CITIGROUP MORTGAGE LOAN TRUST INC. as Depositor as Indenture Trustee CITIMORTGAGE, INC., as Master Servicer and Securities Administrator CITIBANK, N.A., as Note Registrar, Paying Agent and Authenticating Agent and CITIGROUP GLOBAL MARKETS REALTY...

CITIGROUP MORTGAGE LOAN TRUST INC.
as Depositor
U.S. BANK NATIONAL ASSOCIATION,
as Indenture Trustee
CITIMORTGAGE, INC.,
as Master Servicer and Securities Administrator
CITIBANK, N.A.,
as Note Registrar, Paying Agent and Authenticating Agent
and
CITIGROUP GLOBAL MARKETS REALTY CORP.,
as Seller
SERVICING AGREEMENT
Dated as of August 31, 2005
Citigroup Mortgage Loan Trust 2005-6,
Mortgage-Backed Notes, Series 2005-6
TABLE OF CONTENTS
ARTICLE I
DEFINITIONS
Section 1.01
Definitions
Section 1.02
Other Definitional Provisions
Section 1.03
Representations and Warranties Regarding the Master Servicer
Section 1.04
Cure of Breach
Section 1.05
Conveyance of Mortgage Loans.
Section 1.06
Acceptance of the Trust Fund by the Indenture Trustee.
Section 1.07
Repurchase or Substitution of Mortgage Loans by the Seller, the Originator or the Depositor.
ARTICLE II
ADMINISTRATION AND SERVICING OF MORTGAGE LOANS
Section 2.01
Master Servicer
Section 2.02
Sub-Servicing Agreements Between the Master Servicer and Sub-Servicers
Section 2.03
Successor Sub-Servicers
Section 2.04
Liability of the Master Servicer
Section 2.05
No Contractual Relationship Between Sub-Servicers and Indenture Trustee, Securities Administrator or Noteholders
Section 2.06
Assumption or Termination of Sub-Servicing Agreements by Indenture Trustee
Section 2.07
Collection of Certain Mortgage Loan Payments
Section 2.08
Sub-Servicing Accounts
Section 2.09
Collection of Taxes, Assessments and Similar Items; Servicing Accounts
Section 2.10
Collection Account
Section 2.11
Withdrawals from the Collection Account and Payment Account
Section 2.12
Investment of Funds in the Collection Account
Section 2.13
Maintenance of the Primary Mortgage Insurance Policies; Collections Thereunder
Section 2.14
Maintenance of Hazard Insurance and Errors and Omissions and Fidelity Coverage
Section 2.15
Enforcement of Due-On-Sale Clauses; Assumption Agreements
Section 2.16
Realization Upon Defaulted Mortgage Loans
Section 2.17
Indenture Trustee to Cooperate; Release of Mortgage Files
Section 2.18
Servicing Compensation
Section 2.19
Reports to the Securities Administrator; Collection Account Statements
Section 2.20
Statement as to Compliance
Section 2.21
Independent Public Accountants’ Servicing Report
Section 2.22
Access to Certain Documentation
Section 2.23
Title, Management and Disposition of REO Property
Section 2.24
Obligations of the Master Servicer in Respect of Prepayment Interest Shortfalls
Section 2.25
Obligations of the Master Servicer in Respect of Monthly Payments
Section 2.26
Foreclosure Rights
ARTICLE III
REMITTANCE REPORTS; MONTHLY ADVANCES; COMMISSION REPORTING
Section 3.01
Remittance Reports; Monthly Advances
Section 3.02
Commission Reporting
ARTICLE IV
THE DEPOSITOR AND THE MASTER SERVICER
Section 4.01
Liability of the Depositor and the Master Servicer
Section 4.02
Merger or Consolidation of the Depositor or the Master Servicer
Section 4.03
Limitation on Liability of the Depositor, the Master Servicer and Others
Section 4.04
Limitation on Resignation of the Master Servicer
Section 4.05
Rights of the Depositor in Respect of the Master Servicer
ARTICLE V
DEFAULT
Section 5.01
Master Servicer Events of Default
Section 5.02
Indenture Trustee to Act; Appointment of Successor
Section 5.03
Notification to Noteholders
Section 5.04
Waiver of Master Servicer Events of Default
ARTICLE VI
MISCELLANEOUS PROVISIONS
Section 6.01
Amendment
Section 6.02
Recordation of Agreement
Section 6.03
GOVERNING LAW
Section 6.04
Notices
Section 6.05
Severability of Provisions
Section 6.06
Successors and Assigns
Section 6.07
Article and Section Headings
Section 6.08
Counterparts
Section 6.09
Notice to Rating Agencies
Section 6.10
Termination
Section 6.11
No Petition
Section 6.12
No Recourse
Section 6.13
Additional Terms Regarding Indenture
EXHIBITS
Exhibit A	-	Mortgage Loan Schedule
Exhibit B	-	▇▇▇▇▇ Fargo Servicing Agreement
Exhibit C	-	First Republic Servicing Agreement
Exhibit D	-	Forms of Assignment, Assumption and Recognition Agreement
Exhibit E	-	Form of Request of Release
Exhibit F		List of Approved Appraisal Firms
SERVICING AGREEMENT
Servicing Agreement, dated as of August 31, 2005 (the “Agreement”), among Citigroup Mortgage Loan Trust Inc. a Delaware corporation, as depositor (the “Depositor”), U.S. Bank National Association, a national banking association, not in its individual capacity but solely as indenture trustee (the “Indenture Trustee”), CitiMortgage Inc., (“CitiMortgage”), as master servicer (in that capacity, the “Master Servicer”) and as securities administrator (in that capacity, the “Securities Administrator”), Citibank, N.A. as paying agent (the “Paying Agent”) and Citigroup Global Markets Realty Corp., as seller (the “Seller”).
PRELIMINARY STATEMENT
On or prior to the Closing Date, the Depositor acquired the Mortgage Loans from the Seller pursuant to the Mortgage Loan Purchase Agreement and the First Republic Servicing Agreement, as applicable. The Depositor will establish Citigroup Mortgage Loan Trust 2005-6, a Delaware Statutory Trust (the “Owner Trust”) pursuant to an Amended and Restated Trust Agreement, dated as of August 31, 2005. The Depositor will deposit the Mortgage Loans into the Owner Trust in exchange for the Owner Trust Certificates, which will evidence the entire beneficial ownership interest in the Mortgage Loans (such certificate being referred to herein as the “Owner Trust Certificate”). Pursuant to the Indenture, the Issuer will pledge all of its right, title and interest in and to the Owner Trust Certificate and other property acquired from the Depositor to the Indenture Trustee to secure the Notes issued pursuant to the Indenture. The Depositor will receive from the Issuer the Owner Trust Certificates evidencing the entire beneficial ownership interest in the Issuer and the Notes representing indebtedness of the Issuer.
In consideration of the mutual agreements herein contained, each of the Depositor, the Indenture Trustee, the Master Servicer and the Securities Administrator, the Paying Agent and the Seller undertakes and agrees to perform its duties hereunder as follows:
ARTICLE I
DEFINITIONS
Section 1.01 Definitions. For all purposes of this Agreement, except as otherwise expressly provided herein or unless the context otherwise requires, capitalized terms not otherwise defined herein shall have the meanings assigned to such terms in the Definitions contained in Appendix A to the Indenture which is incorporated by reference herein. All other capitalized terms used herein shall have the meanings specified herein.
Section 1.02 Other Definitional Provisions. (a) All terms defined in this Agreement shall have the defined meanings when used in any certificate or other document made or delivered pursuant hereto unless otherwise defined therein.
(b) As used in this Agreement and in any certificate or other document made or delivered pursuant hereto or thereto, accounting terms not defined in this Agreement or in any such certificate or other document, and accounting terms partly defined in this Agreement or in any such certificate or other document, to the extent not defined, shall have the respective meanings given to them under generally accepted accounting principles. To the extent that the definitions of accounting terms in this Agreement or in any such certificate or other document are inconsistent with the meanings of such terms under generally accepted accounting principles, the definitions contained in this Agreement or in any such certificate or other document shall control.
(c) The words “hereof,” “herein,” “hereunder” and words of similar import when used in this Agreement shall refer to this Agreement as a whole and not to any particular provision of this Agreement; Section and Exhibit references contained in this Agreement are references to Sections and Exhibits in or to this Agreement unless otherwise specified; and the term “including” shall mean “including without limitation”.
(d) The definitions contained in this Agreement are applicable to the singular as well as the plural forms of such terms and to the masculine as well as the feminine and neuter genders of such terms.
(e) Any agreement, instrument or statute defined or referred to herein or in any instrument or certificate delivered in connection herewith means such agreement, instrument or statute as from time to time amended, modified or supplemented and includes (in the case of agreements or instruments) references to all attachments thereto and instruments incorporated therein; references to a Person are also to its permitted successors and assigns.
Section 1.03 Representations and Warranties Regarding the Master Servicer. The Master Servicer represents and warrants to the Indenture Trustee, for the benefit of the Noteholders, to the Issuer, as pledgee of the Mortgage Loans, and to the Owner Trustee, on behalf of the Holder of the Owner Trust Certificate, as of the Cut-off Date, as follows:
The Master Servicer hereby represents, warrants and covenants to the parties hereto, for the benefit of each of the parties hereto and the Noteholders that as of the Closing Date or as of such date specifically provided herein:
(i) The Master Servicer is a corporation duly organized, validly existing and in good standing under the laws of the State of New York and is duly authorized and qualified to transact any and all business contemplated by this Agreement to be conducted by the Master Servicer in any state in which a Mortgaged Property is located or is otherwise not required under applicable law to effect such qualification and, in any event, is in compliance with the doing business laws of any such State, to the extent necessary to ensure its ability to enforce each Mortgage Loan and to service the Mortgage Loans in accordance with the terms of this Agreement;
(ii) The Master Servicer has the full corporate power and authority to service each Mortgage Loan, and to execute, deliver and perform, and to enter into and consummate the transactions contemplated by this Agreement and has duly authorized by all necessary corporate action on the part of the Master Servicer the execution, delivery and performance of this Agreement; and this Agreement, assuming the due authorization, execution and delivery thereof by the other parties hereto, constitutes a legal, valid and binding obligation of the Master Servicer, enforceable against the Master Servicer in accordance with its terms, except to the extent that (a) the enforceability thereof may be limited by bankruptcy, insolvency, moratorium, receivership and other similar laws relating to creditors’ rights generally and (b) the remedy of specific performance and injunctive and other forms of equitable relief may be subject to the equitable defenses and to the discretion of the court before which any proceeding therefor may be brought;
(iii) The execution and delivery of this Agreement by the Master Servicer, the servicing of the Mortgage Loans by the Master Servicer hereunder, the consummation of any other of the transactions herein contemplated, and the fulfillment of or compliance with the terms hereof are in the ordinary course of business of the Master Servicer and will not (A) result in a breach of any term or provision of the charter or by-laws of the Master Servicer or (B) conflict with, result in a breach, violation or acceleration of, or result in a default under, the terms of any other material agreement or instrument to which the Master Servicer is a party or by which it may be bound, or any statute, order or regulation applicable to the Master Servicer of any court, regulatory body, administrative agency or governmental body having jurisdiction over the Master Servicer; and the Master Servicer is not a party to, bound by, or in breach or violation of any indenture or other agreement or instrument, or subject to or in violation of any statute, order or regulation of any court, regulatory body, administrative agency or governmental body having jurisdiction over it, which materially and adversely affects or, to the Master Servicer’s knowledge, would in the future materially and adversely affect, (x) the ability of the Master Servicer to perform its obligations under this Agreement or (y) the business, operations, financial condition, properties or assets of the Master Servicer taken as a whole;
(iv) The Master Servicer is an approved seller/servicer for ▇▇▇▇▇▇ Mae or ▇▇▇▇▇▇▇ Mac in good standing and is a HUD approved mortgagee pursuant to Section 203 of the National Housing Act;
(v) No litigation is pending against the Master Servicer that would materially and adversely affect the execution, delivery or enforceability of this Agreement or the ability
of the Master Servicer to service the Mortgage Loans or to perform any of its other obligations hereunder in accordance with the terms hereof;
(vi) No consent, approval, authorization or order of any court or governmental agency or body is required for the execution, delivery and performance by the Master Servicer of, or compliance by the Master Servicer with, this Agreement or the consummation of the transactions contemplated by this Agreement, except for such consents, approvals, authorizations or orders, if any, that have been obtained prior to the Closing Date;
(vii) The Master Servicer covenants that its computer and other systems used in servicing the Mortgage Loans operate in a manner such that the Master Servicer can service the Mortgage Loans in accordance with the terms of this Agreement; and
(viii) The Master Servicer (or a Sub-Servicer servicing the Mortgage Loans on its behalf) is a member of MERS in good standing, and will comply in all material respects with the rules and procedures of MERS in connection with the servicing of the Mortgage Loans that are registered with MERS.
Section 1.04 Cure of Breach. Within 90 days of the earlier of discovery by the Master Servicer or receipt of notice by the Master Servicer of the breach of any representation, warranty or covenant of the Master Servicer set forth in Section 1.03 which materially and adversely affects the interests of the Noteholders in any Mortgage Loan, the Master Servicer shall cure such breach in all material respects.
The foregoing representations and warranties shall survive any termination of the Master Servicer hereunder.
Section 1.05
Conveyance of Mortgage Loans.
In instances where an original recorded Mortgage cannot be delivered by the Depositor to the Indenture Trustee (or a Custodian on behalf of the Indenture Trustee) prior to or concurrently with the execution and delivery of this Agreement, due to a delay in connection with the recording of such Mortgage, the Depositor may, (a) in lieu of delivering such original recorded Mortgage, deliver to the Indenture Trustee (or a Custodian on behalf of the Indenture Trustee) a copy thereof, provided that the Depositor certifies that the original Mortgage has been delivered to a title insurance company for recordation after receipt of its policy of title insurance or binder therefor (which may be a certificate relating to a master policy of title insurance), and (b) in lieu of delivering the completed assignment in recordable form to the Indenture Trustee (or a Custodian on behalf of the Indenture Trustee), deliver such assignment to the Indenture Trustee (or a Custodian on behalf of the Indenture Trustee) completed except for recording information. In all such instances, the Depositor will deliver the original recorded Mortgage and completed assignment (if applicable) to the Indenture Trustee (or a Custodian on behalf of the Indenture Trustee) promptly upon receipt of such Mortgage. In instances where an original recorded Mortgage has been lost or misplaced, the Depositor or the related title insurance company may deliver, in lieu of such Mortgage, a copy of such Mortgage bearing recordation information and certified as true and correct by the office in which recordation thereof was made. In instances where the original or a copy of the title insurance policy (which may be a certificate relating to a
master policy of title insurance) pertaining to the Mortgaged Property relating to a Mortgage Loan cannot be delivered by the Depositor to the Indenture Trustee (or a Custodian on behalf of the Indenture Trustee) prior to or concurrently with the execution and delivery of this Agreement because such policy is not yet available, the Depositor may, in lieu of delivering the original or a copy of such title insurance, deliver to the Indenture Trustee (or a Custodian on behalf of the Indenture Trustee) a binder with respect to such policy (which may be a certificate relating to a master policy of title insurance) and deliver the original or a copy of such policy (which may be a certificate relating to a master policy of title insurance) to the Indenture Trustee (or a Custodian on behalf of the Indenture Trustee) within 180 days of the Closing Date, in instances where an original assumption, modification, buydown or conversion-to-fixed-interest-rate agreement cannot be delivered by the Depositor to the Indenture Trustee (or a Custodian on behalf of the Indenture Trustee) prior to or concurrently with the execution and delivery of this Agreement, the Depositor may, in lieu of delivering the original of such agreement, deliver a certified copy thereof.
To the extent not already recorded, except with respect to any Mortgage Loan for which MERS is identified on the Mortgage or on a properly recorded assignment of the Mortgage as the mortgagee of record, the Master Servicer, at the expense of the Seller shall promptly (and in no event later than five Business Days following the later of the Closing Date and the date of receipt by the Master Servicer of the recording information for a Mortgage) submit or cause to be submitted for recording, at no expense to the Issuer, in the appropriate public office for real property records, each Assignment delivered to it. In the event that any such Assignment is lost or returned unrecorded because of a defect therein, the Master Servicer, at the expense of the Seller or the related originator, as applicable, shall promptly prepare or cause to be prepared a substitute Assignment or cure or cause to be cured such defect, as the case may be, and thereafter cause each such Assignment to be duly recorded. Notwithstanding the foregoing, but without limiting the requirement that such Assignments be in recordable form, neither the Master Servicer nor the Indenture Trustee shall be required to submit or cause to be submitted for recording any Assignment delivered to it or a Custodian if such recordation shall not, as of the Closing Date, be required by the Rating Agencies, as a condition to their assignment on the Closing Date of their initial ratings to the Notes, as evidenced by the delivery by the Rating Agencies of their ratings letters on the Closing Date; provided, however, notwithstanding the foregoing, the Master Servicer shall submit each Assignment for recording, at no expense to the Issuer or the Master Servicer, upon the earliest to occur of: (A) reasonable direction by at least 25% of the Holders of the Outstanding Notes, (B) the occurrence of an Event of Servicer Termination, (C) the occurrence of a bankruptcy, insolvency or foreclosure relating to the Seller or the related originator, as applicable, (D) the occurrence of a servicing transfer as described in Section 5.02 of this Agreement and (E) with respect to any one Assignment, the occurrence of a foreclosure relating to the Mortgagor under the related Mortgage. Notwithstanding the foregoing, if the Seller fails to pay the cost of recording the Assignments, such expense will be paid by the Master Servicer and the Master Servicer shall be reimbursed for such expenses by the Trust as set forth herein.
