the Mortgage Loans; and
d. Neither
the Assignor nor anyone acting on its behalf has offered, transferred, pledged,
sold or otherwise disposed of the Mortgage Loans, any interest in the Mortgage
Loans or any other similar security to, or solicited any offer to buy or
accept
a transfer, pledge or other disposition of the Mortgage Loans, any interest
in
the Mortgage Loans or any other similar security from, or otherwise approached
or negotiated with respect to the Mortgage Loans, any interest in the Mortgage
Loans or any other similar security with, any person in any manner, or made
any
general solicitation by means of general advertising or in any other manner,
or
taken any other action which would constitute a distribution of the Mortgage
Loans under the Securities Act of 1933 (the “33 Act”) or which would render the
disposition of the Mortgage Loans a violation of Section 5 of the 33 Act
or
require registration pursuant thereto.
e. The
Assignor’s address for purposes of all notices and correspondence related to the
Mortgage Loans and the ▇▇▇▇▇ Fargo Servicing Agreement is:
Citigroup
Global Markets Realty Corp.
▇▇▇
▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇
▇▇▇▇,
▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attention:
Mortgage Finance Group
Facsimile:
(▇▇▇) ▇▇▇-▇▇▇▇
3. Representations
and Warranties of the Assignee.
That
Assignee warrants and represent to, and covenants with, the Assignor and
the
Company that:
a. The
Assignee agrees to be bound by all of the terms, covenants and conditions
of the
▇▇▇▇▇ Fargo Servicing Agreement and the Mortgage Loans, from and after the
date
hereof;
b. Assignee
is a national banking association duly organized, validly existing and in
good
standing under the laws of the United States of America and has all requisite
power and authority to hold the Assigned Loans as trustee on behalf of the
holders of the Citigroup Mortgage Loan Trust Inc., Mortgage-Backed Notes,
Series
2006-AR1;
c. The
Assignee has been furnished with all information regarding the Mortgage Loans
that it has requested from the Assignor or the Company;
d. The
Assignee’s address for purposes of all notices and correspondence related to the
Mortgage Loans and the ▇▇▇▇▇ Fargo Servicing Agreement is:
U.S.
Bank, National Association
▇▇▇
▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇,
▇▇ ▇▇▇▇▇
Attention:
Corporate Trust Services
CMLTI
2006-AR1
Telecopy:
(▇▇▇) ▇▇▇-▇▇▇▇
4. Recognition
of Assignee.
From and
after the date hereof, the Company shall note the transfer of the Mortgage
Loans
to the Assignee in its books and records, the Company shall recognize the
Assignee as the owner of the Mortgage Loans and the Company shall service
the
Mortgage Loans for the benefit of the Assignee pursuant to the ▇▇▇▇▇ Fargo
Servicing Agreement. It is the intention of the Assignor, the Company and
the
Assignee that the Servicing Agreement and the Purchase Agreement shall be
binding upon and inure to the benefit of the Company and the Assignee and
their
respective successors and assigns.
In
addition, Company hereby acknowledges that from and after the date hereof,
the
Mortgage Loans will be subject to the Servicing Agreement. Pursuant to the
Servicing Agreement, the Master Servicer has
the
right to monitor the Company's performance of its servicing obligations under
the ▇▇▇▇▇ Fargo Servicing Agreement. Such right will include, without
limitation, the right to receive all remittances required to be made by the
Company under the ▇▇▇▇▇ Fargo Servicing Agreement, the right to receive all
monthly reports and other data required to be delivered by the Company under
the
▇▇▇▇▇ Fargo Servicing Agreement, the right to examine the books and records
of
the Company, indemnification rights, and the right to exercise certain rights
of
consent and approval relating to actions taken by the Company. The Company
hereby acknowledges that the Master Servicer shall be obligated to notify
the
Assignee in accordance with the Servicing Agreement upon the discovery of
an
event of default by the Company of its obligations under the ▇▇▇▇▇ Fargo
Servicing Agreement and the Assignee shall have the right to terminate the
Company as servicer under the ▇▇▇▇▇ Fargo Servicing Agreement upon the
occurrence of such an event of default. The Company shall make all distributions
under the ▇▇▇▇▇ Fargo Servicing Agreement to the Master Servicer by wire
transfer of immediately available funds to:
CitiBank
(West)
ABA#
▇▇▇▇▇▇▇▇▇
Account
Name: CMI MSD Clearing
Account
#
070-▇▇▇▇▇▇▇
For
Further Credit to: CMLTI 2006-AR1
and
the
Company shall deliver all reports required to be delivered under the ▇▇▇▇▇
Fargo
Servicing Agreement to the Master Servicer at:
CitiMortgage,
Inc.
Master
Servicing Division- MC: N3B-355
▇▇▇▇
▇▇▇▇▇▇ ▇▇▇▇.
▇▇▇▇▇▇,
▇▇▇▇▇ ▇▇▇▇▇
Attention: MSD
Private Accounting
Telecopy
No.: (▇▇▇) ▇▇▇-▇▇▇▇
5. Costs.
Each party will pay any commissions, fees and expenses, including attorney’s
fees, it has incurred and the Assignor shall pay the fees of its attorneys
and
the reasonable fees of the attorneys of the Assignee in connection with the
negotiations for, documenting of and closing of the transactions contemplated
by
this AAR Agreement.
6. Governing
Law. This AAR Agreement shall be construed in accordance with the laws of
the
State of New York, without regard to conflicts of law principles (other than
Sections 5-1401 and 5-1402 of the General Obligations Law, which shall govern),
and the obligations, rights and remedies of the parties hereunder shall be
determined in accordance with such laws.
7. Modification
of the ▇▇▇▇▇ Fargo Servicing Agreement.
The
Company and Assignor hereby amend the ▇▇▇▇▇ Fargo Servicing Agreement with
respect to the Mortgage Loans as follows:
(a) The
following definitions shall be added to Article I of the ▇▇▇▇▇ Fargo Servicing
Agreement:
Indenture
Trustee:
U.S.
Bank National Association, or its successors in interest, or any successor
indenture trustee appointed as provided in the Servicing Agreement.
Master
Servicer:
CitiMortgage, Inc. or any successor thereto.
Nonrecoverable
Advance:
Any
advance previously made by the Company pursuant to Section 5.03 or any Servicing
Advance which, in the good faith judgment of the Company, may not be ultimately
recoverable by the Company from Liquidation Proceeds or otherwise. The
determination by the Company that it has made a Nonrecoverable Advance, shall
be
evidenced by an Officer’s Certificate of the Company delivered to the Purchaser
and the Master Servicer and detailing the reasons for such
determination.
Servicing
Agreement:
That
certain Servicing Agreement, dated as of February 1, 2006 among the Indenture
Trustee, the Master Servicer, the Securities Administrator, the Depositor,
the
Seller, Citibank, N.A.
and CSE
Mortgage LLC, in its capacity as sponsor.
Securities
Administrator:
CitiMortgage, Inc. or any successor thereto.
(b) Sections
6.04 and 6.06 of the ▇▇▇▇▇ Fargo Servicing Agreement shall be modified by
replacing the words “Owner” or “Owner and any Depositor” or “Owner and such
Depositor” with the phrase “Master Servicer on behalf of the Owner” in each
instance.
