EXHIBIT 99.7
MASTER SERVICING AGREEMENT
between
CENTRE CAPITAL GROUP, INC,
OWNER
and
COMMERCIAL FEDERAL MORTGAGE CORPORATION
SERVICER
Dated as of June 19, 2001
Fixed and Adjustable Rate Mortgage Loans
TABLE OF CONTENTS
Page
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ARTICLE I
DEFINITIONS
ARTICLE II
OWNER'S ENGAGEMENT OF SERVICER TO PERFORM SERVICING
RESPONSIBILITIES
Section 2.01 Contract for Servicing; Possession of Servicing Files.........12
Section 2.02 Books and Records.............................................12
Section 2.03 Commencement of Servicing Responsibilities....................13
Section 2.04 Custodial Agreement...........................................13
ARTICLE III
SERVICING OF THE MORTGAGE LOANS
Section 3.01 Servicer to Service...........................................14
Section 3.02 Liquidation of Mortgage Loans.................................15
Section 3.03 Collection of Mortgage Loan Payments..........................16
Section 3.04 Establishment of and Deposits to Custodial Account............16
Section 3.05 Permitted Withdrawals From Custodial Account..................17
Section 3.06 Establishment of and Deposits to Escrow Account...............18
Section 3.07 Permitted Withdrawals From Escrow Account.....................19
Section 3.08 Notification of Adjustments...................................20
Section 3.09 Completion and Recordation of Assignment of Mortgage..........20
Section 3.10 Protection of Accounts........................................20
Section 3.11 Payment of Taxes, Insurance and Other Charges.................21
Section 3.12 Maintenance of Hazard Insurance...............................21
Section 3.13 Force Placed Insurance........................................23
Section 3.14 Maintenance of Fidelity Bond and Errors and Omissions
Insurance...................................................23
Section 3.15 Inspections...................................................24
Section 3.16 Restoration of Mortgaged Property.............................24
Section 3.17 Maintenance of PMI Policy and/or LPMI Policy; Claims..........25
Section 3.18 Title, Management and Disposition of REO Property.............26
Section 3.19 Real Estate Owned Reports.....................................27
Section 3.20 Liquidation Reports...........................................27
Section 3.21 Reports of Foreclosures and Abandonments of Mortgaged
Property....................................................27
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Section 3.22 PMI and LPMI Obligations......................................28
ARTICLE IV
PAYMENTS TO OWNER
Section 4.01 Remittances...................................................29
Section 4.02 Statements to Owner...........................................29
Section 4.03 Monthly Advances by Servicer..................................30
Section 4.04 Due Dates Other Than the First of the Month...................30
ARTICLE V
GENERAL SERVICING PROCEDURES
Section 5.01 Servicing Compensation........................................31
Section 5.02 Transfers of Mortgaged Property...............................31
Section 5.03 Right to Examine Servicer Records.............................32
Section 5.04 Servicing Tape................................................32
Section 5.05 Satisfaction of Mortgages and Release of Mortgage Files.......32
Section 5.06 Annual Independent Public Accountants' Servicing Report.......33
ARTICLE VI
REPRESENTATIONS, WARRANTIES
AND AGREEMENTS
Section 6.01 Representations, Warranties and Agreements of the Servicer....34
Section 6.02 Remedies for Breach of Representations and Warranties of
the Servicer................................................35
Section 6.03 Representations and Warranties of the Owner...................36
Section 6.04 Remedies for Breach of Representations and Warranties of
the Owner...................................................37
ARTICLE VII
WHOLE LOAN TRANSFER; PASS-THROUGH TRANSFER
Section 7.01 Removal of Mortgage Loans from Inclusion Under this
Agreement Upon a Pass-Through Transfer or a Whole Loan
Transfer on One or More Reconstitution Dates................39
Section 7.02 Owner's Repurchase and Indemnification Obligations............41
Section 7.03 Indemnification; Third Party Claims...........................42
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ARTICLE VIII
THE SERVICER
Section 8.01 Merger or Consolidation of the Servicer.......................44
Section 8.02 Limitation on Liability of the Servicer and Others............44
Section 8.03 Limitation on Resignation and Assignment by Servicer..........44
ARTICLE IX
TERMINATION
Section 9.01 Termination for Cause.........................................46
Section 9.02 Termination Without Cause.....................................47
ARTICLE X MISCELLANEOUS PROVISIONS
Section 10.01 Successor to the Servicer.....................................49
Section 10.02 Closing.......................................................50
Section 10.03 Closing Documents.............................................51
Section 10.04 Appointment and Designation of Master Servicer................52
Section 10.05 Costs.........................................................52
Section 10.06 Protection of Confidential Information........................52
Section 10.07 Notices.......................................................52
Section 10.08 Severability Clause...........................................53
Section 10.09 No Personal Solicitation......................................53
Section 10.10 Counterparts..................................................54
Section 10.11 Place of Delivery and Governing Law...........................54
Section 10.12 Further Agreements............................................54
Section 10.13 Intention of the Parties......................................54
Section 10.14 Successors and Assigns; Assignment of Agreement...............54
Section 10.15 Waivers.......................................................54
Section 10.16 Exhibits......................................................54
Section 10.17 General Interpretive Principles...............................55
Section 10.18 Reproduction of Documents.....................................55
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EXHIBITS
EXHIBIT A MORTGAGE LOAN SCHEDULE
EXHIBIT B FORM OF ACKNOWLEDGMENT AGREEMENT
EXHIBIT C CUSTODIAL ACCOUNT LETTER AGREEMENT
EXHIBIT D ESCROW ACCOUNT LETTER AGREEMENT
EXHIBIT E-1 OFFICER'S CERTIFICATE FOR CLOSING
EXHIBIT E-2 OFFICER'S CERTIFICATE FOR SUBSEQUENT CLOSINGS
EXHIBIT F CUSTODIAL AGREEMENT
EXHIBIT G FORM OF OPINION OF COUNSEL OF THE SERVICER
EXHIBIT H INTENTIONALLY OMITTED
EXHIBIT I FORM OF ASSIGNMENT AND ASSUMPTION
EXHIBIT J FORM OF ASSIGNMENT AND ASSUMPTION
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MASTER SERVICING AGREEMENT
--------------------------
This is a Master Servicing Agreement (the "Agreement"), dated
as of June 19, 2001, by and between Centre Capital Group, Inc., having an office
at ▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇, ▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇ ▇▇▇▇▇ (the "Owner") and
Commercial Federal Mortgage Corporation having an office at ▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇,
▇▇▇▇▇, ▇▇ ▇▇▇▇▇ (the "Servicer").
W I T N E S S E T H
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WHEREAS, the Owner has acquired certain first lien fixed and
adjustable rate conventional mortgage loans on a servicing-retained basis (the
"Mortgage Loans") originated or acquired by the Servicer;
WHEREAS, the Owner desires to contract with the Servicer, from
time to time, for the servicing responsibilities associated with the Mortgage
Loans and the Servicer desires to assume the servicing responsibilities to such
Mortgage Loans, from time to time, and the parties desire to provide the terms
and conditions of such servicing by the Servicer; and
WHEREAS, the Owner desires to sell some or all of the Mortgage
Loans from time to time (a) to one or more third party purchasers in one or more
whole loan pools (each a "Whole Loan Transfer"); or (b) directly or indirectly,
to certain trusts to be formed as part of publicly-issued or privately placed,
rated or unrated, mortgage pass-through transactions (each a "Pass-Through
Transfer"), in any or all cases (subject to the terms of this Agreement)
retaining the Servicer to service the Mortgage Loans.
NOW, THEREFORE, in consideration of the mutual agreements
hereinafter set forth, and for other good and reasonable consideration, the
receipt and adequacy of which is hereby acknowledged, the Owner and Servicer
hereby agree as follows:
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ARTICLE I
DEFINITIONS
The following terms are defined as follows (except as
otherwise agreed in writing by the parties):
Accepted Servicing Practices: With respect to any Mortgage
Loan, those mortgage servicing practices of prudent mortgage lending
institutions which service mortgage loans of the similar type as such Mortgage
Loans in the jurisdiction where the related Mortgaged Property is located.
Acknowledgment Agreement: The document, substantially in the
form of Exhibit B, to be executed by the Owner and the Servicer on or prior to
each Closing Date which document shall amend the Mortgage Loan Schedule attached
as Exhibit A hereto to reflect the addition of Mortgage Loans to such Exhibit A
and which document reflects the addition of Mortgage Loans which are subject to
the terms and conditions of this Agreement.
Agreement: This Master Servicing Agreement and all amendments
hereof and supplements hereto for the servicing and administering of the
Mortgage Loans.
Ancillary Income: All income derived from the Mortgage Loans,
other than Servicing Fees, including but not limited to, late charges,
prepayment penalties, fees received with respect to checks or bank drafts
returned by the related bank for non-sufficient funds, assumption fees, optional
insurance administrative fees and all other incidental fees and charges. The
Servicer shall retain all Ancillary Income to the extent not required to be
deposited into the Custodial Account.
ARM Mortgage Loan: A Mortgage Loan pursuant to which the
interest rate shall be adjusted from time to time in accordance with the related
Mortgage Note.
Assignment of Mortgage: An assignment of the Mortgage, notice
of transfer or equivalent instrument in recordable form, sufficient under the
laws of the jurisdiction wherein the related Mortgaged Property is located to
reflect the transfer of the Mortgage to the party indicated therein.
Best Efforts: Efforts determined to be reasonably diligent by
the Owner or Servicer, as the case may be, in its sole discretion. Such efforts
do not require the Owner or Servicer, as the case may be, to enter into any
litigation, arbitration or other legal or quasi-legal proceeding, nor do they
require the Owner or Servicer, as the case may be, to advance or expend fees or
sums of money in addition to those specifically set forth in this Agreement.
BIF: The Bank Insurance Fund, or any successor thereto.
Business Day: Any day other than (i) a Saturday or Sunday, or
(ii) a federal holiday.
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CCGI: Centre Capital Group, Inc.
Closing Dates: The date or dates stated in the related
Acknowledgment Agreement, on which the Owner from time to time shall contract
with the Servicer for, and Servicer shall assume the servicing responsibilities
for, the Mortgage Loans on the related Mortgage Loan Schedule.
Condemnation Proceeds: All awards of settlements in respect of
a Mortgaged Property, whether permanent or temporary, partial or entire, by
exercise of the power of eminent domain or condemnation, to the extent not
required to be released to a Mortgagor in accordance with the terms of the
related Mortgage Loan Documents.
Custodial Account: The separate account or accounts created
and maintained pursuant to Section 3.04.
Custodial Agreement: The agreement governing the retention of
the originals of each Mortgage Note, Mortgage, Assignment of Mortgage and other
Mortgage Loan documents, which is annexed hereto as Exhibit F.
Custodian: The Custodian under the Custodial Agreement, or its
successor in interest or assigns or any successor to the Custodian under the
Custodial Agreement as provided therein.
Cut-off Date: With respect to each Mortgage Loan, the date set
forth in the related Mortgage Loan Schedule.
Determination Date: The fifteenth (15th) day of the calendar
month of the related Remittance Date (or if such day is not a Business Day, the
Business Day immediately preceding such day).
Due Date: The day of the month on which the Monthly Payment is
due on a Mortgage Loan, exclusive of any days of grace.
Due Period: With respect to each Remittance Date, the period
commencing on the first day of the month preceding the month of the Remittance
Date and ending in the last day of the month preceding the Remittance Date.
Duff & ▇▇▇▇▇▇: ▇▇▇▇ & ▇▇▇▇▇▇ Credit Rating Co. or any
successor thereto.
Eligible Investments: Any one or more of the obligations and
securities listed below which investment provides for a date of maturity not
later than the Determination Date in each month:
(a) direct general obligations of, or obligations fully and
unconditionally guaranteed as to the timely payment of principal and interest
by, the United States or any agency or instrumentality thereof, provided such
obligations are backed by the full faith and credit of the United States,
Federal Housing Administration debentures, ▇▇▇▇▇▇▇ Mac senior debt obligations,
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and ▇▇▇▇▇▇ ▇▇▇ senior debt obligations, but excluding any of such securities
whose terms do not provide for payment of a fixed dollar amount upon maturity or
call for redemption;
(b) Federal Housing Administration debentures; provided, that
any such investment shall be rated in one of the two highest ratings categories
by each Rating Agency;
(c) ▇▇▇▇▇▇▇ Mac participation certificates which guaranty
timely payment of principal and interest and senior debt obligations;
(d) Consolidated senior debt obligations of any Federal Home
Loan Bank;
(e) ▇▇▇▇▇▇ ▇▇▇ mortgage-backed securities (other than stripped
mortgage securities which are valued greater than par on the portion of unpaid
principal) and senior debt obligations;
(f) Federal funds, certificates of deposit, time deposits, and
bankers' acceptances (having original maturities of not more than 365 days) of
any domestic bank, the short-term debt obligations of which have been rated F-1
or better by Fitch, A-1 or better by Standard & Poor's and P-1 by Moody's;
(g) Deposits of any bank or savings and loan association (the
long-term deposit rating of which is Baa3 or better by Moody's and BBB by each
of Standard & Poor's and Fitch) which has combined capital, surplus and
undivided profits of at least $50,000,000 which deposits are insured by the FDIC
and held up to the limits insured by the FDIC;
(h) Investment agreements provided:
(i) The agreement is with a bank or insurance company
which has unsecured, uninsured and unguaranteed senior
debt obligations rated Aa2 or better by Moody's and AA or
better by each of Standard & Poor's and Fitch, or is the lead
bank of a parent bank holding company with an uninsured,
unsecured and unguaranteed senior debt obligation meeting such
rating requirements;
(ii) Moneys invested thereunder may be withdrawn without
any penalty, premium or charge upon not more than one day's
notice (provided such notice may be amended or canceled at any
time prior to the withdrawal date);
(iii) The agreement is not subordinated to any other
obligations of such insurance company or bank;
(iv) The same guaranteed interest rate will be paid on any
future deposits made pursuant to such agreement; and
(v) The Owner receives an opinion of counsel (at the
expense of the party requesting the investment) that such
agreement is an enforceable obligation of such insurance
company or bank.
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(i) Repurchase agreements collateralized by securities
described in (a), (c), or (e) above with any registered broker/dealer subject to
the Securities Investors Protection Corporation's jurisdiction and subject to
applicable limits therein promulgated by Securities Investors Protection
Corporation or any commercial bank, if such broker/dealer or bank has an
uninsured, unsecured and unguaranteed short-term or long-term obligation rated
P-1 or Aa2, respectively, or better by Moody's, A-1 or AA, respectively, or
better by Standard & Poor's and A-1 or AA, respectively, or better by Fitch,
provided:
(i) A master repurchase agreement or specific written
repurchase agreement governs the transaction;
(ii) The securities are held free and clear of any lien by
the Owner or an independent third party acting solely as agent
for the Owner, and such third party is (a) a Federal Reserve
Bank or (b) a bank which is a member of the FDIC and which has
combined capital, surplus and undivided profits of not less
than $125 million, and the Owner shall have received written
confirmation from such third party that it holds such
securities, free and clear of any lien, as agent for the
Owner;
(iii) A perfected first security interest under the
Uniform Commercial Code, or book entry procedures prescribed
at 31 CFR 306.1 et seq. or 31 CFR 350.0 et seq., in such
securities is created for the benefit of the Owner;
(iv) The repurchase agreement has a term of thirty days or
less and the Owner will value the collateral securities no
less frequently than monthly and will liquidate the collateral
securities if any deficiency in the required collateral
percentage is not restored within two business days of such
valuation; and
(v) The fair market value of the collateral securities in
relation to the amount of the repurchase obligation, including
principal and interest, is equal to at least 106%;
(j) Commercial paper (having original maturities of not more
than 270 days) rated in the highest short-term rating categories of each Rating
Agency;
(k) Investments in no load money market funds registered under
the Investment Company Act of 1940, whose shares are registered under the
Securities Act and rated Aaa by Moody's, AAAm or AAAm-G by Standard & Poor's and
AAA, if rated by Fitch; and
(l) such other investments bearing interest or sold at a
discount approved in writing by the Owner in its sole discretion
provided that no instrument described above shall evidence either the right to
receive (a) only interest with respect to the obligations underlying such
instrument or (b) both principal and interest payments derived from obligations
underlying such instrument and the interest and principal payments with respect
to such instrument provided a yield to maturity at par greater than 120% of the
yield to maturity at par of the underlying obligations; and provided, further
that
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all instruments described hereunder shall mature at par on or prior to the next
succeeding Payment Date unless otherwise provided in this Agreement and that no
instrument described hereunder may be purchased at a price greater than par if
such instrument may be prepaid or called at a price less than its purchase price
prior to stated maturity.
Notwithstanding anything herein to the contrary, with respect
to Mortgage Loans subject to a Whole Loan Transfer or a Pass-Through Transfer,
in the event that the applicable Reconstitution Agreement has a more limiting
definition of "Eligible Investments", then the definition contained in such
Reconstitution Agreement shall apply to such Mortgage Loans.
Errors and Omissions Insurance Policy: An errors and omissions
insurance policy to be maintained by the Servicer pursuant to Section 3.14.
Escrow Account: The separate account or accounts operated and
maintained pursuant to Section 3.05.
Escrow Mortgage Loans: The Mortgage Loans for which the
Servicer has established an Escrow Account for items constituting Escrow
Payments.
Escrow Payments: With respect to any Mortgage Loan, the
amounts constituting ground rents, taxes, assessments, water rates, sewer rents,
municipal charges, mortgage blanket insurance premiums, fire and hazard
insurance premiums, condominium charges, and any other payments required to be
escrowed by the Mortgagor with the mortgagee pursuant to the Mortgage or any
other related document.
Event of Default: Any event set forth in Section 9.01.
▇▇▇▇▇▇ ▇▇▇: ▇▇▇▇▇▇ ▇▇▇, or any successor thereto.
▇▇▇▇▇▇ Mae Guides: The ▇▇▇▇▇▇ ▇▇▇ Selling Guide and the ▇▇▇▇▇▇
Mae Servicing Guide and all amendments or additions thereto.
FDIC: The Federal Deposit Insurance Corporation, or any
successor thereto.
Fidelity Bond: A fidelity bond to be maintained by the
Servicer pursuant to the Section 3.14.
First Remittance Date: With respect to each Mortgage Loan, the
18th day of the month following the month in which the related Closing Date
occurs, or if such 18th day is not a Business Day, the first Business Day
immediately following such 18th day.
Fitch: Fitch IBCA, Inc. or any successor thereto.
▇▇▇▇▇▇▇ Mac: ▇▇▇▇▇▇▇ Mac, or any successor thereto.
Index: With respect to each ARM Mortgage Loan and with respect
to each related interest rate adjustment date, the index as specified in the
related Mortgage Note.
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Insurance Proceeds: With respect to each Mortgage Loan,
proceeds of insurance policies insuring the Mortgage Loan or the related
Mortgaged Property.
Liquidation Proceeds: Cash received in connection with the
liquidation of a defaulted Mortgage Loan, whether through the sale or assignment
of such Mortgage Loan, trustee's sale, foreclosure sale or otherwise, or the
sale of the related REO Property, if the Mortgaged Property is acquired in
satisfaction of the Mortgage Loan.
LPMI Loan: A Mortgage Loan with a LPMI Policy.
LPMI Policy: A policy of primary mortgage guaranty insurance
issued by United Guaranty Corporation or another Qualified Insurer pursuant to
which the related premium is to be paid by the Servicer of the related Mortgage
Loan from payments of interest made by the Mortgagor in an amount as is set
forth in the related Trade Confirmation Letter and Mortgage Loan Schedule.