In connection with the assignment of any Mortgage Loan registered on the MERS® System, the Depositor further agrees that it will cause, within 30 Business Days after the Closing Date, the MERS® System to indicate that such Mortgage Loans have been assigned by the Depositor to the Indenture Trustee in accordance with this Agreement for the benefit of
the Noteholders by including in such computer files (a) the code in the field which identifies the specific trustee and (b) the code in the field “Pool Field” (or such other designation) which identifies the series of the Notes issued in connection with such Mortgage Loans. The Depositor further agrees that it will not, and will not permit the Master Servicer to, and the Master Servicer agrees that it will not and will not permit a Sub-Servicer to, alter the codes referenced in this paragraph with respect to any Mortgage Loan during the term of this Agreement unless and until such Mortgage Loan is repurchased in accordance with the terms of this Agreement, the Mortgage Loan Purchase Agreement or the First Republic Servicing Agreement, as applicable.
With respect to a maximum of approximately 5.00% of the Mortgage Loans, by outstanding principal balance of the Mortgage Loans as of the Cut-off Date, if any original Mortgage Note cannot be located, the obligations of the Depositor to deliver such documents shall be deemed to be satisfied upon delivery to the Indenture Trustee (or a Custodian on behalf of the Indenture Trustee) of a photocopy of such Mortgage Note, if available, with a lost note affidavit. If any of the original Mortgage Notes for which a lost note affidavit was delivered to the Indenture Trustee (or a Custodian on behalf of the Indenture Trustee) is subsequently located, such original Mortgage Note shall be delivered to the Indenture Trustee (or a Custodian on behalf of the Indenture Trustee) within three Business Days.
The Depositor shall deliver or cause to be delivered to the Indenture Trustee (or a Custodian on behalf of the Indenture Trustee) promptly upon receipt thereof any other original documents constituting a part of a Mortgage File received with respect to any Mortgage Loan, including, but not limited to, any original documents evidencing an assumption, modification, consolidation or extension of any Mortgage Loan.
All original documents relating to the Mortgage Loans that are not delivered to the Indenture Trustee (or a Custodian on behalf of the Indenture Trustee) are and shall be held by or on behalf of the Seller, the Depositor or the Master Servicer, as the case may be, in trust for the benefit of the Indenture Trustee on behalf of the Noteholders. In the event that any such original document is required pursuant to the terms of this Section to be a part of a Mortgage File, such document shall be delivered promptly to the Indenture Trustee (or a Custodian on behalf of the Indenture Trustee). Any such original document delivered to or held by the Depositor that is not required pursuant to the terms of this Section to be a part of a Mortgage File, shall be delivered promptly to the Master Servicer.
Wherever it is provided in this Section 1.05 that any document, evidence or information relating to a Mortgage Loan be delivered or supplied to the Indenture Trustee, the Depositor shall do so by delivery thereof to the Indenture Trustee or Custodian on behalf of the Indenture Trustee.
It is agreed and understood by the parties hereto that it is not intended that any Mortgage Loan to be included in the Trust Fund be (i) a "High-Cost Home Loan" as defined in the New Jersey Home Ownership Act effective November 27, 2003, (ii) a "High-Cost Home Loan" as defined in the New Mexico Home Loan Protection Act effective January 1, 2004, (iii) a "High-Cost Home Mortgage Loan" as defined in the Massachusetts Predatory Home Loan Practices Act effective November 7, 2004 or (iv) a "High Cost Home Loan" as defined in the Indiana Home Loan Practices Act effective January 1, 2005.
Section 1.06
Acceptance of the Trust Fund by the Indenture Trustee.
Subject to the provisions of Section 1.05 and subject to any exceptions noted on an exception report delivered by or on behalf of the Indenture Trustee, the Indenture Trustee acknowledges receipt of the Related Documents and all other assets included in the definition of “Trust Estate” and declares that it holds and will hold such documents and the other documents delivered to it constituting the Mortgage File, and that it holds or will hold all such assets and such other assets included in the definition of “Trust Estate” in trust for the exclusive use and benefit of all present and future Noteholders.
The Indenture Trustee, by execution and delivery hereof, acknowledges receipt, subject to the review described in the succeeding sentence, of the Related Documents and all other assets referred to in the immediately preceding paragraph and declares that the Indenture Trustee (or a Custodian on behalf of the Indenture Trustee) holds and will hold such documents and other assets, including property yet to be received by the Issuer, in trust, upon the trusts herein set forth, for the benefit of all present and future Noteholders. The Indenture Trustee or the Custodian on its behalf shall, for the benefit of the Indenture Trustee and the Noteholders, review each Mortgage File within 90 days after execution and delivery of this Agreement, to ascertain that all required documents have been executed, received and recorded, if applicable, and that such documents relate to the Mortgage Loans. If in the course of such review the Indenture Trustee or the Custodian on its behalf finds a document or documents constituting a part of a Mortgage File to be defective in any material respect, the Indenture Trustee or the Custodian on its behalf shall promptly so notify the Depositor, the Securities Administrator, the Paying Agent, the Seller and the related originator, as applicable, the Master Servicer, the applicable Initial Sub-Servicer and, if such notice is from the Custodian on the Indenture Trustee’s behalf, the Indenture Trustee. In addition, upon the discovery by the Depositor, the Master Servicer, the applicable Initial Sub-Servicer, the Securities Administrator, the Paying Agent or the Indenture Trustee of a breach of any of the representations and warranties made by the Seller or the related originator, as applicable, in the Mortgage Loan Purchase Agreement or the First Republic Servicing Agreement, as applicable, in respect of any Mortgage Loan which materially adversely affects such Mortgage Loan or the interests of the related Noteholders in such Mortgage Loan, the party discovering such breach shall give prompt written notice to the other parties.
The Depositor and the Indenture Trustee intend that the assignment and transfer herein contemplated constitute a sale of the Mortgage Loans, the related Mortgage Notes and the related documents, conveying good title thereto free and clear of any liens and encumbrances, from the Depositor to the Indenture Trustee in trust for the benefit of the Noteholders and that such property not be part of the Depositor’s estate or property of the Depositor in the event of any insolvency by the Depositor. In the event that such conveyance is deemed to be, or to be made as security for, a loan, the parties intend that the Depositor shall be deemed to have granted and does hereby grant to the Indenture Trustee a first priority perfected security interest in all of the Depositor’s right, title and interest in and to the Mortgage Loans, the related Mortgage Notes and the related documents, and that this Agreement shall constitute a security agreement under applicable law.
The Indenture Trustee may, concurrently with the execution and delivery hereof or at any time thereafter, enter into a custodial agreement with a Custodian pursuant to which the Indenture Trustee appoints a Custodian to hold the Mortgage Files on behalf of the Indenture Trustee for the benefit of the Indenture Trustee and all present and future Noteholders, which may provide that the Custodian shall, on behalf of the Indenture Trustee, conduct the review of each Mortgage File required under the first paragraph of this Section 1.06. Initially, Citibank West, FSB is appointed as Custodian with respect to the Mortgage Files of all the Mortgage Loans and, notwithstanding anything to the contrary herein, it is understood that such initial Custodian shall be responsible for the review contemplated in the second paragraph of this Section 1.06 and for all other functions relating to the receipt, review, reporting and certification provided for herein with respect to the Mortgage Files (other than ownership thereof for the benefit of the Certificateholders and related duties and obligations set forth herein).
Section 1.07 Repurchase or Substitution of Mortgage Loans by the Seller, the Originator or the Depositor.
(a) Upon discovery or receipt of notice by the Depositor, the Master Servicer, the applicable Initial Sub-Servicer, the Securities Administrator or the Indenture Trustee of any materially defective document in, or that a document is missing from, a Mortgage File or of the breach by the Seller or the related originator, as applicable, of any representation, warranty or covenant under the Mortgage Loan Purchase Agreement or the First Republic Servicing Agreement, as applicable, in respect of any Mortgage Loan which materially adversely affects the value of such Mortgage Loan or the interest therein of the Noteholders, the party so discovering or receiving notice shall promptly notify the other parties to this Agreement, and the Indenture Trustee thereupon shall promptly notify the Seller and the related originator, as applicable, of such defect, missing document or breach and request that the Seller or the related originator, as applicable, deliver such missing document or cure such defect or breach within 90 days from the date the Seller and the related originator, as applicable, was notified of such missing document, defect or breach, and if the Seller or the related originator, as applicable, does not deliver such missing document or cure such defect or breach in all material respects during such period, the Indenture Trustee shall enforce the obligations of the Seller and the related originator, as applicable, under the Mortgage Loan Purchase Agreement or the First Republic Servicing Agreement, as applicable, (i) to repurchase such Mortgage Loan from the Issuer at the Repurchase Price within 90 days after the date on which the Seller and the related originator, as applicable, was notified (subject to Section 1.07(e)) of such missing document, defect or breach, and (ii) to indemnify the Issuer in respect of such missing document, defect or breach, in the case of each of (i) and (ii), if and to the extent that the Seller or the related originator, as applicable, is obligated to do so under the Mortgage Loan Purchase Agreement or the First Republic Servicing Agreement, as applicable. The Repurchase Price for the repurchased Mortgage Loan and any indemnification shall be remitted by the Seller or the related originator, as applicable, to the Master Servicer for deposit into the Collection Account, and the Note Registrar, upon receipt of written notice from the Master Servicer of such deposit, shall give written notice to the Indenture Trustee that such deposit has taken place and the Indenture Trustee shall release (or cause the Custodian to release on its behalf) to the Seller or the related originator, as applicable, the related Mortgage File, and the Indenture Trustee, the Securities Administrator and the Note Registrar shall execute and deliver such instruments of transfer or assignment, in each case without recourse, as the Seller or the related originator, as applicable, shall furnish to it and as shall be
necessary to vest in the Seller and the related originator, as applicable, any Mortgage Loan released pursuant hereto, and the Indenture Trustee and the Securities Administrator shall have no further responsibility with regard to such Mortgage File. In furtherance of the foregoing, if the Seller or the related originator, as applicable, is not a member of MERS and repurchases a Mortgage Loan which is registered on the MERS® System, the Seller or the related originator, as applicable, pursuant to the Mortgage Loan Purchase Agreement or the First Republic Servicing Agreement, as applicable, at its own expense and without any right of reimbursement, shall cause MERS to execute and deliver an assignment of the Mortgage in recordable form to transfer the Mortgage from MERS to the Seller or the related originator, as applicable, and shall cause such Mortgage to be removed from registration on the MERS® System in accordance with MERS rules and regulations. In lieu of repurchasing any such Mortgage Loan as provided above, if so provided in the Mortgage Loan Purchase Agreement or the First Republic Servicing Agreement, as applicable, the Seller or the related originator, as applicable, may cause such Mortgage Loan to be removed from the Issuer (in which case it shall become a Deleted Mortgage Loan) and substitute one or more Substitute Mortgage Loans in the manner and subject to the limitations set forth in Section 1.07(d). It is understood and agreed that the obligation of the Seller and the related originator, as applicable, 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, and, if and to the extent provided in the Mortgage Loan Purchase Agreement or the First Republic Servicing Agreement, as applicable, to perform any applicable indemnification obligations with respect to any such omission, defect or breach, as provided in the Mortgage Loan Purchase Agreement or the First Republic Servicing Agreement, as applicable, shall constitute the only remedies respecting such omission, defect or breach available to the Indenture Trustee or the Securities Administrator on behalf of the Noteholders.
(b)
Reserved.
(c) Within 90 days of the earlier of discovery by the Master Servicer or receipt of notice by the Master Servicer of the breach of any representation, warranty or covenant of the Master Servicer set forth in Section 1.03 which materially and adversely affects the interests of the Noteholders in any Mortgage Loan, the Master Servicer shall cure such breach in all material respects.
(d) As to any Deleted Mortgage Loan for which the Seller or the related originator, as applicable, substitutes a Substitute Mortgage Loan or Substitute Mortgage Loans, such substitution shall be effected by the Seller or the related originator, as applicable, delivering to the Indenture Trustee (or to the Custodian on behalf of the Indenture Trustee), for such Substitute Mortgage Loan or Substitute Mortgage Loans, the Mortgage Note, the Mortgage, the Assignment in blank or to the Indenture Trustee, and such other documents and agreements, with all necessary endorsements thereon, together with an Officers’ Certificate providing that each such Substitute Mortgage Loan satisfies the definition thereof and specifying the Substitution Shortfall Amount, if any, in connection with such substitution. The Custodian on its behalf and on behalf of the Indenture Trustee shall, for the benefit of the Noteholders, review each Mortgage File within 90 days after execution and delivery of this Agreement, to ascertain that all required documents have been executed, received and recorded, if applicable, and that such documents relate to the Mortgage Loans. If in the course of such review the Indenture Trustee or
the Custodian on its behalf finds a document or documents constituting a part of a Mortgage File to be defective in any material respect, the Indenture Trustee or the Custodian on its behalf shall promptly so notify the Depositor, the Securities Administrator, the Seller and the related originator, as applicable, and the Master Servicer. Monthly Payments due with respect to Substitute Mortgage Loans in the month of substitution are not part of the Trust Estate and will be retained by the Seller or the related originator, as applicable. For the month of substitution, distributions 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 the Seller or the related originator, as applicable, shall thereafter be entitled to retain all amounts subsequently received in respect of such Deleted Mortgage Loan. The Note Registrar shall give or cause to be given written notice to the Indenture Trustee and the Noteholders that such substitution has taken place, and the Securities Administrator shall amend or cause the Custodian to amend the Mortgage Loan Schedule to reflect the removal of such Deleted Mortgage Loan from the terms of this Agreement and the substitution of the Substitute Mortgage Loan or Substitute Mortgage Loans and, upon receipt thereof, shall deliver a copy of such amended Mortgage Loan Schedule to the Master Servicer. Upon such substitution, such Substitute Mortgage Loan or Substitute Mortgage Loans shall constitute part of the Trust Estate and shall be subject in all respects to the terms of this Agreement, the Mortgage Loan Purchase Agreement and the First Republic Servicing Agreement, as applicable (including all applicable representations and warranties thereof included in the Mortgage Loan Purchase Agreement or the First Republic Servicing Agreement, as applicable), in each case as of the date of substitution.
For any month in which the Seller or the related originator, as applicable, substitutes one or more 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 Substitute Mortgage Loan, the Scheduled Principal Balance thereof as of the date of substitution, together with one month’s interest on such Scheduled Principal Balance at the applicable Net Mortgage Rate. On the date of such substitution, the Indenture Trustee will monitor the obligation of the Seller or the related originator, as applicable, to deliver or cause to be delivered, and shall request that such delivery be to the Master Servicer for deposit in the Collection Account, an amount equal to the Substitution Shortfall Amount, if any, and the Indenture Trustee (or the Custodian on behalf of the Indenture Trustee), upon receipt of the related Substitute Mortgage Loan or Substitute Mortgage Loans and written notice given by the Master Servicer of such deposit, shall release to the Seller or the related originator, as applicable, the related Mortgage File or Mortgage Files and the Indenture Trustee, the Securities Administrator and the Note Registrar shall execute and deliver such instruments of transfer or assignment, in each case without recourse, as the Seller or the related originator, as applicable, shall deliver to it and as shall be necessary to vest therein any Deleted Mortgage Loan released pursuant hereto.
ARTICLE II
ADMINISTRATION AND SERVICING OF MORTGAGE LOANS
Section 2.01 Master Servicer. The Master Servicer shall service and administer the Mortgage Loans on behalf of the Indenture Trustee and in the best interests of and for the benefit of the Noteholders (as determined by the Master Servicer in its reasonable judgment) in accordance with the terms of this Agreement and the respective Mortgage Loans and, to the extent consistent with such terms, in the same manner in which it services and administers similar mortgage loans for its own portfolio, giving due consideration to customary and usual standards of practice of prudent mortgage lenders and loan servicers administering similar mortgage loans but without regard to:
(i) any relationship that the Master Servicer, any Sub-Servicer or any Affiliate of the Master Servicer or any Sub-Servicer may have with the related Mortgagor;
(ii) the ownership of any Note by the Master Servicer or any Affiliate of the Master Servicer;
(iii) the Master Servicer’s obligation to make Monthly Advances or Servicing Advances; or
(iv) the Master Servicer’s or any Sub-Servicer’s right to receive compensation for its services hereunder or with respect to any particular transaction.
To the extent consistent with the foregoing, the Master Servicer shall also seek to maximize the timely and complete recovery of principal and interest on the Mortgage Notes. Subject only to the above-described servicing standards and the terms of this Agreement and of the respective Mortgage Loans, the Master Servicer shall have full power and authority, acting alone or through Sub-Servicers as provided in Section 2.02, to do or cause to be done any and all things in connection with such servicing and administration which it may deem necessary or desirable. Without limiting the generality of the foregoing, the Master Servicer in its own name or in the name of a Sub-Servicer is hereby authorized and empowered by the Indenture Trustee when the Master Servicer believes it appropriate in its best judgment in accordance with the servicing standards set forth above, to execute and deliver, on behalf of the Noteholders and the Indenture Trustee, and upon notice to the Indenture Trustee, any and all instruments of satisfaction or cancellation, or of partial or full release or discharge, and all other comparable instruments, with respect to the Mortgage Loans and the Mortgaged Properties and to institute foreclosure proceedings or obtain a deed-in-lieu of foreclosure so as to convert the ownership of such properties, and to hold or cause to be held title to such properties, on behalf of the Indenture Trustee and Noteholders. The Master Servicer shall service and administer the Mortgage Loans in accordance with applicable state and federal law and shall provide to the Mortgagors any reports required to be provided to them thereby. The Master Servicer shall also comply in the performance of this Agreement with all reasonable rules and requirements of each insurer under each Primary Mortgage Insurance Policy and any standard hazard insurance policy. Subject to Section 2.17, the Indenture Trustee shall execute, at the written request of the Master Servicer, and furnish to the Master Servicer and any Sub-Servicer such documents as are necessary or
appropriate to enable the Master Servicer or any Sub-Servicer to carry out their servicing and administrative duties hereunder, and the Indenture Trustee hereby grants to the Master Servicer a power of attorney to carry out such duties. The Indenture Trustee shall not be liable for the actions of the Master Servicer or any Sub-Servicers under such powers of attorney.