(c) The
following is added as Subsection 4.05(x) of the ▇▇▇▇▇ Fargo Servicing
Agreement:
“(x)
to
reimburse itself for any Nonrecoverable Advances;”
(d) Section
10.01(ix) of the ▇▇▇▇▇ Fargo Servicing Agreement shall be modified by
adding the phrase “or by any master servicer responsible for master
servicing the Mortgage Loans pursuant to a securitization of such Mortgage
Loans” after the phrase “shall have been given to the Servicer by the
Owner.”
(e) Section
4.02 of the ▇▇▇▇▇ Fargo Servicing Agreement is hereby modified by deleting
the
second and third sentences of the first paragraph and replacing them with
the
following:
“In
the
event that any payment due under any Mortgage Loan is not postponed pursuant
to
Section 4.01 and remains delinquent for a period of ninety (90) days or any
other default continues for a period of ninety (90) days beyond the expiration
of any grace or cure period, the Company shall provide written notice to
the
Purchaser and, if the Mortgage Loans have been included in a securitization
transaction, to the master servicer, if any (the “Master Servicer”), that the
Company intends to proceed with foreclosure. In the event the Purchaser or,
if
the Purchaser is the holder of trust certificates issued in connection with
a
securitization transaction (in such capacity, the “Certificateholder”), the
Purchaser in its capacity as Certificateholder, either directly or through
the
Master Servicer, objects to such action, the Company shall not be required
to
make Monthly Advances with respect to such Mortgage Loan, pursuant to Section
5.03, and the Company's obligation to make such Monthly Advances shall terminate
on the 90th day referred to above.”
(f) Section
4.02 of the ▇▇▇▇▇ Fargo Servicing Agreement is hereby modified by adding
the
following paragraphs to the end of such Section:
“Subject
to this Section 4.02, the Company shall use its best reasonable efforts to
realize upon any pledged assets (the “Pledged
Assets”)
for
such of the Pledged Asset Mortgage Loans as come into and continue in default
and as to which no satisfactory arrangements can be made for collection of
delinquent payments pursuant to this Section 4.02; provided that the Company
shall not, on behalf of the indenture trustee in connection with a
securitization transaction, obtain title to any such Pledged Assets as a
result
of or in lieu of the disposition thereof or otherwise; and provided further
that
(i) the Company shall not proceed with respect to such Pledged Assets in
any
manner that would impair the ability to recover against the related Mortgaged
Property, and (ii) the Company shall proceed with any REO acquisition in
a
manner that preserves the ability to apply the proceeds of such Pledged Assets
against amounts owed under the defaulted Mortgage Loan. Any proceeds realized
from such Pledged Assets (other than amounts to be released to the Mortgagor
or
the related guarantor in accordance with procedures that the Company would
follow in servicing mortgage loans held for its own account, subject to the
terms and conditions of the related Mortgage and Mortgage Note and to the
terms
and conditions of any security agreement, guarantee agreement, mortgage or
other
agreement governing the disposition of the proceeds of such Pledged Assets)
shall be deposited in the Custodial Account, subject to withdrawal pursuant
to
Section 4.05. Any other payment received by the Company in respect of such
Pledged Assets shall be deposited in the Custodial Account subject to withdrawal
pursuant to Section 4.05.
Notwithstanding
anything in this Agreement to the contrary, unless the Company has been notified
that the Purchaser (either as Purchaser hereunder or in its capacity as
Certificateholder) is no longer entitled to the rights described in this
Section
4.02:
(a) The
Company shall not commence foreclosure proceedings with respect to a Mortgage
Loan unless (i) no later than five Business Days prior to its commencement
of
such foreclosure proceedings, it notifies the Purchaser and the Master Servicer
of its intention to do so, and (ii) the Purchaser (either as Purchaser hereunder
or in its capacity as Certificateholder), either directly or through the
Master
Servicer, does not, within such five-Business-Day period, affirmatively object
to such action.
(b) In
the
event that the Company determines in accordance with Accepted Servicing
Practices not to proceed with foreclosure proceedings with respect to a Mortgage
Loan that becomes 60 days’ or more delinquent and the Company has determined
that it is unable to collect payments due under such Mortgage Loan in accordance
with Accepted Servicing Practices, the Company shall, prior to taking any
action
with respect to such Mortgage Loan, promptly provide the Purchaser and the
Master Servicer with notice of such determination and a description of such
other action as it intends to take with respect to such Mortgage Loan; provided,
that the Company shall not be permitted to proceed with any such action unless
the Purchaser (either as Purchaser hereunder or in its capacity as
Certificateholder), either directly or through the Master Servicer, does
not,
within five Business Days following such notice, affirmatively object to
the
Company taking such action.
(c) If
the
Purchaser (either as Purchaser hereunder or in its capacity as
Certificateholder) timely and affirmatively objects to an action or contemplated
action of the Company pursuant to either (a) or (b) above, then the Purchaser
shall hire or, in its capacity as Certificateholder shall instruct the Master
Servicer to hire, at the Certificateholder’s sole cost and expense, three
appraisal firms, selected by the Purchaser or the Master Servicer, as
applicable, in its sole and absolute discretion from the list of appraisal
firms
attached as Exhibit H, to compute the fair value of the Mortgaged Property
relating to the related Mortgage Loan utilizing the ▇▇▇▇▇▇ Mae Form 2055
Exterior-Only Inspection Residential Appraisal Report (each such appraisal-firm
computation, a “Fair Value Price”), in each case (other than as set forth in (d)
below) no later than 30 days from the date of such Purchaser or
Certificateholder objection. If the Purchaser or the Master Servicer, as
applicable, shall have received three Fair Value Prices by the end of such
30-day period, then the Purchaser (either as Purchaser hereunder or in its
capacity as Certificateholder) shall, no later than 5 days after the expiration
of such 30-day period, purchase such Mortgage Loan and the related Mortgaged
Property at an amount equal to the sum of (i) accrued and unpaid interest
on
such Mortgage Loan as of such purchase date (“Accrued Interest”) and (ii) the
highest of such three Fair Value Prices respectively determined by such
appraisal firms, and shall promptly deliver such amount to the Company for
deposit into the Custodial Account. All costs relating to the computation
of the
related Fair Value Prices shall be for the account of the Purchaser (either
as
Purchaser hereunder or in its capacity as Certificateholder) and shall be
paid
by the Purchaser (either as Purchaser hereunder or in its capacity as
Certificateholder) at the time such Mortgage Loan and the related Mortgaged
Property are purchased by the Purchaser (either as Purchaser hereunder or
in its
capacity as Certificateholder).
(d) If
the
Purchaser or the Master Servicer, as applicable, shall not have received
three
Fair Value Prices at the end of the 30-day period set forth in (c) above,
then:
(i) The
Purchaser or the Master Servicer, as applicable, shall obtain such three
Fair
Value Prices no later than 15 days after the end of such 30-day
period.