LPMI Fee: With respect to each LPMI Loan, the portion of the
Mortgage Interest Rate as set forth on the related Mortgage Loan Schedule (which
shall be payable solely from the interest portion of Monthly Payments, Insurance
Proceeds, Condemnation Proceeds or Liquidation Proceeds), which, during such
period prior to the required cancellation of the LPMI Policy, shall be used to
pay the premium due on the related LPMI Policy.
Monthly Advance: With respect to each Remittance Date and each
Mortgage Loan, an amount equal to the Monthly Payment (with the interest portion
of such Monthly Payment, adjusted to the Mortgage Loan Remittance Rate) which
was due on the Mortgage Loan, and (i) which was delinquent at the close of
business on the immediately preceding Determination Date, and (ii) which was not
the subject of a previous Monthly Advance.
Monthly Payment: The scheduled monthly payment of principal
and interest on a Mortgage Loan.
Monthly Remittance Advice: The monthly report required to be
furnished by Servicer to Owner pursuant to Section 4.02.
Moody's: ▇▇▇▇▇'▇ Investors Service, Inc. or any successor
thereto.
Mortgage: The mortgage, deed of trust or other instrument
securing a Mortgage Note, which creates a first lien on an unsubordinated estate
in fee simple in real property securing the Mortgage Note.
Mortgage File: The items pertaining to a particular Mortgage
Loan held by the Custodian, and any additional documents required to be
delivered to the Custodian pursuant to this Agreement.
Mortgage Interest Rate: The annual rate of interest borne on a
Mortgage Note. With respect to ARM Mortgage Loans, the Mortgage Interest Rate
shall be adjusted from time to time in accordance with the provisions of the
Mortgage Note.
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Mortgage Loan: An individual servicing retained Mortgage Loan
which is the subject of this Agreement, each Mortgage Loan subject to this
Agreement being identified on the Mortgage Loan Schedule, which Mortgage Loan
includes without limitation the Mortgage Loan documents, the Monthly Payments,
Principal Prepayments, Liquidation Proceeds, Condemnation Proceeds, Insurance
Proceeds, REO Disposition Proceeds, and all other rights, benefits, proceeds and
obligations arising from or in connection with such Mortgage Loan.
Mortgage Loan Remittance Rate: With respect to each Mortgage
Loan, the annual rate of interest remitted to the Owner, which shall be equal to
the Mortgage Interest Rate minus the sum of (a) the Servicing Fee Rate and (b)
with respect to LPMI Loans, the LPMI Fee.
Mortgage Loan Schedule: The schedule of certain Mortgage Loans
setting forth information with respect to such Mortgage Loans, which schedule
supplements this Agreement and becomes part of Exhibit A hereof on the related
Closing Date to reflect the addition of such Mortgage Loan to the terms of this
Agreement.
Mortgage Note: The note or other evidence of the indebtedness
of a Mortgagor secured by a Mortgage.
Mortgaged Property: The real property securing repayment of
the debt evidenced by a Mortgage Note.
Mortgagor: The obligor on a Mortgage Note.
Non-Escrow Mortgage Loan: Any Mortgage Loan which is not an
Escrow Mortgage Loan.
Officer's Certificate: A certificate signed by the Chairman of
the Board or the Vice Chairman of the Board or the President or a Vice President
or an Assistant Vice President and by the Treasurer or the Secretary or one of
the Assistant Treasurers or Assistant Secretaries of the Owner or Servicer, as
applicable, and delivered as required by this Agreement.
Opinion of Counsel: A written opinion of counsel, who may be
an employee of the Servicer, reasonably acceptable to the Owner.
Originator: The originator of the related Mortgage Loan.
Owner: Centre Capital Group, Inc., or its successors in
interest and assigns.
Pass-Through Transfer: The sale or transfer of some or all of
the Mortgage Loans to (i) a trust to be formed as part of a publicly-issued
and/or privately placed, rated or unrated, mortgage pass-through transaction, or
(ii) to ▇▇▇▇▇▇ Mae, ▇▇▇▇▇▇▇ Mac or GNMA on a negotiated basis, in each case,
retaining the Servicer as "servicer" (with or without a master servicer)
thereunder.
Person: Any individual, corporation, partnership, limited
liability company, joint venture, association, joint-stock company, trust,
unincorporated organization, government or any agency or political subdivision
thereof.
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PMI Policy: A policy of primary mortgage guaranty insurance
issued by United Guaranty Corporation or other AAA rated primary mortgage
guaranty insurer which meets all the requirements set forth in this agreement,
in each case, acceptable to the Purchaser in its sole discretion.
Prepayment Interest Shortfall Amount: With respect to any
Mortgage Loan that was subject to a Principal Prepayment in full during the
related Principal Prepayment Period, which Principal Prepayment was applied to
such Mortgage Loan prior to such Mortgage Loan's Due Date in such related
Principal Prepayment Period, the amount of interest (net of the related
Servicing Fee, and with respect to the LPMI Loans, the LPMI Fee) that would have
accrued on the amount of such Principal Prepayment during the period commencing
on the date as of which such Principal Prepayment was applied to such Mortgage
Loan and ending on the day immediately preceding such Due Date, inclusive.
Prime Rate: The prime rate announced to be in effect from time
to time, as published as the average rate in The Wall Street Journal Northeast
Edition.
Principal Prepayment: Any payment or other recovery of
principal on a Mortgage Loan which is received in advance of its scheduled Due
Date, including any prepayment charge or premium thereon and which is not
accompanied by an amount of interest representing scheduled interest due on any
date or dates in any month or months subsequent to the month of prepayment.
Principal Prepayment Period: The month preceding the month in
which the related Remittance Date occurs.
Qualified Depository: A depository the accounts of which are
insured by the FDIC through the BIF or the SAIF and the debt obligations of
which are rated AA or better by Standard & Poor's.
Qualified Insurer: An insurer acceptable to the Purchaser in
its sole discretion.
Rating Agency: Any of Fitch, Moody's, Standard & Poor's, Duff
& ▇▇▇▇▇▇ or their respective successors designed by the Owner.
Reconstitution Agreements: The agreement or agreements entered
into by the Owner, the Servicer, and certain third parties on the Reconstitution
Date(s) with respect to any or all of the Mortgage Loans serviced hereunder, in
connection with a Whole Loan Transfer or a Pass-Through Transfer as set forth in
Section 7.01, including, but not limited to, a pooling and servicing agreement
and/or a subservicing/master servicing agreement and related custodial/trust
agreement and related documents with respect to a Pass-Through Transfer. Such
agreement or agreements shall prescribe the rights and obligations of the
Servicer in servicing the related Mortgage Loans and shall provide for servicing
compensation to the Servicer (calculated on a weighted average basis for all the
related Mortgage Loans as of the Reconstitution Date), at least equal to the
Servicing Fee and Ancillary Income due the Servicer in accordance with this
Agreement or the servicing fee required pursuant to the Reconstitution
Agreement, whichever is greater. The form of relevant Reconstitution Agreement
to be entered into by the Owner and/or
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master servicer or trustee and the Servicer with respect to Pass-Through
Transfers and/or Whole Loan Transfers shall be reasonably satisfactory in form
and substance to the Owner and the Servicer (giving due regard to any rating or
master servicing requirements) and servicing provisions contained therein shall
be substantially similar to those contained in this Agreement and shall not
contain any obligations materially more onerous than those contained herein that
materially increase the expenses or obligations of the Servicer, unless
otherwise mutually agreed by the parties.
Reconstitution Date: The date or dates on which any or all of
the Mortgage Loans serviced under this Agreement shall be removed from this
Agreement and reconstituted as part of a Pass-Through Transfer or a Whole Loan
Transfer pursuant to Section 7.01 hereof. On such date or dates, the Mortgage
Loans transferred shall cease to be covered by this Agreement and the Servicer's
servicing responsibilities shall cease under this Agreement with respect to the
related transferred Mortgage Loans.
Remittance Date: The remittance date shall be the 18th day of
each calendar month (or if such 18th day is not a Business Day, the first
Business Day immediately following).
REO Disposition: The final sale by the Servicer of any REO
Property.
REO Disposition Proceeds: All amounts received with respect to
an REO Disposition pursuant to Section 3.18.
REO Property: A Mortgaged Property acquired by the Servicer on
behalf of the Owner through foreclosure or by deed in lieu of foreclosure, as
described in Section 3.18.
Repurchase Price: With respect to any Mortgage Loan, a price
equal to (i) the Stated Principal Balance of the Mortgage Loan plus (ii)
interest on such Stated Principal Balance at the Mortgage Loan Remittance Rate,
in each case from the date on which interest has last been paid and distributed
to the Owner to the date of repurchase, less amounts received, if any, plus
amounts advanced, if any, by any servicer, in respect of such repurchased
Mortgage Loan.
SAIF: The Savings Association Insurance Fund, or any successor
thereto.
Servicer: Commercial Federal Mortgage Corporation or its
successor in interest or assigns or any successor to the Servicer under this
Agreement as herein provided.
Servicing Advances: All customary, reasonable and necessary
"out of pocket" costs and expenses (including reasonable attorneys' fees and
disbursements) incurred in the performance by the Servicer of its servicing
obligations, including, but not limited to, the cost of (a) the preservation,
restoration, inspection and protection of the Mortgaged Property, (b) any
enforcement or administrative or judicial proceedings, including foreclosures,
(c) the management and liquidation of any REO Property, and (d) compliance with
the obligations under Section 3.01, 3.02, 3.03, 3.04, 3.07, 3.12, 3.13, 3.16,
3.17, 3.18 and 3.22.
Servicing Fee: With respect to each Mortgage Loan that has not
been removed from this Agreement as part of a Pass-Through Transfer or a Whole
Loan Transfer and with
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respect to each Mortgage Loan that has been removed from this agreement as part
of a Pass-Through Transfer or a Whole Loan Transfer and subsequently repurchased
by the Owner pursuant to Section 7.02 hereof and again becoming subject to this
Agreement, the monthly amount of the annual fee the Owner shall pay to the
Servicer, which shall, for a period of one full month, be equal to one-twelfth
of the product of (a) the Servicing Fee Rate and (b) the outstanding principal
balance of such Mortgage Loan. Such fee shall be payable monthly, computed on
the basis of the same principal amount and period respecting which any related
interest payment on a Mortgage Loan is computed.
Servicing Fee Rate: With respect to all Mortgage Loans, a rate
equal to 0.25% per annum.
Servicing File: The items pertaining to a particular Mortgage
Loan including, but not limited to, the computer files, data disks, books,
records, data tapes, notes, and all additional documents generated as a result
of or utilized in originating and/or servicing each Mortgage Loan, which are
held in trust for the Owner by the Servicer.
Servicing Officer: Any officer of the Servicer involved in or
responsible for, the administration and servicing of the Mortgage Loans whose
name appears on a list of servicing officers furnished by the Servicer to the
Owner upon request, as such list may from time to time be amended.
Standard & Poor's: Standard and Poor's Ratings Service, a
division of the ▇▇▇▇▇▇-▇▇▇▇ Companies, Inc. or any successor thereto.
Whole Loan Transfer: The sale or transfer of some or all of
the Mortgage Loans to a third party purchaser in a whole loan transaction
pursuant to a seller's warranties and servicing agreement or a participation and
servicing agreement, retaining the Servicer as "servicer" thereunder.
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ARTICLE II
OWNER'S ENGAGEMENT OF SERVICER TO PERFORM SERVICING
RESPONSIBILITIES
Section 2.01 Contract for Servicing; Possession of
-------------------------------------
Servicing Files.
---------------
From time to time, the Owner, by execution and delivery of the
related Acknowledgment Agreement, in the form attached hereto as Exhibit B, and
the related Mortgage Loan Schedule, does hereby contract with the Servicer,
subject to the terms of this Agreement, for the servicing of the Mortgage Loans.
The Servicer has in its possession the Servicing Files with respect to the
Mortgage Loans listed on the related Mortgage Loan Schedule and the Servicer
shall hold the Servicing Files in trust for the Owner pursuant to this
Agreement. Each Servicing File shall be held by the Servicer in order to service
the Mortgage Loans pursuant to this Agreement and are and shall be held in trust
by the Servicer for the benefit of the Owner as the owner thereof. The
Servicer's possession of any portion of the Mortgage Loan documents shall be at
the will of the Owner for the sole purpose of facilitating servicing of the
related Mortgage Loan pursuant to this Agreement, and such retention and
possession by the Servicer shall be in a custodial capacity only. The ownership
of each Mortgage Note, Mortgage, and the contents of the Servicing File shall be
vested in the Owner and the ownership of all records and documents with respect
to the related Mortgage Loan prepared by or which come into the possession of
the Servicer shall immediately vest in the Owner and shall be retained and
maintained, in trust, by the Servicer at the will of the Owner in such custodial
capacity only. The portion of each Servicing File retained by the Servicer
pursuant to this Agreement shall be segregated from the other books and records
of the Servicer and shall be appropriately marked to clearly reflect the
ownership of the related Mortgage Loan by the Owner. The Servicer shall release
from its custody the contents of any Servicing File retained by it only in
accordance with this Agreement.
Section 2.02 Books and Records.
------------------
Record title to each Mortgage and the related Mortgage Note
shall remain in the name of (i) the Owner, (ii) the Servicer or (iii) in the
name as the Owner shall designate. The Servicer shall prepare and record any
Assignments of Mortgage required pursuant to this Section 2.02. CCGI shall pay
all necessary fees associated with the initial preparation, endorsement, and
recording of the Assignments of Mortgage. The Owner shall pay for any fee
associated with the preparation, endorsement, or recording of any subsequent
Assignments of Mortgage. Additionally, the Servicer shall prepare and execute,
at the direction of the Owner, any note endorsements in connection with any and
all Reconstitution Agreements. The Servicer shall pay all necessary fees
associated with the preparation and execution of the initial note endorsements;
the Owner shall pay for any fee associated with the preparation and execution of
any subsequent note endorsements. All rights arising out of the Mortgage Loans
shall be vested in the Owner. All funds, other than Servicing Fees and other
amounts owed to the Servicer, received on or in connection with a Mortgage Loan
shall be received and held by the Servicer in trust for the
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benefit of the Owner as the owner of the Mortgage Loans pursuant to the terms of
this Agreement.
Section 2.03 Commencement of Servicing Responsibilities.
------------------------------------------
On each Closing Date, the Owner shall appoint the Servicer to
perform, and the Servicer shall assume and accept such appointment for, all
servicing responsibilities for the related Mortgage Loans on the related
Mortgage Loan Schedule. Prior to each Closing Date, the Servicer shall have
serviced the related Mortgage Loans in accordance with Accepted Servicing
Practices from the date of origination of the related Mortgage Loans to the
related Closing Date.
Section 2.04 Custodial Agreement.
-------------------
On or prior to each Closing Date, the Custodian shall have
certified its receipt of all such Mortgage Loan documents required to be
delivered pursuant to the Custodial Agreement, as evidenced by the Initial
Certification of the Custodian in the form annexed to the Custodial Agreement.
The applicable purchaser shall be responsible for, as and when due, (i) any and
all initial document review fees, (ii) initial and final certification fees and
recertification fees, and (iii) any costs associated with correcting any
deficiencies identified in connection with such review(s). The applicable
purchaser shall be responsible for, as and when due, (x) any and all annual and
warehousing fees of the Custodian, (y) any and all termination fees in the event
the Custodian is terminated by the Servicer, and (z) any and all fees due in
connection with the deposit or retrieval of a Mortgage Loan document or
documents.
The Servicer shall forward to the Custodian original documents
evidencing an assumption, modification, consolidation or extension of any
Mortgage Loan entered into in accordance with this Agreement within two (2)
weeks of their execution and shall provide the original of any document
submitted for recordation or a copy of such document certified by the
appropriate public recording office to be a true and complete copy of the
original within 180 days of its submission for recordation. In the event the
Servicer cannot provide a copy of such document certified by the public
recording office within such 180 day period, an Officer's Certificate of the
Servicer which shall (A) identify the recorded document, (B) state that the
recorded document has not been delivered to the Owner due solely to a delay
caused by the public recording office, (C) state the amount of time generally
required by the applicable recording office to record and return a document
submitted for recordation, if known, and (D) specify the date the applicable
recorded document is expected to be delivered to the Owner, and upon receipt of
a copy of such document certified by the public recording office, the Servicer
shall immediately deliver such document to the Owner. In the event the
appropriate public recording office will not certify as to the accuracy of such
document, the Servicer shall deliver a copy of such document certified by an
Officer's Certificate of the Servicer to be a true and complete copy of the
original to the Owner.
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ARTICLE III
SERVICING OF THE MORTGAGE LOANS
Section 3.01 Servicer to Service.
-------------------
From the date of origination of the related Mortgage Loans to
the related Closing Date, the Servicer shall have serviced the related Mortgage
Loans in accordance with Accepted Servicing Practices. From and after the
related Closing Date, the Servicer, as an independent contractor, shall service
and administer the Mortgage Loans pursuant to this Agreement and shall have full
power and authority, acting alone, to do any and all things in connection with
such servicing and administration which the Servicer may deem necessary or
desirable, consistent with the terms of this Agreement and with Accepted
Servicing Practices.
Consistent with the terms of this Agreement, the Servicer may
waive, modify or vary any term of any Mortgage Loan or consent to the
postponement of strict compliance with any such term or in any manner grant
indulgence to any Mortgagor if in the Servicer's reasonable and prudent
determination such waiver, modification, postponement or indulgence is not
materially adverse to the Owner, provided, however, that the Servicer shall not
make any future advances with respect to a Mortgage Loan and (unless the
Mortgagor is in default with respect to the Mortgage Loan or such default is, in
the judgment of the Servicer, imminent and the Servicer has obtained the prior
written consent of the Owner) the Servicer shall not permit any modification
with respect to any Mortgage Loan that would change the Mortgage Interest Rate,
defer or forgive the payment of principal or interest, reduce or increase the
outstanding principal balance (except for actual payments of principal) or
change the final maturity date on such Mortgage Loan. With respect to a
Reconstitution Agreement, in the event of any such modification which permits
the deferral of interest or principal payments on any Mortgage Loan, the
Servicer shall, on the Business Day immediately preceding the Remittance Date in
any month in which any such principal or interest payment has been deferred,
deposit in the Custodial Account from its own funds, in accordance with Section
3.04, the difference between (a) such month's principal and one month's interest
at the Mortgage Loan Remittance Rate on the unpaid principal balance of such
Mortgage Loan and (b) the amount paid by the Mortgagor. Without limiting the
generality of the foregoing, the Servicer shall continue, and is hereby
authorized and empowered, to execute and deliver on behalf of itself and the
Owner, all instruments of satisfaction or cancellation, or of partial or full
release, discharge and all other comparable instruments, with respect to the
Mortgage Loans and with respect to the Mortgaged Properties. If reasonably
required by the Servicer, the Owner shall furnish the Servicer with any powers
of attorney and other documents necessary or appropriate to enable the Servicer
to carry out its servicing and administrative duties under this Agreement.
In servicing and administering the Mortgage Loans, the
Servicer shall employ procedures (including collection procedures) and exercise
the same care that it customarily employs and exercises in servicing and
administering mortgage loans for its own account, giving due consideration to
Accepted Servicing Practices where such practices do not conflict with the
requirements of this Agreement, and the Owner's reliance on the Servicer.
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Absent written consultation and approval by the Owner, as
specified in this Section 3.01, the Servicer may take actions relative to the
servicing and administration of the Mortgage Loans that are consistent with
Accepted Servicing Practices.
Section 3.02 Liquidation of Mortgage Loans.
