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[------------------],
as Master Servicer,
CITIGROUP MORTGAGE LOAN TRUST 200_-_,
as Issuer
and
[-------------------------------],
as Indenture Trustee,
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SERVICING AGREEMENT
Dated as of [_____________]
--------------------------------------
Mortgage Loans
Citigroup Mortgage Loan Trust 200_-_
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TABLE OF CONTENTS
ARTICLE I
DEFINITIONS
Section 1.01. Definitions...............................................
Section 1.02. Other Definitional Provisions.............................
Section 1.03. Interest Calculations.....................................
ARTICLE II
REPRESENTATIONS AND WARRANTIES
Section 2.01. Representations and Warranties Regarding the
Master Servicer................................6
Section 2.02. Existence.................................................
Section 2.03. Enforcement of Representations and Warranties.............
ARTICLE III
ADMINISTRATION AND SERVICING OF MORTGAGE LOANS
Section 3.01. Master Servicer to Act as Master Servicer.................
Section 3.02. Sub-Servicing Agreements Between Master Servicer and
Sub-Servicers.........................13
Section 3.03. Successor Sub-Servicers...................................
Section 3.04. Liability of the Master Servicer..........................
Section 3.05. No Contractual Relationship Between Sub-Servicers,
the Indenture Trustee or the Noteholders..................
Section 3.06. Assumption or Termination of Sub-Servicing Agreements
by the Indenture Trustee..................................
Section 3.07. Collection of Certain Mortgage Loan Payments..............
Section 3.08. Sub-Servicing Accounts....................................
Section 3.09. Collection of Taxes, Assessments and Similar Items;
Servicing Accounts.....................16
Section 3.10. Collection Account and Payment Account....................
Section 3.11. Withdrawals from the Collection Account and Payment
Account................................19
Section 3.12. Investment of Funds in the Collection Account and the
Payment Account......................21
Section 3.13. [Reserved]................................................
Section 3.14. Maintenance of Hazard Insurance and Errors and Omissions
and Fidelity Coverage.....................................
Section 3.15. Enforcement of Due-On-Sale Clauses; Assumption Agreements.
Section 3.16. Realization Upon Defaulted Mortgage Loans.................
Section 3.17. Trustee to Cooperate; Release of Mortgage Files...........
Section 3.18. Servicing Compensation....................................
Section 3.19. Reports to the Indenture Trustee and Others; Collection
Account Statements........................................
Section 3.20. Statement as to Compliance................................
Section 3.21. Independent Public Accountants' Servicing Report..........
Section 3.22. Access to Certain Documentation...........................
Section 3.23. Title, Management and Disposition of REO Property.........
Section 3.24. Obligations of the Master Servicer in Respect of
Prepayment Interest Shortfalls............................
Section 3.25. Obligations of the Master Servicer in Respect of Mortgage
Rates and Monthly Payments................................
Section 3.26. Advance Facility..........................................
ARTICLE IV
SERVICING CERTIFICATE
Section 4.01. Remittance Reports and P&I Advances.......................
Section 4.02. Exchange Act Reporting....................................
ARTICLE V
THE MASTER SERVICER
Section 5.01. Liability of the Master Servicer..........................
Section 5.02. Merger or Consolidation of or Assumption of the
Obligations of the Master Servicer........................
Section 5.03. Limitation on Liability of the Master Servicer and Others.
Section 5.04. Master Servicer Not to Resign.............................
Section 5.05. Delegation of Duties......................................
Section 5.06. Rights of the Issuer in Respect of the Master Servicer....
Section 5.07. Indemnification...........................................
ARTICLE VI
DEFAULT
Section 6.01. Master Servicer Events of Default.........................
Section 6.02. Indenture Trustee to Act; Appointment of Successor........
Section 6.03. Notification to Noteholders...............................
Section 6.04. Waiver of Master Servicer Events of Default...............
ARTICLE VII
MISCELLANEOUS PROVISIONS
Section 7.01. Amendment.................................................
Section 7.02. GOVERNING LAW.............................................
Section 7.03. Notices...................................................
Section 7.04. Severability of Provisions................................
Section 7.05. Third-Party Beneficiaries.................................
Section 7.06. Counterparts..............................................
Section 7.07. Effect of Headings and Table of Contents..................
Section 7.08. Termination...............................................
Section 7.09. No Petition...............................................
Section 7.10. No Recourse...............................................
Section 7.11. Indenture Trustee Rights..................................
ARTICLE VIII
DUTIES OF THE MASTER SERVICER AS ADMINISTRATOR
Section 8.01. Administrative Duties.....................................
Section 8.02. Records...................................................
Section 8.03. Additional Information to be Furnished....................
Section 8.04. No Recourse to Owner Trustee..............................
EXHIBITS
Exhibit A Mortgage Loan Schedule
Exhibit B Form of Request for Release
Exhibit C-1 Form of Certification to Be Provided by the Depositor
with Form 10-K
Exhibit C-2 Form of Certification to Be Provided to the Depositor by
the Indenture Trustee
Exhibit D Form of Officer's Certificate Regarding Annual Statement
of Compliance
This Servicing Agreement, dated as of [_____________], among
[_________________________], as Master Servicer (the "Master Servicer" ),
Citigroup Mortgage Loan Trust 200_-_, as Issuer (the "Issuer") and
[_________________________], as Indenture Trustee (the "Indenture Trustee").
W I T N E S S E T H T H A T :
WHEREAS, pursuant to the terms of the Mortgage Loan Purchase Agreement,
Citigroup Mortgage Loan Trust Inc. (the "Depositor") will acquire the Mortgage
Loans;
WHEREAS, the Depositor will create Citigroup Mortgage Loan Trust 200_-_, a
Delaware statutory trust, and will transfer the Mortgage Loans and all of its
rights under the Mortgage Loan Purchase Agreement to the Issuer;
WHEREAS, pursuant to the terms of an Amended and Restated Trust Agreement
dated as of [_____________] (the "Trust Agreement") among the Depositor, as
depositor, Wilmington Trust Company, as owner trustee (the "Owner Trustee") and
[_________________________], as certificate registrar and certificate paying
agent, the Depositor will convey the Mortgage Loans to the Issuer in exchange
for the Certificates (as defined below);
WHEREAS, pursuant to the terms of the Trust Agreement, the Issuer will
issue and transfer to or at the direction of the Depositor, the Trust
Certificates, Series 200_-_ (the "Certificates");
WHEREAS, pursuant to the terms of an Indenture dated as of [_____________]
(the "Indenture") between the Issuer and [_________________________] (the
"Indenture Trustee"), the Issuer will pledge the Mortgage Loans and issue and
transfer to or at the direction of the Purchaser the Asset-Backed Notes, Series
200_-_, Class A- [____], Class M-[__] Notes (collectively, the "Notes"); and
WHEREAS, pursuant to the terms of this Servicing Agreement, the Master
Servicer will service the Mortgage Loans set forth on the Mortgage Loan Schedule
attached hereto as Exhibit A directly or through one or more Sub-Servicers;
NOW, THEREFORE, in consideration of the mutual covenants herein contained, the
parties hereto agree as follows:
ARTICLE I
DEFINITIONS
Section 1.01. DEFINITIONS. For all purposes of this Servicing Agreement,
except as otherwise expressly provided herein or unless the context otherwise
requires, capitalized terms not otherwise defined herein shall have the meanings
assigned to such terms in the Definitions contained in Appendix A to the
Indenture which is incorporated by reference herein. All other capitalized terms
used herein shall have the meanings specified herein.
Section 1.02. OTHER DEFINITIONAL PROVISIONS.
(a) All terms defined in this Servicing Agreement shall have the defined
meanings when used in any certificate or other document made or delivered
pursuant hereto unless otherwise defined therein.
(b) As used in this Servicing Agreement and in any certificate or other
document made or delivered pursuant hereto or thereto, accounting terms not
defined in this Servicing Agreement or in any such certificate or other
document, and accounting terms partly defined in this Servicing Agreement or in
any such certificate or other document, to the extent not defined, shall have
the respective meanings given to them under generally accepted accounting
principles. To the extent that the definitions of accounting terms in this
Servicing Agreement or in any such certificate or other document are
inconsistent with the meanings of such terms under generally accepted accounting
principles, the definitions contained in this Servicing Agreement or in any such
certificate or other document shall control.
(c) The words "hereof," "herein," "hereunder" and words of similar import
when used in this Servicing Agreement shall refer to this Servicing Agreement as
a whole and not to any particular provision of this Servicing Agreement; Section
and Exhibit references contained in this Servicing Agreement are references to
Sections and Exhibits in or to this Servicing Agreement unless otherwise
specified; and the term "including" shall mean "including without limitation".
(d) The definitions contained in this Servicing Agreement are applicable to
the singular as well as the plural forms of such terms and to the masculine as
well as the feminine and neuter genders of such terms.
(e) Any agreement, instrument or statute defined or referred to herein or
in any instrument or certificate delivered in connection herewith means such
agreement, instrument or statute as from time to time amended, modified or
supplemented and includes (in the case of agreements or instruments) references
to all attachments thereto and instruments incorporated therein; references to a
Person are also to its permitted successors and assigns.
Section 1.03. INTEREST CALCULATIONS. All calculations of interest hereunder
that are made in respect of the Stated Principal Balance of a Mortgage Loan
shall be made on the basis of a 360-day year consisting of twelve 30-day months,
notwithstanding the terms of the related Mortgage Note and Mortgage.
ARTICLE II
REPRESENTATIONS AND WARRANTIES
Section 2.01. REPRESENTATIONS AND WARRANTIES REGARDING THE MASTER SERVICER.
The Master Servicer hereby represents, warrants and covenants to the Issuer and
for the benefit of the Indenture Trustee, as pledgee of the Mortgage Loans, 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 and validly
existing under the laws of the State of California and is duly authorized
and qualified to transact any and all business contemplated by this
Servicing 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 Servicing
Agreement;
(ii) The Master Servicer has the full power and authority to conduct
its business as presently conducted by it and to execute, deliver and
perform, and to enter into and consummate, all transactions contemplated by
this Servicing Agreement. The Master Servicer has duly authorized the
execution, delivery and performance of this Servicing Agreement, has duly
executed and delivered this Servicing Agreement, and this Servicing
Agreement, assuming due authorization, execution and delivery by the
Depositor and the Indenture Trustee, constitutes a legal, valid and binding
obligation of the Master Servicer, enforceable against it in accordance
with its terms except as the enforceability thereof may be limited by
bankruptcy, insolvency, reorganization or similar laws affecting the
enforcement of creditors' rights generally and by general principles of
equity;
(iii) The execution and delivery of this Servicing Agreement by the
Master Servicer, the servicing of the Mortgage Loans by the Master Servicer
hereunder, the consummation by the Master Servicer 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 Servicing Agreement or (y) the business, operations, financial
condition, properties or assets of the Master Servicer taken as a whole;
(iv) The Master Servicer is a HUD approved servicer. No event has
occurred, including but not limited to a change in insurance coverage, that
would make the Master Servicer unable to comply with HUD eligibility
requirements or that would require notification to HUD;
(v) The Master Servicer does not believe, nor does it have any reason
or cause to believe, that it cannot perform each and every covenant made by
it and contained in this Servicing Agreement;
(vi) [Reserved];
(vii) No litigation is pending against the Master Servicer that would
materially and adversely affect the execution, delivery or enforceability
of this Servicing 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;
(viii) There are no actions or proceedings against, or investigations
known to it of, the Master Servicer before any court, administrative or
other tribunal (A) that might prohibit its entering into this Servicing
Agreement, (B) seeking to prevent the consummation of the transactions
contemplated by this Servicing Agreement or (C) that might prohibit or
materially and adversely affect the performance by the Master Servicer of
its obligations under, or validity or enforceability of, this Servicing
Agreement;
(ix) 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 Servicing Agreement or the consummation by it of the
transactions contemplated by this Servicing Agreement, except for such
consents, approvals, authorizations or orders, if any, that have been
obtained prior to the Closing Date;
(x) The Master Servicer will not waive any Prepayment Charge unless it
is waived in accordance with the standard set forth in Section 3.01; and
(xi) The Master Servicer has fully furnished and will continue to
fully furnish, in accordance with the Fair Credit Reporting Act and its
implementing regulations, accurate and complete information (e.g.,
favorable and unfavorable) on its borrower credit files to Equifax,
Experian and Trans Union Credit Information Company or their successors on
a monthly basis.
The foregoing representations and warranties shall survive any termination
of the Master Servicer hereunder.
It is understood and agreed that the representations, warranties and
covenants set forth in this Section 2.01 shall survive delivery of the Mortgage
Files to the Indenture Trustee and shall inure to the benefit of the Indenture
Trustee, the Depositor and the Noteholders. Upon discovery by any of the
Depositor, the Master Servicer or the Indenture Trustee of a breach of any of
the foregoing representations, warranties and covenants which materially and
adversely affects the value of any Mortgage Loan or the interests therein of the
Noteholders, the party discovering such breach shall give prompt written notice
(but in no event later than two Business Days following such discovery) to the
Indenture Trustee. Subject to Section 6.01, unless such breach shall not be
susceptible of cure within 90 days, the obligation of the Master Servicer set
forth in this Section 2.01 to cure breaches shall constitute the sole remedy
against the Master Servicer available to the Noteholders, the Depositor and the
Indenture Trustee on behalf of the Noteholders respecting a breach of the
representations, warranties and covenants contained in this Section 2.01.
Notwithstanding the foregoing, within 90 days of the earlier of discovery by the
Master Servicer or receipt of notice by the Master Servicer of the breach of the
representation or covenant of the Master Servicer set forth in Section 2.01(x)
above, which breach materially and adversely affects the interests of the
Holders of the Certificates in any Prepayment Charge, the Master Servicer must
pay the amount of such waived Prepayment Charge, for the benefit of the holders
of the Notes, by depositing such amount into the Collection Account.
Section 2.02. EXISTENCE. The Issuer will keep in full effect its existence,
rights and franchises as a statutory trust under the laws of the State of
Delaware (unless it becomes, or any successor Issuer hereunder is or becomes,
organized under the laws of any other state or of the United States of America,
in which case the Issuer will keep in full effect its existence, rights and
franchises under the laws of such other jurisdiction) and will obtain and
preserve its qualification to do business in each jurisdiction in which such
qualification is or shall be necessary to protect the validity and
enforceability of this Servicing Agreement.