In accordance with the standards of the preceding paragraph, the Master Servicer shall advance or cause to be advanced funds as necessary for the purpose of effecting the timely payment of taxes and assessments on the Mortgaged Properties, which advances shall be Servicing Advances reimbursable in the first instance from related collections from the Mortgagors pursuant to Section 2.09, and further as provided in Section 2.11. Any cost incurred by the Master Servicer or by Sub-Servicers in effecting the timely payment of taxes and assessments on a Mortgaged Property shall not, for the purpose of calculating payments to Noteholders, be added to the unpaid principal balance of the related Mortgage Loan, notwithstanding that the terms of such Mortgage Loan so permit.
The Master Servicer further is authorized and empowered by the Indenture Trustee, on behalf of the Noteholders and the Indenture Trustee, in its own name or in the name of the Sub-Servicer, when the Master Servicer or the Sub-Servicer, as the case may be, believes it is appropriate in its best judgment to register any Mortgage Loan on the MERS System, or cause the removal from the registration of any Mortgage Loan on the MERS System, to execute and deliver, on behalf of the Indenture Trustee and the Noteholders or any of them, any and all instruments of assignment and other comparable instruments with respect to such assignment or re-recording of a Mortgage in the name of MERS, solely as nominee for the Indenture Trustee and its successors and assigns. Any reasonable expenses (i) incurred as a result of MERS discontinuing or becoming unable to continue operations in connection with the MERS System or (ii) if the affected Mortgage Loan is in default or, in the judgment of the Master Servicer, such default is reasonably foreseeable, incurred in connection with the actions described in the preceding sentence, shall be subject to withdrawal by the Master Servicer from the Collection Account.
Notwithstanding anything in this Agreement to the contrary, the Master Servicer may not make any future advances with respect to a Mortgage Loan (except as provided in Section 3.01) and the Master Servicer shall not (i) permit any modification with respect to any Mortgage Loan (except with respect to a Mortgage Loan that is in default or, in the judgment of the Master Servicer, such default is reasonably foreseeable) that would change the Mortgage Interest Rate, reduce or increase the principal balance (except for reductions resulting from actual payments of principal) or change the final maturity date on such Mortgage Loan or (ii) permit any modification, waiver or amendment of any term of any Mortgage Loan that would effect an exchange or reissuance of such Mortgage Loan under Section 1001 of the Code (or final, temporary or proposed Treasury regulations promulgated thereunder).
The Master Servicer may delegate its responsibilities under this Agreement; provided, however, that no such delegation shall release the Master Servicer from the responsibilities or liabilities arising under this Agreement.
The Master Servicer shall accurately and fully report (or cause each Sub-Servicer to accurately and fully report), its borrower credit files to each of the credit repositories in a timely manner.
Section 2.02 Sub-Servicing Agreements Between the Master Servicer and Sub-Servicers. (a) The Master Servicer may enter into Sub-Servicing Agreements (provided that such agreements would not result in a withdrawal or a downgrading by the Rating Agencies of the rating on any Class of Notes) with Sub-Servicers, for the servicing and administration of the Mortgage Loans. As of the Cut-Off Date, ▇▇▇▇▇ Fargo is the Sub-Servicer with respect to he Mortgage Loans originated by ▇▇▇▇▇ Fargo and in such capacity ▇▇▇▇▇ Fargo will be primarily responsible for the servicing of such Mortgage Loans. As of the Cut-Off Date, First Republic is the Sub-Servicer with respect to the First Republic Mortgage Loans and in such capacity First Republic will be primarily responsible for the servicing of such Mortgage Loans.
(b) Each Sub-Servicer shall be (i) authorized to transact business in the state or states in which the related Mortgaged Properties it is to service are situated, if and to the extent required by applicable law to enable the Sub-Servicer to perform its obligations hereunder and under the Sub-Servicing Agreement, (ii) an institution approved as a mortgage loan originator by the Federal Housing Administration or an institution the deposit accounts of which are insured by the FDIC and (iii) a ▇▇▇▇▇▇▇ Mac or ▇▇▇▇▇▇ ▇▇▇ approved mortgage servicer. Each Sub-Servicing Agreement must impose on the Sub-Servicer requirements conforming to the provisions set forth in Section 2.08 and provide for servicing of the Mortgage Loans consistent with the terms of this Agreement. The Master Servicer will examine each Sub-Servicing Agreement and will be familiar with the terms thereof. The terms of any Sub-Servicing Agreement will not be inconsistent with any of the provisions of this Agreement. The Master Servicer and the Sub-Servicers may enter into and make amendments to the Sub-Servicing Agreements or enter into different forms of Sub-Servicing Agreements; provided, however, that any such amendments or different forms shall be consistent with and not violate the provisions of this Agreement, and that no such amendment or different form shall be made or entered into which could be reasonably expected to be materially adverse to the interests of the Noteholders, without the consent of the Holders of 66% of the aggregate Note Principal Balance of the Notes. Any variation without the consent of the Holders of 66% of the aggregate Note Principal Balance of the Notes from the provisions set forth in Section 2.08 relating to insurance or priority requirements of Sub-Servicing Accounts, or credits and charges to the Sub-Servicing Accounts or the timing and amount of remittances by the Sub-Servicers to the Master Servicer, are conclusively deemed to be inconsistent with this Agreement and therefore prohibited. The Master Servicer shall deliver to the Indenture Trustee and the Securities Administrator copies of all Sub-Servicing Agreements, and any amendments or modifications thereof, promptly upon the Master Servicer’s execution and delivery of such instruments.
(c) As part of its servicing activities hereunder, the Master Servicer (except as otherwise provided in the last sentence of this paragraph), for the benefit of the Indenture Trustee and the Noteholders, shall enforce the obligations of each Sub-Servicer under the related Sub-Servicing Agreement, including, without limitation, any obligation to make advances in respect of delinquent payments as required by a Sub-Servicing Agreement. Such enforcement, including, without limitation, the legal prosecution of claims, termination of Sub-Servicing Agreements, and the pursuit of other appropriate remedies, shall be in such form and carried out to such an
extent and at such time as the Master Servicer, in its good faith business judgment, would require were it the owner of the related Mortgage Loans. The Master Servicer shall pay the costs of such enforcement at its own expense, and shall be reimbursed therefor only (i) from a general recovery resulting from such enforcement, to the extent, if any, that such recovery exceeds all amounts due in respect of the related Mortgage Loans, or (ii) from a specific recovery of costs, expenses or attorneys’ fees against the party against whom such enforcement is directed.
Section 2.03 Successor Sub-Servicers. The Master Servicer shall be entitled to terminate any Sub-Servicing Agreement and the rights and obligations of any Sub-Servicer pursuant to any Sub-Servicing Agreement in accordance with the terms and conditions of such Sub-Servicing Agreement. In the event of termination of any Sub-Servicer, all servicing obligations of such Sub-Servicer shall be assumed simultaneously by the Master Servicer without any act or deed on the part of such Sub-Servicer or the Master Servicer, and the Master Servicer either shall service directly the related Mortgage Loans or shall enter into a Sub-Servicing Agreement with a successor Sub-Servicer which qualifies under Section 2.02.
Any Sub-Servicing Agreement (other than any Initial Sub-Servicing Agreement) shall include the provision that such agreement may be immediately terminated by the Indenture Trustee or the Securities Administrator without fee, in accordance with the terms of this Agreement, in the event that the Master Servicer shall, for any reason, no longer be the Master Servicer (including termination due to a Master Servicer Event of Default).
Section 2.04 Liability of the Master Servicer. Notwithstanding any Sub-Servicing Agreement, any of the provisions of this Agreement relating to agreements or arrangements between the Master Servicer and a Sub-Servicer or reference to actions taken through a Sub-Servicer or otherwise, the Master Servicer shall remain obligated and primarily liable to the Indenture Trustee and the Noteholders for the servicing and administering of the Mortgage Loans in accordance with the provisions of Section 2.01 without diminution of such obligation or liability by virtue of such Sub-Servicing Agreements or arrangements or by virtue of indemnification from the Sub-Servicer and to the same extent and under the same terms and conditions as if the Master Servicer alone were servicing and administering the Mortgage Loans. The Master Servicer shall be entitled to enter into any agreement with a Sub-Servicer for indemnification of the Master Servicer by such Sub-Servicer and nothing contained in this Agreement shall be deemed to limit or modify such indemnification.
Section 2.05 No Contractual Relationship Between Sub-Servicers and Indenture Trustee, Securities Administrator or Noteholders. Any Sub-Servicing Agreement that may be entered into and any transactions or services relating to the Mortgage Loans involving a Sub-Servicer in its capacity as such shall be deemed to be between the Sub-Servicer and the Master Servicer alone, and the Indenture Trustee, the Securities Administrator and the Noteholders shall not be deemed parties thereto and shall have no claims, rights, obligations, duties or liabilities with respect to the Sub-Servicer except as set forth in Section 2.06. The Master Servicer shall be solely liable for all fees owed by it to any Sub-Servicer, irrespective of whether the Master Servicer’s compensation pursuant to this Agreement is sufficient to pay such fees.
Section 2.06 Assumption or Termination of Sub-Servicing Agreements by Indenture Trustee. In the event the Master Servicer shall for any reason no longer be the master servicer
(including by reason of the occurrence of a Master Servicer Event of Default), the Indenture Trustee or its designee shall thereupon assume all of the rights and obligations of the Master Servicer under each Sub-Servicing Agreement that the Master Servicer may have entered into, unless the Indenture Trustee elects to terminate any Sub-Servicing Agreement in accordance with its terms as provided in Section 2.03. Upon such assumption, the Indenture Trustee, its designee or the successor servicer for the Indenture Trustee appointed pursuant to Section 5.02 shall be deemed, subject to Section 2.03, to have assumed all of the Master Servicer’s interest therein and to have replaced the Master Servicer as a party to each Sub-Servicing Agreement to the same extent as if each Sub-Servicing Agreement had been assigned to the assuming party, except that (i) the Master Servicer shall not thereby be relieved of any liability or obligations under any Sub-Servicing Agreement and (ii) none of the Indenture Trustee, its designee or any successor Master Servicer shall be deemed to have assumed any liability or obligation of the Master Servicer that arose before it ceased to be the Master Servicer.
The Master Servicer at its expense shall, upon request of the Indenture Trustee, deliver to the assuming party all documents and records relating to each Sub-Servicing Agreement and the Mortgage Loans then being serviced and an accounting of amounts collected and held by or on behalf of it, and otherwise use its best efforts to effect the orderly and efficient transfer of the Sub-Servicing Agreements to the assuming party.
Section 2.07 Collection of Certain Mortgage Loan Payments. The Master Servicer shall make reasonable efforts to collect all payments called for under the terms and provisions of the Mortgage Loans, and shall, to the extent such procedures shall be consistent with this Agreement and the terms and provisions of any related Primary Mortgage Insurance Policy and any other applicable insurance policies, follow such collection procedures as it would follow with respect to mortgage loans comparable to the Mortgage Loans and held for its own account. Consistent with the foregoing and the servicing standards set forth in Section 2.01, the Master Servicer may in its discretion and subject to Section 2.26 (i) waive any late payment charge or, if applicable, penalty interest, only upon determining that the coverage of such Mortgage Loan by the related Primary Mortgage Insurance Policy, if any, will not be affected, or (ii) extend the due dates for Monthly Payments due on a Mortgage Note for a period of not greater than 180 days; provided that any extension pursuant to clause (ii) above shall not affect the amortization schedule of any Mortgage Loan for purposes of any computation hereunder, except as provided below. In the event of any such arrangement pursuant to clause (ii) above, the Master Servicer shall make timely advances on such Mortgage Loan during such extension pursuant to Section 3.01 and in accordance with the amortization schedule of such Mortgage Loan without modification thereof by reason of such arrangements. Notwithstanding the foregoing, in the event that any Mortgage Loan is in default or, in the judgment of the Master Servicer, such default is reasonably foreseeable, the Master Servicer, consistent with the standards set forth in Section 2.01 and subject to Section 2.26, may waive, modify or vary any term of such Mortgage Loan (including modifications that change the Mortgage Interest Rate, forgive the payment of principal or interest or extend the final maturity date of such Mortgage Loan), accept payment from the related Mortgagor of an amount less than the Scheduled Principal Balance in final satisfaction of such Mortgage Loan (such payment, a “Short Pay-off”) or consent to the postponement of strict compliance with any such term or otherwise grant indulgence to any Mortgagor, if in the Master Servicer’s determination such waiver, modification, postponement or
indulgence is not materially adverse to the interests of the Noteholders (taking into account any estimated Realized Loss that might result absent such action).
Section 2.08 Sub-Servicing Accounts. In those cases where a Sub-Servicer is servicing a Mortgage Loan pursuant to a Sub-Servicing Agreement, the Sub-Servicer will be required to establish and maintain one or more accounts (collectively, the “Sub-Servicing Account”). The Sub-Servicing Account shall be an Eligible Account and shall comply with all requirements of this Agreement relating to the Collection Account (provided, however, that in the case of each Initial Sub-Servicing Agreement, the applicable Sub-Servicing Account shall comply with all requirements of the Initial Sub-Servicing Agreement relating to the custodial account provided for therein). The Sub-Servicer shall deposit in the clearing account (which account must be an Eligible Account) in which it customarily deposits payments and collections on mortgage loans in connection with its mortgage loan servicing activities on a daily basis, and in no event more than two Business Days after the Sub-Servicer’s receipt thereof, all proceeds of Mortgage Loans received by the Sub-Servicer less its servicing compensation to the extent permitted by the Sub-Servicing Agreement, and shall thereafter deposit such amounts in the Sub-Servicing Account, in no event more than one Business Day after the deposit of such funds into the clearing account. The Sub-Servicer shall thereafter remit such proceeds to the Master Servicer for deposit in the Collection Account not later than two Business Days after the deposit of such amounts in the Sub-Servicing Account (or, in the case of the Initial Sub-Servicing Agreement, at such time as is required pursuant to the terms of the Initial Sub-Servicing Agreement). For purposes of this Agreement, the Master Servicer shall be deemed to have received payments on the Mortgage Loans when the Sub-Servicer receives such payments.
Section 2.09 Collection of Taxes, Assessments and Similar Items; Servicing Accounts. The Master Servicer shall establish and maintain (or cause a Sub-Servicer to establish and maintain) one or more accounts (the “Servicing Accounts”), into which all collections from the Mortgagors (or related advances from Sub-Servicers) for the payment of ground rents, taxes, assessments, fire and hazard insurance premiums, Primary Mortgage Insurance Premiums, water charges, sewer rents and comparable items for the account of the Mortgagors (“Escrow Payments”) shall be deposited and retained. Servicing Accounts shall be Eligible Accounts. The Master Servicer (or the applicable Sub-Servicer) shall deposit in the clearing account (which account must be an Eligible Account) in which it customarily deposits payments and collections on mortgage loans in connection with its mortgage loan servicing activities on a daily basis, and in no event more than two Business Days after the Master Servicer’s (or the applicable Sub-Servicer’s) receipt thereof, all Escrow Payments collected on account of the Mortgage Loans and shall thereafter deposit such Escrow Payments in the Servicing Accounts, in no event more than one Business Day after the deposit of such funds in the clearing account, for the purpose of effecting the payment of any such items as required under the terms of this Agreement. Withdrawals of amounts from a Servicing Account may be made only to (i) effect payment of Escrow Payments; (ii) reimburse the Master Servicer (or a Sub-Servicer to the extent provided in the related Sub-Servicing Agreement) out of related collections for any advances made pursuant to Section 2.01 (with respect to taxes and assessments) and Section 2.14 (with respect to hazard insurance); (iii) refund to Mortgagors any sums as may be determined to be overages; (iv) pay interest, if required and as described below, to Mortgagors on balances in the Servicing Account; (v) clear and terminate the Servicing Account at the termination of the Master Servicer’s obligations and responsibilities in respect of the Mortgage Loans under this Agreement in
accordance with Section 6.10; or (vi) recover amounts deposited in error. As part of its servicing duties, the Master Servicer or Sub-Servicers shall pay to the Mortgagors interest on funds in Servicing Accounts, to the extent required by law and, to the extent that interest earned on funds in the Servicing Accounts is insufficient, to pay such interest from its or their own funds, without any reimbursement therefor. To the extent that a Mortgage does not provide for Escrow Payments, the Master Servicer shall determine whether any such payments are made by the Mortgagor in a manner and at a time that avoids the loss of the Mortgaged Property due to a tax sale or the foreclosure of a tax lien. The Master Servicer assumes full responsibility for the payment of all such bills and shall effect payments of all such bills irrespective of the Mortgagor’s faithful performance in the payment of same or the making of the Escrow Payments and shall make advances from its own funds to effect such payments.