-----------------------------
In the event that any payment due under any Mortgage Loan is
not paid when the same becomes due and payable, or in the event the Mortgagor
fails to perform any other covenant or obligation under the Mortgage Loan and
such failure continues beyond any applicable grace period, the Servicer shall
take such action as it shall deem to be in the best interest of the Owner,
consistent with any related PMI Policy or LPMI Policy. With respect to any
defaulted Mortgage Loan, the Servicer shall have the right to review the status
of the related forbearance plan and, subject to the second paragraph of Section
3.01, may modify such forbearance plan; including extending the Mortgage Loan
repayment date for a period of one year. In connection with a foreclosure or
other conversion, the Servicer shall exercise such rights and powers vested in
it hereunder and use the same degree of care and skill in its exercise as
prudent mortgage servicers would exercise or use under the circumstances in the
conduct to their own affairs, including, without limitation, advancing funds for
the payment of taxes and insurance premiums. During this period and in the
administration of such defaulted Mortgage Loans, the Servicer shall be
responsible for making all customary Servicing Advances.
Notwithstanding anything to the contrary contained herein, in
connection with a foreclosure or acceptance of a deed in lieu of foreclosure, in
the event the Servicer has reasonable cause to believe that a Mortgaged Property
is contaminated by hazardous or toxic substances or wastes, or if the Owner
otherwise requests an environmental inspection or review of such Mortgaged
Property to be conducted by a qualified inspector, the Servicer shall cause such
inspection to occur. Inspections conducted upon the Owner's request shall be at
the Owner's expense. Upon completion of the inspection, the Servicer shall
promptly provide the Owner with a written report of the environmental
inspection.
After reviewing the environmental inspection report, the Owner
shall determine how the Servicer shall proceed with respect to the Mortgaged
Property. In the event (a) the environmental inspection report indicates that
the Mortgaged Property is contaminated by hazardous or toxic substances or
wastes and (b) the Owner directs the Servicer to proceed with foreclosure or
acceptance of a deed in lieu of foreclosure, the Servicer shall be reimbursed
for all reasonable costs associated with such foreclosure or acceptance of a
deed in lieu of foreclosure and any related environmental clean up costs, as
applicable, from the related Liquidation Proceeds, or if the Liquidation
Proceeds are insufficient to fully reimburse the Servicer, the Servicer shall be
entitled to be reimbursed from amounts in the Custodial Account pursuant to
Section 3.05 hereof. In the event the Owner directs the Servicer not to proceed
with foreclosure or acceptance of a deed in lieu of foreclosure, the Servicer
shall be reimbursed for all Servicing Advances made with respect to the related
Mortgaged Property from the Custodial Account pursuant to Section 3.05 hereof.
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Section 3.03 Collection of Mortgage Loan Payments.
------------------------------------
Continuously from the related Closing Date until the date each
Mortgage Loan ceases to be subject to this Agreement, the Servicer shall proceed
diligently to collect all payments due under each of the Mortgage Loans when the
same shall become due and payable and, with respect to Escrow Mortgage Loans
only, shall take special care in ascertaining and estimating Escrow Payments and
all other charges that will become due and payable with respect to the Mortgage
Loans and each related Mortgaged Property, to the end that the installments
payable by the Mortgagors will be sufficient to pay such charges as and when
they become due and payable.
Section 3.04 Establishment of and Deposits to Custodial
------------------------------------------
Account.
-------
The Servicer shall segregate and hold all funds collected and
received pursuant to the Mortgage Loans separate and apart from any of its own
funds and general assets and shall establish and maintain one or more Custodial
Accounts, in the form of time deposit or demand accounts, titled "Commercial
Federal Mortgage Corporation in trust for Centre Capital Group, Inc., owner of
Fixed and Adjustable Rate Mortgage Loans, and various Mortgagors" (provided, in
the event that this Agreement is assigned to a third party, the Custodial
Account(s) shall be reestablished in trust for such Assignee). The Custodial
Account shall be established with a Qualified Depository acceptable to the
Owner. Any funds deposited in the Custodial Account shall at all times be fully
insured to the full extent permitted under applicable law. Funds deposited in
the Custodial Account may be drawn on by the Servicer in accordance with Section
3.05. The creation of any Custodial Account shall be evidenced by a letter
agreement in the form of Exhibit C hereto. A copy of such letter agreement shall
be furnished to the Owner and, upon request, to any subsequent owner of the
Mortgage Loans.
The Servicer shall deposit in the Custodial Account within 48
hours of receipt, and retain therein, the following collections received by the
Servicer and payments made by the Servicer after the related Closing Date, other
than payments of principal and interest due on or before the Cut-off Date, or
received by the Servicer prior to the Cut-off Date but allocable to a period
subsequent thereto:
(i) all payments on account of principal on the Mortgage
Loans, including all Principal Prepayments;
(ii) any amounts received from the Originator in
connection with the repurchase of any Mortgage Loan;
(iii) all payments on account of interest on the Mortgage
Loans adjusted to the Mortgage Loan Remittance Rate;
(iv) all Liquidation Proceeds;
(v) all Insurance Proceeds including amounts required to
be deposited pursuant to Section 3.12 (other than proceeds to be held
in the Escrow Account and applied to the
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restoration and repair of the Mortgaged Property or released to the
Mortgagor in accordance with Section 3.17) and Section 3.17;
(vi) all Condemnation Proceeds that are not applied to the
restoration or repair of the Mortgaged Property or released to the
Mortgagor;
(vii) any amount required to be deposited in the Custodial
Account pursuant to Sections 3.01, 3.10, 4.03, 5.01 or 5.02;
(viii) with respect to each Principal Prepayment in full or
in part, the Prepayment Interest Shortfall Amount, if any, for the
month of distribution. Such deposit shall be made from the Servicer's
own funds, without reimbursement therefor up to a maximum amount per
month of the Servicing Fee actually received for such month for the
Mortgage Loans; and
(ix) any amounts received with respect to or related to
any REO Property or REO Disposition Proceeds.
The foregoing requirements for deposit into the Custodial
Account shall be exclusive, it being understood and agreed that, without
limiting the generality of the foregoing, payments in the nature of (a)
Servicing Fees which are payable solely from the interest portion of Monthly
Payments, Insurance Proceeds, Condemnation Proceeds, Liquidation Proceeds, or
(b) Ancillary Income, need not be deposited by the Servicer into the Custodial
Account. Any interest paid on funds deposited in the Custodial Account by the
depository institution shall accrue to the benefit of the Servicer and the
Servicer shall be entitled to retain and withdraw such interest from the
Custodial Account pursuant to Section 3.05. Additionally, any other benefit
derived from the Custodial Account associated with the receipt, disbursement and
accumulation of principal, interest, taxes, hazard insurance, mortgage blanket
insurance, etc. shall accrue to the Servicer.
Section 3.05 Permitted Withdrawals From Custodial
------------------------------------
Account.
-------
The Servicer shall, from time to time, withdraw funds from the
Custodial Account for the following purposes:
(i) to make payments to the Owner in the amounts and in
the manner provided for in Section 4.01;
(ii) with respect to each LPMI Loan, in the amount of LPMI
Fee, to make payments with respect to premiums for LPMI Policies;
(iii) to reimburse itself for Monthly Advances of the
Servicer's funds made pursuant to Section 4.03, the Servicer's right to
reimburse itself pursuant to this subclause (ii) being limited to
amounts received on the related Mortgage Loan which represent late
payments of principal and/or interest respecting which any such advance
was made, it being understood that, in the case of any such
reimbursement, the Servicer's right thereto shall be prior to the
rights of Owner;
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(iv) to reimburse itself for unreimbursed Servicing
Advances, the Servicer's right to reimburse itself pursuant to this
subclause (iii) with respect to any Mortgage Loan (a) being limited to
related Liquidation Proceeds, Condemnation Proceeds, Insurance Proceeds
and such other amounts as may be collected by the Servicer from the
Mortgagor or otherwise relating to the Mortgage Loan and (b) if, after
the liquidation of such Mortgage Loan, such payments are insufficient
to satisfy such unreimbursed Servicing Advances then the Servicer may
seek reimbursement from other amounts in the Custodial Account, it
being understood that, in the case of any such reimbursement, the
Servicer's right thereto shall be prior to the rights of the Owner;
(v) to pay itself interest on funds deposited in the
Custodial Account and to pay itself the Servicing Fee pursuant to
Section 5.01 hereof;
(vi) to clear and terminate the Custodial Account upon the
termination of this Agreement;
(vii) to transfer funds to another Qualified Depository in
accordance with Section 3.10 hereof;
(viii) to pay any amount required to be paid pursuant to
Section 3.18 related to any REO Property, it being understood that in
the case of any such expenditure or withdrawal related to a particular
REO Property, the amount of such expenditure or withdrawal from the
Custodial Account shall be limited to amounts on deposit in the
Custodial Account with respect to the related REO Property;
(ix) to invest funds in certain Eligible Investments in
accordance with Section 3.10 hereof; and
(x) to withdraw funds deposited in error.
In the event that the Custodial Account is interest bearing,
on each Remittance Date, the Servicer shall withdraw all funds from the
Custodial Account except for those amounts which, pursuant to Section 4.01, the
Servicer is not obligated to remit on such Remittance Date. The Servicer may use
such withdrawn funds only for the purposes described in this Section 3.05.
Section 3.06 Establishment of and Deposits to Escrow
---------------------------------------
Account.
-------
The Servicer shall segregate and hold all funds collected and
received pursuant to a Mortgage Loan constituting Escrow Payments separate and
apart from any of its own funds and general assets and shall establish and
maintain one or more Escrow Accounts, in the form of time deposit or demand
accounts, titled, "Commercial Federal Mortgage Corporation in trust for Centre
Capital Group, Inc., owner of Fixed and Adjustable Rate Mortgage Loans, and
various Mortgagors" (provided, in the event that this Agreement is assigned to a
third party, the Escrow Account(s) shall be reestablished in trust for such
Assignee). The Escrow Accounts shall be established with a Qualified Depository
in a manner that shall provide maximum available insurance thereunder. Funds
deposited in the Escrow Account may be drawn on by the Servicer in accordance
with Section 3.07. The creation of any Escrow Account shall be evidenced by a
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letter agreement in the form of Exhibit D hereto. A copy of such letter
agreement shall be furnished to the Owner and, upon request, to any subsequent
owner of the Mortgage Loans.
The Servicer shall deposit in the Escrow Account or Accounts
within 48 hours of receipt, and retain therein:
(i) all Escrow Payments collected on account of the
Mortgage Loans, for the purpose of effecting timely payment of any such
items as required under the terms of this Agreement; and
(ii) all amounts representing Insurance Proceeds or
Condemnation Proceeds which are to be applied to the restoration or
repair of any Mortgaged Property.
The Servicer shall make withdrawals from the Escrow Account
only to effect such payments as are required under this Agreement, as set forth
in Section 3.07. The Servicer shall retain any interest paid on funds deposited
in the Escrow Account by the depository institution, other than interest on
escrowed funds required by law to be paid to the Mortgagor. To the extent
required by law, the Servicer shall pay interest on escrowed funds to the
Mortgagor notwithstanding that the Escrow Account may be non-interest bearing or
that interest paid thereon is insufficient for such purposes.
Section 3.07 Permitted Withdrawals From Escrow Account.
-----------------------------------------
Withdrawals from the Escrow Account or Accounts may be made by
the Servicer only:
(i) to effect timely payments of ground rents, taxes,
assessments, water rates, mortgage insurance premiums, condominium
charges, fire and hazard insurance premiums or other items constituting
Escrow Payments for the related Mortgage;
(ii) to reimburse the Servicer for any Servicing Advance
made by the Servicer with respect to a related Mortgage Loan, but only
from amounts received on the related Mortgage Loan which represent late
collections of Escrow Payments thereunder;
(iii) to refund to any Mortgagor any funds found to be in
excess of the amounts required under the terms of the related Mortgage
Loan;
(iv) for transfer to the Custodial Account and application
to reduce the principal balance of the Mortgage Loan in accordance with
the terms of the related Mortgage and Mortgage Note;
(v) for application to restoration or repair of the
Mortgaged Property in accordance with the procedures outlined in
Section 3.16;
(vi) to pay to the Servicer, or any Mortgagor to the
extent required by law, any interest paid on the funds deposited in the
Escrow Account;
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(vii) to clear and terminate the Escrow Account on the
termination of this Agreement; and
(viii) to withdraw funds deposited in error.
Section 3.08 Notification of Adjustments.
---------------------------
With respect to each ARM Mortgage Loan, the Servicer shall
adjust the Mortgage Interest Rate on the related interest rate adjustment date
and shall adjust the Monthly Payment on the related mortgage payment adjustment
date, if applicable, in compliance with the requirements of applicable law and
the related Mortgage and Mortgage Note. The Servicer shall execute and deliver
any and all necessary notices required under applicable law and the terms of the
related Mortgage Note and Mortgage regarding the Mortgage Interest Rate and
Monthly Payment adjustments. The Servicer shall promptly, upon written request
therefor, deliver to the Owner, at the Owner's expense, such notifications and
any additional applicable data regarding such adjustments and the methods used
to calculate and implement such adjustments. Upon the discovery by the Servicer
or the receipt of notice from the Owner that the Servicer has failed to adjust a
Mortgage Interest Rate or Monthly Payment in accordance with the terms of the
related Mortgage Note, the Servicer shall immediately deposit in the Custodial
Account from its own funds the amount of any interest loss or deferral caused
the Owner thereby.
Section 3.09 Completion and Recordation of Assignment of
-------------------------------------------
Mortgage.
--------
To the extent permitted by applicable law, each of the
Assignments of Mortgage 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, such recordation
to be effected at the CCGI's expense at the direction of the Owner. At the
Owner's direction and expense (provided that CCGI shall be responsible only for
such expenses with respect to the first set of Assignments of Mortgages prepared
and recorded after the related Closing Date), the Servicer shall cause the
endorsements on the Mortgage Note, the Assignment of Mortgage, and the
assignment of security agreement to be completed. Notwithstanding the transfer
of rights pursuant to any Assignments of Mortgage, CCGI shall remain liable for
the expenses associated with the preparation, endorsement and recordation with
respect to the first set of Assignments of Mortgages prepared and recorded after
the related Closing Date.
Section 3.10 Protection of Accounts.
----------------------
The Servicer may transfer the Custodial Account or the Escrow
Account to a different Qualified Depository from time to time. Such transfer
shall be made only upon obtaining the consent of the Owner, which consent shall
not be withheld unreasonably, provided, however, if the Owner does not respond
within 30 days after receipt of request for consent, the Owner shall have been
deemed to consent to such transfer.
The Servicer shall bear any expenses, losses or damages
sustained by the Owner because the Custodial Account and/or the Escrow Account
are not demand deposit accounts and/or money market accounts.
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Amounts on deposit in the Custodial Account may at the option
of the Servicer be invested in Eligible Investments; provided that in the event
that amounts on deposit in the Custodial Account or the Escrow Account exceed
the amount fully insured by the FDIC (the "Insured Amount") the Servicer shall
be obligated to invest the excess amount over the Insured Amount in Eligible
Investments on the same Business Day as such excess amount becomes present in
the Custodial Account or the Escrow Account. Any such Eligible Investment shall
mature no later than the Determination Date next following the date of such
Eligible Investment, provided, however, that if such Eligible Investment is an
obligation of a Qualified Depository that maintains the Custodial Account, then
such Eligible Investment may mature on such Remittance Date. Any such Eligible
Investment shall be made in the name of the Servicer in trust for the benefit of
the Owner. All income on or gain realized from any such Eligible Investment
shall be for the benefit of the Servicer and may be withdrawn at any time by the
Servicer. Any losses incurred in respect of any such investment shall be
deposited in the Custodial Account, by the Servicer out of its own funds
immediately as realized.
Section 3.11 Payment of Taxes, Insurance and Other
-------------------------------------
Charges.
-------
With respect to each Mortgage Loan, the Servicer shall
maintain accurate records reflecting the status of ground rents, taxes,
assessments, water rates, sewer rents, and other charges which are or may become
a lien upon the Mortgaged Property and the status of PMI Policy and LPMI Policy
premiums and fire and hazard insurance coverage and shall obtain, from time to
time, all bills for the payment of such charges (including renewal premiums) and
shall effect payment thereof prior to the applicable penalty or termination
date, employing for such purpose deposits of the Mortgagor in the Escrow Account
which shall have been estimated and accumulated by the Servicer in amounts
sufficient for such purposes, as allowed under the terms of the Mortgage. The
Servicer assumes full responsibility for the timely payment of all such bills,
shall effect timely payment of all such charges irrespective of each 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.
With regard to Non-Escrow Mortgage Loans, the Servicer shall use reasonable
efforts consistent with Accepted Servicing Practices to determine that any such
payments are made by the Mortgagor at the time they first became due and shall
insure that the Mortgaged Property is not lost to a tax lien as a result of
nonpayment and that such Mortgage is not left uninsured and shall make advances
from its own funds to effect any such delinquent payments to avoid the lapse of
insurance coverage on the Mortgaged Property or to avoid the imposition of a tax
lien.
Section 3.12 Maintenance of Hazard Insurance.
-------------------------------
The Servicer shall cause to be maintained for each Mortgage
Loan hazard insurance such that all buildings upon the Mortgaged Property are
insured by a generally acceptable insurer rated B:III or better in the current
Best's Key Rating Guide ("Best's") against loss by fire, hazards of extended
coverage and such other hazards as are customary in the area where the Mortgaged
Property is located, in an amount which is at least equal to the lesser of (i)
100% of the maximum insurable value of the improvements securing such Mortgage
Loan and (ii) the greater of (a) the outstanding principal balance of the
Mortgage Loan and (b) an amount
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such that the proceeds thereof shall be sufficient to prevent the Mortgagor or
the loss payee from becoming a co-insurer.
If upon origination of the Mortgage Loan, the related
Mortgaged Property was located in an area identified in the Federal Register by
the Flood Emergency Management Agency as having special flood hazards (and such
flood insurance has been made available) a flood insurance policy meeting the
requirements of the current guidelines of the Federal Insurance Administration
is in effect with a generally acceptable insurance carrier rated B:III or better
in Best's in an amount representing coverage equal to the lesser of (i) the
minimum amount required, under the terms of coverage, to compensate for any
damage or loss on a replacement cost basis (or the unpaid balance of the
mortgage if replacement cost coverage is not available for the type of building
insured) and (ii) the maximum amount of insurance which is available under the
Flood Disaster Protection Act of 1973, as amended. If at any time during the
term of the Mortgage Loan, the Servicer determines in accordance with applicable
law and pursuant to the ▇▇▇▇▇▇ ▇▇▇ Guides that a Mortgaged Property is located
in a special flood hazard area and is not covered by flood insurance or is
covered in an amount less than the amount required by the Flood Disaster
Protection Act of 1973, as amended, the Servicer shall notify the related
Mortgagor that the Mortgagor must obtain such flood insurance coverage, and if
said Mortgagor fails to obtain the required flood insurance coverage within
forty-five (45) days after such notification, the Servicer shall immediately
force place the required flood insurance on the Mortgagor's behalf.
If a Mortgage is secured by a unit in a condominium project,
the Servicer shall verify that the coverage required of the owner's association,
including hazard, flood, liability, and fidelity coverage, is being maintained
in accordance with then current ▇▇▇▇▇▇ Mae requirements, and secure from the
owner's association its agreement to notify the Servicer promptly of any change
in the insurance coverage or of any condemnation or casualty loss that may have
a material effect on the value of the Mortgaged Property as security.
The Servicer shall cause to be maintained on each Mortgaged
Property any additional insurance as may be required pursuant to applicable
laws.
In the event that any Owner or the Servicer shall determine
that the Mortgaged Property should be insured against loss or damage by hazards
and risks not covered by the insurance required to be maintained by the
Mortgagor pursuant to the terms of the Mortgage, the Servicer shall, in
accordance with Accepted Servicing Practices, provide notice of such to the
Mortgagor.