Section 2.03. ENFORCEMENT OF REPRESENTATIONS AND WARRANTIES. (a) The Master
Servicer (to the extent it is not [_________] or an Affiliate of [_________],
and otherwise the Indenture Trustee) shall enforce the representations and
warranties and related obligations for breaches thereof of [_________] pursuant
to the Mortgage Loan Purchase Agreement. Upon the discovery or receipt of notice
of any materially defective document in, or that a document is missing from, a
Mortgage File or of a breach by [_________] of any of the representations and
warranties made in the Mortgage Loan Purchase Agreement in respect of any
Mortgage Loan that materially and adversely affects the value of the value of
such Mortgage Loan or the interests therein of the Noteholders, the Indenture
Trustee shall give prompt written notice to [_________] and the Master Servicer
of such defect, missing document or breach and request that [_________] deliver
such missing document or cure such defect or breach within 60 days from the date
[_________] was notified of such missing document, defect or breach, and if
[_________] does not deliver such missing document or cure such defect or breach
in all material respects during such period, the Master Servicer, to the extent
it is not [_________] or an Affiliate of [_________], and otherwise the
Indenture Trustee, shall enforce the obligations of [_________] under the
Mortgage Loan Purchase Agreement to repurchase such Mortgage Loan from the
Issuer at the Purchase Price within 90 days after the date on which [_________]
was notified of such missing document, defect or breach, if and to the extent
that [_________] is obligated to do so under the Mortgage Loan Purchase
Agreement. The Purchase Price for the repurchased Mortgage Loan shall be
remitted to the Master Servicer for deposit in the Collection Account and the
Indenture Trustee, upon receipt of written certification from the Master
Servicer of such deposit, shall release to [_________] the related Mortgage File
and the Indenture Trustee shall execute and deliver such instruments of transfer
or assignment, in each case without recourse, as [_________] shall furnish to it
and as shall be necessary to vest in [_________] any Mortgage Loan released
pursuant hereto. The Indenture Trustee shall not have any further responsibility
with regard to such Mortgage File. In lieu of repurchasing any such Mortgage
Loan as provided above, if so provided in the Mortgage Loan Purchase Agreement,
[_________] may cause such Mortgage Loan to be removed from the Trust Estate (in
which case it shall become a Deleted Mortgage Loan) and substitute one or more
Qualified Substitute Mortgage Loans in the manner and subject to the limitations
set forth in Section 2.03(b); provided, however, [_________] may not substitute
a Qualified Substitute Mortgage Loan for any Deleted Mortgage Loan that violates
any predatory or abusive lending law. It is understood and agreed that the
obligation of [_________] to cure or to repurchase (or to substitute for) any
Mortgage Loan as to which a document is missing, a material defect in a
constituent document exists or as to which such a breach has occurred and is
continuing shall constitute the sole remedy respecting such omission, defect or
breach available to the Indenture Trustee and the Noteholders. The Indenture
Trustee will be reimbursed for reasonable expenses incurred in connection with
any breach or defect giving rise to the purchase obligation under this Section
2.03 pursuant to Section 3.11(a)(viii).
With respect to the representations and warranties made by [_________] in
the Mortgage Loan Purchase Agreement, the Indenture Trustee shall not be charged
with knowledge of any breach of any such representation or warranty by
[_________] unless a Responsible Officer of the Indenture Trustee at the
Corporate Trust Office obtains actual knowledge of such breach or a Responsible
Officer of the Indenture Trustee receives written notice of such breach from the
Depositor, the Master Servicer or the Noteholders.
(b) As to any Deleted Mortgage Loan for which [_________] substitutes a
Qualified Substitute Mortgage Loan or Loans, such substitution shall be effected
by [_________] delivering to the Indenture Trustee, for such Qualified
Substitute Mortgage Loan or Loans, the Mortgage Note, the Mortgage, the
Assignment to the Indenture Trustee, and such other documents and agreements,
with all necessary endorsements thereon, as are required by Section 2.1(b) of
the Mortgage Loan Purchase Agreement, together with an Officers' Certificate
providing that each such Qualified Substitute Mortgage Loan satisfies the
definition thereof and specifying the Substitution Shortfall Amount (as
described below), if any, in connection with such substitution. The Indenture
Trustee shall acknowledge receipt for such Qualified Substitute Mortgage Loan or
Loans and, within ten Business Days thereafter, shall review such documents as
specified in Section 2.1(b) of the Mortgage Loan Purchase Agreement and deliver
to the Depositor and the Master Servicer, with respect to such Qualified
Substitute Mortgage Loan or Loans, a certification substantially in the form
attached as Exhibit C-1 to the Indenture, with any applicable exceptions noted
thereon. Within one year of the date of substitution, the Indenture Trustee
shall deliver to the Depositor and the Master Servicer a certification
substantially in the form of Exhibit C-2 to the Indenture with respect to such
Qualified Substitute Mortgage Loan or Loans, with any applicable exceptions
noted thereon. Monthly Payments due with respect to Qualified Substitute
Mortgage Loans in the month of substitution are not part of the Trust Estate and
will be retained by [_________]. For the month of substitution, payments to
Noteholders will reflect the Monthly Payment due on such Deleted Mortgage Loan
on or before the Due Date in the month of substitution, and [_________] shall
thereafter be entitled to retain all amounts subsequently received in respect of
such Deleted Mortgage Loan. The Master Servicer shall give or cause to be given
written notice to the Noteholders that such substitution has taken place, shall
amend the Mortgage Loan Schedule to reflect the removal of such Deleted Mortgage
Loan from the terms of this Servicing Agreement and the substitution of the
Qualified Substitute Mortgage Loan or Loans and shall deliver a copy of such
amended Mortgage Loan Schedule to the Indenture Trustee and the Owner Trustee.
Upon such substitution, such Qualified Substitute Mortgage Loan or Loans shall
constitute part of the Mortgage Pool and shall be subject in all respects to the
terms of this Servicing Agreement and the Mortgage Loan Purchase Agreement,
including, all applicable representations and warranties thereof included in the
Mortgage Loan Purchase Agreement.
For any month in which [_________] substitutes one or more Qualified
Substitute Mortgage Loans for one or more Deleted Mortgage Loans, the Master
Servicer will determine the amount (the "Substitution Shortfall Amount"), if
any, by which the aggregate Purchase Price of all such Deleted Mortgage Loans
exceeds the aggregate of, as to each such Qualified Substitute Mortgage Loan,
the Stated Principal Balance thereof as of the date of substitution, together
with one month's interest on such Stated Principal Balance at the applicable Net
Mortgage Rate, plus all outstanding P&I Advances and Servicing Advances
(including Nonrecoverable P&I Advances and Nonrecoverable Servicing Advances)
related thereto. On the date of such substitution, [_________] will deliver or
cause to be delivered to the Master Servicer for deposit in the Collection
Account an amount equal to the Substitution Shortfall Amount, if any, and the
Indenture Trustee, upon receipt of the related Qualified Substitute Mortgage
Loan or Loans and certification by the Master Servicer of such deposit, shall
release to [_________] the related Mortgage File or Files and the Indenture
Trustee shall execute and deliver such instruments of transfer or assignment, in
each case without recourse, [_________] shall deliver to it and as shall be
necessary to vest therein any Deleted Mortgage Loan released pursuant hereto.
ARTICLE III
ADMINISTRATION ANDSERVICING OF MORTGAGE LOANS
Section 3.01. MASTER SERVICER TO ACT AS MASTER SERVICER.
The Master Servicer shall service and administer the Mortgage Loans on
behalf of the Trust Estate 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 Servicing 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 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 or non-ownership of any Note by the Master Servicer
or any Affiliate of the Master Servicer;
(iii) the Master Servicer's obligation to make P&I 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 (a) shall
seek to maximize the timely and complete recovery of principal and interest on
the Mortgage Notes and (b) shall waive (or permit a Sub-Servicer to waive) a
Prepayment Charge only under the following circumstances: (i) such waiver is
standard and customary in servicing similar Mortgage Loans and (ii) either (A)
such waiver would, in the reasonable judgment of the Master Servicer, maximize
recovery of total proceeds taking into account the value of such Prepayment
Charge and the related Mortgage Loan and, if such waiver is made in connection
with a refinancing of the related Mortgage Loan, such refinancing is related to
a default or a reasonably foreseeable default or (B) such waiver is made in
connection with a refinancing of the related Mortgage Loan unrelated to a
default or a reasonably foreseeable default where (x) the related mortgagor has
stated to the Master Servicer or an applicable Sub-Servicer an intention to
refinance the related Mortgage Loan and (y) the Master Servicer has concluded in
its reasonable judgement that the waiver of such Prepayment Charge would induce
such mortgagor to refinance with the Master Servicer or (iii) collection of the
related Prepayment Charge would violate applicable law. If a Prepayment Charge
is waived as permitted by meeting both of the standards described in clauses (i)
and (ii)(B) or (iii) above, then the Master Servicer is required to pay the
amount of such waived Prepayment Charge, for the benefit of the Holders of the
Notes, by depositing such amount into the Collection Account together with and
at the time that the amount prepaid on the related Mortgage Loan is required to
be deposited into the Collection Account.
Subject only to the above-described servicing standards and the terms of
this Servicing 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 3.02, 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 Trust
Estate, the Issuer, the Noteholders and the Indenture Trustee or any of them,
and upon written 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
Servicing Agreement with all reasonable rules and requirements of each insurer
under any standard hazard insurance policy. Subject to Section 3.17, the Issuer
and the Indenture Trustee shall execute, at the written request of the Master
Servicer, and furnish to the Master Servicer and any Sub-Servicer any special or
limited powers of attorney and other documents necessary or appropriate to
enable the Master Servicer or any Sub-Servicer to carry out their servicing and
administrative duties hereunder and the Issuer and the Indenture Trustee shall
not be liable for the actions of the Master Servicer or any Sub-Servicers under
such powers of attorney.
Subject to Section 3.09 hereof, 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 in a manner and at a time that avoids
the loss of the Mortgaged Property due to a tax sale or the foreclosure as a
result of a tax lien, which advances shall be Servicing Advances reimbursable in
the first instance from related collections from the Mortgagors pursuant to
Section 3.09, and further as provided in Section 3.11. 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 Stated Principal Balance of the
related Mortgage Loan, notwithstanding that the terms of such Mortgage Loan so
permit.
Notwithstanding anything in this Servicing Agreement to the contrary, the
Master Servicer may not make any future advances with respect to a Mortgage Loan
(except as provided in Section 4.01) and the Master Servicer shall not permit
any modification with respect to any Mortgage Loan that would change the
Mortgage 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 (unless, as provided in Section 3.07, the Mortgagor is in
default with respect to the Mortgage Loan or such default is, in the judgment of
the Master Servicer, reasonably foreseeable).
The Master Servicer may delegate its responsibilities under this Servicing
Agreement; provided, however, that no such delegation shall release the Master
Servicer from the responsibilities or liabilities arising under this Servicing
Agreement.
Section 3.02. SUB-SERVICING AGREEMENTS BETWEEN MASTER SERVICER AND
SUB-SERVICERS.
(a) The Master Servicer may enter into Sub-Servicing Agreements with
Sub-Servicers for the servicing and administration of the Mortgage Loans;
provided, however, that such agreements would not result in a withdrawal or a
downgrading by any Rating Agency of the rating on any Class of Notes. The
Indenture Trustee is hereby authorized to acknowledge, at the request of the
Master Servicer, any Sub-Servicing Agreement that, based on an Officers'
Certificate of the Master Servicer delivered to the Indenture Trustee (upon
which the Indenture Trustee can conclusively rely), meets the requirements
applicable to Sub-Servicing Agreements set forth in this Servicing Agreement and
that is otherwise permitted under this Servicing Agreement.
Each Sub-Servicer shall be (i) authorized to transact business in the state
or states where 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 and (ii)
a ▇▇▇▇▇▇▇ Mac or ▇▇▇▇▇▇ Mae approved mortgage servicer. Each Sub-Servicing
Agreement must impose on the Sub-Servicer requirements conforming to the
provisions set forth in Section 3.08 and provide for servicing of the Mortgage
Loans consistent with the terms of this Servicing 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 Servicing 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 Servicing 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 Notes entitled to at least 66% of the Voting
Rights; provided, further, that the consent of the Holders of Notes entitled to
at least 66% of the Voting Rights shall not be required (i) to cure any
ambiguity or defect in a Sub-Servicing Agreement, (ii) to correct, modify or
supplement any provisions of a Sub-Servicing Agreement, or (iii) to make any
other provisions with respect to matters or questions arising under a
Sub-Servicing Agreement, which, in each case, shall not be inconsistent with the
provisions of this Servicing Agreement. Any variation without the consent of the
Holders of Notes entitled to at least [__]% of the Voting Rights from the
provisions set forth in Section 3.08 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 Servicing Agreement and therefore prohibited. The Master Servicer
shall deliver to the Indenture Trustee, upon its request, copies of all
Sub-Servicing Agreements, and any amendments or modifications thereof, promptly
upon the Master Servicer's execution and delivery of such instruments.
(b) As part of its servicing activities hereunder, the Master Servicer, 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 of a Sub-Servicer 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 enforcing the obligations of a Sub-Servicer 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 3.03. 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 3.02.
Any Sub-Servicing Agreement shall include the provision that such agreement
may be immediately terminated by the Indenture Trustee (if the Indenture Trustee
is acting as Master Servicer) without fee, in accordance with the terms of this
Servicing Agreement, in the event that the Master Servicer (or the Indenture
Trustee, if it is then acting as Master Servicer) shall, for any reason, no
longer be the Master Servicer (including termination due to a Master Servicer
Event of Default).
Section 3.04. LIABILITY OF THE MASTER SERVICER.
Notwithstanding any Sub-Servicing Agreement or the provisions of this
Servicing 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 3.01 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 Servicing Agreement shall be deemed to limit or modify such
indemnification.
Section 3.05. NO CONTRACTUAL RELATIONSHIP BETWEEN SUB-SERVICERS, THE
INDENTURE TRUSTEE OR THE 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 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
3.06. 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 Servicing Agreement is sufficient to pay such fees.
Section 3.06. ASSUMPTION OR TERMINATION OF SUB-SERVICING AGREEMENTS BY THE
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, its designee or other successor master
servicer 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, such designee or other successor
master servicer elects to terminate any Sub-Servicing Agreement in accordance
with its terms as provided in Section 3.03. Upon such assumption, the Indenture
Trustee, its designee or the successor master servicer appointed pursuant to
Section 6.02 shall be deemed, subject to Section 3.03, 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 that arose before it ceased to be
the Master Servicer 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.