(ii) If
the
Purchaser or the Master Servicer, as applicable, shall have only received
two
Fair Value Prices at the end of such 15-day extension period, then the Purchaser
or the Master Servicer, as applicable, will determine, in its sole and absolute
discretion, the fair value of the Mortgaged Property relating to such Mortgage
Loan, related Insurance Proceeds and the current delinquency status of such
Mortgage Loan (such fair value, the “Purchaser/Master Servicer Fair Value
Price”), and the Purchaser (either as Purchaser hereunder or in its capacity as
Certificateholder) shall, no later than 5 days after the expiration of such
15-day extension period, purchase (and deliver to the Company the purchase
price
for) such Mortgage Loan and the related Mortgaged Property at an amount equal
to
the sum of (A) Accrued Interest thereon and (B) the higher of (1) the highest
of
such two Fair Value Prices determined by such appraisal firms or (2) the
Purchaser/Master Servicer Fair Value Price.
(iii) If
the
Purchaser or the Master Servicer, as applicable, shall have received only
one
Fair Value Price at the end of such 15-day extension period, then the Purchaser
or the Master Servicer, as applicable, will determine, in its sole and absolute
discretion, the Purchaser/Master Servicer Fair Value Price of the Mortgaged
Property related to such Mortgage Loan, and:
(A) if
such
Purchaser/Master Servicer Fair Value Price is equal to or greater than the
unpaid principal balance of the related Mortgage Loan as of such date (the
“Unpaid Principal Balance”), then the Purchaser (either as Purchaser hereunder
or in its capacity as Certificateholder) shall, no later than 5 days after
the
expiration of such 15-day extension period, purchase (and deliver to the
Company
the purchase price for) such Mortgage Loan and the related Mortgaged Property
at
an amount equal to the sum of (1) Accrued Interest thereon and (2) such
Purchaser/Master Servicer Fair Value Price; or
(B) if
such
Purchaser/Master Servicer Fair Value Price is less than the related Unpaid
Principal Balance, then the Purchaser (either as Purchaser hereunder or in
its
capacity as Certificateholder) shall, no later than 5 days after the expiration
of such 15-day extension period, purchase (and deliver to the Company the
purchase price for) such Mortgage Loan and the related Mortgaged Property
at an
amount equal to the sum of (1) Accrued Interest thereon and (2) the related
Unpaid Principal Balance (such sum, the “Preliminary Purchase Price”); provided,
that the provisions of clause (d)(iv) below shall thereafter apply.
(iv) Following
the payment by the Purchaser (either as Purchaser hereunder or in its capacity
as Certificateholder) of the Preliminary Purchase Price, the Purchaser or
the
Master Servicer, as applicable, shall continue to hire appraisal firms at
the
Purchaser’s (either as Purchaser hereunder or in its capacity as
Certificateholder) sole cost and expense to compute the Fair Value Price
of the
Mortgaged Property related to such Mortgage Loan, and at such time as two
such
Fair Value Prices shall have been obtained:
(A) if
the
sum of (1) Accrued Interest on the related Mortgage Loan and (2) the higher
of
(x) the highest of such two Fair Value Prices determined by such appraisal
firms
or (y) the Purchaser/Master Servicer’s Fair Value Price of the Mortgaged
Property related to such Mortgage Loan (such sum, the “Revised Fair Value
Price”) is greater than such Preliminary Purchase Price, then the Master
Servicer, if applicable, shall promptly notify the Certificateholder and
the
Purchaser or the Master Servicer, as applicable, shall notify the Company
of
such calculation, and the Purchaser (either as Purchaser hereunder or in
its
capacity as Certificateholder) shall, no later than 5 days after such notice,
remit to the Company, for deposit into the Custodial Account, the difference
between such Revised Fair Value Price and such Preliminary Purchase Price;
or
(B) if
such
Preliminary Purchase Price is greater than such Revised Fair Value Price,
then
the Master Servicer, if applicable, shall promptly notify the Certificateholder
and the Purchaser or the Master Servicer, as applicable, shall notify the
Company of such calculation, and the Company shall, no later than 5 days
after
such notice, remit to the Purchaser (either as Purchaser hereunder or in
its
capacity as Certificateholder), from funds then on deposit in the Custodial
Account, the difference between such Preliminary Purchase Price and such
Revised
Fair Value Price.
(e) Notwithstanding
anything herein to the contrary, the Purchaser (either as Purchaser hereunder
or
in its capacity as Certificateholder) shall not be entitled to any of its
rights
set forth herein with respect to a Mortgage Loan following its failure to
purchase such Mortgage Loan and the related Mortgaged Property, at the related
purchase price set forth in this Section 4.02 within the timeframe set forth
in
this Section 4.02 following the Purchaser’s (either as Purchaser hereunder or in
its capacity as Certificateholder) objection to an action of the Company,
and
the Company shall provide the Master Servicer, if applicable, written notice
of
such failure.
(f) Any
notice, confirmation, instruction or objection pursuant to paragraphs (a),
(b),
(c) and (d) above may be delivered via facsimile or other written or electronic
communication as the parties hereto and the Purchaser (either as Purchaser
hereunder or in its capacity as Certificateholder) may agree to from time
to
time.
(g) To
the
extent that the Purchaser (either as Purchaser hereunder or in its capacity
as
Certificateholder) purchases any Mortgage Loan pursuant to this Section 4.02,
the Company will continue to service such Mortgage Loan in accordance with
this
Agreement. The parties acknowledge that, in such event, the Master Servicer
in
connection with a securitization transaction will have no duty or responsibility
to master service any such Mortgage Loan.”
(g) The
▇▇▇▇▇
Fargo Servicing Agreement is hereby modified by adding the following section.
Section 13.01 “Servicing Provisions Upon a TMP Trigger Event”:
“The
Servicer will comply with the following provisions upon receiving notice
provided by the party specified in the Indenture that a TMP Trigger Event
will
occur and REMIC Elections will be made with respect to the Trust.
Prior
to
any REMIC Elections being made with respect to the Trust and upon receipt
of
notice from the Trustee, the Servicer will sell any REO Property on behalf
of
the trust to a third party at its fair market value. The Servicer shall solicit
at least two bids with respect to the sale of such REO Property.
Subject
to any REMIC Elections, with respect to any Mortgage Loans that are 60 or
more
days Delinquent as of the “Startup Day” (each such Mortgage Loan, a “Foreclosure
Restricted Loan”), the following restrictions on foreclosure shall apply: In
connection with the servicing of any Mortgage Loan, the Servicer shall not
acquire any Mortgaged Property on behalf of any REMIC created hereunder in
connection with a default or imminent default on a Foreclosure Restricted
Loan,
if acquiring title to the Mortgaged Property underlying the loan would cause
the
adjusted basis, for federal income tax purposes, of these Mortgaged Properties
owned by the related REMIC after foreclosure, along with any other assets
owned
by the related REMIC other than “qualified mortgages” and “permitted
investments” within the meaning of Section 860G of the Code, to exceed
0.75% of the adjusted basis of the assets of the related REMIC. If the adjusted
basis of such Mortgaged Properties in foreclosure, along with any other assets
owned by the related REMIC, other than “qualified mortgages” and “permitted
investments” with the meaning of Section 860G of the Code, exceed 1.0% of
the adjusted basis of the assets of the related REMIC immediately after the
distribution of principal and interest on any Distribution Date, the Servicer
will dispose of enough of such Mortgaged Properties in foreclosure, for cash
or
otherwise, so that the adjusted basis of such Mortgaged Properties in
foreclosure, along with any other assets owned by the related REMIC, other
than
“qualified mortgages” and “permitted investments” within the meaning of
Section 860G of the Code, will be less than 1.0% of the adjusted basis of
the assets of the related REMIC. In either event, the Servicer is permitted
to
acquire (for its own account and not on behalf of the Trust Estate) the
Mortgaged Property at the foreclosure sale for an amount not less than the
greater of: (i) the highest amount bid by any other person at the foreclosure
sale, or (ii) the estimated fair value of the Mortgaged Property, as determined
by the Servicer in good faith.”