All policies required hereunder shall name the Servicer as
loss payee and shall be endorsed with standard or union mortgagee clauses,
without contribution, which shall provide for at least 30 days prior written
notice of any cancellation, reduction in amount or material change in coverage.
The Servicer shall not interfere with the Mortgagor's freedom
of choice in selecting either his insurance carrier or agent, provided, however,
that the Servicer shall not accept any such insurance policies from insurance
companies unless such companies are rated B:III or better in Best's and are
licensed to do business in the jurisdiction in which the
-22-
Mortgaged Property is located. The Servicer shall determine that such policies
provide sufficient risk coverage and amounts, that they insure the property
owner, and that they properly describe the property address. The Servicer shall
furnish to the Mortgagor a formal notice of expiration of any such insurance in
sufficient time for the Mortgagor to arrange for renewal coverage by the
expiration date.
Pursuant to Section 3.04, any amounts collected by the
Servicer under any such policies (other than amounts to be deposited in the
Escrow Account and applied to the restoration or repair of the related Mortgaged
Property, or property acquired in liquidation of the Mortgage Loan, or to be
released to the Mortgagor, in accordance with the Servicer's normal servicing
procedures as specified in Section 3.16) shall be deposited in the Custodial
Account subject to withdrawal pursuant to Section 3.05.
Section 3.13 Force Placed Insurance.
----------------------
Each Mortgage obligates the Mortgagor thereunder to maintain
the required hazard insurance policy at the Mortgagor's cost and expense, and on
the Mortgagor's failure to do so, authorizes the Servicer to obtain and maintain
such insurance at such Mortgagor's cost and expense, and to seek reimbursement
therefor from the Mortgagor. Upon any failure of the Mortgagor to maintain the
required hazard insurance, the Servicer shall obtain and maintain such force
placed hazard insurance at the Mortgagor's cost and expense.
Section 3.14 Maintenance of Fidelity Bond and Errors and
-------------------------------------------
Omissions Insurance.
-------------------
The Servicer shall maintain with responsible companies, at its
own expense, a blanket Fidelity Bond and an Errors and Omissions Insurance
Policy, with broad coverage on all officers, employees or other persons acting
in any capacity requiring such persons to handle funds, money, documents or
papers relating to the Mortgage Loans ("Servicer Employees"). Any such Fidelity
Bond and Errors and Omissions Insurance Policy shall be in the form of the
Mortgage Banker's Blanket Bond and shall protect and insure the Servicer against
losses, including forgery, theft, embezzlement, fraud, errors and omissions and
negligent acts of such Servicer Employees. Such Fidelity Bond and Errors and
Omissions Insurance Policy also shall protect and insure the Servicer against
losses in connection with the release or satisfaction of a Mortgage Loan without
having obtained payment in full of the indebtedness secured thereby. No
provision of this Section 3.14 requiring such Fidelity Bond and Errors and
Omissions Insurance Policy shall diminish or relieve the Servicer from its
duties and obligations as set forth in this Agreement. The minimum coverage
under any such bond and insurance policy shall be at least equal to the
corresponding amounts required by ▇▇▇▇▇▇ ▇▇▇ in the ▇▇▇▇▇▇ Mae Guides or by
▇▇▇▇▇▇▇ Mac in the ▇▇▇▇▇▇▇ ▇▇▇ ▇▇▇▇▇▇▇' & Servicers' Guide. Upon the request of
any Owner, the Servicer shall cause to be delivered to such Owner a certified
true copy of such fidelity bond and insurance policy and a statement from the
surety and the insurer that such fidelity bond and insurance policy shall in no
event be terminated or materially modified without using commercially reasonable
efforts to provide 30 days' prior written notice to the Owner.
-23-
Section 3.15 Inspections.
-----------
The Servicer shall inspect the Mortgaged Property as often as
deemed necessary by the Servicer to assure itself that the value of the
Mortgaged Property is being preserved. In addition, if any Mortgage Loan is more
than 90 days delinquent, the Servicer immediately shall inspect the Mortgaged
Property and shall conduct subsequent inspections in accordance with Accepted
Servicing Practices. The Servicer shall keep an electronic report of each such
inspection.
Section 3.16 Restoration of Mortgaged Property.
---------------------------------
The Servicer need not obtain the approval of the Owner prior
to releasing any Insurance Proceeds or Condemnation Proceeds to the Mortgagor to
be applied to the restoration or repair of the Mortgaged Property if such
release is in accordance with Accepted Servicing Practices. At a minimum, with
respect to claims greater than $10,000, the Servicer shall comply with the
following conditions in connection with any such release of Insurance Proceeds
or Condemnation Proceeds:
(i) the Servicer shall receive satisfactory independent
verification of completion of repairs and issuance of any required
approvals with respect thereto;
(ii) the Servicer shall take all steps necessary to
preserve the priority of the lien of the Mortgage, including, but not
limited to requiring waivers with respect to mechanics' and
materialmen's liens;
(iii) the Servicer shall verify that the Mortgage Loan is
not 60 or more days delinquent; and
(iv) pending repairs or restoration, the Servicer shall
place the Insurance Proceeds or Condemnation Proceeds in the Escrow
Account.
With respect to claims of $10,000 or less, the Servicer shall
comply with the following conditions in connection with any such release of
Insurance Proceeds or Condemnation Proceeds:
(i) the related Mortgagor shall provide an affidavit
verifying the completion of repairs and issuance of any required
approvals with respect thereto;
(ii) the Servicer shall verify the total amount of the
claim with the applicable insurance company; and
(iii) pending repairs or restoration, the Servicer shall
place the Insurance Proceeds or Condemnation Proceeds
in the Escrow Account.
If the Owner is named as an additional loss payee, the
Servicer is hereby empowered to endorse any loss draft issued in respect of such
a claim in the name of the Owner.
-24-
Section 3.17 Maintenance of PMI Policy and/or LPMI
-------------------------------------
Policy; Claims.
--------------
With respect to each Mortgage Loan with a LTV in excess of
80%, the Servicer shall:
(i) with respect to Mortgage Loans which are not LPMI
Loans, without any cost to the Owner, maintain or cause the Mortgagor
to maintain in full force and effect a PMI Policy insuring that portion
of the Mortgage Loan in excess of 67% (or such other percentage as
stated in the related Acknowledgment Agreement) of value, and shall pay
or shall cause the Mortgagor to pay the premium thereon on a timely
basis, until the LTV of such Mortgage Loan is reduced to 80%. In the
event that such PMI Policy shall be terminated, the Servicer shall
obtain from another Qualified Insurer a comparable replacement policy,
with a total coverage equal to the remaining coverage of such
terminated PMI Policy, at substantially the same fee level. The
Servicer shall not take any action which would result in noncoverage
under any applicable PMI Policy of any loss which, but for the actions
of the Servicer would have been covered thereunder. In connection with
any assumption or substitution agreement entered into or to be entered
into pursuant to Section 5.02, the Servicer shall promptly notify the
insurer under the related PMI Policy, if any, of such assumption or
substitution of liability in accordance with the terms of such PMI
Policy and shall take all actions which may be required by such insurer
as a condition to the continuation of coverage under such PMI Policy.
If such PMI Policy is terminated as a result of such assumption or
substitution of liability, the Servicer shall obtain a replacement PMI
Policy as provided above.
(ii) with respect to LPMI Loans, maintain in full force
and effect an LPMI Policy insuring that portion of the Mortgage Loan in
excess of 67% (or such other percentage as stated in the related
Acknowledgment Agreement) of value, and from time to time, withdraw the
LPMI Fee with respect to such LPMI Loan from the Custodial Account in
order to pay the premium thereon on a timely basis, until the LTV of
such Mortgage Loan is reduced to 80%. In the event that the interest
payments made with respect to any LPMI Loan are less than the LPMI Fee,
the Servicer shall advance from its own funds the amount of any such
shortfall in the LPMI Fee, in payment of the premium on the related
LPMI Policy. Any such advance shall be a Servicing Advance subject to
reimbursement pursuant to the provisions on Section 3.05. In the event
that such LPMI Policy shall be terminated, the Servicer shall obtain
from another Qualified Insurer a comparable replacement policy, with a
total coverage equal to the remaining coverage of such terminated LPMI
Policy, at substantially the same fee level. The Servicer shall not
take any action which would result in noncoverage under any applicable
LPMI Policy of any loss which, but for the actions of the Servicer
would have been covered thereunder. In connection with any assumption
or substitution agreement entered into or to be entered into pursuant
to Section 5.02, the Servicer shall promptly notify the insurer under
the related LPMI Policy, if any, of such assumption or substitution of
liability in accordance with the terms of such LPMI Policy and shall
take all actions which may be required by such insurer as a condition
to the continuation of coverage under such PMI Policy. If such LPMI
Policy is terminated as a result of such assumption or substitution of
liability, the Servicer shall obtain a replacement LPMI Policy as
provided above.
-25-
In connection with its activities as servicer, the Servicer
agrees to prepare and present, on behalf of itself and the Owner, claims to the
insurer under any PMI Policy or LPMI Policy in a timely fashion in accordance
with the terms of such PMI Policy or LPMI Policy and, in this regard, to take
such action as shall be necessary to permit recovery under any PMI Policy or
LPMI Policy respecting a defaulted Mortgage Loan. Pursuant to Section 3.04, any
amounts collected by the Servicer under any PMI Policy or LPMI Policy shall be
deposited in the Custodial Account, subject to withdrawal pursuant to Section
3.05.
Section 3.18 Title, Management and Disposition of REO
----------------------------------------
Property.
--------
In the event that title to any Mortgaged Property is acquired
in foreclosure or by deed in lieu of foreclosure, the deed or certificate of
sale shall be taken in the name of the Servicer, or in the event the Servicer is
not authorized or permitted to hold title to real property in the state where
the REO Property is located, or would be adversely affected under the "doing
business" or tax laws of such state by so holding title, the deed or certificate
of sale shall be taken in the name of such Person or Persons as shall be
consistent with an Opinion of Counsel obtained by the Servicer from any attorney
duly licensed to practice law in the state where the REO Property is located.
The Person or Persons holding such title other than the Owner shall acknowledge
in writing that such title is being held as nominee for the Owner.
The Servicer shall manage, conserve, protect and operate each
REO Property for the Owner solely for the purpose of its prompt disposition and
sale. The Servicer, either itself or through an agent selected by the Servicer,
shall manage, conserve, protect and operate the REO Property in the same manner
that it manages, conserves, protects and operates other foreclosed property for
its own account, and in the same manner that similar property in the same
locality as the REO Property is managed. The Servicer shall attempt to sell the
same (and may temporarily rent the same for a period not greater than one year,
except as otherwise provided below) on such terms and conditions as the Servicer
deems to be in the best interest of the Owner.
The Servicer shall use its Best Efforts to dispose of the REO
Property as soon as possible and shall sell such REO Property in any event
within three years after title has been taken to such REO Property, unless (i) a
REMIC election has not been made with respect to the arrangement under which the
Mortgage Loans and the REO Property are held, and (ii) the Servicer determines,
and gives an appropriate notice to the Owner to such effect, that a longer
period is necessary for the orderly liquidation of such REO Property. If a
period longer than one and a half years is permitted under the foregoing
sentence and is necessary to sell any REO Property, (i) the Servicer shall
report monthly to the Owner as to the progress being made in selling such REO
Property and (ii) if, with the written consent of the Owner, a purchase money
mortgage is taken in connection with such sale, such purchase money mortgage
shall name the Servicer as mortgagee, and such purchase money mortgage shall not
be held pursuant to this Agreement, but instead a separate participation
agreement among the Servicer and Owner shall be entered into with respect to
such purchase money mortgage.
The Servicer shall also maintain on each REO Property fire and
hazard insurance with extended coverage in an amount which is at least equal to
the lesser of (a) 100% of the maximum insurable value of the improvements which
are a part of such property, or (b) unpaid principal balance of the related
Mortgage Loan at the time it becomes an REO Property, liability
-26-
insurance and, to the extent required and available under the Flood Disaster
Protection Act of 1973, as amended, flood insurance in the amount required
above.
The disposition of REO Property shall be carried out by the
Servicer at such price, and upon such terms and conditions, as the Servicer
deems to be in the best interests of the Owner. The proceeds of sale of the REO
Property shall be promptly deposited in the Custodial Account. As soon as
practical thereafter the expenses of such sale shall be paid and the Servicer
shall reimburse itself for any related unreimbursed Servicing Advances, unpaid
Servicing Fees, and on the Remittance Date immediately following the date on
which such sale proceeds are received the net cash proceeds of such sale
remaining in the Custodial Account shall be distributed to the Owner.
The Servicer shall advance funds necessary for the proper
operation, management and maintenance of the REO Property, including the cost of
maintaining any hazard insurance pursuant to Section 3.12 and the fees of any
managing agent of the Servicer, or the Servicer itself, which advances shall be
deemed "Servicing Advances" for the purposes hereunder. The REO management fee
shall be an amount that is reasonable and customary in the area where the
Mortgaged Property is located. The Servicer shall make monthly distributions on
each Remittance Date to the Owners of the net cash flow from the REO Property
(which shall equal the revenues from such REO Property net of the expenses
described in this Section 3.18 and of any reserves reasonably required from time
to time to be maintained to satisfy anticipated liabilities for such expenses).
Notwithstanding the foregoing, at any time and from time to
time, the Owner may at its election terminate this Agreement with respect to one
or more REO Properties as provided by Section 9.02.
Section 3.19 Real Estate Owned Reports.
-------------------------
Together with the statement furnished pursuant to Section
4.02, the Servicer shall furnish to the Owner upon request an electronic
statement with respect to any REO Property covering the operation of such REO
Property for the previous month and the Servicer's efforts in connection with
the sale of such REO Property and any rental of such REO Property incidental to
the sale thereof for the previous month. That statement shall be accompanied by
such other information as the Owner shall reasonably request.
Section 3.20 Liquidation Reports.
-------------------
Upon the foreclosure sale of any Mortgaged Property or the
acquisition thereof by the Owner pursuant to a deed in lieu of foreclosure, the
Servicer shall submit to the Owner a liquidation report with respect to such
Mortgaged Property.
Section 3.21 Reports of Foreclosures and Abandonments of
-------------------------------------------
Mortgaged Property.
------------------
Following the foreclosure sale or abandonment of any Mortgaged
Property, the Servicer shall report such foreclosure or abandonment as required
pursuant to Section 6050J of
-27-
the Internal Revenue Code of 1986, as it may be amended from time to time, or
any successor statute thereto, and applicable U.S. Department of the Treasury
regulations issued pursuant thereto.
Section 3.22 PMI and LPMI Obligations.
------------------------
The Servicer shall comply with all provisions of applicable
state and federal law relating to the cancellation of, or collection of premiums
with respect to, PMI Policies and LPMI Policies, including, but not limited to,
the provisions of the Homeowners Protection Act of 1998, and all regulations
promulgated thereunder, as amended from time to time. The Servicer shall be
obligated to make premium payments with respect to (a) LPMI Policies, and (b) if
the Mortgagor fails to pay any PMI Policy premium, such PMI Policy.
-28-
ARTICLE IV
PAYMENTS TO OWNER
Section 4.01 Remittances.
-----------
On each Remittance Date the Servicer shall remit by wire
transfer of immediately available funds to the Owner (a) all amounts deposited
in the Custodial Account as of the close of business on the Determination Date
(net of charges against or withdrawals from the Custodial Account pursuant to
Section 3.05), plus (b) all amounts, if any, which the Servicer is obligated to
distribute pursuant to Section 4.03, minus (c) any amounts attributable to
Principal Prepayments received after the applicable Principal Prepayment Period
which amounts shall be remitted on the following Remittance Date, together with
any additional interest required to be deposited in the Custodial Account in
connection with such Principal Prepayment in accordance with Section 3.04(viii),
and minus (d) any amounts attributable to Monthly Payments collected but due on
a Due Date or Dates subsequent to the first day of the month of the Remittance
Date, which amounts shall be remitted on the Remittance Date next succeeding the
Due Period for such amounts.
With respect to any remittance received by the Owner after the
second Business Day following the Business Day on which such payment was due,
the Servicer shall pay to the Owner interest on any such late payment at an
annual rate equal to the Prime Rate, adjusted as of the date of each change,
plus three percentage points, but in no event greater than the maximum amount
permitted by applicable law. Such interest shall be deposited in the Custodial
Account by the Servicer on the date such late payment is made and shall cover
the period commencing with the day following such second Business Day and ending
with the Business Day on which such payment is made, both inclusive. Such
interest shall be remitted along with the distribution payable on the next
succeeding Remittance Date. The payment by the Servicer of any such interest
shall not be deemed an extension of time for payment or a waiver of any Event of
Default by the Servicer.
Section 4.02 Statements to Owner.
-------------------
(a) Not later than the tenth calendar day of each month,
the Servicer shall furnish to the Owner a monthly statement (a "Monthly
Remittance Advice") containing such information in the form required by the
Owner, or its designee, in hard copy or electronic medium mutually acceptable to
the parties as to the accompanying remittance and the period ending on the
preceding Determination Date.
(b) In addition, such Monthly Remittance Advice shall track,
on a monthly basis, the Mortgage Interest Rate and the delinquency status of the
Mortgage Loans. A cumulative delinquency report shall be provided to the Owner
upon the Owner's request.
(c) Not more than 60 days after the end of each calendar year,
commencing December 31, 2001, the Servicer shall furnish to each Person who was
an Owner of the Mortgage Loans at any time during such calendar year an annual
statement in accordance with
-29-
the requirements of applicable federal income tax law as to the aggregate of
remittances for the applicable portion of such year. Such obligation of the
Servicer shall be deemed to have been satisfied to the extent that substantially
comparable information shall be provided by the Servicer pursuant to any
requirements of the Internal Revenue Code as from time to time are in force.
Beginning with calendar year 2001, the Servicer shall prepare
and file any and all tax returns, information statements or other filings for
the tax year 2001 and subsequent tax years required to be delivered to any
governmental taxing authority or to the Owner pursuant to any applicable law
with respect to the Mortgage Loans and the transactions contemplated hereby. In
addition, the Servicer shall provide the Owner with such information concerning
the Mortgage Loans as is necessary for the Owner to prepare its federal income
tax return as the Owner may reasonably request from time to time.
Section 4.03 Monthly Advances by Servicer.
----------------------------
On the Business Day immediately preceding each Remittance
Date, the Servicer shall deposit in the Custodial Account from its own funds an
amount equal to all Monthly Payments (with interest adjusted to the Mortgage
Loan Remittance Rate) which were due on the Mortgage Loans during the applicable
Due Period and which were delinquent at the close of business on the immediately
preceding Determination Date or which were deferred pursuant to Section 3.01.
The Servicer's obligation to make such Monthly Advances as to any Mortgage Loan
will continue through the last Monthly Payment due prior to the payment in full
of the Mortgage Loan, or through the last Remittance Date prior to the
Remittance Date for the distribution of all Liquidation Proceeds and other
payments or recoveries (including Insurance Proceeds and Condemnation Proceeds)
with respect to the Mortgage Loan unless the Servicer deems such Monthly
Advances to be unrecoverable, as evidenced by an Officer's Certificate of the
Servicer delivered to the Owner.
Section 4.04 Due Dates Other Than the First of the Month.