The Servicing Fee payable to the Indenture Trustee or other successor
master servicer shall be payable from payments received on the Mortgage Loans in
the amount and in the manner set forth in this Servicing Agreement.
Section 3.07. 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 Servicing Agreement and
the terms and provisions of any 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, the Master Servicer may in its discretion (i) waive any late
payment charge or, if applicable, any penalty interest, or (ii) extend the due
dates for the Monthly Payments due on a Mortgage Note for a period of not
greater than 180 days; provided, however, 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 4.01 and in accordance with the amortization schedule of such Mortgage
Loan without modification thereof by reason of such arrangement. 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 3.01, may
also waive, modify or vary any term of such Mortgage Loan (including
modifications that would change the Mortgage 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 Stated
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.
Section 3.08. 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 Servicing Agreement relating to the Collection Account. The
Sub-Servicer shall deposit in the clearing 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
one Business Day 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 two
Business Days after the receipt of such amounts. The Sub-Servicer shall
thereafter deposit such proceeds in the Collection Account or 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. For purposes of this Servicing Agreement, the Master Servicer shall be
deemed to have received payments on the Mortgage Loans when the Sub-Servicer
receives such payments.
Section 3.09. COLLECTION OF TAXES, ASSESSMENTS AND SIMILAR ITEMS; SERVICING
ACCOUNTS.
The Master Servicer shall establish and maintain, or cause to be
established and maintained, one or more accounts (the "Servicing Accounts"),
into which all collections from the Mortgagors (or related advances from
Sub-Servicers) for the payment of taxes, assessments, hazard insurance premiums
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 shall deposit in the clearing 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
one Business Day after the Master 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 two
Business Days after the receipt of such Escrow Payments, all Escrow Payments
collected on account of the Mortgage Loans for the purpose of effecting the
timely payment of any such items as required under the terms of this Servicing
Agreement. Withdrawals of amounts from a Servicing Account may be made only to
(i) effect payment of taxes, assessments, hazard insurance premiums, and
comparable items in a manner and at a time that assures that the lien priority
of the Mortgage is not jeopardized (or, with respect to the payment of taxes, in
a manner and at a time that avoids the loss of the Mortgaged Property due to a
tax sale or the foreclosure as a result of a tax lien); (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 3.01 (with respect to taxes and assessments) and Section
3.14 (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; or (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 Servicing Agreement in accordance with Section 7.08. As part of its
servicing duties, the Master Servicer or Sub-Servicers shall pay to the
Mortgagors interest on funds in the 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.
Section 3.10. COLLECTION ACCOUNT AND PAYMENT ACCOUNT.
(a) On behalf of the Trust Estate, the Master Servicer shall establish and
maintain, or cause to be established and maintained, one or more accounts (such
account or accounts, the "Collection Account"), held in trust for the benefit of
the Owner Trustee, 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 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 one Business Day after the Master
Servicer's receipt thereof, and shall thereafter deposit in the Collection
Account, in no event more than two Business Days after the Master Servicer's
receipt thereof, as and when received or as otherwise required hereunder, the
following payments and collections received or made by it subsequent to 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) on each Mortgage Loan;
(iii) all Insurance Proceeds, Liquidation Proceeds (other than
proceeds collected in respect of any particular REO Property and amounts
paid in connection with the redemption of the Notes pursuant to Section
8.07 of the Indenture) and Subsequent Recoveries;
(iv) any amounts required to be deposited pursuant to Section 3.12 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 3.14(a) in respect of any
blanket policy deductibles;
(vi) all proceeds of any Mortgage Loan repurchased or purchased in
accordance with Section 3.1 of the Mortgage Loan Purchase Agreement or
Section 3.16;
(vii) all amounts required to be deposited in connection with
shortfalls in principal amount of Qualified Substitute Mortgage Loans
pursuant to Section 2.03(b) hereof; and
(viii) all Prepayment Charges collected by the Master Servicer in
connection with the Principal Prepayment of any of the Mortgage Loans.
The foregoing requirements for deposit in the Collection Account shall be
exclusive, it being understood and agreed that, without limiting the generality
of the foregoing, payments in the nature of late payment charges, modification
or assumption fees, or insufficient funds charges need not be deposited by the
Master Servicer in the Collection Account and may be retained by the Master
Servicer as additional compensation. 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) On behalf of the Trust Estate, the Master Servicer shall deliver to the
Indenture Trustee in immediately available funds for deposit in the Payment
Account by 1:00 p.m. New York time (i) on the Master Servicer Remittance Date,
that portion of the Available Payment Amount (calculated without regard to the
references in clause (2) of the definition thereof to amounts that may be
withdrawn from the Payment Account) for the related Payment Date then on deposit
in the Collection Account and the amount of all Prepayment Charges collected by
the Master Servicer in connection with the Principal Prepayment of any of the
Mortgage Loans then on deposit in the Collection Account and the amount of any
funds reimbursable to an Advancing Person pursuant to Section 3.26 and (ii) on
each Business Day as of the commencement of which the balance on deposit in the
Collection Account exceeds $[_________] following any withdrawals pursuant to
the next succeeding sentence, the amount of such excess, but only if the
Collection Account constitutes an Eligible Account solely pursuant to clause
(ii) of the definition of "Eligible Account." If the balance on deposit in the
Collection Account exceeds $[_______] as of the commencement of business on any
Business Day and the Collection Account constitutes an Eligible Account solely
pursuant to clause (ii) of the definition of "Eligible Account," the Master
Servicer shall, by 1:00 p.m. New York time on such Business Day, withdraw from
the Collection Account any and all amounts payable or reimbursable to the
Depositor, the Master Servicer, the Owner Trustee, the Indenture Trustee, the
Originator, the Seller or any Sub-Servicer pursuant to Section 3.11 and shall
pay such amounts to the Persons entitled thereto.
(c) Funds in the Collection Account and the Payment Account may be invested
in Permitted Investments in accordance with the provisions set forth in Section
3.12. The Master Servicer shall give notice to the Indenture Trustee of the
location of the Collection Account maintained by it when established and prior
to any change thereof. The Indenture Trustee shall give notice to the Master
Servicer and the Depositor of the location of the Payment Account 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 Indenture Trustee 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
Servicing Agreement shall be deemed to be a part of the Collection Account (and
in such event, the Master Servicer shall provide the Indenture Trustee with
written instructions regarding the investment of such funds); provided, however,
that the Indenture Trustee 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 Indenture Trustee for deposit in the Payment Account any amount
not required to be deposited therein, it may at any time request in writing that
the Indenture Trustee 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 Indenture Trustee from time
to time for deposit, and the Indenture Trustee shall so deposit, in the Payment
Account:
(i) any P&I Advances, as required pursuant to Section 4.01;
(ii) any amounts required to be deposited pursuant to Section 3.23(d)
or (f) in connection with any REO Property; and
(iii) any amounts required to be deposited pursuant to Section 3.24 in
connection with any Prepayment Interest Shortfall.
(e) The Master Servicer shall deposit in the Collection Account any amounts
required to be deposited pursuant to Section 3.12(b) in connection with losses
realized on Permitted Investments with respect to funds held in the Collection
Account (and the Payment Account to the extent that funds therein are deemed to
be part of the Collection Account).
Section 3.11. 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
4.01:
(i) to remit to the Indenture Trustee for deposit in the Payment
Account the amounts required to be so remitted pursuant to Section 3.10(b)
or permitted to be so remitted pursuant to the first sentence of Section
3.10(d);
(ii) subject to Section 3.16(d), to reimburse the Master Servicer for
P&I Advances, but only to the extent of amounts received which represent
Late Collections (net of the related Servicing Fees) of Monthly Payments on
Mortgage Loans with respect to which such P&I Advances were made in
accordance with the provisions of Section 4.01;
(iii) subject to Section 3.16(d), to pay the Master Servicer or any
Sub-Servicer, as applicable, (a) any unpaid Servicing Fees, (b) any
unreimbursed Servicing Advances with respect to each Mortgage Loan, but
only to the extent of any Late Collections, Liquidation Proceeds, Insurance
Proceeds and Subsequent Recoveries received with respect to such Mortgage
Loan and (c) any Nonrecoverable Servicing Advances with respect to 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 Servicing Advances;
(iv) to pay to the Master Servicer as servicing compensation (in
addition to the Servicing 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 Originator or
the Seller, as the case may be, with respect to each Mortgage Loan that has
previously been purchased or replaced pursuant to Section 3.1 of the
Mortgage Loan Purchase Agreement or Section 3.16(c) 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 P&I Advance previously
made which the Master Servicer has determined to be a Nonrecoverable P&I
Advance in accordance with the provisions of Section 4.01;
(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 3.02(b) and Section 5.03;
(viii) to reimburse the Master Servicer or Indenture Trustee for
expenses reasonably incurred in connection with any breach or defect giving
rise to the purchase obligation under Section 3.1 of the Mortgage Loan
Purchase Agreement and Section 2.03 hereof, including any expenses arising
out of the enforcement of the purchase obligation;
(ix) to pay, or to reimburse the Master Servicer for Servicing
Advances in respect of, expenses incurred in connection with any Mortgage
Loan pursuant to Section 3.16(b); and
(x) to clear and terminate the Collection Account pursuant to Section
7.08.
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,
on or prior to the next succeeding Master Servicer Remittance Date, upon making
any withdrawals from the Collection Account pursuant to subclauses (vi) and
(vii) above; provided that an Officers' Certificate in the form described under
Section 4.01(d) shall suffice for such written notification to the Indenture
Trustee in respect of clause (vi) hereof.
(b) The Indenture Trustee shall, from time to time, make withdrawals from
the Payment Account, for any of the following purposes, without priority:
(i) to make payments to Noteholders in accordance with Section 4.01;
(ii) to pay and reimburse itself and the Owner Trustee amounts to
which it or the Owner Trustee is entitled pursuant to Section 6.07 of the
Indenture;
(iii) to reimburse itself pursuant to Section 6.02;
(iv) to pay to an Advancing Person reimbursements for P&I Advances
and/or Servicing Advances pursuant to Section 3.26; and
(v) to clear and terminate the Payment Account pursuant to Section
4.10 of the Indenture.
Section 3.12. INVESTMENT OF FUNDS IN THE COLLECTION ACCOUNT AND THE
PAYMENT ACCOUNT.
(a) The Master Servicer may direct any depository institution maintaining
the Collection Account or any REO Account (for purposes of this Section 3.12, an
"Investment Account") to invest the funds in such Investment Account in one or
more Permitted Investments 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 Servicing Agreement, if a Person other than the
Indenture Trustee 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
Servicing Agreement, if the Indenture Trustee is the obligor thereon. Amounts in
the Payment Account shall be held uninvested unless directed otherwise pursuant
to Section 3.10(d) of the Servicing Agreement. 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 Indenture Trustee for the
benefit of the Noteholders. The Indenture Trustee 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 Indenture Trustee or its agent,
together with any document of transfer necessary to transfer title to such
investment to the Indenture Trustee 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 party with investment discretion over such
Investment Account 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 Indenture Trustee 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 and Payment Account, solely to the extent that the Master
Servicer gives the Indenture Trustee investment directions with respect to the
funds in the Payment Account pursuant to Section 3.10(d), and any REO 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 3.11 or Section 3.23, as applicable. The Master Servicer shall deposit
in the Collection Account or any REO Account, as applicable, 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.
(c) Except as otherwise expressly provided in this Servicing Agreement, if
any default occurs in the making of a payment due under any Permitted
Investment, or if a default occurs in any other performance required under any
Permitted Investment (of which a Responsible Officer of the Indenture Trustee
obtains actual knowledge), the Indenture Trustee may and, subject to Section
6.01 of the Indenture, upon the request of the Holders of Notes representing
more than [__]% of the Voting Rights allocated to any Class of Notes, shall take
such action as may be appropriate to enforce such payment or performance,
including the institution and prosecution of appropriate proceedings.
(d) The Indenture Trustee or its Affiliates are permitted to receive
additional compensation that could be deemed to be in the Indenture Trustee's
economic self-interest for (i) serving as investment adviser, administrator,
shareholder, servicing agent, custodian or sub-custodian with respect to certain
of the Permitted Investments, (ii) using Affiliates to effect transactions in
certain Permitted Investments and (iii) effecting transactions in certain
Permitted Investments. Such compensation shall not be considered an amount that
is reimbursable or payable to the Indenture Trustee pursuant to Section 3.11 or
3.12.
Section 3.13. [RESERVED].
Section 3.14. 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 lesser of the current principal balance of
such Mortgage Loan and 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, 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 Rate and related Servicing
Advances. The Master Servicer will comply in the performance of this Servicing
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 3.11, if received
in respect of a Mortgage Loan, or in the REO Account, subject to withdrawal
pursuant to Section 3.23, 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
Stated 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 and flood insurance has been made available, 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 3.14, 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 3.14, 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 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
Servicing Agreement a policy or policies of insurance covering errors and
omissions for failure in the performance of the Master Servicer's obligations
under this Servicing 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 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 3.15. 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 be required to take such action if in its sole
business judgment the Master Servicer believes it is not in the best interests
of the Trust Estate and shall not exercise any such rights if prohibited by law
from doing so. 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 Originator and has a credit risk rating at least equal to that
of the original Mortgagor. In connection with any assumption or substitution,
the Master Servicer shall apply the Originator's 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 hazard insurance policy. Any fee collected by
the Master Servicer in respect of an assumption, modification or substitution of
liability agreement shall 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 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, modification or
assumption agreement has been completed by forwarding to the Indenture Trustee
the executed original of such substitution, modification 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
Servicing 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 3.15,
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 3.16. REALIZATION UPON DEFAULTED MORTGAGE LOANS.
(a) The Master Servicer shall exercise its discretion, consistent with
customary servicing procedures and the terms of this Servicing Agreement, with
respect to the enforcement and servicing of defaulted Mortgage Loans in such
manner as will maximize the receipt of principal and interest with respect
thereto, including but not limited to the modification of such Mortgage Loan, or
foreclosure upon the related Mortgaged Property and disposition thereof.
In furtherance of the foregoing, the Master Servicer shall use its best
efforts, consistent with Accepted Servicing Practices, to 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 3.07. 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 3.11 and Section 3.23. 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.
(b) Notwithstanding the foregoing provisions of this Section 3.16 or any
other provision of this Servicing 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 Issuer
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 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 an Independent Person who regularly conducts environmental audits
using customary industry standards, that:
(1) 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 Estate to take such actions as are necessary to bring
the Mortgaged Property into compliance therewith; and
(2) 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 Estate to take such actions with respect to the affected Mortgaged
Property.