(h) Section
6.04(i) and Section 6.05 of the ▇▇▇▇▇ Fargo Servicing Agreement are hereby
modified by deleting both sections in their entirety and replacing the sections
with the phrase “Reserved”.
8. Waiver.
No term
or provision of this AAR Agreement may be waived or modified unless such
waiver
or modification is in writing and signed by the party against whom such waiver
or modification is sought to be enforced.
9. Successors
and Assigns.
This AAR
Agreement shall inure to the benefit of the successors and assigns of the
parties hereto. Any entity into which Assignor, Assignee or Company may be
merged or consolidated shall, without the requirement for any further writing,
be deemed Assignor, Assignee or Company, respectively, hereunder.
10. Counterparts.
This
AAR Agreement may be executed simultaneously in any number of counterparts.
Each
counterpart shall be deemed to be an original and all such counterparts shall
constitute one and the same instrument.
11. Waiver
of Jury Trial.
To the
fullest extent permitted under applicable law, each party hereto hereby
irrevocably waives all right to a trial by jury in any action, proceeding
or
counterclaim arising out of or relating to this AAR Agreement.
12.
Trustee
Capacity
It is
expressly understood and agreed by the parties hereto that insofar as this
AAR
Agreement is executed by the Indenture Trustee: (i) this AAR Agreement is
executed and delivered by U.S. Bank National Association, not in its individual
capacity but solely as Indenture Trustee under the Indenture referred to
herein,
in the exercise of the powers and authority conferred and invested in it
thereunder, (ii) each of the representations, undertakings and agreements
herein
made on the part of the Indenture Trustee is made and intended not as a personal
representation, undertaking or agreement by U.S. Bank National Association,
but
is made and intended for the purpose of binding only Citigroup Mortgage Loan
Trust 2006-AR1 and the Trust Estate pledged by it to secure its Mortgage-Backed
Notes, Series 2006-AR1, (iii) nothing herein contained shall be construed
as
creating any liability on the part of U.S. Bank National Association,
individually or personally, to perform any covenant either expressed or implied
contained herein, all such liability, if any, being expressly waived by the
parties hereto and by any Person claiming by, through or under the parties
hereto, and (iv) under no circumstances shall U.S. Bank National Association,
in
its individual capacity be personally liable for the payment of any indebtedness
or expenses or be personally liable for the breach or failure of any obligation,
representation, warranty or covenant made or undertaken under this AAR
Agreement.
[Signatures
Follow]
IN
WITNESS WHEREOF, the parties have caused this Assignment, Assumption and
Recognition
Agreement to be executed by their duly authorized officers as of the date
first
above written.
CITIGROUP
GLOBAL MARKETS REALTY CORP.
|
U.S.
BANK, NATIONAL ASSOCIATION
not
individually, but solely in its capacity as Indenture Trustee
|
||||
|
Assignor
|
Assignee
|
|||
|
By:
|
/s/
▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
|
By:
|
/s/
▇▇▇▇▇ ▇. ▇’▇▇▇▇▇
|
|
|
Name:
|
▇▇▇▇▇
▇. ▇▇▇▇▇▇▇▇▇
|
Name:
|
▇▇▇▇▇
▇. ▇’▇▇▇▇▇
|
|
|
Its:
|
Authorized
Agent
|
Its:
|
Vice
President
|
|
|
▇▇▇▇▇
FARGO BANK, N.A.
Company
|
|
|
By:
|
/s/
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇
|
|
Name:
|
▇▇▇▇▇▇▇
▇. ▇▇▇▇▇
|
|
Its:
|
Vice
President
|
EXHIBIT
D
FORM
OF
REQUEST FOR RELEASE
|
To:
|
[applicable
Custodian]
|
|
Re:
|
Servicing
Agreement, dated as of February [__], 2006, among Citigroup Mortgage
Loan
Trust Inc., as depositor, CitiMortgage, Inc. as Master Servicer and
securities administrator, CS OT I LLC, as seller, Citibank, N.A.
as note
registrar, paying agent and authenticating agent, and U.S. Bank National
Association as Indenture Trustee
|
In
connection with the administration of the Mortgage Loans held by you as
Custodian on behalf of the Indenture Trustee pursuant to the above-captioned
Servicing Agreement and the applicable Mortgage Document Custodial Agreement,
we
request the release, and hereby acknowledge receipt, of the Mortgage File for
the Mortgage Loan described below, for the reason indicated.
Mortgage
Loan Number:
Mortgagor
Name, Address & Zip Code:
Reason
for Requesting Documents (check one):
______________ 1. Mortgage
Paid in Full
______________ 2. Foreclosure
______________ 3. Substitution
______________ 4. Other
Liquidation (Repurchases, etc.)
______________ 5. Nonliquidation
Reason:______________________________________________
Address
to which Indenture Trustee should
deliver
the Mortgage File:
[___________________]
[___________________]
By: ______________________________
(authorized signer)
Issuer:________________________________________
Address: _____________________________________
Date:
________________________________________
Custodian
Please
acknowledge the execution of the above request by your signature and date
below:
_____________________________________
__________________________
Signature Date
Documents
returned to Custodian:
____________________________________ __________________________
Indenture
Trustee Date
EXHIBIT
E
LIST
OF
APPROVED APPRAISAL FIRMS
[Provided
Upon Request]
EXHIBIT
F
SERVICING
CRITERIA TO BE ADDRESSED IN
ASSESSMENT
OF COMPLIANCE
Definitions
Primary
Servicer - transaction party having borrower contact
Master
Servicer - aggregator of pool assets
Securities
Administrator - waterfall calculator (may be the Trustee, or may be the Master
Servicer)
Back-up
Servicer - named in the transaction (in the event a Back up Servicer becomes
the
Primary Servicer, follow Primary Servicer obligations)
Custodian
- safe keeper of pool assets
Paying
Agent - distributor of funds to ultimate investor
Trustee
-
fiduciary of the transaction
Note:
The
definitions above describe the essential function that the party performs,
rather than the party’s title. So, for example, in a particular transaction, the
trustee may perform the “paying agent” and “securities administrator” functions,
while in another transaction, the securities administrator may perform these
functions.
Where
there are multiple checks for criteria the attesting party will identify in
their management assertion that they are attesting only to the portion of the
distribution chain they are responsible for in the related transaction
agreements.