-------------------------------------------
Mortgage Loans having Due Dates other than the first day of a
month, including Mortgage Loans permitting semi-annual amortization of
principal, shall be accounted for as described in this Section 4.04. Any payment
due on a day other than the first day of each month shall be considered due on
the first day of the month in which that payment is due as if such payment were
due on the first day of said month. For example, a payment due on August 15
shall be considered to be due on August 1 of said month. With respect to a
Mortgage Note permitting semi-annual amortization of principal, the Servicer
shall be required to remit monthly scheduled principal and interest based on a
monthly amortization schedule. Any payment collected on a Mortgage Loan after
the Cut-off Date shall be deposited in the Custodial Account. For Mortgage Loans
with Due Dates on the first day of a month, deposits to the Custodial Account
begin with the payment due on the first of the month following the Cut-off Date.
-30-
ARTICLE V
GENERAL SERVICING PROCEDURES
Section 5.01 Servicing Compensation.
----------------------
As compensation for its services hereunder, the Servicer shall
be entitled to withdraw from the Custodial Account or to retain from interest
payments on the Mortgage Loans the amount of its Servicing Fee. The Servicing
Fee shall be payable monthly and shall be computed on the basis of the same
unpaid principal balance and for the period respecting which any related
interest payment on a Mortgage Loan is computed.
Additional servicing compensation in the form of Ancillary
Income shall be retained by the Servicer to the extent not required to be
deposited in the Custodial Account. The Servicer shall be entitled to retain
late charges whether or not deposited to the Custodial Account. The Servicer
shall be required to pay all expenses incurred by it in connection with its
servicing activities hereunder and shall not be entitled to reimbursement
thereof except as specifically provided for herein.
Section 5.02 Transfers of Mortgaged Property.
-------------------------------
The Servicer shall use its best efforts to enforce any
"due-on-sale" provision contained in any Mortgage or Mortgage Note and to deny
assumption by the person to whom the Mortgaged Property has been or is about to
be sold whether by absolute conveyance or by contract of sale, and whether or
not the Mortgagor remains liable on the Mortgage and the Mortgage Note; provided
that, if in the Servicer's prudent business judgment, it determines that an
assumption of the Mortgage Loan is in the best interests of the Owner, it shall
deliver notice of such determination to the Owner and may permit such assumption
if approved by the Owner. When the Mortgaged Property has been conveyed by the
Mortgagor, the Servicer shall, to the extent it has knowledge of such conveyance
or the Owner's consent otherwise in accordance with the preceding sentence,
exercise its rights to accelerate the maturity of such Mortgage Loan under the
"due-on-sale" clause applicable thereto, provided, however, that the Servicer
shall not be required to take such action if the Servicer, in its prudent
business judgment, believes it is not in the best interests of the Owner and
shall not exercise 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 PMI Policy or LPMI Policy, if any.
If the Servicer reasonably believes it is unable under
applicable law to enforce such "due-on-sale" clause or if the Owner approves
such assumption pursuant to the preceding paragraph, the Servicer shall enter
into (i) an assumption and modification agreement with the person to whom such
property has been conveyed, pursuant to which such person becomes liable under
the Mortgage Note and the original Mortgagor remains liable thereon or (ii) in
the event the Servicer is unable under applicable law to require that the
original Mortgagor remain liable under the Mortgage Note and the Servicer has
the prior consent of the primary mortgage guaranty insurer, a substitution of
liability agreement with the Owner of the Mortgaged Property
-31-
pursuant to which the original Mortgagor is released from liability and the
Owner of the Mortgaged Property is substituted as Mortgagor and becomes liable
under the Mortgage Note; provided that no such substitutions should be permitted
unless such person satisfies the underwriting criteria of the Servicer and has a
credit risk rating at least equal to that of the original Mortgagor. The
Mortgage Loan, as assumed, shall conform in all respects to the requirements,
representations and warranties of this Agreement. The Servicer shall notify the
Owner that any such assumption or substitution agreement has been contemplated
by forwarding to the Owner the original copy of such assumption or substitution
agreement (indicating the Mortgage File to which it relates) which copy shall be
added by the Owner to the related Mortgage File and which shall, for all
purposes, be considered part of such Mortgage File to the same extent as all
other documents and instruments constituting a part thereof. The Servicer shall
be responsible for recording any such assumption or substitution agreements. In
connection with any such assumption or substitution agreement, the Monthly
Payment on the related Mortgage Loan shall not be changed but shall remain as in
effect immediately prior to the assumption or substitution, the Mortgage
Interest Rate, the stated maturity or the outstanding principal amount of such
Mortgage Loan shall not be changed nor shall any required monthly payments of
principal or interest be deferred or forgiven. Any assumption fee collected by
the Servicer for entering into an assumption agreement shall be retained by the
Servicer as additional servicing compensation. In connection with any such
assumption, neither the Mortgage Interest Rate borne by the related Mortgage
Note, the term of the Mortgage Loan nor the outstanding principal amount of the
Mortgage Loan shall be changed.
Section 5.03 Right to Examine Servicer Records.
---------------------------------
The Owner shall have the right to examine and audit any and
all of the books, records, or other information of the Servicer, whether held by
the Servicer or by another on its behalf, with respect to or concerning this
Agreement or the Mortgage Loans, during business hours or at such other times as
may be reasonable under applicable circumstances, upon reasonable advance
notice.
Section 5.04 Servicing Tape.
--------------
Not later than the tenth calendar day of each month, the
Servicer shall deliver or cause to be delivered to the Owner and the Owner's
designee, a file in an electronic reporting format as shall be mutually agreed
on by the Owner and Servicer, containing servicing information, including
without limitation, those fields specified by the Owner from time to time and
reasonably available to the Servicer, on a loan-by-loan basis and in the
aggregate, with respect to the Mortgage Loans serviced hereunder.
Section 5.05 Satisfaction of Mortgages and Release of
----------------------------------------
Mortgage Files.
--------------
Upon the payment in full of any Mortgage Loan the Servicer
shall notify the Owner in the Monthly Remittance Advice as provided in Section
4.02, and may request the release of any Mortgage Loan documents. Upon receipt
of such request, the Custodian shall, within five (5) Business Days, release the
related Mortgage File to the Servicer; provided, that the Servicer shall use its
best efforts to obtain the release of the related Mortgage File from the
Custodian. The Custodian shall indemnify the Servicer out of its own funds for
any loss, liability
-32-
or expense incurred by the Servicer as a direct result of the failure of the
Custodian to release the related Mortgage File as provided in this paragraph.
If the Servicer satisfies or releases a Mortgage without first
having obtained payment in full of the indebtedness secured by the Mortgage or
should the Servicer otherwise prejudice any rights the Owner may have under the
mortgage instruments, upon written demand of the Owner, the Servicer shall
repurchase the related Mortgage Loan at the Repurchase Price by deposit thereof
in the Custodial Account within 2 Business Days of receipt of such demand by the
Owner. The Servicer shall maintain the Fidelity Bond and Errors and Omissions
Insurance Policy as provided for in Section 3.14 insuring the Servicer against
any loss it may sustain with respect to any Mortgage Loan not satisfied in
accordance with the procedures set forth herein.
Section 5.06 Annual Independent Public Accountants'
--------------------------------------
Servicing Report.
----------------
On or before July 31st of each year beginning July 31, 2001,
the Servicer, at its expense, shall cause a firm of independent public
accountants which is a member of the American Institute of Certified Public
Accountants to furnish a statement to each Owner stating that (i) it has
obtained a letter of representation regarding certain matters from the
management of the Servicer which includes an assertion that the Servicer has
complied with certain minimum residential mortgage loan servicing standards,
identified in the Uniform Single Attestation Program for Mortgage Bankers
established by the Mortgage Bankers Association of America, with respect to the
servicing of residential mortgage loans during the most recently completed
fiscal year and (ii) on the basis of an examination conducted by such firm in
accordance with standards established by the American Institute of Certified
Public Accountants, such representation is fairly stated in all material
respects, subject to the exception and other qualifications that may be
appropriate.
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ARTICLE VI
REPRESENTATIONS, WARRANTIES
AND AGREEMENTS
Section 6.01 Representations, Warranties and Agreements
------------------------------------------
of the Servicer.
---------------
The Servicer, as a condition to the consummation of the
transactions contemplated hereby, hereby makes the following representations and
warranties to the Owner as of each Closing Date:
(a) Due Organization and Authority. The Servicer is a
Nebraska corporation duly organized, validly existing and in good standing under
the laws of state and has all licenses necessary to carry on its business as now
being conducted and is licensed, qualified and in good standing in each state
where a Mortgaged Property is located if the laws of such state require
licensing or qualification in order to conduct business of the type conducted by
the Servicer, and in any event the Servicer is in compliance with the laws of
any such state to the extent necessary to ensure the enforceability of the terms
of this Agreement; the Servicer has the full power and authority to execute and
deliver this Agreement and to perform in accordance herewith; the execution,
delivery and performance of this Agreement (including all instruments of
transfer to be delivered pursuant to this Agreement) by the Servicer and the
consummation of the transactions contemplated hereby have been duly and validly
authorized; this Agreement evidences the valid, binding and enforceable
obligation of the Servicer and all requisite action has been taken by the
Servicer to make this Agreement valid and binding upon the Servicer in
accordance with its terms;
(b) Ordinary Course of Business. The consummation of the
transactions contemplated by this Agreement are in the ordinary course of
business of the Servicer;
(c) No Conflicts. Neither the execution and delivery of this
Agreement, the acquisition of the servicing responsibilities by the Servicer or
the transactions contemplated hereby, nor the fulfillment of or compliance with
the terms and conditions of this Agreement, will conflict with or result in a
breach of any of the terms, conditions or provisions of the Servicer's charter
or by-laws or any legal restriction or any agreement or instrument to which the
Servicer is now a party or by which it is bound, or constitute a default or
result in an acceleration under any of the foregoing, or result in the violation
of any law, rule, regulation, order, judgment or decree to which the Servicer or
its property is subject, or impair the ability of the Servicer to service the
Mortgage Loans, or impair the value of the Mortgage Loans;
(d) Ability to Perform. The Servicer does not believe, nor
does it have any reason or cause to believe, that it cannot perform each and
every covenant contained in this Agreement. The Servicer is solvent;
(e) No Litigation Pending. There is no action, suit,
proceeding or investigation pending or, to the Servicer's knowledge, threatened
against the Servicer which, either in any one instance or in the aggregate, is
likely to result in any material adverse change in the business,
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operations, financial condition, properties or assets of the Servicer, or in any
material impairment of the right or ability of the Servicer to carry on its
business substantially as now conducted, or in any material liability on the
part of the Servicer, or which would draw into question the validity of this
Agreement or of any action taken or to be taken in connection with the
obligations of the Servicer contemplated herein, or which would be likely to
impair materially the ability of the Servicer to perform under the terms of this
Agreement;
(f) No Consent Required. No consent, approval, authorization
or order of any court or governmental agency or body is required for the
execution, delivery and performance by the Servicer of or compliance by the
Servicer with this Agreement, or if required, such approval has been obtained
prior to each Closing Date;
(g) Ability to Service. The Servicer is an approved servicer
of conventional residential mortgage loans for ▇▇▇▇▇▇ ▇▇▇ or ▇▇▇▇▇▇▇ Mac, with
the facilities, procedures, and experienced personnel necessary for the sound
servicing of mortgage loans of the same type as the Mortgage Loans. The Servicer
is in good standing to service mortgage loans for either ▇▇▇▇▇▇ Mae or ▇▇▇▇▇▇▇
Mac, and no event has occurred, including but not limited to a change in
insurance coverage, which would make the Servicer unable to comply with either
▇▇▇▇▇▇ Mae or ▇▇▇▇▇▇▇ Mac eligibility requirements or which would require
notification to ▇▇▇▇▇▇ Mae or ▇▇▇▇▇▇▇ Mac;
(h) No Commissions to Third Parties. The Servicer has not
dealt with any broker or agent or anyone else who might be entitled to a fee or
commission in connection with this transaction other than the Owner;
Section 6.02 Remedies for Breach of Representations and
------------------------------------------
Warranties of the Servicer.
--------------------------
It is understood and agreed that the representations and
warranties set forth in Section 6.01 shall survive the engagement of the
Servicer to perform the servicing responsibilities as of each Closing Date and
the delivery of the Servicing Files to the Servicer and shall inure to the
benefit of the Owner. Upon discovery by either the Servicer or the Owner of a
Breach of any of the foregoing representations and warranties which materially
and adversely affects the ability of the Servicer to perform its duties and
obligations under this Agreement or otherwise materially and adversely affects
the value of the Mortgage Loans, the Mortgaged Property or the priority of the
security interest on such Mortgaged Property or the interest of the Owner (in
the case of any of the foregoing, a "Breach"), the party discovering such Breach
shall give prompt written notice to the other.
Within 60 days of the earlier of either discovery by or notice
to the Servicer of any Breach of a representation or warranty set forth in
Section 6.01 which materially and adversely affects the ability of the Servicer
to perform its duties and obligations under this Agreement or otherwise
materially and adversely affects the value of the Mortgage Loans, the Mortgaged
Property or the priority of the security interest on such Mortgaged Property,
the Servicer shall use its Best Efforts promptly to cure such Breach in all
material respects and, if such Breach cannot be cured, the Servicer shall, at
the Owner's option, assign the Servicer's rights and obligations under this
Agreement (or respecting the affected Mortgage Loans) to a
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successor servicer, subject to the approval of the Owner, which approval shall
be in the Owner's sole discretion. Such assignment shall be made in accordance
with Section 10.01.
In addition, the Servicer shall indemnify the Owner and hold
it harmless against any losses, damages, penalties, fines, forfeitures,
reasonable and necessary legal fees and related costs, judgments, and other
costs and expenses resulting from any claim, demand, defense or assertion based
on or grounded upon, or resulting from, a Breach of the Servicer representations
and warranties contained in this Agreement.
Any cause of action against the Servicer relating to or
arising out of the Breach of any representations and warranties made in Section
6.01 shall accrue upon (i) discovery of such Breach by the Servicer or notice
thereof by the Owner to the Servicer, (ii) failure by the Servicer to cure such
Breach within the applicable cure period, and (iii) demand upon the Servicer by
the Owner for compliance with this Agreement.
Section 6.03 Representations and Warranties of the Owner.
-------------------------------------------
The Owner, as a condition to the consummation of the
transactions contemplated hereby, makes the following representations and
warranties to the Servicer as of each Closing Date:
(a) Due Organization and Authority. The Owner is a North
Carolina corporation duly organized, validly existing and in good standing under
the laws of the state of its incorporation and has all licenses necessary to
carry on its business as now being conducted; the Owner has the full corporate
power and authority to execute and deliver this Agreement and to perform in
accordance herewith; the execution, delivery and performance of this Agreement
(including all instruments of transfer to be delivered pursuant to this
Agreement) by the Owner and the consummation of the transactions contemplated
hereby have been duly and validly authorized; this Agreement evidences the
valid, binding and enforceable obligation of the Owner; and all requisite
corporate action has been taken by the Owner to make this Agreement valid and
binding upon the Owner in accordance with its terms;
(b) Ordinary Course of Business. The consummation of the
transactions contemplated by this Agreement are in the ordinary course of
business of the Owner;
(c) No Conflicts. Neither the execution and delivery of this
Agreement, the conveyance of the servicing responsibilities to the Servicer or
the transactions contemplated hereby, nor the fulfillment of or compliance with
the terms and conditions of this Agreement, will conflict with or result in a
Breach of any of the terms, conditions or provisions of the Owner's charter or
by-laws or any legal restriction or any agreement or instrument to which the
Owner is now a party or by which it is bound, or constitute a default or result
in an acceleration under any of the foregoing, or result in the violation of any
law, rule, regulation, order, judgment or decree to which the Owner or its
property is subject, or impair the value of the servicing contract consummated
hereby;
(d) Ability to Perform. The Owner does not believe, nor does
it have any reason or cause to believe, that it cannot perform each and every
covenant contained in this Agreement;
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(e) No Litigation Pending. There is no action, suit,
proceeding or investigation pending or threatened against the Owner which,
either in any one instance or in the aggregate, may result in any material
adverse change in the business, operations, financial condition, properties or
assets of the Owner, or in any material impairment of the right or ability of
the Owner to carry on its business substantially as now conducted, or in any
material liability on the part of the Owner, or which would draw into question
the validity of this Agreement or of any action taken or to be taken in
connection with the obligations of the Owner contemplated herein, or which would
be likely to impair materially the ability of the Owner to perform under the
terms of this Agreement;
(f) No Consent Required. No consent, approval, authorization
or order of any court or governmental agency or body is required for the
execution, delivery and performance by the Owner of or compliance by the Owner
with this Agreement, or if required, such approval has been obtained prior to
each Closing Date;
(g) Ownership. The Owner is the sole owner and holder of the
Mortgage Loans. The servicing responsibilities contracted for as of the relevant
Closing Date have not been assigned or pledged, and the Owner has good and
marketable interest therein, has full right to transfer the servicing
responsibilities to the Servicer free and clear of any encumbrance, equity,
interest, lien, pledge, charge, claim or security interest, and has full right
and authority, subject to no interest of, or agreement with, any other party
(other than any notice required by law, regulation or otherwise, to be delivered
to the Mortgagors) to assign the servicing responsibilities pursuant to this
Agreement; and
(h) No Commissions to Third Parties. The Owner has not dealt
with any broker or agent or anyone else who might be entitled to a fee or
commission in connection with this transaction other than the Servicer.
Section 6.04 Remedies for Breach of Representations and
------------------------------------------
Warranties of the Owner.
-----------------------
It is understood and agreed that the representations and
warranties set forth in Section 6.03 shall survive the engagement of the
Servicer to perform the servicing responsibilities as of the Closing Dates and
the delivery of the Servicing Files to the Servicer and shall inure to the
benefit of the Servicer. Upon discovery by either the Servicer or the Owner of a
Breach of any of the foregoing representations and warranties which materially
and adversely affects the value of the servicing contract established herein or
the interest of the Servicer, the party discovering such Breach shall give
prompt written notice to the other.
Within 60 days of the earlier of either discovery by or notice
to the Owner of any Breach of a representation or warranty set forth in Section
6.03 which materially and adversely affects the value of the servicing contract,
the Owner shall use its Best Efforts promptly to cure such Breach in all
material respects.
The Owner shall indemnify the Servicer and hold it harmless
against any losses, damages, penalties, fines, forfeitures, reasonable and
necessary legal fees and related costs, judgments, and other costs and expenses,
including, without limitation, any reasonable legal fees
-37-
and related expenses incurred by the Owner in connection with enforcing this
indemnity, resulting from any claim, demand, defense or assertion based on or
grounded upon, or resulting from, a Breach of the Owner representations and
warranties contained in this Agreement. It is understood and agreed that the
obligation of the Owner to indemnify the Servicer pursuant to this Section 6.04
constitutes the sole remedy of the Servicer respecting a Breach of the foregoing
representation and warranties.
Any cause of action against the Owner relating to or arising
out of the Breach of any representations and warranties made in Section 6.03
shall accrue upon (i) discovery of such Breach by the Owner or notice thereof by
the Servicer to the Owner, (ii) failure by the Owner to cure such Breach within
the applicable cure period, and (iii) demand upon the Owner by the Servicer for
compliance with this Agreement.
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ARTICLE VII
WHOLE LOAN TRANSFER; PASS-THROUGH TRANSFER
Section 7.01 Removal of Mortgage Loans from Inclusion
----------------------------------------
Under this Agreement Upon a Pass-Through Transfer or a Whole Loan Transfer on
-----------------------------------------------------------------------------
One or More Reconstitution Dates.
--------------------------------
(a) The Owner and the Servicer agree that with respect to some
or all of the Mortgage Loans, from time to time the Owner shall:
1. Effect a Whole Loan Transfer, and/or
2. Effect a Pass-Through Transfer,
in each case retaining the Servicer as the servicer thereof,
or as applicable the "seller/servicer". On the related Reconstitution Date, the
Mortgage Loans transferred shall cease to be covered by this Agreement.