The cost of the environmental audit report contemplated by this Section
3.16 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 3.11(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 Estate 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 Estate; provided that any amounts disbursed by
the Master Servicer pursuant to this Section 3.16(b) shall constitute Servicing
Advances, subject to Section 4.01(d). 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 3.11(a)(iii) and (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.
(c) The Master Servicer may at its option, on behalf of the Issuer,
purchase from the Issuer any Mortgage Loan or related REO Property that is 90
days or more delinquent, which the Master Servicer determines in good faith will
otherwise become subject to foreclosure proceedings (evidence of such
determination to be delivered in writing to the Indenture Trustee, in form and
substance satisfactory to the Indenture Trustee prior to purchase), at a price
equal to the Purchase Price; provided, however, that the Master Servicer shall
purchase any such Mortgage Loans or related REO Properties on the basis of
delinquency, purchasing the most delinquent Mortgage Loans or related REO
Properties first. The Purchase Price for any Mortgage Loan or related REO
Property purchased hereunder shall be deposited in the Collection Account, and
the Indenture Trustee, upon receipt of written certification from the Master
Servicer of such deposit, shall release or cause to be released to the Master
Servicer the related Mortgage File and the Indenture Trustee shall execute and
deliver such instruments of transfer or assignment, in each case without
recourse, as the Master Servicer shall furnish and as shall be necessary to vest
in the Master Servicer title to any Mortgage Loan or related REO Property
released pursuant hereto.
(d) Proceeds received in connection with any Final Recovery Determination,
as well as any recovery resulting from a partial collection of Insurance
Proceeds, Liquidation Proceeds or Subsequent Recoveries, 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 P&I Advances, pursuant to Section 3.11(a)(ii) or
(a)(iii); 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 second, to the balance of the
interest then due and owing. The portion of the recovery so allocated to unpaid
Servicing Fees shall be reimbursed to the Master Servicer or any Sub-Servicer
pursuant to Section 3.11(a)(iii).
(e) The Holder of the Certificates will have the option to purchase, at any
one time, [__]% (and in any case, at least [__] Mortgage Loans) of the Mortgage
Loans, by aggregate Stated Principal Balance of the Mortgage Loans as of such
date, at a purchase price equal to the greater of (A) the aggregate Purchase
Price of such Mortgage Loans and (B) the aggregate fair market value of such
Mortgage Loans. The Mortgage Loans that may be purchased by the Holder of the
Trust Certificates pursuant to this paragraph will be selected by the Master
Servicer in its sole discretion. If at any time the Holder of the Certificates
exercises such option, it shall immediately notify or cause to be notified the
Indenture Trustee by a certification in the form of Exhibit B (which
certification shall include a statement to the effect that all amounts required
to be deposited in the Collection Account pursuant to Section 3.10 have been or
will be so deposited) of a Servicing Officer and shall request delivery to it of
the Mortgage File. Upon receipt of such certification and request, the Indenture
Trustee shall promptly release the related Mortgage Files to the Holder of the
Trust Certificates.
Section 3.17. 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
or cause to be notified the Indenture Trustee by a certification in the form of
Exhibit B (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 3.10 have
been or will be so deposited) of a Servicing Officer and shall request delivery
to it of the Mortgage File. Upon receipt of such certification and request, the
Indenture Trustee shall promptly release and deliver the related Mortgage File
to the Master Servicer (at the expense of the Master Servicer and at no cost to
the Indenture Trustee or the Trust Estate). 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) From time to time and as appropriate for the servicing or foreclosure
of any Mortgage Loan, including, for this purpose, collection under any
insurance policy relating to the Mortgage Loans, the Indenture Trustee shall,
upon any request made by or on behalf of the Master Servicer and delivery to the
Indenture Trustee of a Request for Release in the form of Exhibit B, release the
related Mortgage File to the Master Servicer, and 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 Indenture Trustee 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, or caused to be
delivered, to the Indenture Trustee an additional Request for Release certifying
as to such liquidation or action or proceedings. Upon the request of the
Indenture Trustee, the Master Servicer shall provide notice to the Indenture
Trustee of 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, any outstanding Requests for Release with respect to such Mortgage
Loan shall be released by the Indenture Trustee to the Master Servicer or its
designee.
(c) Upon written certification of a Servicing Officer, the Indenture
Trustee shall execute and deliver to the Master Servicer or the Sub-Servicer, as
the case may be, any court pleadings, requests for trustee's sale or other
documents 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 3.18. SERVICING COMPENSATION.
As compensation for the activities of the Master Servicer hereunder, the
Master Servicer shall be entitled to the Servicing Fee with respect to each
Mortgage Loan payable solely from payments of interest in respect of such
Mortgage Loan, subject to Section 3.24. In addition, the Master Servicer shall
be entitled to recover unpaid Servicing Fees out of Insurance Proceeds,
Liquidation Proceeds or Subsequent Recoveries to the extent permitted by Section
3.11(a)(iii) and out of amounts derived from the operation and sale of an REO
Property to the extent permitted by Section 3.23. Except as provided in Sections
3.26, the right to receive the Servicing 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 Servicing Agreement; provided,
however, that the Master Servicer may pay from the Servicing Fee any amounts due
to a Sub-Servicer pursuant to a Sub-Servicing Agreement entered into under
Section 3.02.
Additional servicing compensation in the form of assumption or modification
fees, late payment charges, insufficient funds charges or otherwise (subject to
Section 3.24 and other than Prepayment Charges) shall be retained by the Master
Servicer only to the extent such fees or charges are received by the Master
Servicer. The Master Servicer shall also be entitled pursuant to Section
3.11(a)(iv) to withdraw from the Collection Account and pursuant to Section
3.23(b) to withdraw from any REO Account, as additional servicing compensation,
interest or other income earned on deposits therein, subject to Section 3.12 and
Section 3.24. The Master Servicer shall be required to pay all expenses incurred
by it in connection with its servicing activities hereunder (including premiums
for the insurance required by Section 3.14, 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 8.05, the
expenses of the Indenture Trustee) and shall not be entitled to reimbursement
therefor except as specifically provided herein.
Section 3.19. REPORTS TO THE INDENTURE TRUSTEE AND OTHERS; COLLECTION
ACCOUNT STATEMENTS.
Not later than twenty days after each Payment Date, the Master Servicer
shall forward to the Indenture Trustee (upon the Indenture Trustee's request)
and the Depositor the most current available bank statement for the Collection
Account. Copies of such statement shall be provided by the Indenture Trustee to
any Noteholder and to any Person identified to the Indenture Trustee as a
prospective transferee of a Note, upon request at the expense of the requesting
party, provided such statement is delivered by the Master Servicer to the
Indenture Trustee.
In addition, on each Payment Date, the Master Servicer shall forward to the
Rating Agencies and the Indenture Trustee a report setting forth the percentage
of Mortgage Loans that are 30 or more days delinquent, in foreclosure, have been
converted to REO Properties or have been discharged by reason of bankruptcy.
Section 3.20. STATEMENT AS TO COMPLIANCE.
The Master Servicer will deliver to the Indenture Trustee, the NIMS Insurer
and the Depositor not later than March 15th, commencing in 2007, an Officers'
Certificate (an "Annual Statement of Compliance") substantially in the form of
Exhibit [__] attached hereto 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 or other applicable servicing
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 or other applicable
servicing agreement in all material respects throughout such calendar year, or,
if there has been a failure to fulfill any such obligation in any material
respectx, specifying each such failure known to such officer and the nature and
status of cure provisions thereof. Copies of any such statement shall be
provided by the Indenture Trustee to any Noteholder and to any Person identified
to the Indenture Trustee as a prospective transferee of a Note, upon request at
the expense of the requesting party, provided such statement is delivered by the
Master Servicer to the Indenture Trustee. Such Annual Statement of Compliance
shall contain no restrictions or limitations on its use. In the event that the
Master Servicer has delegated any servicing responsibilities with respect to the
Mortgage Loans serviced by it to a Sub-Servicer, the Master Servicer shall
deliver an officer's certificate of the Sub-Servicer as described above as to
each Sub-Servicer as and when required with respect to the Master Servicer.
If the Master Servicer cannot deliver the Annual Statement of Compliance by
March 15th of such year, the Indenture Trustee, at its sole option, may permit a
cure period for the related Servicer to deliver such Annual Statement of
Compliance, but in no event later than March 30th of such year.
Failure of the Master Servicer to timely comply with this Section 3.20
shall be deemed an Master Servicer Event of Termination, automatically, without
notice and without any cure period, and the Indenture Trustee 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, 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.
Section 3.21. ASSESSMENTS OF COMPLIANCE AND ATTESTATION REPORTS.
On and after January 1, 2006, each of the Master Servicer and the Indenture
Trustee shall service and administer the Mortgage Loans in accordance with all
applicable requirements of the Servicing Criteria (as set forth in Exhibit
[__]). Each of the Master Servicer and the Indenture Trustee shall deliver to
the Depositor (and, in the case of the Master Servicer, the Indenture Trustee)
on or before March 15th of each calendar year beginning in 2007, a report (an
"Assessment of Compliance") reasonably satisfactory to the Depositor regarding
the Master Servicer's and Indenture Trustee's assessment of compliance with the
applicable Servicing Criteria during the preceding calendar year as required by
Rules 13a-18 and 15d-18 of the Exchange Act and Item 1122 of Regulation AB,
which as of the date hereof, require a report by an authorized officer of the
Master Servicer or the Indenture Trustee that contains the following: (a) A
statement by such officer of its responsibility for assessing compliance with
the Servicing Criteria applicable to the Master Servicer or the Indenture
Trustee;
(b) A statement by such officer that such officer used the Servicing
Criteria to assess compliance with the Servicing Criteria applicable to the
Master Servicer or the Indenture Trustee;
(c) An assessment by such officer of the Master Servicer's or Indenture
Trustee's compliance with the applicable Servicing Criteria for the period
consisting of the preceding calendar year, including disclosure of any material
instance of noncompliance with respect thereto during such period, which
assessment shall be based on the activities it performs with respect to
asset-backed securities transactions taken as a whole involving the Master
Servicer or the Indenture Trustee, as applicable, that are backed by the same
asset type as the Mortgage Loans;
(d) A statement that a registered public accounting firm has issued an
attestation report on the Master Servicer's or Indenture Trustee's Assessment of
Compliance for the period consisting of the preceding calendar year; and
(e) A statement as to which of the Servicing Criteria, if any, are not
applicable to the Master Servicer or Indenture Trustee, 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 or Indenture
Trustee, that are backed by the same asset type as the Mortgage Loans.
Such report at a minimum shall address each of the Servicing Criteria
specified on a certification substantially in the form of Exhibit [___] hereto
delivered to the Depositor (and, in the case of the Master Servicer, the
Indenture Trustee) concurrently with the execution of this Agreement.
On or before March 15th of each calendar year beginning in 2007, each of
the Master Servicer and the Indenture Trustee shall furnish to the Depositor
(and, in the case of the Master Servicer, the Indenture Trustee) a report (an
"Attestation Report") by a registered public accounting firm that attests to,
and reports on, the Assessment of Compliance made by the Master Servicer or the
Indenture Trustee, as applicable, as required by Rules 13a-18 and 15d-18 of the
Exchange Act and Item 1122(b) of Regulation AB, which Attestation Report must be
made in accordance with standards for attestation reports issued or adopted by
the Public Company Accounting Oversight Board.
Each of the Master Servicer and the Indenture Trustee shall cause any
servicer, and each subcontractor determined by the Master Servicer or the
Trustee, as applicable, to be "participating in the servicing function" within
the meaning of Item 1122 of Regulation AB, to deliver to the Depositor (and, in
the case of the Master Servicer, the Indenture Trustee) an assessment of
compliance and accountants' attestation.
If the Master Servicer or the Indenture Trustee cannot deliver the related
Assessment of Compliance or Attestation Report by March 15th of such year, the
Depositor, at its sole option, may permit a cure period for the Master Servicer
or the Indenture Trustee, as applicable, to deliver such Assessment of
Compliance or Attestation Report, but in no event later than March 30th of such
year.
Failure of the Master Servicer to timely comply with this Section 3.21
shall be deemed a Master Servicer Event of Termination, automatically, without
notice and without any cure period, and the Indenture Trustee 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, 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.
Section 3.22. ACCESS TO CERTAIN DOCUMENTATION.
The Master Servicer shall provide to 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 or Note Owner, access to the
documentation in the Master Servicer's possession 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 in the Master Servicer's possession regarding the Mortgage
Loans will be provided to any Noteholder or Note Owner, the Indenture Trustee,
the Owner Trustee and to any Person identified to the Master Servicer as a
prospective transferee of a Note; provided, however, that providing access to
such Person will not violate any applicable laws, 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 3.23. 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 Issuer, shall either sell
any REO Property prior to the end of the third taxable year after the Issuer
acquires ownership of such REO Property for purposes of the Code or request from
the Internal Revenue Service, no later than 60 days before the day on which the
three-year grace period would otherwise expire, an extension of the three-year
grace period. 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 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, or cause
to be established and maintained, 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 the sole discretion to determine whether
an immediate sale of an REO Property or continued management of such REO
Property is in the best interests of the Noteholders. In furtherance of the
foregoing, the Master Servicer shall have full power and authority, subject only
to the specific requirements and prohibitions of this Servicing 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 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 one Business
Day after the Master Servicer's receipt thereof, and shall thereafter deposit in
the REO Account, in no event more than two Business Days after the Master
Servicer's receipt thereof, 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, neither the Master Servicer nor
the Indenture Trustee shall:
(i) authorize the Issuer 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 Issuer;
unless, in any such case, the Master Servicer has obtained an Opinion of
Counsel, provided to 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 the Code at any time that it is held by the Issuer, 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 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 3.23(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 Servicing 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 3.18 is
sufficient to pay such fees; provided, however, that to the extent that any
payments made by such Independent contractor would constitute Servicing Advances
if made by the Master Servicer, such amounts shall be reimbursable as Servicing
Advances made by the Master Servicer.
(d) In addition to the withdrawals permitted under Section 3.23(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 in
respect of the related Mortgage Loan; and (ii) to reimburse itself or any
Sub-Servicer for unreimbursed Servicing Advances and P&I Advances made in
respect of such REO Property or the related Mortgage Loan. On the Master
Servicer Remittance Date, the Master Servicer shall withdraw from each REO
Account maintained by it and deposit into the Payment Account in accordance with
Section 3.10(d)(ii), for payment on the related Payment Date in accordance with
Section 3.05 of the Indenture, the income from the related REO Property received
during the prior calendar month, net of any withdrawals made pursuant to Section
3.23(c) or this Section 3.23(d).