Section 2.10 Collection Account. (a) On behalf of the Trust, the Master Servicer shall establish and maintain one or more separate, segregated trust accounts (such account or accounts, the “Collection Account”), held in trust for the benefit of the Indenture Trustee and the Noteholders. On behalf of the Trust, the Master Servicer shall deposit or cause to be deposited in the clearing account (which account must be an Eligible Account) in which it customarily deposits payments and collections on mortgage loans in connection with its mortgage loan servicing activities on a daily basis, and in no event more than two Business Days after the Master Servicer’s receipt thereof, and shall thereafter deposit in the Collection Account, in no event more than one Business Day after the deposit of such funds into the clearing account, as and when received or as otherwise required hereunder, the following payments and collections received or made by it from and after the Cut-off Date (other than in respect of principal or interest on the related Mortgage Loans due on or before the Cut-off Date), or payments (other than Principal Prepayments) received by it on or prior to the Cut-off Date but allocable to a Due Period subsequent thereto:
(i) all payments on account of principal, including Principal Prepayments, on the Mortgage Loans;
(ii) all payments on account of interest (net of the related Servicing Fee and the related Administration Fee) on each Mortgage Loan;
(iii) all Insurance Proceeds, Subsequent Recoveries and Liquidation Proceeds (other than proceeds collected in respect of any particular REO Property and amounts paid in connection with a redemption of the assets of the Trust Estate of Mortgage Loans and REO Properties pursuant to Section 8.06 of the Indenture;
(iv) any amounts required to be deposited pursuant to Section 2.12 in connection with any losses realized on Permitted Investments with respect to funds held in the Collection Account;
(v) any amounts required to be deposited by the Master Servicer pursuant to the second paragraph of Section 2.14(a) in respect of any blanket policy deductibles;
(vi) all proceeds of any Mortgage Loan repurchased or purchased in accordance with Sections 1.07 and 2.26 hereof, Section 6 of the Mortgage Loan Purchase Agreement, Section 7.03 of the First Republic Servicing Agreement or Section 8.06 of the Indenture; and
(vii) all amounts required to be deposited in connection with shortfalls in principal amount of Substitute Mortgage Loans pursuant to Section 1.07(d) hereof, Section 6 of the Mortgage Loan Purchase Agreement or Section 7.03 of the First Republic Servicing Agreement.
For purposes of the immediately preceding sentence, the Cut-off Date with respect to any Qualified Substitute Mortgage Loan shall be deemed to be the date of substitution.
The foregoing requirements for deposit in the Collection Accounts shall be exclusive, it being understood and agreed that, without limiting the generality of the foregoing, payments in the nature of late payment charges or assumption fees need not be deposited by the Master Servicer in the Collection Account. In the event the Master Servicer shall deposit in the Collection Account any amount not required to be deposited therein, it may at any time withdraw such amount from the Collection Account, any provision herein to the contrary notwithstanding.
(b)
[Reserved]
(c) Funds in the Collection Account may be invested in Permitted Investments in accordance with the provisions set forth in Section 2.12. The Master Servicer shall give notice to the Indenture Trustee, the Securities Administrator, the Paying Agent and the Depositor of the location of the Collection Account maintained by it when established and prior to any change thereof.
(d) Funds held in the Collection Account at any time may be delivered by the Master Servicer to the Paying Agent on behalf of the Securities Administrator for deposit in an account (which may be the Payment Account and must satisfy the standards for the Payment Account as set forth in the definition thereof) and for all purposes of this Agreement shall be deemed to be a part of the Collection Account; provided, however, that the Paying Agent shall have the sole authority to withdraw any funds held pursuant to this subsection (d). In the event the Master Servicer shall deliver to the Paying Agent for deposit in the Payment Account any amount not required to be deposited therein, it may at any time request that the Paying Agent withdraw such amount from the Payment Account and remit to it any such amount, any provision herein to the contrary notwithstanding. In addition, the Master Servicer shall deliver to the Paying Agent from time to time for deposit, and upon written notification from the Master Servicer, the Paying Agent shall so deposit, in the Payment Account:
(i)
any Monthly Advances, as required pursuant to Section 3.01;
(ii) any amounts required to be deposited pursuant to Section 2.23(d) or (f) in connection with any REO Property;
(iii)
[Reserved];
(iv) any amounts required to be deposited pursuant to Section 2.24 in connection with any Prepayment Interest Shortfalls; and
(e)
[Reserved].
(f) The Master Servicer shall deposit in the Collection Account any amounts required to be deposited pursuant to Section 2.12(b) in connection with losses realized on Permitted Investments with respect to funds held in the Collection Account.
Section 2.11 Withdrawals from the Collection Account and Payment Account. (a) The Master Servicer shall, from time to time, make withdrawals from the Collection Account for any of the following purposes or as described in Section 3.01:
(i) to remit to the Paying Agent for deposit in the Payment Account the amounts required to be so remitted pursuant to Section 2.10(b) or permitted to be so remitted pursuant to the first sentence of Section 2.10(d);
(ii) subject to Section 2.16(d), to reimburse the Master Servicer for Monthly Advances, but only to the extent of amounts received which represent (net of the related Servicing Fees and Administration Fees) of Monthly Payments on Mortgage Loans with respect to which such Monthly Advances were made in accordance with the provisions of Section 3.01;
(iii) subject to Section 2.16(d), to pay the Master Servicer or any Sub-Servicer (A) any unpaid Servicing Fees and unpaid Administration Fees, (B) any unreimbursed Servicing Advances with respect to each Mortgage Loan, but only to the extent of any Liquidation Proceeds, Insurance Proceeds or other amounts as may be collected by the Master Servicer from a Mortgagor, or otherwise received with respect to such Mortgage Loan and (C) any nonrecoverable Servicing Advances following the final liquidation of a Mortgage Loan, but only to the extent that Late Collections, Liquidation Proceeds and Insurance Proceeds received with respect to such Mortgage Loan are insufficient to reimburse the Master Servicer or any Sub-Servicer for such Servicing Advances;
(iv) to pay to the Master Servicer as servicing compensation (in addition to the Servicing Fee and the Administration Fee) on the Master Servicer Remittance Date any interest or investment income earned on funds deposited in the Collection Account;
(v) to pay to the Master Servicer, the Depositor, the Seller or the related originator, as the case may be, with respect to each Mortgage Loan that has previously been purchased or replaced pursuant to Sections 1.07 or 2.26 hereof, Section 6 of the Mortgage Loan Purchase Agreement or Section 7.03 of the First Republic Servicing Agreement, as applicable, all amounts received thereon subsequent to the date of purchase or substitution, as the case may be;
(vi) to reimburse the Master Servicer for any Monthly Advance previously made which the Master Servicer has determined to be a Nonrecoverable Advance in accordance with the provisions of Section 3.01;
(vii) to reimburse the Master Servicer or the Depositor for expenses incurred by or reimbursable to the Master Servicer or the Depositor, as the case may be, pursuant to Section 4.03;
(viii) to reimburse the Master Servicer, the Securities Administrator or the Indenture Trustee, as the case may be, for expenses reasonably incurred in respect of the breach or defect giving rise to the purchase obligation under Section 1.07 hereof, Section 6 of the Mortgage Loan Purchase Agreement or Section 7.03 of the First Republic Servicing Agreement that were included in the Repurchase Price of the Mortgage Loan, including any expenses arising out of the enforcement of the purchase obligation;
(ix) to pay, or to reimburse the Master Servicer for advances in respect of expenses incurred in connection with any Mortgage Loan pursuant to Section 2.16(b);
(x)
[Reserved]; and
(xi) to clear and terminate the Collection Account pursuant to Section 6.10.
The Master Servicer shall keep and maintain separate accounting, on a Mortgage Loan by Mortgage Loan basis, for the purpose of justifying any withdrawal from the Collection Account, to the extent held by or on behalf of it, pursuant to subclauses (ii), (iii), (iv), (v), (vi), (viii) and (ix) above. The Master Servicer shall provide written notification to the Indenture Trustee, the Securities Administrator and the Paying Agent, on or prior to the next succeeding Master Servicer Remittance Date, upon making any withdrawals from the Collection Account pursuant to subclause (vii) above.
Section 2.12 Investment of Funds in the Collection Account. (a) The Master Servicer may direct any depository institution maintaining the Collection Account (for purposes of this Section 2.12, an “Investment Account”), to hold the funds in such Investment Account uninvested or to invest the funds in such Investment Account in one or more Permitted Investments specified in such instruction bearing interest or sold at a discount, and maturing, unless payable on demand, (i) no later than the Business Day immediately preceding the date on which such funds are required to be withdrawn from such account pursuant to this Agreement, if a Person other than the Paying Agent is the obligor thereon, and (ii) no later than the date on which such funds are required to be withdrawn from such account pursuant to this Agreement, if the Paying Agent is the obligor thereon. All such Permitted Investments shall be held to maturity, unless payable on demand. Any investment of funds in an Investment Account shall be made in the name of the Securities Administrator (in its capacity as such) or in the name of a nominee of the Securities Administrator. The Securities Administrator shall be entitled to sole possession (except with respect to investment direction of funds held in the Collection Account
and any income and gain realized thereon) over each such investment, and any certificate or other instrument evidencing any such investment shall be delivered directly to the Securities Administrator or its agent, together with any document of transfer necessary to transfer title to such investment to the Securities Administrator or its nominee. In the event amounts on deposit in an Investment Account are at any time invested in a Permitted Investment payable on demand, the Securities Administrator shall:
(x)
consistent with any notice required to be given thereunder, demand that payment thereon be made on the last day such Permitted Investment may otherwise mature hereunder in an amount equal to the lesser of (1) all amounts then payable thereunder and (2) the amount required to be withdrawn on such date; and
(y)
demand payment of all amounts due thereunder promptly upon determination by a Responsible Officer of the Securities Administrator that such Permitted Investment would not constitute a Permitted Investment in respect of funds thereafter on deposit in the Investment Account.
(b) All income and gain realized from the investment of funds deposited in the Collection Account held by or on behalf of the Master Servicer, shall be for the benefit of the Master Servicer and shall be subject to its withdrawal in accordance with Section 2.11. The Master Servicer shall deposit in the Collection Account the amount of any loss of principal incurred in respect of any such Permitted Investment made with funds in such accounts immediately upon realization of such loss.
Section 2.13 Maintenance of the Primary Mortgage Insurance Policies; Collections Thereunder. The Master Servicer will maintain or cause the related Sub-Servicer, if any, to maintain in full force and effect, if required under the Mortgage Loan Purchase Agreement or First Republic Servicing Agreement, as applicable, and to the extent available, a Primary Mortgage Insurance Policy with respect to each Mortgage Loan so insured as of the Closing Date (or, in the case of a Substitute Mortgage Loan, on the date of substitution). Such coverage will be maintained with respect to each such Mortgage Loan for so long as it is outstanding, subject to any applicable laws or until the related Loan-to-Value Ratio is reduced to less than or equal to 80% based on Mortgagor payments. The Master Servicer shall cause the premium for each Primary Mortgage Insurance Policy to be paid on a timely basis and shall pay such premium out of its own funds if it is not otherwise paid. The Master Servicer or the related Sub-Servicer, if any, will not cancel or refuse to renew any such Primary Mortgage Insurance Policy in effect on the Closing Date (or, in the case of a Substitute Mortgage Loan, on the date of substitution) that is required to be kept in force under this Agreement unless a replacement Primary Mortgage Insurance Policy for such canceled or non-renewed policy is obtained from and maintained with a Qualified Insurer.
The Master Servicer shall not take, or permit any Sub-Servicer to take, any action which would result in non-coverage under any applicable Primary Mortgage Insurance Policy of any loss which, but for the actions of the Master Servicer or Sub-Servicer, would have been covered thereunder. The Master Servicer will comply in the performance of this Agreement with
all reasonable rules and requirements of each insurer under each Primary Mortgage Insurance Policy. In connection with any assumption and modification agreement or substitution of liability agreement entered into or to be entered into pursuant to Section 2.15, the Master Servicer shall promptly notify the insurer under the related Primary Mortgage Insurance Policy, if any, of such assumption in accordance with the terms of such policies and shall take all actions which may be required by such insurer as a condition to the continuation of coverage under the Primary Mortgage Insurance Policy. If any such Primary Mortgage Insurance Policy is terminated as a result of such assumption, the Master Servicer or the related Sub-Servicer shall obtain a replacement Primary Mortgage Insurance Policy as provided above.
In connection with its activities as administrator and servicer of the Mortgage Loans, the Master Servicer agrees to prepare and present, on behalf of itself, the Indenture Trustee and the Noteholders, claims to the insurer under any Primary Mortgage Insurance Policy in a timely fashion in accordance with the terms of such policies and, in this regard, to take such action as shall be necessary to permit recovery under any Primary Mortgage Insurance Policy respecting a defaulted Mortgage Loan. Any amounts collected by the Master Servicer under any Primary Mortgage Insurance Policy shall be deposited in the Collection Account, subject to withdrawal pursuant to Section 2.11; and any amounts collected by the Master Servicer under any Primary Mortgage Insurance Policy in respect of any REO Property shall be deposited in the Collection Account, subject to withdrawal pursuant to Section 2.23. In those cases in which a Mortgage Loan is serviced by a Sub-Servicer, the Sub-Servicer, on behalf of itself, the Indenture Trustee, and the Noteholders, will present claims to the insurer under any Primary Mortgage Insurance Policy and all collections thereunder shall be deposited initially in the Sub-Servicing Account.
Section 2.14 Maintenance of Hazard Insurance and Errors and Omissions and Fidelity Coverage. (a) The Master Servicer shall cause to be maintained for each Mortgage Loan fire insurance with extended coverage on the related Mortgaged Property in an amount which is at least equal to the least of (i) the current principal balance of such Mortgage Loan, (ii) the amount necessary to fully compensate for any damage or loss to the improvements that are a part of such property on a replacement cost basis and (iii) the maximum insurable value of the improvements which are a part of such Mortgaged Property, in each case in an amount not less than such amount as is necessary to avoid the application of any coinsurance clause contained in the related hazard insurance policy. The Master Servicer shall also cause to be maintained fire insurance with extended coverage on each REO Property in an amount which is at least equal to the lesser of (i) the maximum insurable value of the improvements which are a part of such property and (ii) the outstanding principal balance of the related Mortgage Loan at the time it became an REO Property, plus accrued interest at the Mortgage Interest Rate and related Servicing Advances. The Master Servicer will comply in the performance of this Agreement with all reasonable rules and requirements of each insurer under any such hazard policies. Any amounts to be collected by the Master Servicer under any such policies (other than amounts to be applied to the restoration or repair of the property subject to the related Mortgage or amounts to be released to the Mortgagor in accordance with the procedures that the Master Servicer would follow in servicing loans held for its own account, subject to the terms and conditions of the related Mortgage and Mortgage Note) shall be deposited in the Collection Account, subject to withdrawal pursuant to Section 2.11, if received in respect of a Mortgage Loan, or in the REO Account, subject to withdrawal pursuant to Section 2.23, if received in respect of an REO Property. Any cost
incurred by the Master Servicer in maintaining any such insurance shall not, for the purpose of calculating payments to Noteholders, be added to the unpaid principal balance of the related Mortgage Loan, notwithstanding that the terms of such Mortgage Loan so permit. It is understood and agreed that no earthquake or other additional insurance is to be required of any Mortgagor other than pursuant to such applicable laws and regulations as shall at any time be in force and as shall require such additional insurance. If the Mortgaged Property or REO Property is at any time in an area identified in the Federal Register by the Federal Emergency Management Agency as having special flood hazards, the Master Servicer will cause to be maintained a flood insurance policy in respect thereof. Such flood insurance shall be in an amount equal to the lesser of (i) the unpaid principal balance of the related Mortgage Loan and (ii) the maximum amount of such insurance available for the related Mortgaged Property under the national flood insurance program (assuming that the area in which such Mortgaged Property is located is participating in such program).
In the event that the Master Servicer shall obtain and maintain a blanket policy with an insurer having a General Policy Rating of A:X or better in Best’s Key Rating Guide (or such other rating that is comparable to such rating) insuring against hazard losses on all of the Mortgage Loans, it shall conclusively be deemed to have satisfied its obligations as set forth in the first two sentences of this Section 2.14, it being understood and agreed that such policy may contain a deductible clause, in which case the Master Servicer shall, in the event that there shall not have been maintained on the related Mortgaged Property or REO Property a policy complying with the first two sentences of this Section 2.14, and there shall have been one or more losses which would have been covered by such policy, deposit to the Collection Account from its own funds the amount not otherwise payable under the blanket policy because of such deductible clause. In connection with its activities as administrator and servicer of the Mortgage Loans, the Master Servicer agrees to prepare and present, on behalf of itself, the Indenture Trustee and the Noteholders, claims under any such blanket policy in a timely fashion in accordance with the terms of such policy.
(b) The Master Servicer shall keep in force during the term of this Agreement a policy or policies of insurance covering errors and omissions for failure in the performance of the Master Servicer’s obligations under this Agreement, which policy or policies shall be in such form and amount that would meet the requirements of ▇▇▇▇▇▇ ▇▇▇ or ▇▇▇▇▇▇▇ Mac if it were the purchaser of the Mortgage Loans, unless the Master Servicer has obtained a waiver of such requirements from ▇▇▇▇▇▇ Mae or ▇▇▇▇▇▇▇ Mac. The Master Servicer shall also maintain a fidelity bond in the form and amount that would meet the requirements of ▇▇▇▇▇▇ Mae or ▇▇▇▇▇▇▇ Mac, unless the Master Servicer has obtained a waiver of such requirements from ▇▇▇▇▇▇ Mae or ▇▇▇▇▇▇▇ Mac. The Master Servicer shall provide the Indenture Trustee (upon the Indenture Trustee’s reasonable request) with copies of any such insurance policies and fidelity bond. The Master Servicer shall be deemed to have complied with this provision if an Affiliate of the Master Servicer has such errors and omissions and fidelity bond coverage and, by the terms of such insurance policy or fidelity bond, the coverage afforded thereunder extends to the Master Servicer. Any such errors and omissions policy and fidelity bond shall by its terms not be cancelable without thirty days’ prior written notice to the Indenture Trustee. The Master Servicer shall also cause each Sub-Servicer to maintain a policy of insurance covering errors and omissions and a fidelity bond which would meet such requirements.