Key:
X
-
obligation
|
Reg
AB Reference
|
Servicing
Criteria
|
Primary
Servicer
|
Master
Servicer
|
Securities
Administrator
|
Paying
Agent
|
|
General
Servicing Considerations
|
|||||
|
1122(d)(1)(i)
|
Policies
and procedures are instituted to monitor any performance or other
triggers
and events of default in accordance with the transaction
agreements.
|
X
|
X
|
||
|
1122(d)(1)(ii)
|
If
any material servicing activities are outsourced to third parties,
policies and procedures are instituted to monitor the third party’s
performance and compliance with such servicing activities.
|
X
|
X
|
||
|
1122(d)(1)(iii)
|
Any
requirements in the transaction agreements to maintain a back-up
servicer
for the Pool Assets are maintained.
|
||||
|
1122(d)(1)(iv)
|
A
fidelity bond and errors and omissions policy is in effect on the
party
participating in the servicing function throughout the reporting
period in
the amount of coverage required by and otherwise in accordance with
the
terms of the transaction agreements.
|
X
|
X
|
||
|
Cash
Collection and Administration
|
|||||
|
1122(d)(2)(i)
|
Payments
on pool assets are deposited into the appropriate custodial bank
accounts
and related bank clearing accounts no more than two business days
following receipt, or such other number of days specified in the
transaction agreements.
|
X
|
X
|
X
|
|
|
1122(d)(2)(ii)
|
Disbursements
made via wire transfer on behalf of an obligor or to an investor
are made
only by authorized personnel.
|
X
|
X
|
X
|
|
|
1122(d)(2)(iii)
|
Advances
of funds or guarantees regarding collections, cash flows or distributions,
and any interest or other fees charged for such advances, are made,
reviewed and approved as specified in the transaction agreements.
|
X
|
X
|
||
|
1122(d)(2)(iv)
|
The
related accounts for the transaction, such as cash reserve accounts
or
accounts established as a form of over collateralization, are separately
maintained (e.g., with respect to commingling of cash) as set forth
in the
transaction agreements.
|
|
X
|
||
|
1122(d)(2)(v)
|
Each
custodial account is maintained at a federally insured depository
institution as set forth in the transaction agreements. For purposes
of
this criterion, “federally insured depository institution” with respect to
a foreign financial institution means a foreign financial institution
that
meets the requirements of Rule 13k-1(b)(1) of the Securities Exchange
Act.
࿖
|
X
|
X
|
|
X
|
|
1122(d)(2)(vi)
|
Unissued
checks are safeguarded so as to prevent unauthorized access.
|
X
|
|||
|
1122(d)(2)(vii)
|
Reconciliations
are prepared on a monthly basis for all asset-backed securities related
bank accounts, including custodial accounts and related bank clearing
accounts. These reconciliations are (A) mathematically accurate;
(B)
prepared within 30 calendar days after the bank statement cutoff
date, or
such other number of days specified in the transaction agreements;
(C)
reviewed and approved by someone other than the person who prepared
the
reconciliation; and (D) contain explanations for reconciling items.
These
reconciling items are resolved within 90 calendar days of their original
identification, or such other number of days specified in the transaction
agreements.
|
X
|
X
|
X
|
|
|
Investor
Remittances and Reporting
|
|||||
|
1122(d)(3)(i)
|
Reports
to investors, including those to be filed with the Commission, are
maintained in accordance with the transaction agreements and applicable
Commission requirements. Specifically, such reports (A) are prepared
in
accordance with timeframes and other terms set forth in the transaction
agreements; (B) provide information calculated in accordance with
the
terms specified in the transaction agreements; (C) are filed with
the
Commission as required by its rules and regulations; and (D) agree
with
investors’ or the trustee’s records as to the total unpaid principal
balance and number of Pool Assets serviced by the Servicer.
|
X
|
X
|
X
|
|
|
1122(d)(3)(ii)
|
Amounts
due to investors are allocated and remitted in accordance with timeframes,
distribution priority and other terms set forth in the transaction
agreements.
|
X
|
X
|
X
|
X
|
|
1122(d)(3)(iii)
|
Disbursements
made to an investor are posted within two business days to the Servicer’s
investor records, or such other number of days specified in the
transaction agreements.
|
X
|
X
|
X
|
|
|
1122(d)(3)(iv)
|
Amounts
remitted to investors per the investor reports agree with cancelled
checks, or other form of payment, or custodial bank statements.
|
X
|
X
|
X
|
|
|
Pool
Asset Administration
|
|||||
|
1122(d)(4)(i)
|
Collateral
or security on pool assets is maintained as required by the transaction
agreements or related pool asset documents.
|
X
|
X
|
||
|
1122(d)(4)(ii)
|
Pool
assets and related documents are safeguarded as required by the
transaction agreements
|
X
|
X
|
||
|
1122(d)(4)(iii)
|
Any
additions, removals or substitutions to the asset pool are made,
reviewed
and approved in accordance with any conditions or requirements in
the
transaction agreements.
|
X
|
X
|
||
|
1122(d)(4)(iv)
|
Payments
on pool assets, including any payoffs, made in accordance with the
related
pool asset documents are posted to the Servicer’s obligor records
maintained no more than two business days after receipt, or such
other
number of days specified in the transaction agreements, and allocated
to
principal, interest or other items (e.g., escrow) in accordance with
the
related pool asset documents.
|
X
|
|||
|
1122(d)(4)(v)
|
The
Servicer’s records regarding the pool assets agree with the Servicer’s
records with respect to an obligor’s unpaid principal balance.
|
X
|
|||
|
1122(d)(4)(vi)
|
Changes
with respect to the terms or status of an obligor's pool assets (e.g.,
loan modifications or re-agings) are made, reviewed and approved
by
authorized personnel in accordance with the transaction agreements
and
related pool asset documents.
|
X
|
X
|
||
|
1122(d)(4)(vii)
|
Loss
mitigation or recovery actions (e.g., forbearance plans, modifications
and
deeds in lieu of foreclosure, foreclosures and repossessions, as
applicable) are initiated, conducted and concluded in accordance
with the
timeframes or other requirements established by the transaction
agreements.
|
X
|
X
|
||
|
1122(d)(4)(viii)
|
Records
documenting collection efforts are maintained during the period a
pool
asset is delinquent in accordance with the transaction agreements.
Such
records are maintained on at least a monthly basis, or such other
period
specified in the transaction agreements, and describe the entity’s
activities in monitoring delinquent pool assets including, for example,
phone calls, letters and payment rescheduling plans in cases where
delinquency is deemed temporary (e.g., illness or unemployment).
|
X
|
|||
|
1122(d)(4)(ix)
|
Adjustments
to interest rates or rates of return for pool assets with variable
rates
are computed based on the related pool asset documents.
|
X
|
X
|
||
|
1122(d)(4)(x)
|
Regarding
any funds held in trust for an obligor (such as escrow accounts):
(A) such
funds are analyzed, in accordance with the obligor’s pool asset documents,
on at least an annual basis, or such other period specified in the
transaction agreements; (B) interest on such funds is paid, or credited,
to obligors in accordance with applicable pool asset documents and
state
laws; and (C) such funds are returned to the obligor within 30 calendar
days of full repayment of the related pool assets, or such other
number of
days specified in the transaction agreements.
|
X
|
|||
|
1122(d)(4)(xi)
|
Payments
made on behalf of an obligor (such as tax or insurance payments)
are made
on or before the related penalty or expiration dates, as indicated
on the
appropriate bills or notices for such payments, provided that such
support
has been received by the servicer at least 30 calendar days prior
to these
dates, or such other number of days specified in the transaction
agreements.