(b) With respect to each Whole Loan Transfer or Pass-Through
Transfer, as the case may be, entered into by the Owner, the Servicer agrees to
cooperate fully with the Owner, the Owner's designee, any prospective purchaser,
or any rating agency with respect to all reasonable requests and due diligence
procedures and to use its Best Efforts to facilitate such Whole Loan Transfer or
Pass-Through Transfer, as the case may be.
(c) The Servicer acknowledges that with respect to some or all
of the Mortgage Loans, the Owner intends to effect one or more Whole Loan
Transfers and/or one or more Pass-Through Transfers. With respect to each Whole
Loan Transfer or Pass-Through Transfer, as the case may be, entered into by the
Owner, the Servicer agrees:
(i) to negotiate and to execute all agreements executed
in connection with such Whole Loan Transfer or Pass-Through Transfer
that govern the servicing and administration of the Mortgage Loans (and
any agreements and other documents incidental thereto) as the Owner
shall reasonably request, provided that the servicing provisions
contained therein shall be substantially similar to those contained in
this Agreement and shall not contain any obligations materially more
onerous than those contained herein that increase the expenses or
obligations of the Servicer, unless otherwise mutually agreed by the
parties (provided, that each of the Servicer and the Owner is given an
opportunity to review and reasonably negotiate in good faith the
content of such documents not specifically referenced or provided
herein), which governing documents, in the case of a Pass-Through
Transfer, shall contain provisions customarily included in publicly
issued or privately placed rated secondary mortgage market
transactions;
(ii) to cooperate fully with the Owner and any prospective
purchaser, at the Owner's expense, with respect to all reasonable
requests and due diligence procedures including participating in
meetings with rating agencies, bond insurers and such other
-39-
parties as the Owner shall designate and participating in meetings with
prospective purchasers of the Mortgage Loans or interests therein and
providing information contained in the Mortgage Loan Schedule including
any diskette or other related data tapes provided as reasonably
requested by such purchasers;
(iii) to negotiate and execute one or more master servicing
agreements between the Servicer and any third party servicer which is
servicing loans on behalf of the Owner providing for such third party
servicer to master service such Mortgage Loans on behalf of the Owner;
(iv) to negotiate and execute one or more subservicing
agreements between the Servicer and any master servicer which is
generally considered to be a prudent master servicer in the secondary
mortgage market designated by the Owner in its sole discretion after
consultation with the Servicer and/or one or more custodial and
servicing agreements among the Owner or an affiliate of the Owner, the
Servicer and a third party custodian/trustee which is generally
considered to be a prudent custodian/trustee in the secondary mortgage
market designated by the Owner in its sole discretion after
consultation with the Servicer, in either case for the purpose of
pooling the Mortgage Loans with other mortgage loans for resale or
securitization;
(v) in connection with a Pass-Through Transfer, a Whole
Loan Transfer, or any securitization of any Mortgage Loans, to
negotiate and execute a pooling and servicing agreement, which pooling
and servicing agreement may, at the Owner's direction, contain
contractual provisions including, but not limited to, a 24-day
certificate payment delay (54-day total payment delay), servicer
advances of delinquent scheduled payments of principal and interest
through liquidation (unless deemed non-recoverable) and payment of
compensating interest with respect to prepayment interest shortfalls
(to the extent of the monthly servicing fee payable thereto), servicing
representations and warranties which in form and substance conform to
secondary market standards for securities backed by mortgage loans
similar to the Mortgage Loans, and such provisions with regard to
servicing responsibilities, investor reporting, segregation and deposit
of principal and interest payments, custody of the Mortgage Loans, and
other covenants as are required by the Owner and one or more nationally
recognized rating agencies for "AAA" rated mortgage pass-through
transactions which are "mortgage related securities" for purposes of
the Secondary Mortgage Market Enhancement Act of 1984, unless otherwise
mutually agreed;
(vi) to deliver to the Owner and to any Person designated
by the Owner (a) for inclusion in any prospectus or other offering
material such publicly available information regarding the Servicer,
its financial condition and its mortgage loan delinquency, foreclosure
and loss experience and any additional information requested by the
Owner, (b) any similar non-public, unaudited financial information
(which the Owner may, at its option and at its cost, have audited by
certified public accountants) and such other information as is
reasonably requested by the Owner and which the Servicer is capable of
providing without unreasonable effort or expense, and to indemnify the
Owner and its affiliates for material misstatements contained in such
information, and (c) such
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statements and audit letters of reputable, certified public accountants
pertaining to information provided by the Servicer pursuant to clause
(a) above as shall be reasonably requested by the Owner; and
(vii) to deliver to the Owner, and to any Person designated
by the Owner, such legal documents and opinions of counsel (which may
be in-house opinions of counsel) in a form reasonably acceptable to the
Owner as are customarily delivered and reasonably determined by the
Owner to be necessary in connection with Whole Loan Transfers or
Pass-Through Transfers, as the case may be, it being understood that
the cost of any opinions of outside special counsel that may be
required for a Whole Loan Transfer or Pass-Through Transfer, as the
case may be, shall be the responsibility of the Owner.
(d) The Servicer shall provide to the Owner or issuer, as the
case may be, and any other participants in such Whole Loan Transfer or
Pass-Through Transfer, any and all information with respect to itself, its
servicing portfolio or the Mortgage Loans and appropriate verification of
information which may be reasonably available to the Servicer, whether through
letters of its auditors and counsel or otherwise, as the Owner or any such other
participant shall request upon reasonable demand.
(e) In the event the Owner has elected to have the Servicer
hold record title to the Mortgages, prior to a Reconstitution Date the Owner or
its designee shall prepare an Assignment of Mortgage in blank from the Owner,
acceptable to the trustee or such third party, as the case may be, for each
Mortgage Loan that is part of a Whole Loan Transfer or Pass-Through Transfer and
shall pay all preparation and recording costs associated therewith. The Servicer
shall execute each Assignment of Mortgage, track such Assignments of Mortgage to
ensure they have been recorded and deliver them as required by the trustee or
such third party, as the case may be, upon the Servicer's receipt thereof.
Additionally, the Servicer shall prepare and execute, at the direction and
expense of the Owner, any note endorsements in connection with any and all
Reconstitution Agreements; provided that CCGI shall be responsible for the
expenses with respect to the initial endorsements.
(f) All Mortgage Loans not sold or transferred pursuant to a
Pass-Through Transfer or Whole Loan Transfer and any and all Mortgage Loans
repurchased by the Owner pursuant to Section 7.02 below with respect to a
Pass-Through Transfer or Whole Loan Transfer shall be subject to this Agreement
and shall continue to be serviced in accordance with the terms of this Agreement
and with respect thereto this Agreement shall remain in full force and effect.
Section 7.02 Owner's Repurchase and Indemnification
--------------------------------------
Obligations.
-----------
Upon receipt by the Servicer of notice from the trustee of a
Breach of any Owner representation or warranty contained in any Reconstitution
Agreement or a request by the trustee for the repurchase of any Mortgage Loan
transferred to a trustee pursuant to a Pass-Through Transfer or to a third party
purchaser pursuant to a Whole Loan Transfer, the Servicer shall promptly notify
the Owner of same and shall, at the direction of the Owner, use its Best Efforts
to cure and correct any such Breach and to satisfy the requests or concerns of
the trustee or the third party purchaser related to such deficiencies of the
related Mortgage Loans transferred to the trustee or other such third party
purchaser.
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The Owner shall repurchase from the Servicer any Mortgage Loan
transferred to a trustee pursuant to a Pass-Through Transfer or to a third party
purchaser pursuant to a Whole Loan Transfer with respect to which the Servicer
has been required by the trustee or such third party purchaser to repurchase due
to a Breach of a representation or warranty made by the Owner with respect to
the Mortgage Loans, or the servicing thereof prior to the transfer date to the
trustee or any third party purchaser in any Reconstitution Agreement and not due
to a breach of the Servicer's obligations thereunder or pursuant to this
Agreement. The repurchase price to be paid by the Owner to the Servicer shall
equal that repurchase price paid by the Servicer to the third party purchaser
plus all reasonable costs and expenses borne by the Servicer in connection with
the cure of said Breach of a representation or warranty made by the Owner and in
connection with the repurchase of such Mortgage Loan from the trustee or the
third party purchaser, including, but not limited to, reasonable and necessary
attorneys' fees.
At the time of repurchase, the Custodian and the Servicer
shall arrange for the reassignment of the repurchased Mortgage Loan to the Owner
according to the Owner's instructions and the delivery to the Custodian of any
documents held by the trustee or other relevant third party purchaser with
respect to the repurchased Mortgage Loan pursuant to the related Reconstitution
Agreement. In the event of a repurchase, the Servicer shall, simultaneously with
such reassignment, give written notice to the Owner that such repurchase has
taken place, and amend the Mortgage Loan Schedule to reflect the addition of the
repurchased Mortgage Loan to this Agreement. In connection with any such
addition, the Servicer and the Owner shall be deemed to have made as to such
repurchased Mortgage Loan the representations and warranties set forth in this
Agreement except that all such representations and warranties set forth in this
Agreement shall be deemed made as of the date of such repurchase.
Section 7.03 Indemnification; Third Party Claims.
-----------------------------------
The Servicer shall indemnify the Owner and hold it harmless
against any and all claims, losses, damages, penalties, fines, forfeitures,
reasonable and necessary legal fees and related costs, judgments, and any other
costs, fees and expenses that the Owner may sustain in any way related to the
failure of the Servicer to perform its duties and service the Mortgage Loans in
strict compliance with the terms of this Agreement or any Reconstitution
Agreement entered into pursuant to Section 7.01. The Servicer immediately shall
notify the Owner if a claim is made by a third party with respect to this
Agreement or any Reconstitution Agreement or the Mortgage Loans, shall promptly
notify ▇▇▇▇▇▇ ▇▇▇, ▇▇▇▇▇▇▇ Mac, or the trustee with respect to any claim made by
a third party with respect to any Reconstitution Agreement, assume (with the
prior written consent of the Owner) the defense of any such claim and pay all
expenses in connection therewith, including counsel fees, and promptly pay,
discharge and satisfy any judgment or decree which may be entered against it or
the Owner in respect of such claim. The Servicer shall follow any written
instructions received from the Owner in connection with such claim. The Owner
promptly shall reimburse the Servicer for all amounts advanced by it pursuant to
the preceding sentence except when the claim is in any way related to the
Servicer's indemnification pursuant to Section 6.02, or the failure of the
Servicer to service and administer the Mortgage Loans in strict compliance with
the terms of this Agreement or any Reconstitution Agreement.
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The Owner shall indemnify the Servicer and hold it harmless
against any and all claims, losses, damages, penalties, fines, forfeitures,
reasonable and necessary legal fees and related costs, judgments, and any other
costs, fees and expenses that the Servicer may sustain in any way related to the
failure of the Owner to perform its duties in compliance with the terms of this
Agreement or any Reconstitution Agreement entered into pursuant to Section 7.01.
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ARTICLE VIII
THE SERVICER
Section 8.01 Merger or Consolidation of the Servicer.
---------------------------------------
The Servicer shall keep in full effect its existence, rights
and franchises as a corporation, and shall 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 or any of the Mortgage Loans and to perform its
duties under this Agreement.
Any Person into which the Servicer may be merged or
consolidated, or any Person resulting from any merger, conversion or
consolidation to which the Servicer shall be a party, or any Person succeeding
to the business of the Servicer, shall be the successor of the Servicer
hereunder, without the execution or filing of any paper or any further act on
the part of any of the parties hereto, anything herein to the contrary
notwithstanding, provided, however, that the successor or surviving Person shall
be an institution (i) having a net worth of not less than $25,000,000, and (ii)
which is a ▇▇▇▇▇▇ Mae- and ▇▇▇▇▇▇▇ Mac-approved servicer in good standing.
Section 8.02 Limitation on Liability of the Servicer and
-------------------------------------------
Others.
------
Neither the Servicer nor any of the directors, officers,
employees or agents of the Servicer shall be under any liability to the Owner
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 Servicer or any such person against
any Breach of warranties or representations made herein, or failure to perform
its obligations in strict compliance with any standard of care set forth in this
Agreement, or any liability which would otherwise be imposed by reason of any
breach of the terms and conditions of this Agreement. The Servicer and any
director, officer, employee or agent of the Servicer may rely in good faith on
any document of any kind prima facie properly executed and submitted by any
Person respecting any matters arising hereunder. The Servicer shall not be under
any obligation to appear in, prosecute or defend any legal action which is not
incidental to its duties to service the Mortgage Loans in accordance with this
Agreement and which in its opinion may involve it in any expense or liability,
provided, however, that the Servicer may, with the consent of the Owner,
undertake any such action which it may deem necessary or desirable in respect to
this Agreement and the rights and duties of the parties hereto. In such event,
the Servicer shall be entitled to reimbursement from the Owner of the reasonable
legal expenses and costs of such action.
Section 8.03 Limitation on Resignation and Assignment by
-------------------------------------------
Servicer.
--------
The Owner has entered into this Agreement with the Servicer
and subsequent Owners will purchase the Mortgage Loans in reliance upon the
independent status of the Servicer, and the representations as to the adequacy
of its servicing facilities, plant, personnel, records and
-44-
procedures, its integrity, reputation and financial standing, and the
continuance thereof. Therefore, the Servicer shall neither assign this Agreement
or the servicing hereunder or delegate its rights or duties hereunder or any
portion hereof (to other than a third party in the case of outsourcing routine
tasks such as taxes, insurance and property inspection, in which case the
Servicer shall be fully liable for such tasks as if the Servicer performed them
itself) or sell or otherwise dispose of all or substantially all of its property
or assets without the prior written consent of the Owner, which consent shall be
granted or withheld in the reasonable discretion of the Owner, provided,
however, that the Servicer may assign its rights and obligations hereunder
without prior written consent of the Owner to any entity that is directly owned
or controlled by the Servicer, and the Servicer guarantees the performance of
such entity hereunder. In the event of such assignment by the Servicer, the
Servicer shall provide the Owner with a written statement guaranteeing the
successor entity's performance of the Servicer's obligations under the
Agreement.
The Servicer shall not resign from the obligations and duties
hereby imposed on it except by mutual consent of the Servicer and the Owner or
upon the determination that its duties hereunder are no longer permissible under
applicable law and such incapacity cannot be cured by the Servicer. Any such
determination permitting the resignation of the Servicer shall be evidenced by
an Opinion of Counsel to such effect delivered to the Owner which Opinion of
Counsel shall be in form and substance acceptable to the Owner. No such
resignation shall become effective until a successor shall have assumed the
Servicer's responsibilities and obligations hereunder in the manner provided in
Section 10.01.
Without in any way limiting the generality of this Section
8.03, in the event that the Servicer either shall assign this Agreement or the
servicing responsibilities hereunder or delegate its duties hereunder or any
portion thereof (to other than a third party in the case of outsourcing routine
tasks such as taxes, insurance and property inspection, in which case the
Servicer shall be fully liable for such tasks as if the Servicer performed them
itself) or sell or otherwise dispose of all or substantially all of its property
or assets, without the prior written consent of the Owner, then the Owner shall
have the right to terminate this Agreement upon notice given as set forth in
Section 9.01 without any payment of any penalty or damages and without any
liability whatsoever to the Servicer or any third party.
-45-
ARTICLE IX
TERMINATION
Section 9.01 Termination for Cause.
---------------------
This Agreement shall be terminable at the sole option of the
Owner, if any of the following events of default exist on the part of the
Servicer:
(i) any failure by the Servicer to remit to the Owner any
payment required to be made under the terms of this Agreement which continues
unremedied for a period of five days after the date upon which written notice of
such failure, requiring the same to be remedied, shall have been given to the
Servicer by the Owner; or
(ii) failure by the Servicer duly to observe or perform in
any material respect any other of the covenants or agreements on the part of the
Servicer set forth in this Agreement which continues unremedied for a period of
30 days after the date on which written notice of such failure, requiring the
same to be remedied, shall have been given to the Servicer by the Owner; or
(iii) failure by the Servicer to maintain its license to do
business in any jurisdiction where the Mortgaged Property is located; or
(iv) a decree or order of a court or agency or supervisory
authority having jurisdiction for the appointment of a conservator or receiver
or liquidator in any insolvency, readjustment of debt, including bankruptcy,
marshaling of assets and liabilities or similar proceedings, or for the
winding-up or liquidation of its affairs, shall have been entered against the
Servicer and such decree or order shall have remained in force undischarged or
unstayed for a period of 60 days; or
(v) the Servicer shall consent to the appointment of a
conservator or receiver or liquidator in any insolvency, readjustment of debt,
marshaling of assets and liabilities or similar proceedings of or relating to
the Servicer or of or relating to all or substantially all of its property; or
(vi) the Servicer shall admit in writing its inability to
pay its debts generally as they become due, file a petition to take advantage of
any applicable insolvency, bankruptcy or reorganization statute, make an
assignment for the benefit of its creditors, voluntarily suspend payment of its
obligations or cease its normal business operations for three Business Days; or
(vii) the Servicer ceases to meet the qualifications of a
▇▇▇▇▇▇ ▇▇▇ or ▇▇▇▇▇▇▇ Mac servicer; or
(viii) the Servicer fails to maintain a minimum net worth of
$25,000,000; or
-46-
(ix) the Servicer attempts to assign its right to
servicing compensation hereunder or the Servicer attempts, without the consent
of the Owner, to sell or otherwise dispose of all or substantially all of its
property or assets or to assign this Agreement or the servicing responsibilities
hereunder or to delegate its duties hereunder or any portion thereof (to other
than a third party in the case of outsourcing routine tasks such as taxes,
insurance and property inspection, in which case the Servicer shall be fully
liable for such tasks as if the Servicer performed them itself) in violation of
Section 8.03.
In each and every such case, so long as an event of default
shall not have been remedied, in addition to whatsoever rights the Owner may
have at law or equity to damages, including injunctive relief and specific
performance, the Owner, by notice in writing to the Servicer, may terminate all
the rights and obligations of the Servicer under this Agreement and in and to
the servicing contract established hereby and the proceeds thereof.
Upon receipt by the Servicer of such written notice, all
authority and power of the Servicer under this Agreement, whether with respect
to the Mortgage Loans or otherwise, shall pass to and be vested in a successor
servicer appointed by the Owner. Upon written request from the Owner, the
Servicer shall prepare, execute and deliver to the successor entity designated
by the Owner any and all documents and other instruments, place in such
successor's possession all Servicing Files, and do or cause to be done all other
acts or things necessary or appropriate to effect the purposes of such notice of
termination, including but not limited to the transfer and endorsement or
assignment of the Mortgage Loans and related documents, at the Servicer's sole
expense. The Servicer shall cooperate with the Owner and such successor in
effecting the termination of the Servicer's responsibilities and rights
hereunder, including without limitation, the transfer to such successor for
administration by it of all cash amounts which shall at the time be credited by
the Servicer to the Custodial Account or Escrow Account or thereafter received
with respect to the Mortgage Loans.
By a written notice, the Owner may waive any default by the
Servicer in the performance of its obligations hereunder and its consequences.
Upon any waiver of a past default, such default shall cease to exist, and any
Event of Default arising therefrom shall be deemed to have been remedied for
every purpose of this Agreement. No such waiver shall extend to any subsequent
or other default or impair any right consequent thereon except to the extent
expressly so waived.
Section 9.02 Termination Without Cause.