Section 2.15 Enforcement of Due-On-Sale Clauses; Assumption Agreements. The Master Servicer will, to the extent it has knowledge of any conveyance or prospective conveyance of any Mortgaged Property by any Mortgagor (whether by absolute conveyance or by contract of sale, and whether or not the Mortgagor remains or is to remain liable under the Mortgage Note and/or the Mortgage), exercise its rights to accelerate the maturity of such Mortgage Loan under the “due-on-sale” clause, if any, applicable thereto; provided, however, that the Master Servicer shall not exercise any such rights if prohibited by law from doing so or if the exercise of such rights would impair or threaten to impair any recovery under the related Primary Mortgage Insurance Policy, if any. If the Master Servicer reasonably believes it is unable under applicable law to enforce such “due-on-sale” clause, or if any of the other conditions set forth in the proviso to the preceding sentence apply, the Master Servicer will enter into an assumption and modification agreement from or with the person to whom such property has been conveyed or is proposed to be conveyed, pursuant to which such person becomes liable under the Mortgage Note and, to the extent permitted by applicable state law, the Mortgagor remains liable thereon. The Master Servicer is also authorized to enter into a substitution of liability agreement with such person, pursuant to which the original Mortgagor is released from liability and such person is substituted as the Mortgagor and becomes liable under the Mortgage Note, provided that no such substitution shall be effective unless such person satisfies the underwriting criteria of the Master Servicer. In connection with any assumption or substitution, the Master Servicer shall apply such underwriting standards and follow such practices and procedures as shall be normal and usual in its general mortgage servicing activities and as it applies to other mortgage loans owned solely by it. The Master Servicer shall not take or enter into any assumption and modification agreement, however, unless (to the extent practicable in the circumstances) it shall have received confirmation, in writing, of the continued effectiveness of any applicable Primary Mortgage Insurance Policy or hazard insurance policy, or a new policy meeting the requirements of this Section is obtained. Any fee collected by the Master Servicer in respect of an assumption or substitution of liability agreement will be retained by the Master Servicer as additional servicing compensation. In connection with any such assumption, no material term of the Mortgage Note (including but not limited to the related Mortgage Interest Rate and the amount of the Monthly Payment) may be amended or modified, except as otherwise required pursuant to the terms thereof. The Master Servicer shall notify the Indenture Trustee that any such substitution or assumption agreement has been completed by forwarding to the Custodian (with a copy to the Indenture Trustee) the executed original of such substitution or assumption agreement, which document shall be added to the related Mortgage File and shall, for all purposes, be considered a part of such Mortgage File to the same extent as all other documents and instruments constituting a part thereof.
Notwithstanding the foregoing paragraph or any other provision of this Agreement, the Master Servicer shall not be deemed to be in default, breach or any other violation of its obligations hereunder by reason of any assumption of a Mortgage Loan by operation of law or by the terms of the Mortgage Note or any assumption which the Master Servicer may be restricted by law from preventing, for any reason whatever. For purposes of this Section 2.15, the term “assumption” is deemed to also include a sale (of the Mortgaged Property) subject to the Mortgage that is not accompanied by an assumption or substitution of liability agreement.
Section 2.16 Realization Upon Defaulted Mortgage Loans. (a) The Master Servicer shall, consistent with the servicing standard set forth in Section 2.01 and the provisions of Section 2.26, foreclose upon or otherwise comparably convert the ownership of properties securing such of the Mortgage Loans as come into and continue in default and as to which no satisfactory arrangements can be made for collection of delinquent payments pursuant to Section 2.07. Notwithstanding the foregoing, the Master Servicer shall provide written notice to the Certificateholder that it intends to proceeds with foreclosure. The Master Servicer shall be responsible for all costs and expenses incurred by it in any such proceedings; provided, however, that such costs and expenses will be recoverable as Servicing Advances by the Master Servicer as contemplated in Section 2.11 and Section 2.23. The foregoing is subject to the provision that, in any case in which Mortgaged Property shall have suffered damage from an Uninsured Cause, the Master Servicer shall not be required to expend its own funds toward the restoration of such property unless it shall determine in its discretion that such restoration will increase the proceeds of liquidation of the related Mortgage Loan after reimbursement to itself for such expenses.
In addition the Master Servicer may also, in its discretion, as an alternative to foreclosure, sell defaulted mortgage loans at fair market value to third-parties, if the related Initial Sub-Servicer reasonably believes that such sale would maximize proceeds to the Noteholders in the aggregate (on a present value basis) with respect to that mortgage loan.
Notwithstanding the foregoing provisions of this Section 2.16 or any other provision of this Agreement, with respect to any Mortgage Loan as to which the Master Servicer has received actual notice of, or has actual knowledge of, the presence of any toxic or hazardous substance on the related Mortgaged Property, the Master Servicer shall not, on behalf of the Indenture Trustee, either (i) obtain title to such Mortgaged Property as a result of or in lieu of foreclosure or otherwise, or (ii) otherwise acquire possession of, or take any other action with respect to, such Mortgaged Property, if, as a result of any such action, the Indenture Trustee, the Trust Estate, the Securities Administrator, the Master Servicer or the Noteholders would be considered to hold title to, to be a “mortgagee-in- possession” of, or to be an “owner” or “operator” of such Mortgaged Property within the meaning of the Comprehensive Environmental Response, Compensation and Liability Act of 1980, as amended from time to time, or any comparable law, unless the Master Servicer has also previously determined, based on its reasonable judgment and a report prepared by a Person who regularly conducts environmental audits using customary industry standards, that:
(i) such Mortgaged Property is in compliance with applicable environmental laws or, if not, that it would be in the best economic interest of the Trust to take such actions as are necessary to bring the Mortgaged Property into compliance therewith; and
(ii) there are no circumstances present at such Mortgaged Property relating to the use, management or disposal of any hazardous substances, hazardous materials, hazardous wastes, or petroleum-based materials for which investigation, testing, monitoring, containment, clean-up or remediation could be required under any federal, state or local law or regulation, or that if any such materials are present for which such action could be required, that it would be in
the best economic interest of the Trust to take such actions with respect to the affected Mortgaged Property.
The cost of the environmental audit report contemplated by this Section 2.23 shall be advanced by the Master Servicer, subject to the Master Servicer’s right to be reimbursed therefor from the Collection Account as provided in Section 2.11(a)(ix), such right of reimbursement being prior to the rights of Noteholders to receive any amount in the Collection Account received in respect of the affected Mortgage Loan or other Mortgage Loans.
If the Master Servicer determines, as described above, that it is in the best economic interest of the Trust to take such actions as are necessary to bring any such Mortgaged Property into compliance with applicable environmental laws, or to take such action with respect to the containment, clean-up or remediation of hazardous substances, hazardous materials, hazardous wastes or petroleum-based materials affecting any such Mortgaged Property, then the Master Servicer shall take such action as it deems to be in the best economic interest of the Trust. The cost of any such compliance, containment, cleanup or remediation shall be advanced by the Master Servicer, subject to the Master Servicer’s right to be reimbursed therefor from the Collection Account as provided in Section 2.11(a)(ix), such right of reimbursement being prior to the rights of Noteholders to receive any amount in the Collection Account received in respect of the affected Mortgage Loan or other Mortgage Loans.
Proceeds received in connection with any Final Recovery Determination, as well as any recovery resulting from a partial collection of Insurance Proceeds or Liquidation Proceeds, in respect of any Mortgage Loan, will be applied in the following order of priority: first, to reimburse the Master Servicer or any Sub-Servicer for any related unreimbursed Servicing Advances and Monthly Advances, pursuant to Section 2.11(a)(ii) or (a)(iii)(B); second, to accrued and unpaid interest on the Mortgage Loan, to the date of the Final Recovery Determination, or to the Due Date prior to the Payment Date on which such amounts are to be distributed if not in connection with a Final Recovery Determination; and third, as a recovery of principal of the Mortgage Loan. If the amount of the recovery so allocated to interest is less than the full amount of accrued and unpaid interest due on such Mortgage Loan, the amount of such recovery will be allocated by the Master Servicer as follows: first, to unpaid Servicing Fees and Administration Fees; and second, to the balance of the interest then due and owing. The portion of the recovery so allocated to unpaid Servicing Fees and unpaid Administration Fees shall be reimbursed to the Master Servicer or any Sub-Servicer pursuant to Section 2.11(a)(iii)(A).
Section 2.17 Indenture Trustee to Cooperate; Release of Mortgage Files. (a) Upon the payment in full of any Mortgage Loan, or the receipt by the Master Servicer of a notification that payment in full shall be escrowed in a manner customary for such purposes, the Master Servicer will immediately notify the Custodian, on behalf of the Indenture Trustee, by a certification in the form of Exhibit E (which certification shall include a statement to the effect that all amounts received or to be received in connection with such payment which are required to be deposited in the Collection Account pursuant to Section 2.10 have been or will be so deposited) of a Servicing Officer and shall request that the Custodian, on behalf of the Indenture Trustee, deliver to it the Mortgage File. Upon receipt of such certification and request, the Custodian, on behalf of the Indenture Trustee, shall promptly release the related Mortgage File to the Master Servicer, and the Master Servicer is authorized to cause the removal from the registration on the MERS®
System of any such Mortgage, if applicable, and to execute and deliver, on behalf of the Indenture Trustee and the Noteholders or any of them, any and all instruments of satisfaction or cancellation or of partial or full release. No expenses incurred in connection with any instrument of satisfaction or deed of reconveyance shall be chargeable to the Collection Account or the Payment Account.
(b) The Indenture Trustee (or a Custodian on its behalf) shall, at the written request and expense of any Noteholder, provide a written report to such Noteholder of all Mortgage Files released to the Master Servicer for servicing purposes.
(c) From time to time and as appropriate for the servicing or foreclosure of any Mortgage Loan, including, for this purpose, collection under any Primary Mortgage Insurance Policy or any other insurance policy relating to the Mortgage Loans, the Custodian, on behalf of the Indenture Trustee, shall, upon request of the Master Servicer and delivery to the Custodian and the Indenture Trustee of a Request for Release in the form of Exhibit E, release the related Mortgage File to the Master Servicer, and the Custodian, on behalf of the Indenture Trustee, shall, at the direction of the Master Servicer, execute such documents as shall be necessary to the prosecution of any such proceedings. Such Request for Release shall obligate the Master Servicer to return each and every document previously requested from the Mortgage File to the Custodian when the need therefor by the Master Servicer no longer exists, unless the Mortgage Loan has been liquidated and the Liquidation Proceeds relating to the Mortgage Loan have been deposited in the Collection Account or the Mortgage File or such document has been delivered to an attorney, or to a public trustee or other public official as required by law, for purposes of initiating or pursuing legal action or other proceedings for the foreclosure of the Mortgaged Property either judicially or non-judicially, and the Master Servicer has delivered to the Custodian, on behalf of the Indenture Trustee, a certificate of a Servicing Officer certifying as to the name and address of the Person to which such Mortgage File or such document was delivered and the purpose or purposes of such delivery. Upon receipt of a certificate of a Servicing Officer stating that such Mortgage Loan was liquidated and that all amounts received or to be received in connection with such liquidation that are required to be deposited into the Collection Account have been so deposited, or that such Mortgage Loan has become an REO Property, a copy of the Request for Release shall be released by the Custodian, on behalf of the Indenture Trustee, to the Master Servicer.
Upon written certification of a Servicing Officer, the Indenture Trustee shall execute and deliver to the Master Servicer any court pleadings, requests for trustee’s sale or other documents reasonably necessary to the foreclosure or trustee’s sale in respect of a Mortgaged Property or to any legal action brought to obtain judgment against any Mortgagor on the Mortgage Note or Mortgage or to obtain a deficiency judgment, or to enforce any other remedies or rights provided by the Mortgage Note or Mortgage or otherwise available at law or in equity. Each such certification shall include a request that such pleadings or documents be executed by the Indenture Trustee and a statement as to the reason such documents or pleadings are required and that the execution and delivery thereof by the Indenture Trustee will not invalidate or otherwise affect the lien of the Mortgage, except for the termination of such a lien upon completion of the foreclosure or trustee’s sale.
Section 2.18 Servicing Compensation. As compensation for the activities of the Master Servicer hereunder, the Master Servicer shall be entitled to the Servicing Fee and the Administration Fee with respect to each Mortgage Loan payable solely from payments of interest in respect of such Mortgage Loan, subject to Section 2.24. In addition, the Master Servicer shall be entitled to recover unpaid Servicing Fees and unpaid Administration Fees out of Insurance Proceeds or Liquidation Proceeds to the extent permitted by Section 2.11(a)(iii)(A) and out of amounts derived from the operation and sale of an REO Property to the extent permitted by Section 2.23. The right to receive the Servicing Fee and the Administration Fee may not be transferred in whole or in part except in connection with the transfer of all of the Master Servicer’s responsibilities and obligations under this Agreement.
Additional servicing compensation in the form of assumption fees, late payment charges and other similar fees and charges shall be retained by the Master Servicer (subject to Section 2.24) only to the extent such fees or charges are received by the Master Servicer. The Master Servicer shall also be entitled pursuant to Section 2.11(a)(iv) to withdraw from the Collection Account, and pursuant to Section 2.23(b) to withdraw from any REO Account, as additional servicing compensation, interest or other income earned on deposits therein, subject to Section 2.12 and Section 2.24. The Master Servicer shall be required to pay all expenses incurred by it in connection with its servicing activities hereunder (including premiums due under the Primary Insurance Policies, if any, premiums for the insurance required by Section 2.14, to the extent such premiums are not paid by the related Mortgagors or by a Sub-Servicer, servicing compensation of each Sub-Servicer, and to the extent provided herein in Section 6.08 of the Indenture, the fees and expenses of the Indenture Trustee and the Securities Administrator) and shall not be entitled to reimbursement therefor except as specifically provided herein.
Section 2.19 Reports to the Securities Administrator; Collection Account Statements. Not later than fifteen days after each Payment Date, the Master Servicer shall forward to the Securities Administrator and the Indenture Trustee, upon the request of the Securities Administrator or the Indenture Trustee, a statement prepared by the Master Servicer setting forth the status of the Collection Account as of the close of business on the last day of the calendar month relating to such Payment Date and showing, for the period covered by such statement, the aggregate amount of deposits into and withdrawals from the Collection Account of each category of deposit specified in Section 2.10(a) and each category of withdrawal specified in Section 2.11. Such statement may be in the form of the then current ▇▇▇▇▇▇ ▇▇▇ Monthly Accounting Report for its Guaranteed Mortgage Pass-Through Program with appropriate additions and changes, and shall also include information as to the aggregate of the outstanding principal balances of all of the Mortgage Loans as of the last day of the calendar month immediately preceding such Payment Date. Copies of such statement shall be provided by the Securities Administrator to the Note Registrar, and the Note Registrar shall provide the same to any Noteholder and to any Person identified to the Note Registrar as a prospective transferee of a Note, upon the request and at the expense of the requesting party, provided such statement is delivered by the Master Servicer to the Securities Administrator and by the Securities Administrator to the Note Registrar.
Section 2.20 Statement as to Compliance. The Master Servicer shall deliver to the Indenture Trustee, the Securities Administrator, the Depositor and the Rating Agencies on or before March 15^th of each year, commencing in 2006, an Officer’s Certificate, certifying that
with respect to the period ending December 31^st of the prior year: (i) such Servicing Officer has reviewed the activities of such Master Servicer during the preceding calendar year or portion thereof and its performance under this Agreement, (ii) to the best of such Servicing Officer’s knowledge, based on such review, such Master Servicer has performed and fulfilled its duties, responsibilities and obligations under this Agreement in all material respects throughout such year, or, if there has been a default in the fulfillment of any such duties, responsibilities or obligations, specifying each such default known to such Servicing Officer and the nature and status thereof, (iii) nothing has come to the attention of such Servicing Officer to lead such Servicing Officer to believe that any Servicer has failed to perform any of its duties, responsibilities and obligations under its related servicing agreement in all material respects throughout such year, or, if there has been a material default in the performance or fulfillment of any such duties, responsibilities or obligations, specifying each such default known to such Servicing Officer and the nature and status thereof. Copies of such statements shall be provided to any Noteholder upon request, by the Securities Administrator at the Master Servicer’s expense.
Section 2.21 Independent Public Accountants’ Servicing Report. The Master Servicer at its expense shall cause a nationally recognized firm of independent certified public accountants to furnish a statement to the Indenture Trustee, the Securities Administrator, the Depositor and the Rating Agencies on or before March 15^th of each year, commencing in 2006 to the effect that, with respect to the most recently ended year, such firm has examined certain records and documents relating to the Master Servicer’s performance of its servicing obligations under this Agreement and, on the basis of such examination conducted substantially in compliance with the audit program for mortgages serviced for ▇▇▇▇▇▇▇ Mac or the Uniform Single Attestation Program for Mortgage Bankers, such firm is of the opinion that the Master Servicer’s activities have been conducted in compliance with this Agreement, or that such examination has disclosed no material items of noncompliance except for (i) such exceptions as such firm believes to be immaterial, (ii) such other exceptions as are set forth in such statement and (iii) such exceptions that the Uniform Single Attestation Program for Mortgage Bankers or the Audit Program for Mortgages Serviced by ▇▇▇▇▇▇▇ Mac requires it to report. Copies of such statements shall be provided to any Noteholder upon request by the Securities Administrator at the expense of the Master Servicer. If such report discloses exceptions that are material, the Master Servicer shall advise the Indenture Trustee whether such exceptions have been or are susceptible of cure, and if susceptible of cure will take prompt action to cure.