(e) Subject to the time constraints set forth in Section 3.23(a), 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 Accepted Servicing Practices.
(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 deposited in the Payment Account in accordance with
Section 3.10(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 Section 3.05 of the Indenture. Any REO Disposition shall be for
cash only.
Section 3.24. OBLIGATIONS OF THE MASTER SERVICER IN RESPECT OF PREPAYMENT
INTEREST SHORTFALLS.
The Master Servicer shall deliver to the Indenture Trustee for deposit into
the Payment Account by 1:00 p.m. New York time on the Master Servicer Remittance
Date from its own funds 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
(ii) the aggregate Servicing Fee for the related Prepayment Period. Any amounts
paid by the Master Servicer pursuant to this Section 3.24 shall not be
reimbursed by the Trust Estate.
Section 3.25. OBLIGATIONS OF THE MASTER SERVICER IN RESPECT OF MORTGAGE
RATES AND 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
Mortgage Rates, Monthly Payments or Stated Principal Balances that were made by
the Master Servicer in a manner not consistent with the terms of the related
Mortgage Note and this Servicing Agreement, the Master Servicer, upon discovery
or receipt of notice thereof, immediately shall deliver to the Indenture Trustee
for deposit in the Payment Account from its own funds the amount of any such
shortfall and shall indemnify and hold harmless the Trust Estate, the Indenture
Trustee, the Depositor and any successor master servicer in respect of any such
liability. Such indemnities shall survive the termination or discharge of this
Servicing Agreement. Notwithstanding the foregoing, this Section 3.25 shall not
limit the ability of the Master Servicer to seek recovery of any such amounts
from the related Mortgagor under the terms of the related Mortgage Note, as
permitted by law.
Section 3.26. ADVANCE FACILITY.
(a) Either (i) the Master Servicer or (ii) the Indenture Trustee, on behalf
of the Trust Estate, with the consent of the Master Servicer, is hereby
authorized to enter into a facility with any Person which provides that such
Person (an "Advancing Person") may fund P&I Advances and/or Servicing Advances
to the Trust Estate under this Servicing Agreement, although no such facility
shall reduce or otherwise affect the Master Servicer's obligation to fund such
P&I Advances and/or Servicing Advances. If the Master Servicer enters into such
an Advance Facility pursuant to this Section 3.26, upon reasonable request of
the Advancing Person, the Indenture Trustee shall execute a letter of
acknowledgment, confirming its receipt of notice of the existence of such
Advance Facility. If the Indenture Trustee enters into such an Advance Facility
pursuant to this Section 3.26, the Master Servicer shall also be a party to such
Advance Facility. To the extent that an Advancing Person funds any P&I Advance
or any Servicing Advance and the Master Servicer provides the Indenture Trustee
with an Officers' Certificate that such Advancing Person is entitled to
reimbursement, such Advancing Person shall be entitled to receive reimbursement
pursuant to this Servicing Agreement for such amount to the extent provided in
Section 3.26(b). Such Officers' Certificate must specify the amount of the
reimbursement, the Section of this Servicing Agreement that permits the
applicable P&I Advance or Servicing Advance to be reimbursed and the section(s)
of the Advance Facility that entitle the Advancing Person to request
reimbursement from the Indenture Trustee, rather than the Master Servicer or
proof of an Event of Default under the Advance Facility. The Indenture Trustee
shall have no duty or liability with respect to any calculation of any
reimbursement to be paid to an Advancing Person and shall be entitled to rely
without independent investigation on the Advancing Person's notice provided
pursuant to this Section 3.26. An Advancing Person whose obligations hereunder
are limited to the funding of P&I Advances and/or Servicing Advances shall not
be required to meet the qualifications of the Master Servicer or a Sub-Servicer
pursuant to Section 3.02 hereof and will not be deemed to be a Sub-Servicer
under this Servicing Agreement.
(b) If an advancing facility is entered into, then the Master Servicer
shall not be permitted to reimburse itself therefor under Section 3.11(a)(ii),
Section 3.11(a)(iii) and Section 3.11(a)(vi) prior to the remittance to the
Trust Estate, but instead the Master Servicer shall remit such amounts in
accordance with the documentation establishing the Advance Facility to such
Advancing Person or to a trustee, agent or custodian (an "Advance Facility
Trustee") designated by such Advancing Person. The Indenture Trustee is hereby
authorized to pay to the Advancing Person, reimbursements for P&I Advances and
Servicing Advances from the Payment Account to the same extent the Master
Servicer would have been permitted to reimburse itself for such P&I Advances
and/or Servicing Advances in accordance with 3.11(a)(ii), Section 3.11(a)(iii)
and Section 3.11(a)(vi), as the case may be, had the Master Servicer itself
funded such P&I Advance or Servicing Advance. The Indenture Trustee is hereby
authorized to pay directly to the Advancing Person such portion of the Servicing
Fee as the parties to any advancing facility agree in writing.
(c) All P&I Advances and Servicing Advances made pursuant to the terms of
this Servicing Agreement shall be deemed made and shall be reimbursed on a
"first in-first out" (FIFO) basis.
(d) Any amendment to this Section 3.26 or to any other provision of this
Servicing Agreement that may be necessary or appropriate to effect the terms of
an Advance Facility as described generally in this Section 3.26, including
amendments to add provisions relating to a successor Master Servicer, may be
entered into by the Indenture Trustee and the Master Servicer without the
consent of any Noteholder, notwithstanding anything to the contrary in this
Servicing Agreement.
ARTICLE IV
SERVICING CERTIFICATE
Section 4.01. REMITTANCE REPORTS AND P&I ADVANCES. (a) On the Business Day
following each Determination Date, the Master Servicer shall deliver to the
Indenture Trustee by telecopy (or by such other means as the Master Servicer or
the Indenture Trustee, as the case may be, may agree from time to time) a
Remittance Report with respect to the related Payment Date. On the same date,
the Master Servicer shall electronically transmit (in a format acceptable to the
Indenture Trustee), a data file containing the information set forth in such
Remittance Report with respect to the related Payment Date or if electronic
transmission is not available, the Master Servicer shall forward to the
Indenture Trustee by overnight mail a computer readable magnetic tape. Such
Remittance Report will include (i) the amount of P&I Advances to be made by the
Master Servicer in respect of the related Payment Date, the aggregate amount of
P&I Advances outstanding after giving effect to such P&I Advances, and the
aggregate amount of Nonrecoverable P&I Advances in respect of such Payment Date
and (ii) such other information with respect to the Mortgage Loans as the
Indenture Trustee may reasonably require to perform the calculations necessary
to make the payments contemplated by Section 3.05 of the Indenture and to
prepare the statements to Noteholders contemplated by Section 3.26 of the
Indenture. The Indenture Trustee shall not be responsible to recompute,
recalculate or verify any information provided to it by the Master Servicer.
(b) The amount of P&I Advances to be made by the Master Servicer for any
Payment Date shall equal, subject to Section 4.01(d), the sum of, (i) the
aggregate amount of Monthly Payments (with each interest portion thereof net of
the related Servicing 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 REO Property an REO Disposition did not occur
during the related Prepayment Period, an amount equal to the excess, if any, of
the REO Imputed Interest on such REO Property for the most recently ended
calendar month, over the net income from such REO Property transferred to the
Payment Account pursuant to Section 3.23 for payment on such Payment Date;
provided, however, that the Master Servicer shall not be required to make P&I
Advances with respect to Relief Act Interest Shortfalls or Prepayment Interest
Shortfalls in excess of their respective obligations under Section 3.24.
By 1:00 p.m. New York time on the Master Servicer Remittance Date, the
Master Servicer shall remit in immediately available funds to the Indenture
Trustee for deposit in the Payment Account an amount equal to the aggregate
amount of P&I 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
(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 the Collection Account that amounts held for future payment have
been, as permitted by this Section 4.01, used by the Master Servicer in
discharge of any such P&I Advance) or (iii) in the form of any combination of
(i) and (ii) aggregating the total amount of P&I 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 Payment Amount for the related Payment Date
(determined without regard to P&I 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 3.26 of the Indenture on such Payment
Date if such amounts held for future payments had not been so used to make P&I
Advances. The Indenture Trustee will provide notice to the Master Servicer by
telecopy by the close of business on the Business Day prior to the Payment Date
(so long as the Indenture Trustee receives the required remittance from the
Master Servicer) in the event that the amount remitted by the Master Servicer to
the Indenture Trustee on such date is less than the amount required to be
remitted by the Master Servicer as set forth in the Remittance Report for the
related Payment Date.
(c) The obligation of the Master Servicer to make such P&I Advances is
mandatory, notwithstanding any other provision of this Servicing 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 pursuant to any applicable provision
of this Servicing Agreement, except as otherwise provided in this Section.
(d) Notwithstanding anything herein to the contrary, no P&I Advance or
Servicing Advance shall be required to be made hereunder by the Master Servicer
if such P&I Advance or Servicing Advance would, if made, constitute a
Nonrecoverable P&I Advance or Nonrecoverable Servicing Advance, respectively.
The determination by the Master Servicer that it has made a Nonrecoverable P&I
Advance or a Nonrecoverable Servicing Advance or that any proposed P&I Advance
or Servicing Advance, if made, would constitute a Nonrecoverable P&I Advance or
Nonrecoverable Servicing Advance, respectively, shall be evidenced by an
Officers' Certificate of the Master Servicer delivered to the Depositor and the
Indenture Trustee.
Section 4.02. EXCHANGE ACT REPORTING.
(a) The Indenture Trustee and the Master Servicer shall reasonably
cooperate with the Issuer and the Depositor in connection with the Trust's
satisfying the reporting requirements under the Securities Exchange Act of 1934,
as amended (the "Exchange Act"). The Indenture Trustee shall prepare on behalf
of the Trust any Forms 8-K, 10-D and 10-K customary for similar securities as
required by the Exchange Act and the Rules and Regulations of the Securities and
Exchange Commission thereunder, and the Depositor shall sign (or shall cause
another entity acceptable to the Securities and Exchange Commission to sign) and
the Indenture Trustee shall file (via the Securities and Exchange Commission's
Electronic Data Gathering and Retrieval System) such forms on behalf of the
Depositor or the Issuer (or such other entity).
(b) Within 15 days after each Distribution Date, the Indenture Trustee
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 (which shall, if applicable, provide the information required by
each of the items set forth in Part II thereof) with a copy of the monthly
statement to be furnished by the Indenture Trustee to the Noteholders for such
Distribution Date and detailing all data elements specified in Item 1121(a) of
Regulation AB as an exhibit thereto; provided that the Indenture Trustee shall
have received no later than 10 days prior to the date such Distribution Report
on Form 10-D is required to be filed, the following information:
(A) Notice of any material modifications, extensions or waivers to
Mortgage Loan terms, fees, penalties or payments during the distribution
period or that have cumulatively become material over time from the Master
Servicer;
(B) Notice of any new issuance of asset-backed securities backed by
the same asset pool, any pool asset changes, such as Mortgage Loan
substitutions and repurchases, and cash flows available for future
purchases, if applicable, from the Depositor, the Seller or Master
Servicer;
(C) A brief description of any legal proceedings pending, including
proceedings known to be contemplated by governmental authorities, against
the Depositor, the Seller and the Master Servicer or of which any property
of the foregoing is the subject, that is material to Noteholders from each
of the Depositor, the Seller and the Master Servicer if applicable;
(D) The information required by Item 2 of Part II of Form 10-Q
regarding any sale of securities that are either backed by the same asset
pool or are otherwise issued by the issuer, regardless of whether the
transaction was registered under the Securities Act of 1933 during the
period covered by the report from the Depositor;
(E) The information required by Item 3 of Part II of Form 10-Q with
respect to defaults upon the senior securities during the period covered by
the report, from the Depositor;
(F) Any information required to be disclosed in a report on Form 8-K
during the period covered by the report on the Form 10-D, but not reported,
whether or not otherwise required by the Form 10-D from the Depositor and
the Master Servicer; and
(G) Any exhibits to the Form 10-D from the Depositor.
(ii) The Trustee will prepare and file Current Reports on Form 8-K in
respect of the Trust at the direction and expense of the Depositor, provided,
that, the Depositor, the Seller or the Master Servicer shall have timely
notified the Indenture Trustee of an item reportable on a Current Report on Form
8-K and shall have delivered to the Indenture Trustee no later than two Business
Days prior to the filing deadline for such Current Report, all information,
data, and exhibits required to be provided or filed with such Current Report
with respect to:
(A) Any entry into a material definitive agreement, any termination of
a material definitive agreement and any bankruptcy or receivership of the
Depositor, the Seller or the Master Servicer (including any servicer that
does not sign this Agreement and any Sub-Servicer that signs a
Sub-Servicing agreement) from the Depositor, the Seller or the Master
Servicers as applicable;
(B) Any material modification to the rights of Noteholders, amendments
of the articles of incorporation or bylaws or a change of the fiscal year
of any transaction party from each of the Depositor, the Seller or the
Master Servicer as applicable; and
(C) Any Securities Act update provided by the Depositor.
(iii) Prior to January 30th in each year commencing in 2007, the Indenture
Trustee shall, in accordance with industry standards, file a Form 15 Suspension
Notice with respect to the Trust Fund, if applicable. Prior to (x) March 15,
2007 and (y) unless and until a Form 15 Suspension Notice shall have been filed,
prior to March 15th of each year thereafter, the Master Servicer shall provide
the Indenture Trustee with an Annual Compliance Statement, together with a copy
of the Assessment of Compliance and Attestation Report to be delivered by the
Master Servicer pursuant to Sections 3.20 and 3.21. Prior to (x) March 31, 2007
and (y) unless and until a Form 15 Suspension Notice shall have been filed,
March 31st of each year thereafter, the Indenture Trustee shall, subject to
subsection (d) below, file a Form 10-K, in substance conforming to industry
standards, with respect to the Trust Fund. Such Form 10-K shall include the
Assessment of Compliance, Attestation Report, Annual Compliance Statements and
other documentation provided by the Master Servicer pursuant to Sections 3.20
and 3.21 and a certification in the form attached hereto as Exhibit R-1 (the
"Depositor Certification"), which shall be signed by the senior officer of the
Depositor in charge of securitization. The Depositor, the Seller and the Master
Servicers shall provide the Indenture Trustee with the following information, as
applicable, no later than March 15th of each calendar year prior to the filing
deadline for the Form 10-K:
(A) Any exhibits or financial statement schedules required by Item 15
of Form 10-K from each of the Depositor, the Seller and the Master
Servicer;
(B) A description of any legal proceedings pending, including
proceedings known to be contemplated by governmental authorities, against
the Depositor, the Seller and the Master Servicer or of which any property
of the foregoing is the subject, that is material to Noteholders from each
of the Depositor, the Seller and the Master Servicer, if applicable;
(C) A description of any affiliations between the transaction parties
pursuant to Item 1119 of Regulation AB from the Depositor; and
(D) The Assessment of Compliance, Attestation Report, Annual
Compliance Statements and other documentation provided by the Master
Servicer pursuant to Sections 3.20 and 3.21.