|
X
|
|||
|
1122(d)(4)(xii)
|
Any
late payment penalties in connection with any payment to be made
on behalf
of an obligor are paid from the Servicer’s funds and not charged to the
obligor, unless the late payment was due to the obligor’s error or
omission.
|
X
|
|||
|
1122(d)(4)(xiii)
|
Disbursements
made on behalf of an obligor are posted within two business days
to the
obligor’s records maintained by the servicer, or such other number of days
specified in the transaction agreements.
|
X
|
|||
|
1122(d)(4)(xiv)
|
Delinquencies,
charge-offs and uncollectible accounts are recognized and recorded
in
accordance with the transaction agreements.
|
X
|
X
|
||
|
1122(d)(4)(xv)
|
Any
external enhancement or other support, identified in Item 1114(a)(1)
through (3) or Item 1115 of Regulation AB, is maintained as set forth
in
the transaction agreements.
|
X
|
|||
EXHIBIT
G
FORM
10-D, FORM 8-K AND FORM 10-K
REPORTING
RESPONSIBILITY
As
to
each item described below, the entity indicated as the Responsible Party shall
be primarily responsible for reporting the information to the party identified
as responsible for preparing the Securities Exchange Act Reports pursuant to
Section 3.19.
Under
Item 1 of Form 10-D: a) items marked “6.07 statement” are required to be
included in the periodic Payment Date statement under Section 6.07, provided
by
the Securities Administrator based on information received from the Master
Servicer; and b) items marked “Form 10-D report” are required to be in the Form
10-D report but not the 6.07 statement, provided by the party indicated.
Information under all other Items of Form 10-D is to be included in the Form
10-D report. All such information and any other Items on Form 8-K and Form
10-D
set forth in this Exhibit shall be sent to the Securities Administrator and
the
Depositor.
|
Form
|
Item
|
Description
|
Servicers
|
Master
Servicer
|
Securities
Administrator
|
Custodian
|
Indenture
Trustee
|
Depositor
|
Sponsor
|
|||
|
10-D
|
Must
be filed within 15 days of the payment date for the asset-backed
securities.
|
(nominal)
|
||||||||||
|
1
|
Distribution
and Pool Performance Information
|
|||||||||||
|
Item
1121(a) - Distribution and Pool Performance Information
|
||||||||||||
|
(1)
Any applicable record dates, accrual dates, determination dates for
calculating distributions and actual distribution dates for the
distribution period.
|
X
(6.07
Statement)
|
|||||||||||
|
(2)
Cash flows received and the sources thereof for distributions, fees
and
eXpenses.
|
X
(6.07
Statement)
|
|||||||||||
|
(3)
Calculated amounts and distribution of the flow of funds for the
period
itemized by type and priority of payment, including:
|
X
(6.07
Statement)
|
|||||||||||
|
(i)
Fees or eXpenses
accrued and paid, with an identification of the general purpose of
such
fees and the party receiving such fees or eXpenses.
|
X
(6.07
Statement)
|
|||||||||||
|
(ii)
Payments accrued or paid with respect to enhancement or other support
identified in Item 1114 of Regulation AB (such as insurance premiums
or
other enhancement maintenance fees), with an identification of the
general
purpose of such payments and the party receiving such
payments.
|
X
(6.07
Statement)
|
|||||||||||
|
(iii)
Principal, interest and other distributions accrued and paid on the
asset-backed securities by type and by class or series and any principal
or interest shortfalls or carryovers.
|
X
(6.07
Statement)
|
|||||||||||
|
(iv)
The amount of eXcess
cash flow or eXcess
spread and the disposition of eXcess
cash flow.
|
X
(6.07
Statement)
|
|||||||||||
|
(4)
Beginning and ending principal balances of the asset-backed
securities.
|
X
(6.07
Statement)
|
|||||||||||
|
(5)
Interest rates applicable to the pool assets and the asset-backed
securities, as applicable. Consider providing interest rate information
for pool assets in appropriate distributional groups or incremental
ranges.
|
X
(6.07
Statement)
|
|||||||||||
|
(6)
Beginning and ending balances of transaction accounts, such as reserve
accounts, and material account activity during the period.
|
X
(6.07
Statement)
|
|||||||||||
|
(7)
Any amounts drawn on any credit enhancement or other support identified
in
Item 1114 of Regulation AB, as applicable, and the amount of coverage
remaining under any such enhancement, if known and
applicable.
|
X
(6.07
Statement)
|
|||||||||||
|
(8)
Number and amount of pool assets at the beginning and ending of each
period, and updated pool composition information, such as weighted
average
coupon, weighted average remaining term, pool factors and prepayment
amounts.
|
X
(6.07
Statement)
|
Updated
pool composition information fields to be as specified by Depositor
from
time to time
|
||||||||||
|
(9)
Delinquency and loss information for the period.
|
X
|
X
|
X
(6.07
Statement)
|
|||||||||
|
In
addition, describe any material changes to the information specified
in
Item 1100(b)(5) of Regulation AB regarding the pool assets.
(methodology)
|
X
|
|||||||||||
|
(10)
Information on the amount, terms and general purpose of any advances
made
or reimbursed during the period, including the general use of funds
advanced and the general source of funds for
reimbursements.
|
X
|
X
|
X
(6.07
Statement)
|
|||||||||
|
(11)
Any material modifications, eXtensions
or waivers to pool asset terms, fees, penalties or payments during
the
distribution period or that have cumulatively become material over
time.
|
X
|
X
|
X
(6.07
Statement)
|
|||||||||
|
(12)
Material breaches of pool asset representations or warranties or
transaction covenants.
|
X
|
X
(if
agreed upon by the parties)
|
||||||||||
|
(13)
Information on ratio, coverage or other tests used for determining
any
early amortization, liquidation or other performance trigger and
whether
the trigger was met.
|
X
(6.07
Statement)
|
|||||||||||
|
(14)
Information regarding any new issuance of asset-backed securities
backed
by the same asset pool,
|
X
|
|||||||||||
|
information
regarding any pool asset changes (other than in connection with a
pool
asset converting into cash in accordance with its terms), such as
additions or removals in connection with a prefunding or revolving
period
and pool asset substitutions and repurchases (and purchase rates,
if
applicable), and cash flows available for future purchases, such
as the
balances of any prefunding or revolving accounts, if
applicable.
|
X
|
X
|
X
|
X
|
||||||||
|
Disclose
any material changes in the solicitation, credit-granting, underwriting,
origination, acquisition or pool selection criteria or procedures,
as
applicable, used to originate, acquire or select the new pool
assets.
|
X
|
X
|
||||||||||
|
Item
1121(b) - Pre-Funding or Revolving Period Information
Updated
pool information as required under Item 1121(b).