Section 2.22 Access to Certain Documentation. The Master Servicer shall provide to the Office of the Controller of the Currency, the Office of Thrift Supervision, the FDIC, and any other federal or state banking or insurance regulatory authority that may exercise authority over any Noteholder, access to the documentation regarding the Mortgage Loans required by applicable laws and regulations. Such access shall be afforded without charge, but only upon reasonable request and during normal business hours at the offices of the Master Servicer designated by it. In addition, access to the documentation regarding the Mortgage Loans required by applicable laws and regulations will be provided to such Noteholder, the Indenture Trustee, the Securities Administrator and to any Person identified to the Master Servicer as a prospective transferee of a Note, upon reasonable request during normal business hours at the offices of the Master Servicer designated by it at the expense of the Person requesting such access.
Section 2.23 Title, Management and Disposition of REO Property. (a) The deed or certificate of sale of any REO Property shall be taken in the name of the Indenture Trustee, or its nominee, in trust for the benefit of the Noteholders. The Master Servicer, on behalf of the Trust, shall either sell any REO Property before the close of the third taxable year following the year the Trust Estate acquires ownership of such REO Property for purposes of Section 856(e) of the Code or request from the Internal Revenue Service, no later than 60 days before the day on which the above three-year grace period would otherwise expire, an extension of the above three-year grace period or any such grace period under Section 856(e) of the Code, as amended. The Master Servicer shall manage, conserve, protect and operate each REO Property for the Noteholders solely for the purpose of its prompt disposition and sale in a manner which does not cause such REO Property to fail to qualify as “foreclosure property” within the meaning of Section 856(e) of the Code.
(b) The Master Servicer shall segregate and hold all funds collected and received in connection with the operation of any REO Property separate and apart from its own funds and general assets and shall establish and maintain with respect to REO Properties an account held in trust for the Indenture Trustee for the benefit of the Noteholders (the “REO Account”), which shall be an Eligible Account. The Master Servicer shall be permitted to allow the Collection Account to serve as the REO Account, subject to separate ledgers for each REO Property. The Master Servicer shall be entitled to retain or withdraw any interest income paid on funds deposited in the REO Account.
(c) The Master Servicer shall have full power and authority, subject only to the specific requirements and prohibitions of this Agreement, to do any and all things in connection with any REO Property as are consistent with the manner in which the Master Servicer manages and operates similar property owned by the Master Servicer or any of its Affiliates, all on such terms and for such period as the Master Servicer deems to be in the best interests of Noteholders. In connection therewith, the Master Servicer shall deposit, or cause to be deposited in the clearing account (which account must be an Eligible Account) in which it customarily deposits payments and collections on mortgage loans in connection with its mortgage loan servicing activities on a daily basis, and in no event more than two Business Days after the Master Servicer’s receipt thereof, and shall thereafter deposit in the REO Account, in no event more than one Business Day after the deposit of such funds into the clearing account, all revenues received by it with respect to an REO Property and shall withdraw therefrom funds necessary for the proper operation, management and maintenance of such REO Property including, without limitation:
(i) all insurance premiums due and payable in respect of such REO Property;
(ii) all real estate taxes and assessments in respect of such REO Property that may result in the imposition of a lien thereon; and
(iii)
all costs and expenses necessary to maintain such REO Property.
To the extent that amounts on deposit in the REO Account with respect to an REO Property are insufficient for the purposes set forth in clauses (i) through (iii) above with
respect to such REO Property, the Master Servicer shall advance from its own funds such amount as is necessary for such purposes if, but only if, the Master Servicer would make such advances if the Master Servicer owned the REO Property and if in the Master Servicer’s judgment, the payment of such amounts will be recoverable from the rental or sale of the REO Property.
Notwithstanding the foregoing, none of the Master Servicer, the Securities Administrator or the Indenture Trustee shall:
(i) authorize the Trust to enter into, renew or extend any New Lease with respect to any REO Property, if the New Lease by its terms will give rise to any income that does not constitute Rents from Real Property;
(iv) authorize any amount to be received or accrued under any New Lease other than amounts that will constitute Rents from Real Property;
(v) 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
(vi) authorize any Person to Directly Operate any REO Property on any date more than 90 days after its date of acquisition by the Trust;
unless, in any such case, the Master Servicer has obtained an Opinion of Counsel, provided to the Securities Administrator and the Indenture Trustee, to the effect that such action will not cause such REO Property to fail to qualify as “foreclosure property” within the meaning of Section 856(e) of the Code at any time that it is held by the Trust Estate, in which case the Master Servicer may take such actions as are specified in such Opinion of Counsel.
The Master Servicer may contract with any Independent Contractor for the operation and management of any REO Property, provided that:
(i) the terms and conditions of any such contract shall not be inconsistent herewith;
(vii) 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;
(viii) none of the provisions of this Section 2.23(c) relating to any such contract or to actions taken through any such Independent Contractor shall be deemed to relieve the Master Servicer of any of its duties and obligations to the
Indenture Trustee on behalf of the Noteholders with respect to the operation and management of any such REO Property; and
(ix) the Master Servicer shall be obligated with respect thereto to the same extent as if it alone were performing all duties and obligations in connection with the operation and management of such REO Property.
The Master Servicer shall be entitled to enter into any agreement with any Independent Contractor performing services for it related to its duties and obligations hereunder for indemnification of the Master Servicer by such Independent Contractor, and nothing in this Agreement shall be deemed to limit or modify such indemnification. The Master Servicer shall be solely liable for all fees owed by it to any such Independent Contractor, irrespective of whether the Master Servicer’s compensation pursuant to Section 2.18 is sufficient to pay such fees.
(d) In addition to the withdrawals permitted under Section 2.23(c), the Master Servicer may from time to time make withdrawals from the REO Account for any REO Property: (i) to pay itself or any Sub-Servicer unpaid Servicing Fees and Administration Fees in respect of the related Mortgage Loan; and (ii) to reimburse itself or any Sub-Servicer for unreimbursed Servicing Advances and Monthly Advances made in respect of such REO Property or the related Mortgage Loan. Any income from the related REO Property received during any calendar months prior to a Final Recovery Determination, net of any withdrawals made pursuant to Section 2.23(c) or this Section 2.23(d), shall be withdrawn by the Master Servicer from each REO Account maintained by it and remitted to the Paying Agent for deposit into the Payment Account in accordance with Section 2.10(d)(ii) on the Master Servicer Remittance Date relating to a Final Recovery Determination with respect to such Mortgage Loan, for payment on the related Payment Date in accordance with the Indenture.
(e) Subject to the time constraints set forth in Section 2.23(a), and further subject to obtaining the approval of the insurer under any related Primary Mortgage Insurance Policy (if and to the extent that such approvals are necessary to make claims under such policies in respect of the affected REO Property), each REO Disposition shall be carried out by the Master Servicer at such price and upon such terms and conditions as the Master Servicer shall deem necessary or advisable, as shall be normal and usual in its general servicing activities for similar properties.
(f) The proceeds from the REO Disposition, net of any amount required by law to be remitted to the Mortgagor under the related Mortgage Loan and net of any payment or reimbursement to the Master Servicer or any Sub-Servicer as provided above, shall be remitted to the Paying Agent for deposit in the Payment Account in accordance with Section 2.10(d)(ii) on the Master Servicer Remittance Date in the month following the receipt thereof for payment on the related Payment Date in accordance with the Indenture. Any REO Disposition shall be for cash only.
(g) The Master Servicer shall file information returns with respect to the receipt of mortgage interest received in a trade or business, reports of foreclosures and abandonments of any Mortgaged Property and cancellation of indebtedness income with respect
to any Mortgaged Property as required by Sections 6050H, 6050J and 6050P of the Code, respectively. Such reports shall be in form and substance sufficient to meet the reporting requirements imposed by such Sections 6050H, 6050J and 6050P of the Code.
Section 2.24 Obligations of the Master Servicer in Respect of Prepayment Interest Shortfalls. The Master Servicer shall deliver to the Paying Agent for deposit into the Payment Account on or before 12:00 p.m. New York time on the Master Servicer Remittance Date from its own funds (or from a Sub-Servicer’s own funds received by the Master Servicer in respect of Compensating Interests) an amount equal to the lesser of (i) the aggregate of the Prepayment Interest Shortfalls for the related Payment Date resulting from full or partial Principal Prepayments during the related Prepayment Period and not paid by the related Initial Sub-Servicer pursuant to the ▇▇▇▇▇ Fargo Servicing Agreement or the First Republic Servicing Agreement, as applicable, and (ii) the aggregate Master Servicing compensation for such Payment Date (the “Compensating Interest”).
Section 2.25 Obligations of the Master Servicer in Respect of Monthly Payments. In the event that a shortfall in any collection on or liability with respect to any Mortgage Loan results from or is attributable to adjustments to Scheduled Principal Balances that were made by the Master Servicer in a manner not consistent with the terms of the related Mortgage Note and this Agreement, the Master Servicer, upon discovery or receipt of notice thereof, immediately shall deliver to the Paying Agent for deposit in the Payment Account from its own funds the amount of any such shortfall and shall indemnify and hold harmless the Trust, the Indenture Trustee, the Securities Administrator, the Depositor and any successor master servicer in respect of any such liability. Such indemnities shall survive the termination or discharge of this Agreement. If amounts paid by the Master Servicer with respect to any Mortgage Loan pursuant to this Section 2.25 are subsequently recovered from the related Mortgagor, the Master Servicer shall be permitted to reimburse itself for such amounts paid by it pursuant to this Section 2.25 from such recoveries.
Section 2.26 Foreclosure Rights. (a) For so long as the Majority Certificateholder also holds all of the Subordinate Notes and has not previously breached its obligation to purchase a Mortgage Loan as set forth herein, neither of the Initial Sub-Servicers shall commence foreclosure proceedings with respect to a Mortgage Loan unless (i) no later than five Business Days prior to its commencement of such foreclosure proceedings, it notifies the Master Servicer of its intention to do so, and (ii) the Certificateholder, either directly or through the Master Servicer, does not, within such five-Business-Day period, affirmatively object to such action.
(b) In addition, for so long as the Majority Certificateholder also holds all of the Subordinate Notes and has not previously breached its obligation to purchase a Mortgage Loan as set forth herein, in the event that the related Initial Sub-Servicer determines not to proceed with foreclosure proceedings with respect to a Mortgage Loan that becomes 60 days or more delinquent and such Initial Sub-Servicer has determined that it is unable to collect payments due under such Mortgage Loan in accordance with Accepted Servicing Practices, such Initial Sub-Servicer shall, prior to taking any action with respect to such Mortgage Loan, promptly provide the Master Servicer with notice of such determination and a description of such other action as it intends to take with respect to such Mortgage Loan; provided, that the related Initial Sub-Servicer shall not be permitted to proceed with any such action unless the
Certificateholder, either directly or through the Master Servicer, does not, within five Business Days following such notice, affirmatively object to such Initial Sub-Servicer taking such action.
(c) If the Certificateholder timely and affirmatively objects to an action or contemplated action of the related Initial Sub-Servicer pursuant to either (a) or (b) above, then the Certificateholder shall instruct the Master Servicer to hire, at the Certificateholder’s sole cost and expense, three appraisal firms, selected by the Master Servicer in its sole and absolute discretion from the list of appraisal firms attached as Exhibit F, to compute the fair value of the Mortgaged Property relating to the related Mortgage Loan utilizing the ▇▇▇▇▇▇ Mae Form 2055 Exterior-Only Inspection Residential Appraisal Report (each such appraisal-firm computation, a “Fair Value Price”), in each case (other than as set forth in (d) below) no later than 30 days from the date of such Certificateholder objection. If the Master Servicer shall have received three Fair Value Prices by the end of such 30-day period, then the Certificateholder shall, no later than 5 days after the expiration of such 30-day period, purchase such Mortgage Loan and the related Mortgaged Property at an amount equal to the sum of (i) accrued and unpaid interest on such Mortgage Loan as of such purchase date (“Accrued Interest”) and (ii) the highest of such three Fair Value Prices respectively determined by such appraisal firms, and shall promptly deliver such amount to the related Initial Sub-Servicer for deposit into the Custodian Account. All costs relating to the computation of the related Fair Value Prices shall be for the account of the Certificateholder and shall be paid by the Certificateholder at the time of such Mortgage Loan and the related Mortgaged Property are purchased by the Certificateholder.
(d) If the Master Servicer shall not have received three Fair Value Prices at the end of the 30-day period set forth in (c) above, then:
(i) The Master Servicer shall obtain such three Fair Value Prices no later than 15 days after the end of such 30-day period.
(ii) If the Master Servicer shall have only received two Fair Value Prices at the end of such 15-day extension period, then the Master Servicer will determine, in its sole and absolute discretion, the fair value of the Mortgaged Property relating to such Mortgage Loan, related Insurance Proceeds and the current delinquency status of such Mortgage Loan) (such fair value, the “Master Servicer Fair Value Price”), and the Certificateholder shall, no later than 5 days after the expiration of such 15-day extension period, purchase (and deliver to the related Initial Sub-Servicer the purchase price for) such Mortgage Loan and the related Mortgaged Property at an amount equal to the sum of (A) Accrued Interest thereon and (B) the higher of (1) the highest of such two Fair Value Prices determined by such appraisal firms and (2) the Master Servicer Fair Value Price.
(iii) If the Master Servicer shall have received only one Fair Value Price at the end of such 15-day extension period, then the Master Servicer will determine, in its sole and absolute discretion, the Master Servicer Fair Value Price of the Mortgaged Property related to such Mortgage Loan, and:
(A) if such Master Servicer Fair Value Price is equal to or greater than the unpaid principal balance of the related
Mortgage Loan as of such date (the “Unpaid Principal Balance”), then the Certificateholder shall, no later than 5 days after the expiration of such 15-day extension period, purchase (and deliver to the related Initial Sub-Servicer the purchase price for) such Mortgage Loan and the related Mortgaged Property at an amount equal to the sum of (1) Accrued Interest thereon and (2) such Master Servicer Fair Value Price; and
(B) if such Master Servicer Fair Value Price is less than the related Unpaid Principal Balance, then the Certificateholder shall, no later than 5 days after the expiration of such 15-day extension period, purchase (and deliver to the related Initial Sub-Servicer the purchase price for) such Mortgage Loan and the related Mortgaged Property at an amount equal to the sum of (1) Accrued Interest thereon and (2) the related Unpaid Principal Balance (such sum, the “Preliminary Purchase Price”); provided, that the provisions of clause (d)(iv) shall thereafter apply.
(iv) Following the payment by the Certificateholder of the Preliminary Purchase Price, the Master Servicer shall continue to hire appraisal firms at the Certificateholder’s sole cost and expense to compute the Fair Value Price of the Mortgaged Property related to such Mortgage Loan, and at such time as two such Fair Value Prices shall have been obtained:
(A) if the sum of (1) Accrued Interest on the related Mortgage Loan and (2) the higher of (x) the highest of such two Fair Value Prices determined by such appraisal firms and (y) the Master Servicer’s Fair Value Price of the Mortgaged Property related to such Mortgage Loan (such sum, the “Revised Fair Value Price”) is greater than such Preliminary Purchase Price, then the Master Servicer shall promptly notify the Certificateholder and the related Initial Sub-Servicer of such calculation, and the Certificateholder shall, no later than 5 days after such notice, remit to the related Initial Sub-Servicer, for deposit into the Custodian Account, the difference between such Revised Fair Value Price and such Preliminary Purchase Price; and
(B) if such Preliminary Purchase Price is greater than such Revised Fair Value Price, then the Master Servicer shall promptly notify the Certificateholder and the related Initial Sub-Servicer of such calculation, and the related Initial Sub-Servicer shall, no later than 5 days after such notice, remit to the Certificateholder, from funds then on deposit in the Custodian Account, the difference between such Preliminary Purchase Price and such Revised Fair Value Price.
(e) Notwithstanding anything herein to the contrary, the Certificateholder shall not be entitled to any of its rights set forth herein with respect to a Mortgage Loan following its failure to purchase such Mortgage Loan and the related Mortgaged Property, at the related purchase price set forth in this Section 2.26 within the timeframe set forth in this Section 2.26 following the Certificateholder’s objection to an action of the related Initial Sub-Servicer, and such Initial Sub-Servicer shall provide the Master Servicer written notice of such failure. Moreover, the Majority Certificateholder shall not be entitled to any of the rights in this Section 2.26 if any of the Subordinate Notes are held by entities that are unaffiliated with such Majority Certificateholder.
(f) Any notice, confirmation, instruction or objection pursuant to paragraphs (a), (b), (c) and (d) above may be delivered via facsimile or other written or electronic communication as the parties hereto and the Certificateholder may agree to from time to time.
(g) For the avoidance of doubt, the Certificateholder’s rights set forth in this Section 2.26 are intended to provide the Certificateholder, for so long as it owns 100% of the Privately Offered Notes and the Trust Certificates (each, as defined in Appendix A of the Indenture) and has not forfeited its right under this Section 2.26 as set forth in clause (e) above, with the unilateral right to control foreclosure decisions in respect of delinquent and defaulted Mortgage Loans, and certain exclusive purchase rights so as to maximize the recovery value on delinquent and defaulted Mortgage Loans.
To the extent that the Certificateholder purchases any Mortgage Loan pursuant to this Section 2.26, the related Initial Sub-Servicer will continue to service such Mortgage Loan in accordance with this Agreement. The parties acknowledge that, in such event, the Master Servicer will have no duty or responsibility to master service any such Mortgage Loan.”
(h) Subject to the conditions set forth herein, once the Majority Certificateholder no longer holds all of the Subordinate Notes, or following the forfeiture of such Holder's rights as set forth in this Section 2.26, the Seller may, at its option, purchase from the Trust any Mortgage Loan which has been delinquent for at least 91 days. That purchase shall be at a purchase price equal to the Repurchase Price.