-------------------------
This Agreement shall terminate upon: (i) the later of (a) the
distribution of the final payment or liquidation proceeds on the last Mortgage
Loan to the Owner (or advances by the Servicer for the same), and (b) the
disposition of all REO Property acquired upon foreclosure of the last Mortgage
Loan and the remittance of all funds due hereunder, or (ii) mutual consent of
the Servicer and the Owner in writing or (iii) at the sole option of the Owner,
without cause, upon 30 days written notice. Any such notice of termination shall
be in writing and delivered to the Servicer by registered mail to the address
set forth at the beginning of this Agreement. The Owner and the Servicer shall
comply with the termination procedures set forth in Sections 10.01 and 10.03
hereof and the procedures set forth below, provided that, in the event the Owner
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terminates this Agreement without cause in accordance with subclause (iii)
above, the Owner shall pay the Servicer a termination fee equal to (A) with
respect to fixed rate Mortgage Loans, 2.0% of the aggregate unpaid principal
balance of the fixed rate Mortgage Loans as of such termination date and (B)
with respect to ARM Mortgage Loans, 2.0% of the aggregate unpaid principal
balance of the ARM Mortgage Loans as of such termination date.
In connection with any such termination referred to in clause
(ii) or (iii) above, the Owner will be responsible for reimbursing the Servicer
for all unreimbursed out-of-pocket Servicing Advances within 15 Business Days
following the date of termination and other reasonable and necessary
out-of-pocket costs associated with any transfer of servicing.
Notwithstanding and in addition to the foregoing, in the event
that (i) a Mortgage Loan becomes delinquent for a period of 90 days or more (a
"Delinquent Mortgage Loan") or (ii) a Mortgage Loan becomes an REO Property, the
Owner may at its election terminate this Agreement (a) with respect to such
Delinquent Mortgage Loan or (b) REO Property, in each case, upon 15 days'
written notice to the Servicer. In the event of such election, the Owner shall
reimburse the Servicer for all unreimbursed out-of-pocket Servicing Advances and
Monthly Advances on the date of termination and other reasonable and necessary
out-of-pocket costs associated with any transfer of servicing, including, but
not limited to, costs associated with the transfer of the related files to the
Owner's designee.
-48-
ARTICLE X
MISCELLANEOUS PROVISIONS
Section 10.01 Successor to the Servicer.
-------------------------
Simultaneously with the termination of the Servicer's
responsibilities and duties under this Agreement pursuant to Sections 6.02,
7.03, 8.03, 9.01 or 9.02, the Owner shall (i) succeed to and assume all of the
Servicer's responsibilities, rights, duties and obligations under this
Agreement, or (ii) appoint a successor having the characteristics set forth in
clauses (i) and (ii) of Section 8.01 and which shall succeed to all rights and
assume all of the responsibilities, duties and liabilities of the Servicer under
this Agreement simultaneously with the termination of the Servicer's
responsibilities, duties and liabilities under this Agreement. In connection
with such appointment and assumption, the Owner 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 Servicer under this Agreement without the
consent of the Owner. In the event that the Servicer's duties, responsibilities
and liabilities under this Agreement should be terminated pursuant to the
aforementioned sections, the Servicer shall discharge such duties and
responsibilities during the period from the date it acquires knowledge of such
termination until the effective date thereof with the same degree of diligence
and prudence which it is obligated to exercise under this Agreement, and shall
take no action whatsoever that might impair or prejudice the rights or financial
condition of its successor. The resignation or removal of the Servicer pursuant
to the aforementioned sections shall not become effective until a successor
shall be appointed pursuant to this Section 10.01 and shall in no event relieve
the Servicer of the representations and warranties made pursuant to Sections
6.01 and the remedies available to the Owner under Section 6.02 and 7.03, it
being understood and agreed that the provisions of such Sections 6.01, 6.02 and
7.03 shall be applicable to the Servicer notwithstanding any such resignation or
termination of the Servicer, or the termination of this Agreement.
Within 30 days of the appointment of a successor entity by the
Owner, the Servicer shall prepare, execute and deliver to the successor entity
any and all documents and other instruments, place in such successor's
possession all Servicing Files, and do or cause to be done all other acts or
things necessary or appropriate to effect the purposes of such notice of
termination, including but not limited to the transfer and endorsement of the
Mortgage Notes and related documents, and the preparation and recordation of
Assignments of Mortgage, at the discretion of the Owner and, at the Owner's sole
expense. The Servicer shall cooperate with the Owner and such successor in
effecting the termination of the Servicer's responsibilities and rights
hereunder and the transfer of servicing responsibilities to the successor
servicer, including without limitation, the transfer to such successor for
administration by it of all cash amounts which shall at the time be credited by
the Servicer to the Custodial Account or Escrow Account or thereafter received
with respect to the Mortgage Loans.
Any successor appointed as provided herein shall execute,
acknowledge and deliver to the Servicer and to the Owner an instrument accepting
such appointment, wherein the
-49-
successor shall make the representations and warranties set forth in Section
6.01, whereupon such successor shall become fully vested with all the rights,
powers, duties, responsibilities, obligations and liabilities of the Servicer,
with like effect as if originally named as a party to this Agreement. Any
termination or resignation of the Servicer or termination of this Agreement
pursuant to Sections 6.02, 7.03, 8.03, 9.01 or 9.02 shall not affect any claims
that the Owner may have against the Servicer arising out of the Servicer's
actions or failure to act prior to any such termination or resignation.
The Servicer shall deliver promptly to the successor servicer
the funds in the Custodial Account and Escrow Account and all Mortgage Loan
documents and related documents and statements held by it hereunder and the
Servicer shall account for all funds and shall execute and deliver such
instruments and do such other things as may reasonably be required to more fully
and definitively vest in the successor all such rights, powers, duties,
responsibilities, obligations and liabilities of the Servicer.
Upon a successor's acceptance of appointment as such, the
Servicer shall notify by mail the Owner of such appointment in accordance with
the procedures set forth in Section 10.07.
Section 10.02 Closing.
-------
Each closing for the engagement of the Servicer to perform the
servicing responsibilities respecting Mortgage Loans shall take place on the
related Closing Date. At the Owner's option, the closing shall be either: by
telephone, confirmed by letter or wire as the parties shall agree; or conducted
in person, at such place as the parties shall agree.
Each closing shall be subject to each of the following
conditions:
(a) all of the representations and warranties of the
Servicer and the Owner under this Agreement shall be true and correct as of each
Closing Date and no event shall have occurred which, with notice or the passage
of time, would constitute a default under this Agreement;
(b) the Owner and Servicer each shall have received, or the
Owner's attorneys shall have received in escrow, (i) with respect to the first
Closing Date, all Closing Documents as specified in Section 10.03(a) hereof, and
(ii) with respect to all subsequent Closing Dates, the Closing Documents
specified in Section 10.03(b) hereof, in such forms as are agreed upon and
acceptable to the Servicer and the Owner, duly executed by all signatories other
than the Owner as required pursuant to the respective terms thereof; and
(c) all other terms and conditions of this Agreement shall
have been complied with and no default or Event of Default under this Agreement
shall have occurred and be continuing for a period of 30 days or more prior to
the related Closing Date.
-50-
Section 10.03 Closing Documents.
-----------------
The Closing Documents shall consist of fully executed
originals of the following documents:
(a) with respect to the initial Closing Date,
(i) this Agreement;
(ii) the Mortgage Loan Schedule, with one copy to be
attached to each counterpart of this Agreement as Exhibit A, and with
respect to subsequent Closing Dates, a Mortgage Loan Schedule
reflecting the additional Mortgage Loans to be serviced by the Servicer
and a cumulative Mortgage Loan Schedule, reflecting all Mortgage Loans
being serviced by the Servicer from the initial Closing Date up to, and
including, the related subsequent Closing Date;
(iii) an Acknowledgment Agreement in the form of Exhibit B
hereto;
(iv) an Assignment and Assumption Agreement in the form of
Exhibit I hereto;
(v) an Assignment and Assumption Agreement in the form of
Exhibit J hereto;
(vi) a Custodial Account Letter Agreement in the form of
Exhibit C hereto;
(vii) an Escrow Account Letter Agreement in the form of
Exhibit D hereto;
(viii) an Officer's Certificate of the Servicer, in the form
of Exhibit E-1 hereto, including all attachments thereto, and with
respect to subsequent Closing Dates, an Officer's Certificate in the
form of Exhibit E-2 hereto, including all attachments thereto; and
(ix) an Opinion of Counsel of the Servicer in the form of
Exhibit G hereto.
(b) with respect to each subsequent Closing Date,
(i) an Acknowledgment Agreement in the form of Exhibit B
hereto;
(ii) an Assignment and Assumption Agreement in the form of
Exhibit I hereto; and
(iii) an Assignment and Assumption Agreement in the form of
Exhibit J hereto;
-51-
Section 10.04 Appointment and Designation of Master
-------------------------------------
Servicer.
--------
The Owner hereby appoints and designates Aurora Loan Services,
Inc. as its master servicer (the "Master Servicer") for the Mortgage Loans
subject to this Agreement. The Servicer is hereby authorized and instructed to
take any and all instructions with respect to servicing the Mortgage Loans
hereunder as if the Master Servicer were the Owner hereunder. The authorization
and instruction set forth herein shall remain in effect until such time as the
Servicer shall receive written instruction from the Owner that such
authorization and instruction is terminated.
Section 10.05 Costs.
-----
The Owner shall pay any commissions due its salesmen and the
legal fees and expenses of its attorneys. After the initial Assignments of
Mortgage have been prepared and recorded, the Owner shall pay the costs
associated with the preparation, endorsement, delivery and recording of
Assignments of Mortgages.
Section 10.06 Protection of Confidential Information.
--------------------------------------
The Servicer shall keep confidential and shall not divulge to
any party, without the Owner's prior written consent, the purchase price paid by
the Owner for the Mortgage Loans and any information pertaining to the Mortgage
Loans or any borrower thereunder, except to the extent that it is appropriate
for the Servicer to do so in working with legal counsel, auditors, taxing
authorities or other governmental agencies.
Section 10.07 Notices.
-------
All demands, notices and communications hereunder shall be in
writing and shall be deemed to have been duly given if mailed by overnight
courier, addressed as follows (or such other address as may hereafter be
furnished to the other party by like notice):
(i) if to the Owner:
Centre Capital Group, Inc.
▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇ ▇▇▇▇▇
(ii) if to the Servicer:
Commercial Federal Mortgage Corporation
▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇ ▇▇▇▇▇▇▇
-52-
Any such demand, notice or communication hereunder shall be
deemed to have been received on the date delivered to or received at the
premises of the addressee.
Section 10.08 Severability Clause.
-------------------
Any part, provision, representation or warranty of this
Agreement which is prohibited or which is held to be void or unenforceable shall
be ineffective to the extent of such prohibition or unenforceability without
invalidating the remaining provisions hereof. Any part, provision,
representation or warranty of this Agreement which is prohibited or
unenforceable or is held to be void or unenforceable in any jurisdiction shall
be ineffective, as to such jurisdiction, to the extent of such prohibition or
unenforceability without invalidating the remaining provisions hereof, and any
such prohibition or unenforceability in any jurisdiction as to any Mortgage Loan
shall not invalidate or render unenforceable such provision in any other
jurisdiction. To the extent permitted by applicable law, the parties hereto
waive any provision of law which prohibits or renders void or unenforceable any
provision hereof. If the invalidity of any part, provision, representation or
warranty of this Agreement shall deprive any party of the economic benefit
intended to be conferred by this Agreement, the parties shall negotiate, in
good-faith, to develop a structure the economic effect of which is as close as
possible to the economic effect of this Agreement without regard to such
invalidity.
Section 10.09 No Personal Solicitation.
------------------------
From and after each related Closing Date, the Servicer hereby
agrees that it will not take any action or permit or cause any action to be
taken by any of its agents or affiliates, or by any independent contractors or
independent mortgage brokerage companies on the Servicer's behalf, to
personally, by telephone or mail, solicit the Mortgagor under any Mortgage Loan
for the purpose of refinancing such Mortgage Loan; provided, that the Servicer
may solicit any Mortgagor for whom the Servicer has received a request for
verification of mortgage, a request for demand for payoff, a mortgagor initiated
written or verbal communication indicating a desire to prepay the related
Mortgage Loan, or the mortgagor initiates a title search, provided further, it
is understood and agreed that promotions undertaken by the Servicer or any of
its affiliates which (i) concern optional insurance products or other additional
projects or (ii) are directed to the general public at large, including, without
limitation, mass mailings based on commercially acquired mailing lists,
newspaper, radio and television advertisements shall not constitute solicitation
under this Section 10.09 nor is the Servicer prohibited from responding to
unsolicited requests or inquiries made by a Mortgagor or an agent of a
Mortgagor. Notwithstanding the foregoing, the following solicitations, if
undertaken by the Servicer or any affiliate of the Servicer, shall not be
prohibited under this Section 10.09: (i) solicitations that are directed to the
general public at large, including, without limitation, mass mailings based on
commercially acquired mailing lists and newspaper, radio, television and other
mass media advertisements; (ii) borrower messages included on, and statement
inserts provided with, the monthly statements sent to Mortgagors; provided,
however, that similar messages and inserts are sent to the borrowers of other
mortgage loans serviced by the Servicer.
-53-
Section 10.10 Counterparts.
------------
This Agreement may be executed simultaneously in any number of
counterparts. Each counterpart shall be deemed to be an original, and all such
counterparts shall constitute one and the same instrument.
Section 10.11 Place of Delivery and Governing Law.
-----------------------------------
This Agreement shall be deemed in effect when a fully executed
counterpart thereof is received by the Owner in the State of New York and shall
be deemed to have been made in the State of New York. The Agreement shall be
construed in accordance with the laws of the State of New York and the
obligations, rights and remedies of the parties hereunder shall be determined in
accordance with the laws of the State of New York, except to the extent
preempted by Federal law.
Section 10.12 Further Agreements.
------------------
The Owner and the Servicer each agree to execute and deliver
to the other such reasonable and appropriate additional documents, instruments
or agreements as may be necessary or appropriate to effectuate the purposes of
this Agreement.
Section 10.13 Intention of the Parties.
------------------------
It is the intention of the parties that the Owner is
conveying, and the Servicer is receiving only a contract for servicing the
Mortgage Loans. Accordingly, the parties hereby acknowledge that the Owner
remains the sole and absolute owner of the Mortgage Loans and all rights related
thereto.
Section 10.14 Successors and Assigns; Assignment of
-------------------------------------
Agreement.
---------
This Agreement shall bind and inure to the benefit of and be
enforceable by the Servicer and the Owner and the respective successors and
assigns of the Servicer and the Owner. This Agreement shall not be assigned,
pledged or hypothecated by the Servicer to a third party without the prior
written consent of the Owner, which consent shall be given at the sole
discretion of the Owner.
Section 10.15 Waivers.
-------
No term or provision of this Agreement may be waived or
modified unless such waiver or modification is in writing and signed by the
party against whom such waiver or modification is sought to be enforced.
Section 10.16 Exhibits.
--------
The exhibits to this Agreement are hereby incorporated and
made a part hereof and are an integral part of this Agreement.
-54-
Section 10.17 General Interpretive Principles.
-------------------------------
For purposes of this Agreement, except as otherwise expressly
provided or unless the context otherwise requires:
(a) the terms defined in this Agreement have the meanings
assigned to them in this Agreement and include the plural as well as the
singular, and the use of any gender herein shall be deemed to include the other
gender;
(b) accounting terms not otherwise defined herein have the
meanings assigned to them in accordance with generally accepted accounting
principles;
(c) references herein to "Articles", "Sections",
"Subsections", "Paragraphs", and other subdivisions without reference to a
document are to designated Articles, Sections, Subsections, Paragraphs and other
subdivisions of this Agreement;
(d) a reference to a Subsection without further reference to a
Section is a reference to such Subsection as contained in the same Section in
which the reference appears, and this rule shall also apply to Paragraphs and
other subdivisions;
(e) the words "herein", "hereof", "hereunder" and other words
of similar import refer to this Agreement as a whole and not to any particular
provision; and
(f) the term "include" or "including" shall mean by reason of
enumeration.
Section 10.18 Reproduction of Documents.
-------------------------
This Agreement and all documents relating thereto, including,
without limitation, (a) consents, waivers and modifications which may hereafter
be executed, (b) documents received by any party at the closing, and (c)
financial statements, certificates and other information previously or hereafter
furnished, may be reproduced by any photographic, photostatic, microfilm,
micro-card, miniature photographic or other similar process. The parties agree
that any such reproduction shall be admissible in evidence as the original
itself in any judicial or administrative proceeding, whether or not the original
is in existence and whether or not such reproduction was made by a party in the
regular course of business, and that any enlargement, facsimile or further
reproduction of such reproduction shall likewise be admissible in evidence.
-55-
IN WITNESS WHEREOF, the Servicer and the Owner have caused
their names to be signed hereto by their respective officers thereunto duly
authorized as of the date first above written.
CENTRE CAPITAL GROUP, INC.
(Owner)
By:______________________________________
Name:____________________________________
Title:___________________________________
-56-
IN WITNESS WHEREOF, the Servicer and the Owner have caused
their names to be signed hereto by their respective officers thereunto duly
authorized as of the date first above written.
COMMERCIAL FEDERAL MORTGAGE
CORPORATION
(Servicer)
By:______________________________________
Name:____________________________________
Title:___________________________________
-57-
EXHIBIT A
MORTGAGE LOAN SCHEDULE
[Intentionally Omitted]
-1-
EXHIBIT B
ACKNOWLEDGMENT AGREEMENT
On this ____ day of ____________, 200_, Centre Capital Group,
Inc., (the "Owner") as the Owner under that certain Master Servicing Agreement
dated as of June 19, 2001, (the "Agreement"), does hereby contract with the
Commercial Federal Mortgage Corporation (the "Servicer") as Servicer under the
Agreement, to carry out the servicing responsibilities related to the Mortgage
Loans listed on the Mortgage Loan Schedule attached hereto. The Servicer hereby
accepts the servicing responsibilities transferred hereby and on the date hereof
assumes all servicing responsibilities related to the Mortgage Loans identified
on the attached Mortgage Loan Schedule all in accordance with the Agreement. The
contents of each Servicing File required to be delivered to service the Mortgage
Loans pursuant to the Agreement have been or shall be delivered to the Servicer
by the Owner in accordance with the terms of the Agreement.
With respect to the Mortgage Loans made subject to the
Agreement hereby, the Closing Date shall be ___________________.
All other terms and conditions of this transaction shall be
governed by the Agreement.
Capitalized terms used herein and not otherwise defined shall
have the meanings set forth in the Agreement.
Exh B-1-
This Acknowledgment Agreement may be executed simultaneously
in any number of counterparts. Each counterpart shall be deemed to be an
original, and all such counterparts shall constitute one and the same
instrument.
IN WITNESS WHEREOF, the Owner and the Servicer have caused
their names to be signed hereto by their respective officers thereunto duly
authorized as of the day and year first above written.
OWNER:
CENTRE CAPITAL GROUP, INC.
By:______________________________________
Name:____________________________________
Title:___________________________________
SERVICER:
COMMERCIAL FEDERAL MORTGAGE CORPORATION
By:______________________________________
Name:____________________________________
Title:___________________________________
Exh B-2
EXHIBIT C
CUSTODIAL ACCOUNT LETTER AGREEMENT
_________________, 200_
To: _________________________
_________________________
_________________________
(the "Depository")
As Servicer under the Master Servicing Agreement, dated as of
June 19, 2001, Fixed and Adjustable Rate Mortgage Loans (the "Agreement"), we
hereby authorize and request you to establish an account, as a Custodial Account
pursuant to Section 3.04 of the Agreement, to be designated as "Commercial
Federal Mortgage Corporation in trust for Centre Capital Group, Inc., owner of
Fixed and Adjustable Rate Mortgage Loans." All deposits in the account shall be
subject to withdrawal therefrom by order signed by the Servicer. You may refuse
any deposit which would result in violation of the requirement that the account
be fully insured as described below. This letter is submitted to you in
duplicate. Please execute and return one original to us.