|
X
|
|||||||||||
|
2
|
Legal
Proceedings
|
|||||||||||
|
Item
1117 - Legal proceedings pending against the following entities,
or their
respective property, that is material to Certificateholders, including
proceedings known to be contemplated by governmental
authorities:
|
||||||||||||
|
Sponsor
(Seller)
|
X
|
|||||||||||
|
Depositor
|
X
|
|||||||||||
|
Trustee
|
X
|
|||||||||||
|
Issuing
entity
|
X
|
|||||||||||
|
Master
Servicer, affiliated Servicer, other Servicer servicing 20% or more
of
pool assets at time of report, other material servicers
|
X
|
X
|
||||||||||
|
Securities
Administrator
|
X
|
|||||||||||
|
Originator
of 20% or more of pool assets as of the Cut-off Date
|
X
|
|||||||||||
|
Custodian
|
X
|
|||||||||||
|
3
|
Sales
of Securities and Use of Proceeds
|
|||||||||||
|
Information
from Item 2(a) of Part II of Form 10-Q:
With
respect to any sale of securities by the sponsor, depositor or issuing
entity, that are backed by the same asset pool or are otherwise issued
by
the issuing entity, whether or not registered, provide the sales
and use
of proceeds information in Item 701 of Regulation S-K. Pricing information
can be omitted if securities were not registered.
|
X
|
|||||||||||
|
4
|
Defaults
Upon Senior Securities
|
|||||||||||
|
Information
from Item 3 of Part II of Form 10-Q:
Report
the occurrence of any Event of Default (after eXpiration
of any grace period and provision of any required notice)
|
X
|
|||||||||||
|
5
|
Submission
of Matters to a Vote of Security Holders
|
|||||||||||
|
Information
from Item 4 of Part II of Form 10-Q
|
X
|
|||||||||||
|
6
|
Significant
Obligors of Pool Assets
|
|||||||||||
|
Item
1112(b) - Significant Obligor Financial Information*
|
X
|
|||||||||||
|
*This
information need only be reported on the Form 10-D for the distribution
period in which updated information is required pursuant to the
Item.
|
||||||||||||
|
7
|
Significant
Enhancement Provider Information
|
|||||||||||
|
Item
1114(b)(2) - Credit Enhancement Provider Financial
Information*
|
||||||||||||
|
Determining
applicable disclosure threshold
|
X
|
|||||||||||
|
Requesting
required financial information or effecting incorporation by
reference
|
X
|
|||||||||||
|
Item
1115(b) - Derivative Counterparty Financial Information*
|
||||||||||||
|
Determining
current maXimum
probable eXposure
|
X
|
|||||||||||
|
Determining
current significance percentage
|
X
|
|||||||||||
|
Requesting
required financial information or effecting incorporation by
reference
|
X
|
|||||||||||
|
*This
information need only be reported on the Form 10-D for the distribution
period in which updated information is required pursuant to the
Items.
|
||||||||||||
|
8
|
Other
Information
|
|||||||||||
|
Disclose
any information required to be reported on Form 8-K during the period
covered by the Form 10-D but not reported
|
The
Responsible Party for the applicable Form 8-K item as indicated
below.
|
|||||||||||
|
9
|
EXhibits
|
|||||||||||
|
Distribution
report
|
X
|
|||||||||||
|
EXhibits
required by Item 601 of Regulation S-K, such as material
agreements
|
X
|
|||||||||||
|
8-K
|
Must
be filed within four business days of an event reportable on Form
8-K.
|
|||||||||||
|
1.01
|
Entry
into a Material Definitive Agreement
|
|||||||||||
|
Disclosure
is required regarding entry into or amendment of any definitive agreement
that is material to the securitization, even if depositor is not
a
party.
Examples:
servicing agreement, custodial agreement.
Note:
disclosure not required as to definitive agreements that are fully
disclosed in the prospectus
|
X
|
X
|
X
|
X
|
X
|
|||||||
|
1.02
|
Termination
of a Material Definitive Agreement
|
X
|
X
|
X
|
X
|
X
|
||||||
|
Disclosure
is required regarding termination of any definitive agreement that
is
material to the securitization (other than eXpiration
in accordance with its terms), even if depositor is not a
party.
Examples:
servicing agreement, custodial agreement
|
||||||||||||
|
.
|
||||||||||||
|
1.03
|
Bankruptcy
or Receivership
|
|||||||||||
|
Disclosure
is required regarding the bankruptcy or receivership, if known to
the
Master Servicer, with respect to any of the following:
Sponsor
(Seller), Depositor, Master Servicer, affiliated Servicer, other
Servicer
servicing 20% or more of pool assets at time of report, other material
servicers, Certificate Administrator, Trustee, significant obligor,
credit
enhancer (10% or more), derivatives counterparty,
Custodian
|
X
|
X
|
X
|
X
|
X
|
X
|
||||||
|
2.04
|
Triggering
Events that Accelerate or Increase a Direct Financial Obligation
or an
Obligation under an Off-Balance Sheet Arrangement
|
|||||||||||
|
Includes
an early amortization, performance trigger or other event, including
event
of default, that would materially alter the payment priority/distribution
of cash flows/amortization schedule.
Disclosure
will be made of events other than waterfall triggers which are disclosed
in the 6.07 statement
|
X
|
X
|
||||||||||
|
3.03
|
Material
Modification to Rights of Security Holders
|
|||||||||||
|
Disclosure
is required of any material modification to documents defining the
rights
of Certificateholders, including the Pooling and Servicing
Agreement
|
X
|
X
|
||||||||||
|
5.03
|
Amendments
to Articles of Incorporation or Bylaws; Change in Fiscal
Year
|
|||||||||||
|
Disclosure
is required of any amendment “to the governing documents of the issuing
entity”
|
X
|
|||||||||||
|
5.06
|
Change
in Shell Company Status
|
|||||||||||
|
[Not
applicable to ABS issuers]
|
X
|
|||||||||||
|
6.01
|
ABS
Informational and Computational Material
|
|||||||||||
|
[Not
included in reports to be filed under Section 3.18]
|
X
|
|||||||||||
|
6.02
|
Change
of Servicer or Trustee
|
|||||||||||
|
Requires
disclosure of any removal, replacement, substitution or addition
of any
master servicer, affiliated servicer, other servicer servicing 10%
or more
of pool assets at time of report, other material servicers, certificate
administrator or trustee.
|
X
|
X
|
X
|
X
|
||||||||
|
Reg
AB disclosure about any new servicer is also required.
|
X
|
|||||||||||
|
Reg
AB disclosure about any new trustee is also required.
|
X
(to
the extent required by successor trustee
|
|||||||||||
|
Reg
AB disclosure about any new securities administrator is also
required.
|
X
|
|||||||||||
|
6.03
|
Change
in Credit Enhancement or Other EXternal
Support
|
|||||||||||
|
Covers
termination of any enhancement in manner other than by its terms,
the
addition of an enhancement, or a material change in the enhancement
provided. Applies to eXternal
credit enhancements as well as derivatives.
|
X
|
X
|
||||||||||
|
Reg
AB disclosure about any new enhancement provider is also
required.
|
X
|
X
|
||||||||||
|
6.04
|
Failure
to Make a Required Distribution
|
X
|
||||||||||
|
6.05
|
Securities
Act Updating Disclosure
|
|||||||||||
|
If
any material pool characteristic differs by 5% or more at the time
of
issuance of the securities from the description in the final prospectus,
provide updated Reg AB disclosure about the actual asset
pool.
|
X
|
|
||||||||||
|
If
there are any new servicers or originators required to be disclosed
under
Regulation AB as a result of the foregoing, provide the information
called
for in Items 1108 and 1110 respectively.
|
X
|
|||||||||||
|
7.01
|
Regulation
FD Disclosure
|
X
|
X
|
X
|
X
|
X
|
||||||
|
8.01
|
Other
Events
|
|||||||||||
|
Any
event, with respect to which information is not otherwise called
for in
Form 8-K, that the registrant deems of importance to security
holders.