ARTICLE III
REMITTANCE REPORTS; MONTHLY ADVANCES; COMMISSION REPORTING
Section 3.01 Remittance Reports; Monthly Advances. (a) On the second Business Day prior to the related Payment Date, the Master Servicer shall deliver to the Securities Administrator, the Paying Agent and the Indenture Trustee by telecopy (or by such other means as the Master Servicer, the Paying Agent, the Securities Administrator and the Indenture Trustee may agree from time to time) a Remittance Report with respect to the related Payment Date. Such Remittance Report will include (i) the amount of Monthly Advances to be made by the Master Servicer in respect of the related Payment Date, the aggregate amount of Monthly Advances outstanding after giving effect to such Monthly Advances, and the aggregate amount of Nonrecoverable Advances in respect of such Payment Date and (ii) such other information with respect to the Mortgage Loans as the Securities Administrator or the Paying Agent may reasonably require to perform the calculations necessary for the Paying Agent to make the payments contemplated by Section 3.03 of the Indenture and for the Securities Administrator to prepare the statements to Noteholders contemplated by Section 7.04 of the Indenture; provided, however, that if the Master Servicer is not the Securities Administrator, the Master Servicer will forward to the successor Securities Administrator the information set forth in clause (i) above on the next Business Day following the latest related Determination Date and the information set forth in clause (ii) above on the fifth Business Day following the last day of the related calendar month. Neither the Indenture Trustee, the Paying Agent nor the Securities Administrator shall be responsible to recompute, recalculate or verify any information provided to it by the Master Servicer.
(b) The amount of Monthly Advances to be made by the Master Servicer for any Payment Date shall equal, subject to Section 3.01(d), the sum of (i) the aggregate amount of Monthly Payments (with each interest portion thereof net of the related Servicing Fee and the related Administration Fee), due on the related Due Date in respect of the Mortgage Loans, which Monthly Payments were delinquent as of the close of business on the related Determination Date and (ii) with respect to each REO Property, which REO Property was acquired during or prior to the related Prepayment Period and as to which such REO Property an REO Disposition did not occur during the related Prepayment Period, an amount equal to the Monthly Payments (with each interest portion thereof net of the related Servicing Fee and the related Administration Fee) that would have been due on the related Due Date in respect of the related Mortgage Loans.
On or before 12:00 p.m. New York time on the Master Servicer Remittance Date, the Master Servicer shall remit in immediately available funds to the Paying Agent for deposit in the Payment Account an amount equal to the aggregate amount of Monthly Advances, if any, to be made in respect of the Mortgage Loans and REO Properties for the related Payment Date either (i) from its own funds or, if received from a Sub-Servicer, from funds remitted by a Sub-Servicer in payment of required Monthly Advances or (ii) from the Collection Account, to the extent of funds held therein for future payment (in which case, it will cause to be made an appropriate entry in the records of Collection Account that amounts held for future payment have been, as permitted by this Section 3.01, used by the Master Servicer in discharge of any such Monthly Advance) or (iii) in the form of any combination of (i) and (ii) aggregating the total
amount of Monthly Advances to be made by the Master Servicer with respect to the Mortgage Loans and REO Properties. Any amounts held for future payment and so used shall be appropriately reflected in the Master Servicer’s records and replaced by the Master Servicer by deposit in the Collection Account on or before any future Master Servicer Remittance Date to the extent that the Available Funds for the related Payment Date (determined without regard to Monthly Advances to be made on the Master Servicer Remittance Date) shall be less than the total amount that would be paid to the Classes of Noteholders pursuant to Section 3.03 of the Indenture on such Payment Date if such amounts held for future payments had not been so used to make Monthly Advances. The Securities Administrator will provide notice to the Master Servicer by telecopy by the close of business on the Master Servicer Remittance Date in the event that the amount remitted by the Master Servicer to the Securities Administrator on such Master Servicer Remittance Date is less than the Monthly Advances required to be made by the Master Servicer for the related Payment Date.
(c) The obligation of the Master Servicer to make such Monthly Advances is mandatory, notwithstanding any other provision of this Agreement but subject to (d) below, and, with respect to any Mortgage Loan or REO Property, shall continue until a Final Recovery Determination in connection therewith or the removal thereof from the Trust Estate except as otherwise provided in this Section.
(d) Notwithstanding anything herein to the contrary, no Monthly Advance shall be required to be made hereunder by the Master Servicer if such Monthly Advance would, if made, constitute a Nonrecoverable Advance. The determination by the Master Servicer that it has made a Nonrecoverable Advance or that any proposed Monthly Advance, if made, would constitute a Nonrecoverable Advance, shall be evidenced by an Officers’ Certificate of the Master Servicer delivered to the Depositor, the Securities Administrator, the Paying Agent and the Indenture Trustee.
(e) If the Master Servicer shall fail to make any Monthly Advance on any Master Servicer Remittance Date required to be made from its own funds pursuant to this Section 3.01, then the Paying Agent, by not later than 1:00 p.m. on the related Payment Date, shall make such Monthly Advance from its own funds by depositing the amount of such advance into the Payment Account, and the Securities Administrator and the Paying Agent shall include the amount so advanced by the Paying Agent in the Available Funds paid on such Payment Date.
Section 3.02 Commission Reporting. The Depositor shall prepare or cause to be prepared the initial current report on Form 8-K. Within 15 days after each Payment Date, the Securities Administrator shall, in accordance with industry standards, file with the Commission via the Electronic Data Gathering and Retrieval System (“▇▇▇▇▇”), a Form 8-K with a copy of the statement to be furnished to the Noteholders for such Payment Date as an exhibit thereto. Prior to January 30, 2006, the Securities Administrator shall, in accordance with industry standards, file a Form 15 Suspension Notice with respect to the Issuer, if applicable. Prior to (i) March 31, 2006 and (ii) unless and until a Form 15 Suspension Notice shall have been filed, March 31st of each year thereafter, the Securities Administrator, in its capacity as Securities Administrator hereunder, shall execute and file a Form 10-K, in substance conforming to industry standards, with respect to the Issuer. Such Form 10-K shall include the Master Servicer Certification, the annual independent accountant’s servicing report and annual statement of
compliance to be delivered by the Master Servicer pursuant to Sections 2.20 and 2.21. The Depositor hereby grants to the Securities Administrator a limited power of attorney to execute and file the Forms 8-K and the Form 10-K on behalf of the Depositor. Such power of attorney shall continue until either the earlier of (i) receipt by the Securities Administrator from the Depositor of written termination of such power of attorney and (ii) the termination of the Trust Estate. The Depositor agrees to promptly furnish to the Securities Administrator and the Master Servicer, from time to time upon request, such further information, reports and financial statements within its control related to this Agreement or the Mortgage Loans as the Securities Administrator or the Master Servicer reasonably deems appropriate to prepare and file all necessary reports with the Commission. Neither the Securities Administrator nor the Master Servicer shall have any responsibility to file any items other than those specified in this Section 3.02; provided, however, the Securities Administrator and the Master Servicer will cooperate with the Depositor in connection with any additional filings with respect to the Issuer as the Depositor deems necessary under the Securities Exchange Act of 1934, as amended (the “Exchange Act”). Fees and expenses incurred by the Securities Administrator or the Master Servicer in connection with this Section 3.02 shall not be reimbursable from the Trust.
ARTICLE IV
THE DEPOSITOR AND THE MASTER SERVICER
Section 4.01 Liability of the Depositor and the Master Servicer. The Depositor and the Master Servicer each shall be liable in accordance herewith only to the extent of the obligations specifically imposed by this Agreement and undertaken hereunder by the Depositor and the Master Servicer herein.
Section 4.02 Merger or Consolidation of the Depositor or the Master Servicer. Subject to the following paragraph, the Depositor will keep in full effect its existence, rights and franchises as a corporation under the laws of the jurisdiction of its incorporation. Subject to the following paragraph, the Master Servicer will keep in full effect its existence, rights and franchises as a corporation under the laws of the jurisdiction of its incorporation and its qualification as an approved conventional seller/servicer for ▇▇▇▇▇▇ Mae or ▇▇▇▇▇▇▇ Mac in good standing. The Depositor and the Master Servicer each will obtain and preserve its qualification to do business as a foreign corporation in each jurisdiction in which such qualification is or shall be necessary to protect the validity and enforceability of this Agreement, the Notes or any of the Mortgage Loans and to perform its respective duties under this Agreement.
The Depositor or the Master Servicer may be merged or consolidated with or into any Person, or transfer all or substantially all of its assets to any Person, in which case any Person resulting from any merger or consolidation to which the Depositor or the Master Servicer shall be a party, or any Person succeeding to the business of the Depositor or the Master Servicer, shall be the successor of the Depositor or the Master Servicer, as the case may be, hereunder, without the execution or filing of any paper or any further act on the part of any of the parties hereto, anything herein to the contrary notwithstanding; provided, however, that the successor or surviving Person to the Master Servicer shall be qualified to service mortgage loans on behalf of ▇▇▇▇▇▇ Mae or ▇▇▇▇▇▇▇ Mac; and provided further that the Rating Agencies’ ratings of the Notes rated thereby and in effect immediately prior to such merger or consolidation will not be qualified, reduced or withdrawn as a result thereof (as evidenced by a letter to such effect from the Rating Agencies).
Section 4.03 Limitation on Liability of the Depositor, the Master Servicer and Others. None of the Depositor, the Master Servicer or any of the directors, officers, employees or agents of the Depositor or the Master Servicer shall be under any liability to the Trust or the Noteholders for any action taken or for refraining from the taking of any action in good faith pursuant to this Agreement, or for errors in judgment; provided, however, that this provision shall not protect the Depositor, the Master Servicer or any such person against any breach of warranties, representations or covenants made herein, or against any specific liability imposed on the Master Servicer pursuant hereto, or against any liability which would otherwise be imposed by reason of willful misfeasance, bad faith or negligence in the performance of duties or by reason of reckless disregard of obligations and duties hereunder. The Depositor, the Master Servicer and any director, officer, employee or agent of the Depositor or the Master Servicer may rely in good faith on any document of any kind which, prima facie, is properly executed and submitted by any Person respecting any matters arising hereunder. The Depositor, the Master Servicer and any director, officer, employee or agent of the Depositor or the Master Servicer
shall be indemnified and held harmless by the Trust against any loss, liability or expense incurred in connection with any legal action relating to this Agreement or the Notes, other than any loss, liability or expense to any specific Mortgage Loan or Mortgage Loans (except as any such loss, liability or expense shall be otherwise reimbursable pursuant to this Agreement) or any loss, liability or expense incurred by reason of willful misfeasance, bad faith or negligence in the performance of duties hereunder or by reason of reckless disregard of obligations and duties hereunder. Neither the Depositor nor the Master Servicer shall be under any obligation to appear in, prosecute or defend any legal action unless such action is related to its respective duties under this Agreement and, in its opinion, does not involve it in any expense or liability; provided, however, that each of the Depositor and the Master Servicer may in its discretion undertake any such action which it may deem necessary or desirable with respect to this Agreement and the rights and duties of the parties hereto and the interests of the Noteholders hereunder. In such event, unless the Depositor or the Master Servicer acts without the consent of Holders of 51% of the aggregate Note Principal Balance of the Notes (which consent shall not be necessary in the case of litigation or other legal action by either to enforce their respective rights or defend themselves hereunder), the legal expenses and costs of such action and any liability resulting therefrom (except any loss, liability or expense incurred by reason of willful misfeasance, bad faith or negligence in the performance of duties hereunder or by reason of reckless disregard of obligations and duties hereunder) shall be expenses, costs and liabilities of the Trust, and the Depositor (subject to the limitations set forth above) and the Master Servicer shall be entitled to be reimbursed therefor from the Collection Account as and to the extent provided in Section 2.11, any such right of reimbursement being prior to the rights of the Noteholders to receive any amount in the Collection Account.
Section 4.04 Limitation on Resignation of the Master Servicer. The Master Servicer shall not resign from the obligations and duties hereby imposed on it except (i) upon determination that its duties hereunder are no longer permissible under applicable law or (ii) with the written consent of the Indenture Trustee and the Securities Administrator, which consent may not be unreasonably withheld, with written confirmation from the Rating Agencies (which confirmation shall be furnished to the Depositor, the Indenture Trustee and the Securities Administrator) that such resignation will not cause the Rating Agencies to reduce the then current rating of the Class A Notes and provided that a qualified successor has agreed to assume the duties and obligations of the Master Servicer hereunder. Any such determination pursuant to clause (i) of the preceding sentence permitting the resignation of the Master Servicer shall be evidenced by an Opinion of Counsel to such effect obtained at the expense of the Master Servicer and delivered to the Indenture Trustee and the Securities Administrator. No resignation of the Master Servicer shall become effective until the Indenture Trustee or a successor servicer shall have assumed the Master Servicer’s responsibilities, duties, liabilities (other than those liabilities arising prior to the appointment of such successor) and obligations under this Agreement.
Except as expressly provided herein, the Master Servicer shall not assign nor transfer any of its rights, benefits or privileges hereunder to any other Person, nor delegate to or subcontract with, nor authorize or appoint any other Person to perform any of the duties, covenants or obligations to be performed by the Master Servicer hereunder. If, pursuant to any provision hereof, the duties of the Master Servicer are transferred to a successor master servicer, the entire amount of the Servicing Fee, the Administration Fee and other compensation payable
to the Master Servicer pursuant hereto shall thereafter be payable to such successor master servicer.
Section 4.05 Rights of the Depositor in Respect of the Master Servicer. The Master Servicer shall afford (and any Sub-Servicing Agreement shall provide that each Sub-Servicer shall afford) the Depositor, the Indenture Trustee and the Securities Administrator, upon reasonable notice, during normal business hours, access to all records maintained by the Master Servicer (and any such Sub-Servicer) in respect of the Master Servicer’s rights and obligations hereunder and access to officers of the Master Servicer (and those of any such Sub-Servicer) responsible for such obligations. Upon request, the Master Servicer shall furnish to the Depositor, the Indenture Trustee and the Securities Administrator its (and any such Sub-Servicer’s) most recent financial statements of the parent company of the Master Servicer and such other information relating to the Master Servicer’s capacity to perform its obligations under this Agreement that it possesses. Notwithstanding the foregoing, in the case of the Initial Sub-Servicer, such access and information described in the preceding two sentences shall be required to be provided only to the extent provided in the Sub-Servicing Agreement. To the extent such information is not otherwise available to the public, the Depositor, the Indenture Trustee and the Securities Administrator shall not disseminate any information obtained pursuant to the preceding two sentences without the Master Servicer’s written consent, except as required pursuant to this Agreement or to the extent that it is appropriate to do so (i) in working with legal counsel, auditors, taxing authorities or other governmental agencies, rating agencies or reinsurers or (ii) pursuant to any law, rule, regulation, order, judgment, writ, injunction or decree of any court or governmental authority having jurisdiction over the Depositor, the Indenture Trustee, the Securities Administrator or the Trust Estate, and in either case, the Depositor, the Indenture Trustee or the Securities Administrator, as the case may be, shall use its best efforts to assure the confidentiality of any such disseminated non-public information. The Depositor may, but is not obligated to, enforce the obligations of the Master Servicer under this Agreement and may, but is not obligated to, perform, or cause a designee to perform, any defaulted obligation of the Master Servicer under this Agreement or exercise the rights of the Master Servicer under this Agreement; provided that the Master Servicer shall not be relieved of any of its obligations under this Agreement by virtue of such performance by the Depositor or its designee. The Depositor shall not have any responsibility or liability for any action or failure to act by the Master Servicer and is not obligated to supervise the performance of the Master Servicer under this Agreement or otherwise.
ARTICLE V
DEFAULT
Section 5.01 Master Servicer Events of Default. “Master Servicer Event of Default,” wherever used herein, means any one of the following events:
(i) any failure by the Master Servicer to remit to the Paying Agent for payment to the Noteholders any payment (other than a Monthly Advance required to be made from its own funds on any Master Servicer Remittance Date pursuant to Section 3.01) required to be made under the terms of the Notes and this Agreement which continues unremedied for a period of one Business Day after the date upon which written notice of such failure, requiring the same to be remedied, shall have been given to the Master Servicer (with a copy to the Paying Agent) by the Depositor, the Securities Administrator or the Indenture Trustee (in which case notice shall be provided by telecopy), or to the Master Servicer, the Depositor, the Securities Administrator, the Paying Agent and the Indenture Trustee by the Holders of 25% of the aggregate Note Principal Balance of the Notes; or
(ii) any failure on the part of the Master Servicer duly to observe or perform in any material respect any of the covenants or agreements on the part of the Master Servicer contained in the Notes or in this Agreement which continues unremedied for a period of 30 days after the earlier of (i) the date on which written notice of such failure, requiring the same to be remedied, shall have been given to the Master Servicer by the Depositor, the Securities Administrator or the Indenture Trustee, or to the Master Servicer, the Depositor, the Securities Administrator and the Indenture Trustee by the Holders of 25% of the aggregate Note Principal Balance of the Notes and (ii) actual knowledge of such failure by a Servicing Officer of the Master Servicer; or
(iii) a decree or order of a court or agency or supervisory authority having jurisdiction in the premises in an involuntary case under any present or future federal or state bankruptcy, insolvency or similar law or the appointment of a conservator or receiver or liquidator in any insolvency, readjustment of debt, marshalling of assets and liabilities or similar proceeding, or for the winding-up or liquidation of its affairs, shall have been entered against the Master Servicer and if such proceeding is being contested by the Master Servicer in good faith such decree or order shall have remained in force undischarged or unstayed for a period of 60 consecutive days or results in the entry of an order for relief or any such adjudication or appointment; or
(iv) the Master Servicer shall consent to the appointment of a conservator or receiver or liquidator in any insolvency, readjustment of debt, marshalling of assets and liabilities or similar proceedings of or relating to the Master Servicer or of or relating to all or substantially all of its property; or
(v) the Master Servicer shall admit in writing its inability to pay its debts generally as they become due, file a petition to take advantage of any applicable insolvency or reorganization statute, make an assignment for the benefit of its creditors, or voluntarily suspend payment of its obligations; or
(vi) any failure of the Master Servicer to make, or of the Paying Agent to make on behalf of the Master Servicer, any Monthly Advance on any Master Servicer Remittance Date required to be made from its own funds pursuant to Section 3.01.