(c) The Depositor hereby grants to the Indenture Trustee a limited power of
attorney to execute any Form 8-K and file each such document on behalf of the
Depositor. Such power of attorney shall continue until the earlier of (i)
receipt by the Trustee from the Depositor of written termination of such power
of attorney and (ii) the termination of the Trust. The Depositor agrees to
promptly furnish to the Indenture Trustee, from time to time upon request, such
further information, reports and financial statements within its control related
to this Agreement, the Mortgage Loans as the Indenture Trustee reasonably deems
appropriate to prepare and file all necessary reports with the Commission. The
Indenture Trustee shall have no responsibility to file any items other than
those specified in this Section 4.02; provided, however, the Indenture Trustee
will 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. Copies of all reports filed by the Indenture Trustee under the Exchange Act
shall be sent to the Depositor electronically or at the addressed set forth in
Section 11.05. Fees and expenses incurred by the Indenture Trustee in connection
with this Section 4.02 shall not be reimbursable from the Trust Fund.
(d) The Indenture Trustee shall sign a certification (in the form attached
hereto as Exhibit R-2) for the benefit of the Depositor and its officers,
directors and Affiliates regarding certain aspects of items 1 through 3 of the
Depositor Certification (provided, however, that the Indenture Trustee shall not
undertake an analysis of the accountant's report attached as an exhibit to the
Form 10-K). The Indenture Trustee 's certification shall be delivered to the
Depositor by no later than March 18th of each year (or if such day is not a
Business Day, the immediately preceding Business Day) and the Depositor shall
deliver the Depositor Certification to the Indenture Trustee for filing no later
than March 20th of each year (or if such day is not a Business Day, the
immediately preceding Business Day).
The Indenture Trustee shall subject to the provisions of Sections 8.01 and
8.02 hereof, indemnify and hold harmless the Depositor and 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 third party claims
relating to information included in any Form 10-K provided by the Trustee other
than any losses, damages, penalties, fines, forfeitures, reasonable and
necessary legal fees and related costs arising out of third party claims
relating to information contained in the Depositor Certification, the Assessment
of Compliance, Attestation Report, Annual Compliance Statements and other
documentation provided by the Master Servicer pursuant to Sections 3.20 and
3.21. In addition, the Indenture Trustee shall indemnify and hold harmless the
Depositor and 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 a breach of the Indenture Trustee's obligations under this Section
4.02 or the Indenture Trustee's negligence, bad faith or willful misconduct in
connection therewith. If the indemnification provided for herein is unavailable
or insufficient to hold harmless the Depositor, then the Indenture Trustee, in
connection with a breach of the Indenture Trustee's obligations under this
Section 4.02 or the Indenture Trustee's negligence, bad faith or willful
misconduct in connection therewith, 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 Indenture
Trustee on the other.
(e) Nothing shall be construed from the foregoing subsections (a), (b) and
(c) to require the Indenture Trustee or any officer, director or Affiliate
thereof to sign any Form 10-K or any certification contained therein.
Furthermore, the inability of the Indenture Trustee to file a Form 10-K as a
result of the lack of required information as set forth in Section 4.02(b) or
required signatures on such Form 10-K or any certification contained therein
shall not be regarded as a breach by the Indenture Trustee of any obligation
under this Agreement.
(f) Upon any filing with the Securities and Exchange Commission, the
Indenture Trustee shall promptly deliver to the Depositor a copy of any executed
report, statement or information.
(g) Prior to January 30 of the first year in which the Indenture Trustee is
able to do so under applicable law, the Indenture Trustee shall file a Form 15
Suspension Notification with respect to the Trust.
(h) To the extent that, following the Closing Date, the Depositor certifies
that reports and certifications differing from those required under this Section
3.22(b) comply with the reporting requirements under the Exchange Act, the
Indenture Trustee hereby agrees that it will reasonably cooperate to amend the
provisions of this Section 3.22(b) in order to comply with such amended
reporting requirements and such amendment of this Section 3.22(b). Any such
amendment may result in the reduction of the reports filed by the Depositor
under the Exchange Act. Notwithstanding the foregoing, the Indenture Trustee
shall not be obligated to enter into any amendment pursuant to this Section that
adversely affects its obligations and immunities under this Agreement.
(i) Each of the parties acknowledges and agrees that the purpose of
Sections 3.20, 3.21 and this Section 4.02 of this Agreement is to facilitate
compliance by the Depositor with the provisions of Regulation AB promulgated by
the Commission under the 1934 Act (17 C.F.R. ▇▇.▇▇. 229.1100 - 229.1123), as
such may be amended from time to time and subject to clarification and
interpretive advice as may be issued by the staff of the Commission from time to
time. Therefore, each of the parties agrees that (a) the obligations of the
parties hereunder shall be interpreted in such a manner as to accomplish that
purpose, (b) the parties' obligations hereunder will be supplemented and
modified as necessary to be consistent with any such amendments, interpretive
advice or guidance, convention or consensus among active participants in the
asset-backed securities markets, advice of counsel, or otherwise in respect of
the requirements of Regulation AB, (c) the parties shall comply with requests
made by the Depositor for delivery of additional or different information as the
Depositor may determine in good faith is necessary to comply with the provisions
of Regulation AB, and (d) no amendment of this Agreement shall be required to
effect any such changes in the parties' obligations as are necessary to
accommodate evolving interpretations of the provisions of Regulation AB.
(j) Each Form 8-K shall be filed by the Indenture Trustee within 15 days
after each Payment Date, with a copy of the statement to the Noteholders for
such Payment Date as an exhibit thereto. Prior to March 30th of each year (or
such earlier date as may be required by the Exchange Act and the Rules and
Regulations of the Securities and Exchange Commission), the Indenture Trustee
shall file a Form 10-K, in substance as required by applicable law or applicable
Securities and Exchange Commission staff's interpretations. Such Form 10-K shall
include as exhibits the Master Servicer's annual statement of compliance
described under Section 3.20 and the accountant's report described under Section
3.21, in each case to the extent they have been timely delivered to the
Indenture Trustee. If they are not so timely delivered, the Indenture Trustee
shall file an amended Form 10-K including such documents as exhibits reasonably
promptly after they are delivered to the Indenture Trustee. The Indenture
Trustee shall have no liability with respect to any failure to properly prepare
or file such periodic reports resulting from or relating to the Indenture
Trustee's inability or failure to obtain any information not resulting from its
own negligence or willful misconduct. The Form 10-K shall also include a
certification in the form attached hereto as Exhibit C-1 (the "Certification"),
which shall be signed by the senior officer of the Depositor in charge of
securitization.
(k) In addition, the Indenture Trustee shall sign a certification (in the
form attached hereto as Exhibit C-2) for the benefit of the Depositor and its
officers, directors and Affiliates regarding certain aspects of the
Certification (provided, however, that the Indenture Trustee shall not undertake
an analysis of the accountant's report attached as an exhibit to the Form 10-K).
The Indenture Trustee's certification shall be delivered to the Depositor by no
later than March 19th of each year (or if such day is not a Business Day, the
immediately preceding Business Day) and the Depositor shall deliver the
Certification to the Indenture Trustee for filing no later than March 20th of
each year (or if such day is not a Business Day, the immediately preceding
Business Day).
In addition, the Indenture Trustee shall indemnify and hold harmless the
Depositor and 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 a breach of the Indenture Trustee's obligations under this Section
4.02(c) or the Indenture Trustee's negligence, bad faith or willful misconduct
in connection therewith. The Depositor shall indemnify and hold harmless the
Indenture Trustee and 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 a breach of the Depositor's obligations under this Section 4.02
or the Depositor's negligence, bad faith or willful misconduct in connection
therewith. If the indemnification provided for herein is unavailable or
insufficient to hold harmless the Depositor or the Indenture Trustee, as
applicable, then the other party, in connection with a breach of its respective
obligations under this Section 4.02 with respect to the Depositor or Section
4.02(c) with respect to the Indenture Trustee or its respective negligence, bad
faith or willful misconduct in connection therewith, agrees that it shall
contribute to the amount paid or payable by the other party as a result of the
losses, claims, damages or liabilities of the other party in such proportion as
is appropriate to reflect the relative fault and the relative benefit of the
Depositor on the one hand and the Indenture Trustee on the other.
(l) Upon any filing with the Securities and Exchange Commission, the
Indenture Trustee shall promptly deliver to the Depositor a copy of any executed
report, statement or information.
(m) Prior to January 30 of the first year in which the Indenture Trustee is
able to do so under applicable law, the Indenture Trustee shall file a Form 15
Suspension Notification with respect to the Trust.
(n) To the extent that, following the Closing Date, the Depositor certifies
to the Indenture Trustee that reports and certifications differing from those
required under this Section 4.02 comply with the reporting requirements under
the Exchange Act, the Indenture Trustee hereby agrees that it will reasonably
cooperate to amend the provisions of this Section 4.02 (in accordance with
Section 7.01) in order to comply with such amended reporting requirements and
such amendment of this Section 4.02. Any such amendment may result in the
reduction of the reports filed by the Depositor under the Exchange Act.
Notwithstanding the foregoing, the Indenture Trustee shall not be obligated to
enter into any amendment pursuant to this Section that adversely affects its
rights, protections, obligations and immunities under this Servicing Agreement.
ARTICLE V
THE MASTER SERVICER
Section 5.01. LIABILITY OF THE MASTER SERVICER. The Master Servicer shall
be liable in accordance herewith only to the extent of the obligations
specifically imposed upon and undertaken by the Master Servicer herein.
Section 5.02. MERGER OR CONSOLIDATION OF OR ASSUMPTION OF THE OBLIGATIONS
OF THE MASTER SERVICER. 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. The Master Servicer
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 Servicing
Agreement, the Certificates or any of the Mortgage Loans and to perform its
respective duties under this Servicing Agreement.
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 Master
Servicer shall be a party, or any Person succeeding to the business of the
Master Servicer, shall be the successor of the Master Servicer hereunder,
without the execution or filing of any paper or any further act on the part of
any of the parties hereto, anything herein to the contrary notwithstanding;
provided, however, that the successor or surviving Person to the Master Servicer
shall be qualified to service mortgage loans on behalf of ▇▇▇▇▇▇ ▇▇▇ or ▇▇▇▇▇▇▇
Mac; and PROVIDED, FURTHER, that each Rating Agency's rating of the Notes 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 each Rating Agency).
Section 5.03. LIMITATION ON LIABILITY OF THE MASTER SERVICER AND OTHERS.
None of the Master Servicer or any of the directors, officers, employees or
agents of the Master Servicer shall be under any liability to the Issuer, the
Depositor, the Owner Trustee, the Indenture Trustee or the Noteholders for any
action taken or for refraining from the taking of any action in good faith
pursuant to this Servicing Agreement, or for errors in judgment; provided,
however, that this provision shall not protect 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 Master Servicer and any director, officer, employee or agent of 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 Master Servicer and any director, officer, employee or agent of
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 Servicing Agreement or the Notes, other than any loss,
liability or expense relating to any specific Mortgage Loan or Mortgage Loans
(except as any such loss, liability or expense shall be otherwise reimbursable
pursuant to this Servicing Agreement) 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. The Master Servicer shall not be under any obligation to appear in,
prosecute or defend any legal action unless such action is related to its
respective duties under this Servicing Agreement; provided, however, that the
Master Servicer may in its discretion undertake any such action which it may
deem necessary or desirable with respect to this Servicing Agreement and the
rights and duties of the parties hereto and the interests of the Noteholders
hereunder. In such event, 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 Master
Servicer shall be entitled to be reimbursed therefor from the Collection Account
as and to the extent provided in Section 3.11, any such right of reimbursement
being prior to the rights of the Noteholders to receive any amount in the
Collection Account.
Section 5.04. MASTER SERVICER NOT TO RESIGN. The Master Servicer shall not
resign from the obligations and duties hereby imposed on it except upon
determination that its duties hereunder are no longer permissible under
applicable law. Any such determination pursuant to 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. 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 Servicing Agreement.
Except as expressly provided herein, the Master Servicer shall not assign
or transfer any of its rights, benefits or privileges hereunder to any other
Person, or delegate to or subcontract with, or authorize or appoint any other
Person to perform any of the duties, covenants or obligations to be performed by
the Master Servicer hereunder. The foregoing prohibition on assignment shall not
prohibit the Master Servicer from designating a Sub-Servicer as payee of any
indemnification amount payable to the Master Servicer hereunder; provided,
however, that as provided in Section 3.06 hereof, no Sub-Servicer shall be a
third-party beneficiary hereunder and the parties hereto shall not be required
to recognize any Sub-Servicer as an indemnitee under this Servicing Agreement.
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 and other compensation payable to the Master Servicer pursuant hereto shall
thereafter be payable to such successor master servicer.
Section 5.05. DELEGATION OF DUTIES. In the ordinary course of business, the
Master Servicer at any time may delegate any of its duties hereunder to any
Person, including any of its Affiliates, who agrees to conduct such duties in
accordance with standards comparable to those with which the Master Servicer
complies pursuant to Section 3.01. Such delegation shall not relieve the Master
Servicer of its liabilities and responsibilities with respect to such duties and
shall not constitute a resignation within the meaning of Section 5.04.