COMMERCIAL FEDERAL MORTGAGE
CORPORATION
Servicer
By:______________________________________
Name:____________________________________
Title:___________________________________
Date:____________________________________
Exh C-1-
The undersigned, as Depository, hereby certifies that the
above described account has been established under Account Number __________, at
the office of the Depository indicated above, and agrees to honor withdrawals on
such account as provided above. The full amount deposited at any time in the
account will be insured by the Federal Deposit Insurance Corporation through the
Bank Insurance Fund ("BIF") or the Savings Association Insurance Fund ("SAIF").
_________________________________________
Depository
By:______________________________________
Name:____________________________________
Title:___________________________________
Date:____________________________________
Exh C-2
EXHIBIT D
ESCROW ACCOUNT LETTER AGREEMENT
___________________, 200_
To: _________________________
_________________________
_________________________
(the "Depository")
As Servicer under the Master Servicing Agreement, dated as of June 19, 2001,
Fixed and Adjustable Rate Mortgage Loans (the "Agreement"), we hereby authorize
and request you to establish an account, as an Escrow Account pursuant to
Section 3.06 of the Agreement, to be designated as "Commercial Federal Mortgage
Corporation in trust for the Centre Capital Group, Inc., owner of Fixed and
Adjustable Rate Mortgage Loans, and various Mortgagors." All deposits in the
account shall be subject to withdrawal therefrom by order signed by the
Servicer. You may refuse any deposit which would result in violation of the
requirement that the account be fully insured as described below. This letter is
submitted to you in duplicate. Please execute and return one original to us.
COMMERCIAL FEDERAL MORTGAGE
CORPORATION
Servicer
By:______________________________________
Name:____________________________________
Title:___________________________________
Date:____________________________________
Exh D-1-
The undersigned, as Depository, hereby certifies that the above described
account has been established under Account Number ______, at the office of the
Depository indicated above, and agrees to honor withdrawals on such account as
provided above. The full amount deposited at any time in the account will be
insured by the Federal Deposit Insurance Corporation through the Bank Insurance
Fund ("BIF") or the Savings Association Insurance Fund ("SAIF").
_________________________________________
Depository
By:______________________________________
Name:____________________________________
Title:___________________________________
Date:____________________________________
Exh D-2
EXHIBIT E-1
SERVICER'S OFFICER'S CERTIFICATE
I, ____________________, hereby certify that I am the duly
elected [Vice] President of Commercial Federal Mortgage Corporation, a
corporation organized under the laws of the State of Nebraska, (the "Company")
and further as follows:
1. Attached hereto as Exhibit 1 is a true, correct and complete
copy of the charter of the Company which is in full force and effect on the date
hereof and which has been in effect without amendment, waiver, rescission or
modification.
2. Attached hereto as Exhibit 2 is a true, correct and complete
copy of the bylaws of the Company which are in effect on the date hereof and
which have been in effect without amendment, waiver, rescission or modification.
3. Attached hereto as Exhibit 3 is an original certificate of
good standing of the Company, issued within ten days of the date hereof, and no
event has occurred since the date thereof which would impair such standing.
4. Attached hereto as Exhibit 4 is a true, correct and complete
copy of the resolutions of the Board of Directors of the Company authorizing the
Company to execute and deliver the Master Servicing Agreement, dated as of June
19, 2001 (the "Agreement"), by and between the Company and Centre Capital Group,
Inc., (the "Owner"), and such resolutions are in effect on the date hereof and
have been in effect without amendment, waiver rescission or modification.
5. To the best of my knowledge, either (i) no consent, approval,
authorization or order of any court or governmental agency or body is required
for the execution, delivery and performance by the Company of or compliance by
the Company with the Agreement or the consummation of the transactions
contemplated by the Agreement; or (ii) any required consent, approval,
authorization or order has been obtained by the Company.
6. To the best of my knowledge, neither the consummation of the
transactions contemplated by, nor the fulfillment of the terms of the Agreement,
conflicts or will conflict with or results or will result in a breach of or
constitutes or will constitute a default under the charter or by-laws of the
Company, the terms of any indenture or other agreement or instrument to which
the Company is a party or by which it is bound or to which it is subject, or any
statute or order, rule, regulations, writ, injunction or decree of any court,
governmental authority or regulatory body to which the Company is subject or by
which it is bound.
7. To the best of my knowledge, there is no action, suit,
proceeding or investigation pending or threatened against the Company which, in
my judgment, either in any one instance or in the aggregate, may result in any
material adverse change in the business, operations, financial condition,
properties or assets of the Company or in any material impairment of the right
or ability of the Company to carry on its business substantially as now
conducted or in any material
Exh E-2-1-
liability on the part of the Company or which would draw into question the
validity of the Agreement or of any action taken or to be taken in connection
with the transactions contemplated hereby, or which would be likely to impair
materially the ability of the Company to perform under the terms of the
Agreement.
8. Each person listed on Exhibit 5 attached hereto who, as an
officer or representative of the Company, signed the Agreement and any other
document delivered prior hereto or on the date hereof in connection with the
Agreement, was, at the respective times of such signing and delivery, and is
now, a duly elected or appointed, qualified and acting officer or representative
of the Company, who holds the office set forth opposite his or her name on
Exhibit 5, and the signatures of such persons appearing on such documents are
their genuine signatures.
9. The Company is duly authorized to engage in the transactions
described and contemplated in the Agreement.
Exh E-1-2
IN WITNESS WHEREOF, I have hereunto signed my name and affixed
the seal of the Company.
Dated:_________________________________ By:___________________________________
Name:_________________________________
[Seal] Title: [Vice] President
I, ________________________, an [Assistant] Secretary of
Commercial Federal Mortgage Corporation hereby certify that ____________ is the
duly elected, qualified and acting [Vice] President of the Company and that the
signature appearing above is [her] [his] genuine signature.
IN WITNESS WHEREOF, I have hereunto signed my name.
Dated:_________________________________ By:___________________________________
Name:_________________________________
[Seal] Title: [Vice] President
Exh E-1-3
EXHIBIT 5 to
Company's Officer's Certificate
Name Title Signature
---- ----- ---------
_________________________
_________________________
_________________________
_________________________
_________________________
_________________________
Exh E-1-4
EXHIBIT E-2
SERVICER'S OFFICER'S CERTIFICATE
I, ____________________, hereby certify that I am the duly
elected [Vice] President of Commercial Federal Mortgage Corporation, a
corporation organized under the laws of the State of Nebraska, (the "Company")
and further as follows:
1. The charter of the Company in the form attached to the
Company's Officer's Certificate dated ____________ by ____________ is in full
force and effect on the date hereof and has been in effect without amendment,
waiver, rescission or modification since ______________.
2. The bylaws of the Company in the form attached to the
Company's Officer's Certificate dated ____________ by ____________ are in effect
on the date hereof and have been in effect without amendment, waiver, rescission
or modification since ______________.
3. Since the last date of issuance of a certificate of good
standing of the Company in the form attached to the Company's Officer's
Certificate dated ____________ by ____________, no event has occurred since the
date thereof which would impair such standing.
4. The resolutions of the Board of Directors of the Company in
the form attached to the Company's Officer's Certificate dated ____________ by
____________ are in effect on the date hereof and have been in effect without
amendment, waiver, rescission or modification since ______________.
5. To the best of my knowledge, neither the consummation of the
transactions contemplated by, nor the fulfillment of the terms of the Master
Servicing Agreement dated as of June 19, 2001, by and between Centre Capital
Group, Inc. and the Company, conflicts or will conflict with or results or will
result in a breach of or constitutes or will constitute a default under the
charter or by-laws of the Company, the terms of any indenture or other agreement
or instrument to which the Company is a party or by which it is bound or to
which it is subject, or any statute or order, rule, regulations, writ,
injunction or decree of any court, governmental authority or regulatory body to
which the Company is subject or by which it is bound.
6. To the best of my knowledge, there is no action, suit,
proceeding or investigation pending or threatened against the Company which, in
my judgment, either in any one instance or in the aggregate, may result in any
material adverse change in the business, operations, financial condition,
properties or assets or the Company or in any material impairment of the right
or ability of the Company to carry on its business substantially as now
conducted or in any material liability on the part of the Company or which would
draw into question the validity of the Agreement or of any action taken or to be
taken in connection with the transactions contemplated hereby, or which would be
likely to impair materially the ability of the Company to perform under the
terms of the Agreement.
Exh E-2-1-
7. The Company is not currently in material breach of any
representation or warranty, or in material default under any provision of the
Agreement.
8. The Company is duly authorized to engage in the transactions
described and contemplated in the Agreement.
Exh E-2-2
IN WITNESS WHEREOF, I have hereunto signed my name and affixed
the seal of the Company.
Dated:_________________________________ By:___________________________________
Name:_________________________________
[Seal] Title: [Vice] President
I, ________________________, an [Assistant] Secretary of Commercial
Federal Mortgage Corporation hereby certify that ____________ is the duly
elected, qualified and acting [Vice] President of the Company and that the
signature appearing above is [her] [his] genuine signature.
IN WITNESS WHEREOF, I have hereunto signed my name.
Dated:_________________________________ By:___________________________________
Name:_________________________________
[Seal] Title: [Vice] President
Exh E-2-3
EXHIBIT F
CUSTODIAL AGREEMENT
[Intentionally Omitted]
Exh F-1
EXHIBIT G
FORM OF OPINION OF COUNSEL TO THE SERVICER
(date)
Centre Capital Group, Inc.
▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Dear Sirs:
You have requested [our] [my] opinion, as [Assistant] General
Counsel to Commercial Federal Mortgage Corporation (the "Company"), with respect
to certain matters in connection with the servicing by the Company of the
Mortgage Loans pursuant to that certain Master Servicing Agreement, Fixed and
Adjustable Rate Mortgage Loans, by and between the Company and Centre Capital
Group, Inc., (the "Owner"), dated as of June 19, 2001, (the "Master Servicing
Agreement") being executed contemporaneously with an Assignment and Assumption
Agreement by and between the Company and the Owner (the "Assignment and
Assumption Agreement"). Capitalized terms not otherwise defined herein have the
meanings set forth in the Master Servicing Agreement.
[We] [I] have examined the following documents:
1. the Master Servicing Agreement;
2. the Assignment and Assumption Agreement; and
3. such other documents, records and papers as [we] [I]
have deemed necessary and relevant as a basis for
this opinion.
To the extent [we] [I] have deemed necessary and proper, [we]
[I] have relied upon the representations and warranties of the Company contained
in the Master Servicing Agreement. [We] [I] have assumed the authenticity of all
documents submitted to me as
Exh G-1
originals, the genuineness of all signatures, the legal capacity of natural
persons and the conformity to the originals of all documents.
Based upon the foregoing, it is [our] [my] opinion that:
1. The Company is a duly organized, validly existing corporation
in good standing under the laws of Nebraska and is qualified to service and
administer the Mortgage Loans in the states where the Mortgaged Properties are
located.
2. The Company has the power to engage in the transactions
contemplated by the Master Servicing Agreement and all requisite power,
authority and legal right to execute and deliver the Master Servicing Agreement
and the Assignment and Assumption Agreement, and to perform and observe the
terms and conditions of such instruments.
3. Each of the Master Servicing Agreement and the Assignment and
Assumption Agreement has been duly authorized, executed and delivered by the
Company and is a legal, valid and binding agreement enforceable in accordance
with its respective terms against the Company, subject to bankruptcy laws and
other similar laws of general application affecting rights of creditors and
subject to the application of the rules of equity, including those respecting
the availability of specific performance, none of which will materially
interfere with the realization of the benefits provided thereunder.
4. Either (i) no consent, approval, authorization or order of any
court or governmental agency or body is required for the execution, delivery and
performance by the Company of or compliance by the Company with the Master
Servicing Agreement or the Assignment and Assumption Agreement, or the servicing
of the Mortgage Loans or the consummation of the transactions contemplated by
the Master Servicing Agreement; or (ii) any required consent, approval,
authorization or order has been obtained by the Company.
5. Neither the consummation of the transactions contemplated by,
nor the fulfillment of the terms of, the Master Servicing Agreement or the
Assignment and Assumption Agreement conflicts or will conflict with or results
or will result in a breach of, or constitutes or will constitute a default
under, the charter or by-laws of the Company, the terms of any indenture or
other agreement or instrument to which the Company is a party or by which it is
bound or to which it is subject, or violates any statute or order, rule,
regulations, writ, injunction or decree of any court, governmental authority or
regulatory body to which the Company is subject or by which it is bound.
6. There is no action, suit, proceeding or investigation pending
or, to the best of [our] [my] knowledge, threatened against the Company which,
in [our] [my] judgment, either in any one instance or in the aggregate, may
result in any material adverse change in the business, operations, financial
condition, properties or assets of the Company or in any material impairment of
the right or ability of the Company to carry on its business substantially as
now conducted or in any material liability on the part of the Company or which
would draw into question the validity of the Master Servicing Agreement, the
Assignment and Assumption Agreement or of any action taken or to be taken in
connection with the transactions contemplated thereby, or which would be likely
to impair materially the ability of the Company to perform
Exh G-2
under the terms of the Assignment and Assumption Agreement or the Master
Servicing Agreement.
This opinion is given to you for your sole benefit, and no
other person or entity is entitled to rely hereon except that the Owner or
Owners to which you resell the Mortgage Loans may rely on this opinion as if it
were addressed to them as of its date, provided that the Company remains the
Servicer of the Mortgage Loans under the Master Servicing Agreement.
Very truly yours,
_________________________________________
Name
[Assistant] General Counsel
Exh G-3
EXHIBIT H
[INTENTIONALLY OMITTED]
-1-
EXHIBIT I
FORM OF ASSIGNMENT AND ASSUMPTION AGREEMENT
ASSIGNMENT AND ASSUMPTION, dated as of June __, 2001 between
▇▇▇▇▇▇ Capital, A Division of ▇▇▇▇▇▇ Brothers Holdings Inc. having an office at
3 World Financial Center, New York, New York 10285 ("Assignor") and Commercial
Federal Mortgage Corporation, having an office at ▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇, ▇▇
▇▇▇▇▇ ("Assignee"):
For and in consideration of the sum of TEN DOLLARS ($10.00)
and other valuable consideration the receipt and sufficiency of which hereby are
acknowledged, and of the mutual covenants herein contained, the parties hereto
hereby agree as follows:
1. The Assignor hereby grants, transfers and assigns to Assignee,
all of the right, title and interest of Assignor, as "Servicer", with respect to
the mortgage loans identified on Exhibit A (the "Mortgage Loans"), under that
certain Custodial Agreement, dated as of March 1, 1996 (the "Agreement"), by and
between Assignor as owner and servicer, and Norwest Bank of Minnesota, N.A. (the
"Custodian").
The Assignor specifically reserves any and all right, title
and interest and all obligations of the Assignor with respect to any mortgage
loans subject to the Agreement which are not the Mortgage Loans set forth on
Exhibit A hereto and are not the subject of this Assignment and Assumption
Agreement.
2. The Assignor warrants and represents to, and covenants with,
the Assignee that with respect to the Mortgage Loans:
a. The Assignor is assigning its interest as Servicer
under the Agreement for the sole purpose of permitting the Assignee as Servicer
of the Mortgage Loans, to act as Servicer under the Agreement; and
b. The Assignor has not waived or agreed to any waiver
under, or agreed to any amendment or other modification of, the Agreement. The
Assignor has no knowledge of, and has not received notice of, any waivers under
or amendments or other modifications of, or assignments of rights or obligations
under the Agreement.
3. The Assignee warrants and represents to, and covenants with,
the Assignor and the Custodian pursuant to the Agreement that the Assignee
agrees to be bound, as Servicer, by all of the terms, covenants and conditions
of the Agreement and from and after the date hereof, the Assignee assumes for
the benefit of the Assignor all of the Assignor's obligations as Servicer
thereunder.
-1-
IN WITNESS WHEREOF, the parties have caused this Assignment
and Assumption Agreement to be executed by their duly authorized officers as of
the date first above written.
COMMERCIAL FEDERAL MORTGAGE ▇▇▇▇▇▇ CAPITAL, A DIVISION OF
CORPORATION ▇▇▇▇▇▇ BROTHERS HOLDINGS INC.
Assignee Assignor
By:___________________________________ By___________________________________
Its: _________________________________ Its:__________________________________
Exh G-2
EXHIBIT A
MORTGAGE LOAN SCHEDULE
[Intentionally Omitted]
Exh G-3
EXHIBIT J
FORM OF ASSIGNMENT AND ASSUMPTION AGREEMENT
ASSIGNMENT AND ASSUMPTION AGREEMENT, dated June ___, 2001,
between Centre Capital Group, Inc., a state chartered institution organized
under the laws of North Carolina ("Assignor") and ▇▇▇▇▇▇ Capital, A Division of
▇▇▇▇▇▇ Brothers Holdings Inc., a New York corporation ("Assignee"):
For and in consideration of the sum of TEN DOLLARS ($10.00)
and other valuable consideration the receipt and sufficiency of which hereby are
acknowledged, and of the mutual covenants herein contained, the parties hereto
hereby agree as follows:
1. The Assignor hereby grants, transfers and assigns to Assignee,
as Purchaser, all of the right, title and interest of Assignor
with respect to the mortgage loans identified on Exhibit A
(the "Mortgage Loans") under that certain Master Servicing
Agreement, Conventional Residential Fixed and Adjustable Rate
Mortgage Loans, (the "Master Servicing Agreement"), dated as
of June 19, 2001, by and between Centre Capital Group, Inc..
(the "Purchaser"), and Commercial Federal Mortgage Corporation
(the "Servicer").
The Assignor specifically reserves any and all right, title
and interest and all obligations of the Assignor with respect
to any mortgage loans subject to the Agreement which are not
the Mortgage Loans set forth on Exhibit A hereto and are not
the subject of this Assignment and Assumption Agreement.
2. The Assignor warrants and represents to, and covenants with,
the Assignee that:
a. The Assignor has not received notice of, and has no
knowledge of, any offsets, counterclaims or other
defenses available to the Servicer with respect to
the Master Servicing Agreement or the Mortgage Loans;
b. The Assignor has not waived or agreed to any waiver
under, or agreed to any amendment or other
modification of, the Master Servicing Agreement,
including without limitation, the transfer of the
servicing obligations under the Master Servicing
Agreement. The Assignor has no knowledge of, and has
not received notice of, any waivers under or
amendments or other modifications of, or assignments
of rights or obligations under, the Master Servicing
Agreement; and
3. That Assignee warrants and represents to, and covenants with,
the Assignor and the Servicer pursuant to the Master Servicing
Agreement that the Assignee agrees to be bound, as Purchaser,
by all of the terms, covenants and conditions of the Master
Servicing Agreement and from and after the date hereof, the
Assignee assumes for the benefit of each of the Servicer and
the Assignor all of the Assignor's obligations as Purchaser
thereunder;
-1-
IN WITNESS WHEREOF, the parties have caused this Assignment
and Assumption Agreement to be executed by their duly authorized officers as of
the date first above written.
CENTRE CAPITAL GROUP, INC ▇▇▇▇▇▇ CAPITAL, A DIVISION OF
------------------------- -----------------------------
Assignor ▇▇▇▇▇▇ BROTHERS HOLDINGS INC.
-----------------------------
Assignee
By:___________________________________ By___________________________________
Its: _________________________________ Its:__________________________________
Taxpayer Taxpayer
Identification No.____________________ Identification No.____________________
Exh G-2
EXHIBIT A
MORTGAGE LOAN SCHEDULE
[Intentionally Omitted]
Exh G-3