If a Master Servicer Event of Default described in clauses (i) through (v) of this Section shall occur, then, and in each and every such case, so long as such Master Servicer Event of Default shall not have been remedied, the Depositor or the Indenture Trustee may, and at the written direction of the Holders of Notes entitled to at least 51% of Voting Rights, the Indenture Trustee shall, by notice in writing to the Master Servicer (and to the Depositor if given by the Indenture Trustee or to the Indenture Trustee if given by the Depositor), terminate all of the rights and obligations of the Master Servicer in its capacity as a Master Servicer under this Agreement, to the extent permitted by law, and in and to the Mortgage Loans and the proceeds thereof. If a Master Servicer Event of Default described in clause (vi) hereof shall occur and shall not have been remedied by 1:00 p.m. on the related Payment Date, the Paying Agent shall notify the Indenture Trustee of the same, and the Indenture Trustee shall be obligated to make such Monthly Advance and, then so long as such Master Servicer Event of Default shall not have been remedied during the applicable time period set forth in clause (vi) above (including the reimbursement to the Indenture Trustee by the Master Servicer, with interest thereon at the Prime Rate, for any Monthly Advance made), the Indenture Trustee shall, by notice in writing to the Master Servicer and the Depositor, terminate all of the rights and obligations of the Master Servicer in its capacity as a Master Servicer under this Agreement and in and to the Mortgage Loans and the proceeds thereof. On or after the receipt by the Master Servicer of such written notice, all authority and power of the Master Servicer under this Agreement, whether with respect to the Notes (other than as a Holder of any Note) or the Mortgage Loans or otherwise, shall pass to and be vested in the Indenture Trustee pursuant to and under this Section and, without limitation, the Indenture Trustee is hereby authorized and empowered, as attorney-in-fact or otherwise, to execute and deliver on behalf of and at the expense of the Master Servicer, any and all documents and other instruments and to do or accomplish all other acts or things necessary or appropriate to effect the purposes of such notice of termination, whether to complete the transfer and endorsement or assignment of the Mortgage Loans and related documents, or otherwise. The Master Servicer agrees, at its sole cost and expense, promptly (and in any event no later than ten Business Days subsequent to such notice) to provide the Indenture Trustee with all documents and records requested by it to enable it to assume the Master Servicer’s functions under this Agreement, and to cooperate with the Indenture Trustee in effecting the termination of the Master Servicer’s responsibilities and rights under this Agreement, including, without limitation, the transfer within one Business Day to the Indenture Trustee for administration by it of all cash amounts which at the time shall be or should have been credited by the Master Servicer to the Collection Account held by or on behalf of the Master Servicer, the Payment Account or any REO Account or Servicing Account held by or on behalf of the Master Servicer or thereafter be received with respect to the Mortgage Loans or any REO Property serviced by the Master Servicer (provided, however, that the Master Servicer shall continue to be entitled to receive all amounts accrued or owing to it under this Agreement on or prior to the date of such termination, whether in respect of Monthly Advances or otherwise, and shall continue to be entitled to the benefits of Section 4.03, notwithstanding any such termination, with respect to events occurring prior to such termination). For purposes of this Section 5.01, the Indenture Trustee shall not be deemed to have knowledge of a Master Servicer Event of Default unless a Responsible Officer of the Indenture Trustee assigned to and working
in the Indenture Trustee’s Corporate Trust Office has actual knowledge thereof or unless written notice of any event which is in fact such a Master Servicer Event of Default is received by the Indenture Trustee and such notice references the Notes, the Trust or this Agreement.
Section 5.02 Indenture Trustee to Act; Appointment of Successor. (a) On and after the time the Master Servicer receives a notice of termination, the Indenture Trustee shall be the successor in all respects to the Master Servicer in its capacity as Master Servicer under this Agreement, the Master Servicer shall not have the right to withdraw any funds from the Collection Account without the consent of the Indenture Trustee and the transactions set forth or provided for herein and shall be subject to all the responsibilities, duties and liabilities relating thereto and arising thereafter placed on the Master Servicer (except for any representations or warranties of the Master Servicer under this Agreement and its obligation to deposit amounts in respect of losses pursuant to Section 2.12) by the terms and provisions hereof including, without limitation, the Master Servicer’s obligations to make Monthly Advances pursuant to Section 3.01; provided, however, that if the Indenture Trustee is prohibited by law or regulation from obligating itself to make advances regarding delinquent mortgage loans, then the Indenture Trustee shall not be obligated to make Monthly Advances pursuant to Section 3.01; and provided further, that any failure to perform such duties or responsibilities caused by the Master Servicer’s failure to provide information required by Section 5.01 shall not be considered a default by the Indenture Trustee as successor to the Master Servicer hereunder. As compensation therefor, the Indenture Trustee shall be entitled to the Servicing Fees and Administration Fees and all funds relating to the Mortgage Loans to which the Master Servicer would have been entitled if it had continued to act hereunder (other than amounts which were due or would become due to the Master Servicer prior to its termination or resignation). Notwithstanding the above, the Indenture Trustee may, if it shall be unwilling to so act, or shall, if it is unable to so act or if it is prohibited by law from making advances regarding delinquent mortgage loans, or if the Holders of 51% of the aggregate Note Principal Balance of the Notes so request in writing to the Indenture Trustee, promptly appoint or petition a court of competent jurisdiction to appoint, an established mortgage loan servicing institution acceptable to the Rating Agencies and having a net worth of not less than $15,000,000 as the successor to the Master Servicer under this Agreement in the assumption of all or any part of the responsibilities, duties or liabilities of the Master Servicer under this Agreement. No appointment of a successor to the Master Servicer under this Agreement shall be effective until the assumption by the successor of all of the Master Servicer’s responsibilities, duties and liabilities hereunder. In connection with such appointment and assumption described herein, the Indenture Trustee may make such arrangements for the compensation of such successor out of payments on Mortgage Loans as it and such successor shall agree; provided, however, that no such compensation shall be in excess of that permitted the Master Servicer as such hereunder. The Depositor, the Indenture Trustee and such successor shall take such action, consistent with this Agreement, as shall be necessary to effectuate any such succession. Pending appointment of a successor to the Master Servicer under this Agreement, the Indenture Trustee shall act in such capacity as hereinabove provided.
(b) In connection with the termination or resignation of the Master Servicer hereunder, either (i) the successor servicer, including the Indenture Trustee, if the Indenture Trustee is acting as successor Master Servicer, shall represent and warrant that it is a member of MERS in good standing and shall agree to comply in all material respects with the rules and procedures of MERS in connection with the servicing of the Mortgage Loans that are registered
with MERS, in which case the predecessor Master Servicer shall cooperate with the successor Master Servicer in causing MERS to revise its records to reflect the transfer of servicing to the successor Master Servicer as necessary under MERS’ rules and regulations, or (ii) the predecessor Master Servicer shall cooperate with the successor Master Servicer in causing MERS to execute and deliver an Assignment of Mortgage in recordable form to transfer the Mortgage from MERS to the Indenture Trustee and to execute and deliver such other notices, documents and other instruments as may be necessary or desirable to effect a transfer of such Mortgage Loan or servicing of such Mortgage Loan on the MERS® System to the successor Master Servicer. The predecessor Master Servicer shall file or cause to be filed any such assignment in the appropriate recording office. The predecessor Master Servicer shall bear any and all fees of MERS, costs of preparing any assignments of Mortgage, and fees and costs of filing any assignments of Mortgage that may be required under this Section 5.02(b).
Section 5.03 Notification to Noteholders. (a) Upon any termination of the Master Servicer pursuant to Section 5.01 above or any appointment of a successor to the Master Servicer pursuant to Section 5.02 above, the Indenture Trustee shall give prompt written notice thereof to Noteholders at their respective addresses appearing in the Note Register.
(b) Not later than the later of 60 days after the occurrence of any event, which constitutes or which, with notice or lapse of time or both, would constitute a Master Servicer Event of Default or five days after a Responsible Officer of the Indenture Trustee becomes aware of the occurrence of such an event, the Indenture Trustee shall transmit by mail to all Holders of Notes notice of each such occurrence, unless such default or Master Servicer Event of Default shall have been cured or waived.
Section 5.04 Waiver of Master Servicer Events of Default. Subject to Section 1.06, the Holders of 51% of the aggregate Note Principal Balance of the Notes evidenced by all Classes of Notes affected by any default or Master Servicer Event of Default hereunder may waive such default or Master Servicer Event of Default; provided, however, that a default or Master Servicer Event of Default under clause (i) or (vi) of Section 5.01 may be waived only by all of the Holders of the Notes. Upon any such waiver of a default or Master Servicer Event of Default, such default or Master Servicer Event of Default shall cease to exist and shall be deemed to have been remedied for every purpose hereunder. No such waiver shall extend to any subsequent or other default or Master Servicer Event of Default or impair any right consequent thereon except to the extent expressly so waived.
ARTICLE VI
MISCELLANEOUS PROVISIONS
Section 6.01 Amendment. (a) This Agreement may be amended from time to time by the parties hereto to cure any ambiguity, to correct or supplement any provisions herein or therein that may be defective or inconsistent with any other provisions herein or therein, to comply with any changes in the Code or to make any other provisions with respect to matters or questions arising under this Agreement which shall not be inconsistent with the provisions of this Agreement.
(b) This Agreement may also be amended from time to time by the parties hereto for the purpose of adding any provisions to or changing in any manner or eliminating any of the provisions of this Agreement.
	(c)	[Reserved].
	(d)	[Reserved].
(e) Prior to the execution of any amendment to this Agreement, the Indenture Trustee shall be entitled to receive and rely upon an Opinion of Counsel addressed to the Indenture Trustee stating that the execution of such amendment is authorized or permitted by this Agreement. The Indenture Trustee, the Master Servicer, the Securities Administrator and the Paying Agent may, but shall not be obligated to, enter into any such amendment which affects its own respective rights, duties or immunities under this Agreement.
Section 6.02 Recordation of Agreement. To the extent permitted by applicable law, this Agreement is subject to recordation in all appropriate public offices for real property records in all the counties or other comparable jurisdictions in which any or all of the Mortgaged Properties are situated, and in any other appropriate public recording office or elsewhere. The Depositor shall effect such recordation, at the expense of the Trust Estate.
Section 6.03 GOVERNING LAW. THIS AGREEMENT SHALL BE CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK WITHOUT REFERENCE TO ITS CONFLICT OF LAWS RULES (OTHER THAN SECTION 5-1401 OF THE GENERAL OBLIGATIONS LAW, WHICH THE PARTIES HERETO EXPRESSLY RELY UPON IN THE CHOICE OF SUCH LAW AS THE GOVERNING LAW HEREUNDER) AND THE OBLIGATIONS, RIGHTS AND REMEDIES OF THE PARTIES HEREUNDER SHALL BE DETERMINED IN ACCORDANCE WITH SUCH LAWS.
Section 6.04 Notices. All demands and notices hereunder shall be in writing and shall be deemed given when delivered at (including delivery by facsimile) or mailed by registered mail, return receipt requested, postage prepaid, or by recognized overnight courier, to (i) in the case of the Depositor, ▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇, or to such other address as may hereafter be furnished to the other parties hereto in writing by the Depositor; (ii) in the case of the Indenture Trustee, at the Corporate Trust Office or such other address as may hereafter be furnished to the other parties hereto in writing by the Indenture Trustee; (iii) in the case of the Seller, ▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇, or to such other address
as may hereafter be furnished to the other parties hereto in writing by the Seller; (iv) in the case of the Master Servicer, Master Servicing Division, ▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇, ▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇ (Attention: Compliance Manager), facsimile no.: (▇▇▇) ▇▇▇-▇▇▇▇ (with a copy to, ▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇’▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇, Attention: Chief Legal Counsel (facsimile no.: (▇▇▇) ▇▇▇-▇▇▇▇)), or such other address or facsimile number as may hereafter be furnished to the other parties hereto in writing by the Master Servicer; (v) in the case of the Issuer, to Citigroup Mortgage Loan Trust 2005-6 c/o Wilmington Trust Company, ▇▇▇▇▇▇ Square North, ▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇, Attention: Corporate Trust Administration, or such other address as may hereafter be furnished to the other parties hereto in writing by the Issuer; (vi) in the case of the Owner Trustee, to Wilmington Trust Company, ▇▇▇▇▇▇ Square North, ▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇, Attention: Corporate Trust Administration, or such other address as may hereafter be furnished to the other parties hereto in writing by the Owner Trustee; (vii) in the case of the Paying Agent, ▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇^▇▇ ▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇ (Attention: Citigroup Mortgage Loan Trust 2005-6) facsimile no.: (▇▇▇) ▇▇▇-▇▇▇▇, or such other address as may hereafter be furnished to the other parties hereto in writing by the Paying Agent; and (vii) in the case of the Rating Agencies, Standard & Poor’s, a division of The ▇▇▇▇▇▇-▇▇▇▇ Companies, Inc., ▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇ and ▇▇▇▇▇’▇ Investors Service, Inc., ▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇. Any notice delivered to the Depositor, the Master Servicer, the Indenture Trustee, the Issuer, the Owner Trustee or the Paying Agent under this Agreement shall be effective only upon receipt. Any notice so mailed within the time prescribed in this Agreement shall be conclusively presumed to have been duly given when mailed.
Section 6.05 Severability of Provisions. If any one or more of the covenants, agreements, provisions or terms of this Agreement shall be for any reason whatsoever held invalid, then such covenants, agreements, provisions or terms shall be deemed severed from the remaining covenants, agreements, provisions or terms of this Agreement and shall in no way affect the validity or enforceability of the other provisions of this Agreement or of the Notes thereof.
Section 6.06 Successors and Assigns. The provisions of this Agreement shall be binding upon the parties hereto, and their respective successors and assigns.
Section 6.07 Article and Section Headings. The article and section headings herein are for convenience of reference only, and shall not limit or otherwise affect the meaning hereof.
Section 6.08 Counterparts. This Agreement may be executed in two or more counterparts each of which when so executed and delivered shall be an original but all of which together shall constitute one and the same instrument.
Section 6.09 Notice to Rating Agencies. The Indenture Trustee shall promptly provide notice to each Rating Agency with respect to each of the following of which a Responsible Officer of the Indenture Trustee has actual knowledge or written notice:
Any material change or amendment to this Agreement;
2. The occurrence of any Master Servicer Event of Default that has not been cured;
3. The resignation or termination of the Master Servicer, the Indenture Trustee or the Securities Administrator ; and
Any change in the location of the Collection Account.
Section 6.10 Termination. The respective obligations and responsibilities of the parties hereto created hereby shall terminate upon the satisfaction and discharge of the Indenture pursuant to Section 4.10 thereof and, if applicable, the optional redemption of the Notes pursuant to Section 8.06 thereof. Upon the presentation and surrender of the Notes, the Securities Administrator shall distribute to the remaining Securityholders, in accordance with their respective interests, all distributable amounts remaining in the Payment Account. Following such final Payment Date, the Indenture Trustee shall, or shall cause the Custodian to, release promptly to the Issuer or its designee the Mortgage Files for the remaining Mortgage Loans, and the Master Servicer Collection Account and Payment Account shall terminate, subject to the Securities Administrator’s obligation to hold any amounts payable to the Securityholders in trust without interest pending final distributions pursuant to the Indenture.
Section 6.11 No Petition. Each party to this Agreement (and with respect to CitiMortgage, Inc., solely in its capacities as Master Servicer and Securities Administrator and not in its individual or corporate capacity) by entering into this Agreement, hereby covenants and agrees that it will not at any time institute against the Issuer, or join in any institution against the Issuer, any bankruptcy proceedings under any United States federal or state bankruptcy or similar law in connection with any obligations of the Issuer. This section shall survive the termination of this Agreement by one year.
Section 6.12 No Recourse. The Master Servicer acknowledges that no recourse may be had against the Issuer, except as may be expressly set forth in this Agreement.
Section 6.13 Additional Terms Regarding Indenture. The Indenture Trustee shall have only such duties and obligations under this Agreement as are expressly set forth herein, and no implied duties on its part shall be read into this Agreement. In entering into and acting under this Agreement.
IN WITNESS WHEREOF, the Depositor, Master Servicer, the Securities Administrator, the Seller and the Paying Agent have caused their names to be signed hereto by their respective officers thereunto duly authorized as of the day and year first above written.
CITIGROUP MORTGAGE LOAN TRUST INC., as Depositor


By:	/s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
Name: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
Title: Vice President

U.S. BANK NATIONAL ASSOCIATION, as Indenture Trustee


By:	/s/ ▇▇▇▇▇ ▇. ▇'▇▇▇▇▇
Name: ▇▇▇▇▇ ▇. ▇'▇▇▇▇▇
Title: Vice President

CITIMORTGAGE, INC., as Master Servicer and Securities Administrator


By:	/s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Name: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Title: Senior Vice President

CITIBANK, N.A., as Paying Agent


By:	/s/ ▇▇▇▇▇ ▇▇▇▇▇
Name: ▇▇▇▇▇ ▇▇▇▇▇
Title: Assistant Vice President

CITIGROUP GLOBAL MARKETS REALTY CORP., as Seller


By:	/s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
Name: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
Title: Authorized Agent
STATE OF NEW YORK	)
	)	ss.:
COUNTY OF NEW YORK	)
On the 30th day of August, 2005 before me, a notary public in and for said State, personally appeared ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇, known to me to be a Vice President of Citigroup Mortgage Loan Trust Inc., the corporation that executed the within instrument, and also known to me to be the person who executed it on behalf of said corporation, and acknowledged to me that such corporation executed the within instrument.