Section 5.06. RIGHTS OF THE ISSUER 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 Issuer and the Indenture Trustee, 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 Issuer and
the Indenture Trustee its (and any such Sub-Servicer's) most recent financial
statements and such other information relating to the Master Servicer's capacity
to perform its obligations under this Servicing Agreement as it possesses (and
that any such Sub-Servicer possesses). To the extent such information is not
otherwise available to the public, the Issuer and the Indenture Trustee shall
not disseminate any information obtained pursuant to the preceding two sentences
without the Master Servicer's written consent, except as required pursuant to
the Basic Documents or to the extent that it is appropriate to do so (i) in
working with legal counsel, auditors, taxing authorities or other governmental
agencies 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 or the Trust Estate, and in any case,
the Issuer or the Indenture Trustee as the case may be, (iii) disclosure of any
and all information that is or becomes publicly known, or information obtained
by the Indenture Trustee from sources other than the Issuer or the Master
Servicer, (iv) disclosure as required pursuant to this Servicing Agreement or
(v) disclosure of any and all information (A) in any preliminary or final
offering circular, registration statement or contract or other document
pertaining to the transactions contemplated by the Basic Documents approved in
advance by the Issuer or the Master Servicer or (B) to any affiliate,
independent or internal auditor, agent, employee or attorney of the Indenture
Trustee having a need to know the same, provided that the Indenture Trustee
advises such recipient of the confidential nature of the information being
disclosed, shall use its best efforts to assure the confidentiality of any such
disseminated non-public information. The Issuer may, but is not obligated to,
enforce the obligations of the Master Servicer under this Servicing Agreement
and may, but is not obligated to, perform, or cause a designee to perform, any
defaulted obligation of the Master Servicer under this Servicing Agreement or
exercise the rights of the Master Servicer under this Servicing Agreement;
provided that the Master Servicer shall not be relieved of any of its
obligations under this Servicing Agreement by virtue of such performance by the
Issuer or its designee. The Issuer 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
Servicing Agreement or otherwise.
Section 5.07. INDEMNIFICATION. (a) The Master Servicer agrees to indemnify
the Indenture Trustee and the Owner Trustee for, and to hold the Indenture
Trustee and the Owner Trustee, as the case may be, harmless against, any claim,
tax, penalty, loss, liability or expense of any kind whatsoever, incurred
without negligence (gross negligence in the case of the Owner Trustee) or
willful misconduct on its part, arising out of, or in connection with, the
failure by the Master Servicer to perform its duties in compliance with this
Servicing Agreement, including the costs and expenses (including reasonable
legal fees and expenses) of defending itself against any claim in connection
with the exercise or performance of any of its powers or duties under any Basic
Document, provided that:
(i) with respect to any such claim, the Indenture Trustee or Owner
Trustee, as the case may be, shall have given the Master Servicer written
notice thereof as soon as practicable after a Responsible Officer of the
Indenture Trustee or Owner Trustee, as the case may be, shall have actual
knowledge thereof, it being understood that failure to give such notice
shall not relieve the Master Servicer of its indemnification obligations
hereunder;
(ii) while maintaining control over its own defense, the Depositor,
the Indenture Trustee or Owner Trustee, as the case may be, shall cooperate
and consult fully with the Master Servicer in preparing such defense; and
(iii) notwithstanding anything in this Servicing Agreement to the
contrary, the Master Servicer shall not be liable for settlement of any
claim by the Indenture Trustee or the Owner Trustee, as the case may be,
entered into without the prior consent of the Master Servicer, which
consent shall not be unreasonably withheld.
To the extent that the Indenture Trustee is not indemnified by the Master
Servicer hereunder, it shall be indemnified by the Issuer pursuant to Section
6.07 of the Indenture.
(b) The Master Servicer agrees to indemnify the Indemnified Parties for,
and to hold the Indemnified Parties, harmless against, any Expenses which may at
any time be imposed on, incurred by, or asserted against any Indemnified Party
in any way relating to or arising out of this Agreement, any other Basic
Document, the Trust Estate, the administration of the Trust Estate or the action
or inaction of such Indemnified Party, except to the extent such Expense is (i)
caused by such Indemnified Party's own willful misconduct, gross negligence or
bad faith or grossly negligent failure to act or (ii) incurred as a result of
the inaccuracy of any representation or warranty contained in Section 6.03 of
the Trust Agreement expressly made by the Owner Trustee, solely with respect to
the Owner Trustee.
(c) No termination of this Servicing Agreement or the resignation or
removal of the Owner Trustee or the Indenture Trustee shall affect the
obligations created by this Section 5.06 of the Master Servicer to indemnify the
Indenture Trustee and the Owner Trustee under the conditions and to the extent
set forth herein. This section shall survive the termination of this Servicing
Agreement and the resignation or removal of the Master Servicer. Any amounts to
be paid by the Master Servicer pursuant to this Subsection may not be paid from
the Trust Estate.
ARTICLE VI
DEFAULT
Section 6.01. MASTER SERVICER EVENTS OF DEFAULT.
(a) "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 Indenture
Trustee for payment to the Noteholders any payment (other than a P&I
Advance required to be made from its own funds on any Master Servicer
Remittance Date pursuant to Section 4.03) required to be made under the
terms of the Notes and this Servicing 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 by the Depositor or the Indenture Trustee (in which
case notice shall be provided by telecopy), or to the Master Servicer, the
Depositor and the Indenture Trustee by the Holders of not less than [__]%
of the aggregate Note Balances of the Notes; or
(ii) any failure on the part of the Master Servicer duly to observe or
perform in any material respect any other of the covenants or agreements on
the part of the Master Servicer contained in this Servicing Agreement, or
the breach by the Master Servicer of any representation and warranty
contained in Section 2.01, which continues unremedied for a period of 30
days (or if such failure or breach cannot be remedied within 30 days, then
such remedy shall have been commenced within 30 days and diligently pursued
thereafter; provided, however, that in no event shall such failure or
breach be allowed to exist for a period of greater than 90 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 Indenture Trustee or to the Master Servicer, the
Depositor and the Indenture Trustee by the Holders of Notes entitled to at
least 25% of the Voting Rights 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 such decree or
order shall have remained in force undischarged or unstayed for a period of
90 days; 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 it 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 by the Master Servicer of the Master Servicer
Termination Test; or
(vii) any failure of the Master Servicer to make any P&I Advance on
any Master Servicer Remittance Date required to be made from its own funds
pursuant to Section 4.01 which continues unremedied until 3:00 p.m. New
York time on the Business Day immediately following the Master Servicer
Remittance Date.
If a Master Servicer Event of Default described in clauses (i) through (vi)
of this Section shall occur, then, and in each and every such case, so long as a
Master Servicer Event of Default shall not have been remedied, the Depositor or
the Indenture Trustee may, and at the written direction of the Holders of Notes
entitled to at least [__]% of Voting Rights, the Indenture Trustee shall, by
notice in writing to the Master Servicer and the Depositor, terminate all of the
rights and obligations of the Master Servicer in its capacity as Master Servicer
under this Servicing 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 (vii) hereof shall occur, the Indenture Trustee
shall, by notice in writing to the Master Servicer and the Depositor, terminate
all of the rights and obligations of the Master Servicer in its capacity as
Master Servicer under this Servicing Agreement and in and to the Mortgage Loans
and the proceeds thereof and the Indenture Trustee or a successor Master
Servicer appointed in accordance with Section 6.02, shall immediately make such
P&I Advance and assume, pursuant to Section 6.02, the duties of a successor
Master Servicer. On or after the receipt by the Master Servicer of such written
notice, all authority and power of the Master Servicer under this Servicing
Agreement, whether with respect to the 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 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 Servicing Agreement, and to cooperate with the Indenture
Trustee in effecting the termination of the Master Servicer's responsibilities
and rights under this Servicing 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 Servicing
Agreement on or prior to the date of such termination, whether in respect of P&I
Advances, Servicing Advances or otherwise, and shall continue to be entitled to
the benefits of Section 5.03, notwithstanding any such termination, with respect
to events occurring prior to such termination). For purposes of this Section
6.01, 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 a Responsible Officer of
the Indenture Trustee and such notice references the Notes, the Trust Estate or
this Servicing Agreement.
Section 6.02. INDENTURE TRUSTEE TO ACT; APPOINTMENT OF SUCCESSOR.
(a)(1) 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 Servicing
Agreement and the transactions set forth or provided for herein, and all the
responsibilities, duties and liabilities relating thereto and arising thereafter
shall be assumed by the Indenture Trustee (except for any representations or
warranties of the Master Servicer under this Servicing Agreement, the
responsibilities, duties and liabilities contained in Section 2.01 and the
obligation to deposit amounts in respect of losses pursuant to Section 3.12) by
the terms and provisions hereof including, without limitation, the Master
Servicer's obligations to make P&I Advances pursuant to Section 4.01; 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 P&I Advances pursuant to
Section 4.01; 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 6.01 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 Fee and all funds
relating to the Mortgage Loans to which the Master Servicer would have been
entitled if it had continued to act hereunder. Notwithstanding the above and
subject to Section 6.02(a)(2) below, 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 Notes entitled to at least [__]% of the Voting Rights 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 each Rating Agency and having a net worth of not less
than $[__________], as the successor to the Master Servicer under this Servicing
Agreement in the assumption of all or any part of the responsibilities, duties
or liabilities of the Master Servicer under this Servicing Agreement.
The Indenture Trustee or other successor master servicer shall be entitled
to be reimbursed by the Master Servicer (or by the Trust Estate if the Master
Servicer is unable to fulfill its obligations hereunder or if the Indenture
Trustee is acting as successor Master Servicer) for all reasonable out-of-pocket
costs (such expenses of the Indenture Trustee to be documented by the Indenture
Trustee to the extent possible) associated with the transfer of servicing from
the predecessor master servicer, including without limitation, any such costs or
expenses associated with the complete transfer of all servicing data and the
completion, correction or manipulation of such servicing data as may be required
by the Indenture Trustee to correct any errors or insufficiencies in the
servicing data or otherwise to enable the Indenture Trustee to service the
Mortgage Loans properly and effectively.
(2) No appointment of a successor to the Master Servicer under this
Servicing 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
Servicing Agreement, as shall be necessary to effectuate any such succession.
Pending appointment of a successor to the Master Servicer under this Servicing
Agreement, the Indenture Trustee shall act in such capacity as hereinabove
provided.
Section 6.03. NOTIFICATION TO NOTEHOLDERS.
(a) Upon any termination of the Master Servicer pursuant to Section 6.01
above or any appointment of a successor to the Master Servicer pursuant to
Section 6.02 above, the Indenture Trustee shall give prompt written notice
thereof to the Owner Trustee, the Depositor and 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 6.04. WAIVER OF MASTER SERVICER EVENTS OF DEFAULT.
The Holders representing at least [__]% of the Voting Rights 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
(vii) of Section 6.01 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 VII
MISCELLANEOUS PROVISIONS
Section 7.01. AMENDMENT. This Servicing Agreement may be amended from time
to time by the parties hereto, provided that any amendment be accompanied by a
letter from the Rating Agencies that the amendment will not result in the
downgrading or withdrawal of the rating then assigned to the Notes or the rating
then assigned to the Notes, and the consent of the Indenture Trustee.
Section 7.02. GOVERNING LAW. THIS SERVICING AGREEMENT SHALL BE CONSTRUED IN
ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK, WITHOUT REFERENCE TO ITS
CONFLICT OF LAW PROVISIONS, AND THE OBLIGATIONS, RIGHTS AND REMEDIES OF THE
PARTIES HEREUNDER SHALL BE DETERMINED IN ACCORDANCE WITH SUCH LAWS.
Section 7.03. NOTICES. All demands, notices and communications hereunder
shall be in writing and shall be deemed to have been duly given if when
delivered to:
(a) in the case of the Master Servicer:
[-------------------------]
[-------------------------]
[-------------------------]
Attention: [__________]
(b) in the case of Rating Agencies:
[▇▇▇▇▇'▇ Investors Service, Inc.
4th Floor
▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attention: Residential Mortgage Monitoring Unit]
[Standard & Poor's, a division of The ▇▇▇▇▇▇-▇▇▇▇ Companies, Inc.
▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇ - 41st Floor
New York, New York 10041
Attention: Asset Backed Surveillance Group]
[Fitch Inc.
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇]
[Dominion Bond Rating Services, Inc.
▇▇ ▇▇▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇]
(c) in the case of the Owner Trustee, the Corporate Trust Office:
[----------------]
[----------------]
[----------------]
[----------------]
Attention: [________________]
(d) in the case of the Issuer, to Citigroup Mortgage Loan Trust 200_-_:
[-------------------------]
[----------------]
[----------------]
Attention: [________________]
(e) in the case of the Indenture Trustee:
[-------------------------]
[----------------]
[----------------]
Attention: [________________]
or, as to each party, at such other address as shall be designated by such party
in a written notice to each other party. Any notice required or permitted to be
mailed to a Noteholder shall be given by first class mail, postage prepaid, at
the address of such Noteholder as shown in the Note Register. Any notice so
mailed within the time prescribed in this Servicing Agreement shall be
conclusively presumed to have been duly given, whether or not the Noteholder
receives such notice. Any notice or other document required to be delivered or
mailed by the Indenture Trustee to any Rating Agency shall be given on a
reasonable efforts basis and only as a matter of courtesy and accommodation and
the Indenture Trustee shall have no liability for failure to deliver such notice
or document to any Rating Agency.
Section 7.04. SEVERABILITY OF PROVISIONS. If any one or more of the
covenants, agreements, provisions or terms of this Servicing Agreement shall be
for any reason whatsoever held invalid, then such covenants, agreements,
provisions or terms shall be deemed severable from the remaining covenants,
agreements, provisions or terms of this Servicing Agreement and shall in no way
affect the validity or enforceability of the other provisions of this Servicing
Agreement or of the Notes or the rights of the Noteholders thereof.
Section 7.05. THIRD-PARTY BENEFICIARIES. This Servicing Agreement will
inure to the benefit of and be binding upon the parties hereto, the Noteholders,
the Owner Trustee, the Indenture Trustee and their respective successors and
permitted assigns. Except as otherwise provided in this Servicing Agreement, no
other Person will have any right or obligation hereunder. The Indenture Trustee
shall have the right to exercise all rights of the Issuer under this Servicing
Agreement.
Section 7.06. COUNTERPARTS. This instrument may be executed in any number
of counterparts, each of which so executed shall be deemed to be an original,
but all such counterparts shall together constitute but one and the same
instrument.
Section 7.07. EFFECT OF HEADINGS AND TABLE OF CONTENTS. The Article and
Section headings herein and the Table of Contents are for convenience only and
shall not affect the construction hereof.
Section 7.08. TERMINATION. The respective obligations and responsibilities
of the Master Servicer and the Issuer created hereby shall terminate upon the
satisfaction and discharge of the Indenture pursuant to Section 4.10 thereof.
Section 7.09. NO PETITION. The Master Servicer, by entering into this
Servicing 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 Servicing Agreement by one year.
Section 7.10. NO RECOURSE. The Master Servicer acknowledges that no
recourse may be had against the Issuer, except as may be expressly set forth in
this Servicing Agreement.