|
X
|
|||||||||||
|
9.01
|
Financial
Statements and EXhibits
|
The
Responsible Party applicable to reportable event.
|
||||||||||
|
10-K
|
Must
be filed within 90 days of the fiscal year end for the
registrant.
|
|||||||||||
|
9B
|
Other
Information
|
|||||||||||
|
Disclose
any information required to be reported on Form 8-K during the fourth
quarter covered by the Form 10-K but not reported
|
The
Responsible Party for the applicable Form 8-K item as indicated
above.
|
|||||||||||
|
15
|
EXhibits
and Financial Statement Schedules
|
|||||||||||
|
Item
1112(b) - Significant Obligor Financial Information
|
X
|
|||||||||||
|
Item
1114(b)(2) - Credit Enhancement Provider Financial
Information
|
||||||||||||
|
Determining
applicable disclosure threshold
|
X
|
|||||||||||
|
Requesting
required financial information or effecting incorporation by
reference
|
X
|
|||||||||||
|
Item
1115(b) - Derivative Counterparty Financial
Information
|
||||||||||||
|
Determining
current maXimum
probable eXposure
|
X
|
|||||||||||
|
Determining
current significance percentage
|
X
|
|||||||||||
|
Requesting
required financial information or effecting incorporation by
reference
|
X
|
|||||||||||
|
Item
1117 - Legal proceedings pending against the following entities,
or their
respective property, that is material to Certificateholders, including
proceedings known to be contemplated by governmental
authorities:
|
||||||||||||
|
Sponsor
(Seller)
|
X
|
|||||||||||
|
Depositor
|
X
|
|||||||||||
|
Trustee
|
X
|
|||||||||||
|
Issuing
entity
|
X
|
|||||||||||
|
Master
Servicer, affiliated Servicer, other Servicer servicing 20% or more
of
pool assets at time of report, other material servicers
|
X
|
X
|
||||||||||
|
Securities
Administrator
|
X
|
|||||||||||
|
Originator
of 20% or more of pool assets as of the Cut-off Date
|
X
|
|||||||||||
|
Custodian
|
X
|
|||||||||||
|
Item
1119 - Affiliations and relationships between the following entities,
or
their respective affiliates, that are material to
Certificateholders:
|
||||||||||||
|
Sponsor
(Seller)
|
X
|
|||||||||||
|
Depositor
|
X
|
|||||||||||
|
Trustee
|
X
|
|||||||||||
|
Master
Servicer, affiliated Servicer, other Servicer servicing 20% or more
of
pool assets at time of report, other material servicers
|
X
|
X
|
||||||||||
|
Securities
Administrator
|
X
|
|||||||||||
|
Originator
|
X
|
|||||||||||
|
Custodian
|
X
|
|||||||||||
|
Credit
Enhancer/Support Provider
|
X
|
|||||||||||
|
Significant
Obligor
|
X
|
|||||||||||
|
Item
1122 - Assessment of Compliance with Servicing
Criteria
|
X
|
X
|
X
|
X
|
||||||||
|
Item
1123 - Servicer Compliance Statement
|
X
|
X
|
||||||||||
EXHIBIT
H
FORM
CERTIFICATION TO BE PROVIDED BY THE MASTER SERVICER WITH FORM 10-K
|
Re:
|
Citigroup
Mortgage Loan Trust, Series
2006-AR1
|
Mortgage Backed Notes, Series 2006-AR1
I,
[______identify the certifying individual], certify that:
l. I
have
reviewed this annual report on Form 10-K, and all reports on Form 10-D required
to be filed in respect of the period covered by this report on Form 10-K of
Citigroup Mortgage Loan Trust, Mortgage Backed Notes, Series 2006-AR1 (the
“Exchange Act periodic reports”);
2. Based
on
my knowledge, the Exchange Act periodic reports, taken as a whole, do not
contain any untrue statement of a material fact or omit to state a material
fact
necessary to make the statements made, in light of the circumstances under
which
such statements were made, not misleading with respect to the period covered
by
this report;
3. Based
on
my knowledge, all of the distribution, servicing and other information required
to be provided under Form 10-D for the period covered by this report is included
in the Exchange Act periodic reports;
4. I
am
responsible for reviewing the activities performed by the servicer and based
on
my knowledge and the compliance review(s) conducted in preparing the servicer
compliance statement(s) required in this report under Item 1123 of Regulation
AB, and except as disclosed in the Exchange Act periodic reports, the servicer
[has/have] fulfilled [its/their] obligations under the servicing agreement;
and
5. All
of
the reports on assessment of compliance with servicing criteria for asset-backed
securities and their related attestation reports on assessment of compliance
with servicing criteria for asset-backed securities required to be included
in
this report in accordance with Item 1122 of Regulation AB and Exchange Act
Rules
13a-18 and 15d-18 have been included as an exhibit to this report, except as
otherwise disclosed in this report. Any material instances of noncompliance
described in such reports have been disclosed in this report on Form
10-K.
In
giving
the certifications above, I have reasonably relied on information provided
to me
by the following unaffiliated party: ▇▇▇▇▇ Fargo Bank, N.A., as
servicer.
Date:
[__], 2006
CITIMORTGAGE,
INC.
By:
________________________________
Name:
Title:
Date:
EXHIBIT
I
FORM
BACK-UP CERTIFICATION TO FORM 10-K CERTIFICATE TO BE PROVIDED TO DEPOSITOR
BY
THE SECURITIES ADMINISTRATOR
The
Securities Administrator of the Trust, hereby certifies to Citigroup Mortgage
Loan Trust Inc. (the “Depositor”), and its officers, directors and affiliates,
and with the knowledge and intent that they will rely upon this certification,
that:
1. The
Securities Administrator has reviewed the annual report on Form 10-K for the
fiscal year 200_, and all reports on Form 10-D required to be filed in respect
of the period covered by such Form 10-K of the Depositor relating to the
above-referenced trust (the “Exchange Act periodic reports”);
2. Based
on
the Securities Administrator’s knowledge, the information in the distribution
reports prepared by the Securities Administrator, taken as a whole, does not
contain any untrue statement of a material fact or omit to state a material
fact
necessary to make the statements made, in light of the circumstances under
which
such statements were made, not misleading as of the last day of the period
covered by that annual report; and
3. The
information provided by the Securities Administrator pursuant to Sections 2.21
and 3.02 (solely with respect to information about the Securities Administrator)
does not contain any untrue statement of material fact.
4. Based
on
the Securities Administrator’s knowledge, the distribution information required
to be provided by the Securities Administrator under the Servicing Agreement
is
included in the Exchange Act periodic reports.
Capitalized
terms used but not defined herein have the meanings ascribed to them in the
Servicing Agreement, dated February 1, 2006 (the “Servicing Agreement”), among
the Depositor as depositor, CitiMortgage, Inc. as securities administrator
and
master servicer, Citibank, N.A. as note registrar, paying agent and
authenticating agent, CSE Mortgage LLC as sponsor, CS OT I LLC as seller and
U.S. Bank National Association as indenture trustee.
Date: _________________________
By:
Name:
________________________________
Title:
________________________________