Section 7.11. INDENTURE TRUSTEE RIGHTS. The Indenture Trustee shall be
entitled to the same rights, protections, indemnities and immunities afforded to
it under the Indenture as if specifically set forth herein.
Section 7.12. COMPLIANCE. In order to comply with its duties under the
U.S.A. Patriot Act, the Indenture Trustee shall obtain and verify certain
information and documentation from the Master Servicer hereto, including but not
limited to such Master Servicer's name, address, and other identifying
information.
ARTICLE VIII
DUTIES OF THE MASTERSERVICER AS ADMINISTRATOR
Section 8.01. ADMINISTRATIVE DUTIES.
(a) DUTIES WITH RESPECT TO THE INDENTURE. The Administrator shall perform
all its duties and the duties of the Issuer under the Indenture. In addition,
the Administrator shall consult with the Owner Trustee as the Administrator
deems appropriate regarding the duties of the Issuer under the Indenture. The
Administrator shall monitor the performance of the Issuer and shall advise the
Owner Trustee when action is necessary to comply with the Issuer's duties under
the Indenture. The Administrator shall prepare for execution by the Issuer or
shall cause the preparation by other appropriate Persons of all such documents,
reports, filings, instruments, certificates and opinions as it shall be the duty
of the Issuer to prepare, file or deliver pursuant to the Indenture. In
furtherance of the foregoing, the Administrator shall take all necessary action
that is the duty of the Issuer to take pursuant to the Indenture.
(b) DUTIES WITH RESPECT TO THE ISSUER.
(i) In addition to the duties of the Administrator set forth in this
Servicing Agreement or any of the Basic Documents, the Administrator shall
perform such calculations and shall prepare for execution by the Issuer or the
Owner Trustee or shall cause the preparation by other appropriate Persons of all
such documents, reports, filings, instruments, certificates and opinions as it
shall be the duty of the Issuer or the Owner Trustee to prepare, file or deliver
pursuant to this Servicing Agreement or any of the Basic Documents or under
state and federal tax and securities laws (including, but not limited to, UCC
filings in applicable jurisdictions and annual compliance certificates, if any),
and at the request of the Owner Trustee or the Indenture Trustee shall take all
appropriate action that it is the duty of the Issuer to take pursuant to this
Servicing Agreement or any of the Basic Documents. In accordance with the
directions of the Issuer or the Owner Trustee, the Administrator shall
administer, perform or supervise the performance of such other activities in
connection with the Notes (including the Basic Documents) as are not covered by
any of the foregoing provisions and as are expressly requested by the Issuer,
the Indenture Trustee or the Owner Trustee.
(ii) Notwithstanding anything in this Servicing Agreement or any of the
Basic Documents to the contrary, the Administrator shall be responsible for
promptly notifying the Owner Trustee and Certificate Paying Agent in the event
that any withholding tax is imposed on the Issuer's payments (or allocations of
income) to an Owner (as defined in the Trust Agreement) as contemplated in
Section 5.03 of the Trust Agreement. Any such notice shall be in writing and
specify the amount of any withholding tax required to be withheld by the Owner
Trustee or the Certificate Paying Agent pursuant to such provision.
(iii) In carrying out the foregoing duties or any of its other obligations
under this Servicing Agreement, the Administrator may enter into transactions
with or otherwise deal with any of its Affiliates; PROVIDED, HOWEVER, that the
terms of any such transactions or dealings shall be in accordance with any
directions received from the Issuer and shall be, in the Administrator's
opinion, no less favorable to the Issuer in any material respect than with terms
made available to unrelated third parties.
(c) TAX MATTERS. The Administrator shall prepare, on behalf of the Owner
Trustee, financial statements and such annual or other reports of the Issuer as
are necessary for the preparation by the Indenture Trustee of tax returns and
information reports as provided in Section 5.03 of the Trust Agreement,
including, without limitation, Form 1099.
(d) NON-MINISTERIAL MATTERS. With respect to matters that in the reasonable
judgment of the Administrator are non-ministerial, the Administrator shall not
take any action pursuant to this Article VIII unless within a reasonable time
before the taking of such action, the Administrator shall have notified the
Owner Trustee and the Indenture Trustee of the proposed action and the Owner
Trustee and, with respect to items (A), (B), (C) and (D) below, the Indenture
Trustee shall not have withheld consent or provided an alternative direction.
For the purpose of the preceding sentence, "non-ministerial matters" shall
include:
(A) the amendment of or any supplement to the Indenture;
(B) the initiation of any claim or lawsuit by the Issuer and the
compromise of any action, claim or lawsuit brought by or against the Issuer
(other than in connection with the collection of the Mortgage Loans);
(C) the amendment, change or modification of this Servicing Agreement
or any of the Basic Documents to which the Indenture Trustee or the Owner
Trustee, as applicable, is a party;
(D) the appointment of successor Certificate Paying Agents and
successor Indenture Trustees pursuant to the Indenture or the appointment
of successor Servicers or the consent to the assignment by the Certificate
Registrar, Paying Agent or Indenture Trustee of its obligations under the
Indenture; and
(E) the removal of the Indenture Trustee.
(e) MASTER SERVICER SHALL ACT AS ADMINISTRATOR. By execution of this
Agreement, the Master Servicer agrees to be bound as Administrator and shall
perform the obligations of the Administrator as described herein.
Section 8.02. RECORDS. The Administrator shall maintain appropriate books
of account and records relating to services performed under this Servicing
Agreement, which books of account and records shall be accessible for inspection
by the Issuer, the Indenture Trustee and the Owner Trustee at any time during
normal business hours.
Section 8.03. ADDITIONAL INFORMATION TO BE FURNISHED. The Administrator
shall furnish to the Issuer, the Indenture Trustee and the Owner Trustee from
time to time such additional information regarding the Mortgage Loans and the
Notes as the Issuer, the Indenture Trustee or the Owner Trustee shall reasonably
request.
Section 8.04. NO RECOURSE TO OWNER TRUSTEE. It is expressly understood and
agreed by the parties hereto that (a) this Agreement is executed and delivered
by Wilmington Trust Company, not individually or personally, but solely as Owner
Trustee of Citigroup Mortgage Loan Trust 200_-_, in the exercise of the powers
and authority conferred and vested in it, (b) each of the representations,
undertakings and agreements herein made on the part of the Issuer is made and
intended not as personal representations, undertakings and agreements by
Wilmington Trust Company but is made and intended for the purpose for binding
only the Issuer, (c) nothing herein contained shall be construed as creating any
liability of Wilmington Trust Company, 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 (d) under no circumstances shall
Wilmington Trust Company be personally liable for the payment of any
indebtedness or expenses of the Issuer or be liable for the breach or failure of
any obligation, representation, warranty or covenant made or undertaken by the
Issuer under this Agreement or any other related documents.
IN WITNESS WHEREOF, the Master Servicer, the Issuer and the Indenture
Trustee have caused this Servicing Agreement to be duly executed by their
respective officers or representatives all as of the day and year first above
written.
[-------------------------],
as Master Servicer
By:
Name:
Title:
CITIGROUP MORTGAGE LOAN TRUST 200_-_, as Issuer
---------------------------------------------------------
By: [____________], not in its individual capacity, but
solely as Owner Trustee
By:
Name:
Title:
[-------------------------],
as Indenture Trustee
By:
Name:
Title:
By:
Name:
Title:
EXHIBIT A
MORTGAGE LOAN SCHEDULE
(Filed Manually)
(In accordance with Rule 202 of Regulation S-T, this Mortgage Loan Schedule is
being filed in paper pursuant to a continuing hardship exemption.)
B-3
EXHIBIT B
FORM OF REQUEST FOR RELEASE
(for Indenture Trustee)
LOAN INFORMATION
Name of Mortgagor: ______________________________
Master Servicer
Loan No.: ______________________________
INDENTURE TRUSTEE
Name: ______________________________
Address: ______________________________
Trustee Mortgage
File No.: ______________________________
ISSUER
Name: CITIGROUP MORTGAGE LOAN TRUST 200_-_
Address: ______________________________
Certificates: Asset-Backed Notes, Series 200_-_.
The undersigned Master Servicer hereby acknowledges that it has received
from [_________________________], as Indenture Trustee for the Holders of
Asset-Backed Notes, Series 200_-_, the documents referred to below (the
"Documents"). All capitalized terms not otherwise defined in this Request for
Release shall have the meanings given them in the Servicing Agreement, dated as
of [_____________], among the Indenture Trustee, the Issuer and the Master
Servicer (the "Servicing Agreement").
( ) Promissory Note dated _______________, 20__, in the original
principal sum of $__________, made by _____________________,
payable to, or endorsed to the order of, the Indenture Trustee.
( ) Mortgage recorded on _________________________ as instrument no.
____________________ in the County Recorder's Office of the
County of _______________, State of __________________ in
book/reel/docket_________________ of official records at
page/image _____________.
( ) Deed of Trust recorded on ___________________ as instrument no.
________________ in the County Recorder's Office of the County of
_________________, State of ____________________ in
book/reel/docket _________________ of official records at
page/image ______________.
( ) Assignment of Mortgage or Deed of Trust to the Indenture Trustee,
recorded on __________________ as instrument no. _________ in the
County Recorder's Office of the County of _______________, State
of _______________________ in book/reel/docket ____________ of
official records at page/image ------------.
( ) Other documents, including any amendments, assignments or other
assumptions of the Mortgage Note or Mortgage.
( ) -----------------------------------
( ) -----------------------------------
( ) -----------------------------------
( ) -----------------------------------
The undersigned Master Servicer hereby acknowledges and agrees as follows:
(1) The Master Servicer shall hold and retain possession of the Documents
in trust for the benefit of the Indenture Trustee, solely for the purposes
provided in the Servicing Agreement.
(2) The Master Servicer shall not cause or permit the Documents to become
subject to, or encumbered by, any claim, liens, security interest, charges,
writs of attachment or other impositions nor shall the Master Servicer assert or
seek to assert any claims or rights of setoff to or against the Documents or any
proceeds thereof.
(3) The Master Servicer shall return each and every Document previously
requested from the Mortgage File to the Indenture Trustee when the need therefor
no longer exists, unless the Mortgage Loan relating to the Documents has been
liquidated and the proceeds thereof have been remitted to the Collection Account
and except as expressly provided in the Servicing Agreement.
(4) The Documents and any proceeds thereof, including any proceeds of
proceeds, coming into the possession or control of the Master Servicer shall at
all times be earmarked for the account of the Indenture Trustee, and the Master
Servicer shall keep the Documents and any proceeds separate and distinct from
all other property in the Master Servicer's possession, custody or control.
Dated:
[-------------------------]
By:
Name:-------------------------
Title:
EXHIBIT C-1
FORM OF CERTIFICATION TO BE PROVIDED BY THE DEPOSITOR WITH FORM 10-K
Certification
1. I have reviewed this annual report on Form 10-K, and all reports on Form
8-K containing distribution or servicing reports filed in respect of periods
included in the year covered by this annual report, of Citigroup Mortgage Loan
Trust 200_-_, Asset Backed Notes, Series 200_-_;
2. Based on my knowledge, the information in these reports, 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 this annual report;
3. Based on my knowledge, the distribution or servicing information
required to be provided to the trustee by the servicer under the servicing, or
similar, agreement, for inclusion in these reports is included in these reports;
4. Based on my knowledge and upon the annual compliance statement included
in the report and required to be delivered to the trustee in accordance with the
terms of the servicing, or similar, agreement, and except as disclosed in the
reports, the servicer has fulfilled its obligations under the servicing
agreement; and
5. The reports disclose all significant deficiencies relating to the
servicer's compliance with the minimum servicing standards based upon the report
provided by an independent public accountant, after conducting a review in
compliance with the Uniform Single Attestation Program for Mortgage Bankers or
similar procedure, as set forth in the servicing, or similar, agreement, that is
included in these reports.
In giving the certifications above, I have reasonably relied on information
provided to me by the following unaffiliated parties:
[_________________________].
CITIGROUP MORTGAGE LOAN TRUST INC.
By:
Name:
Title:
Date:
EXHIBIT C-2
FORM OF CERTIFICATION TO BE
PROVIDED TO THE DEPOSITOR BY THE INDENTURE TRUSTEE
Re: Citigroup Mortgage Loan Trust 200_-_ (the "Trust" or the "Issuer")
Asset-Backed Notes, Series 200_-_
I, [identify the certifying individual], a [title] of
[_________________________], as Indenture Trustee, hereby certify 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. I have reviewed the annual report on Form 10-K for the fiscal year 2005,
and all reports on Form 8-K containing distribution reports filed in respect of
periods included in the year covered by that annual report, of the Depositor
relating to the above-referenced trust;
2. Based on my knowledge, the information in these distribution reports
prepared by the Indenture Trustee, 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. Based on my knowledge, the distribution information required to be
provided by the Indenture Trustee under the Servicing Agreement is included in
these distribution reports.
Capitalized terms used but not defined herein have the meanings ascribed to
them in Appendix A to the Indenture, dated [_____________] (the "Indenture"),
between Citigroup Mortgage Loan Trust 200_-_, as issuer, and
[_________________________], as indenture trustee.
[_________________________], as Indenture Trustee
By:
Name:
Title:
Date:
EXHIBIT D
OFFICER'S CERTIFICATE
REGARDING ANNUAL STATEMENT OF COMPLIANCE
___________________ Trust, Series 200_-___
_______________ Asset-Backed Notes
I, _____________________, hereby certify that I am a duly appointed
__________________________ of _______________________________ (the "Master
Servicer"), and further certify as follows:
1. This certification is being made pursuant to the terms of the
Servicing Agreement, dated as of ____________, _____ (the "Servicing
Agreement"), among _____________________, as issuer, the Master Servicer, as
master servicer and ________________, as indenture trustee.
2. I have reviewed the activities of the Master Servicer during the
preceding year and the Master Servicer's performance under the Servicing
Agreement and to the best of my knowledge, based on such review, the Master
Servicer has fulfilled all of its obligations under the Servicing Agreement
throughout the year.
Capitalized terms not otherwise defined herein have the meanings set forth
in the Servicing Agreement.
Dated: _________________
IN WITNESS WHEREOF, the undersigned has executed this Certificate as of
_____________.
By:
Name:---------------------------
Title:
I, _________________________, a (an) __________________ of the
[Master Servicer], hereby certify that _________________ is a duly elected,
qualified, and acting _______________________ of the [Master Servicer] and that
the signature appearing above is his/her genuine signature.
IN WITNESS WHEREOF, the undersigned has executed this Certificate as of
______________.
By:
Name:---------------------------
Title: