Exhibit 99.11
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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
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
Section 3.22 PMI and LPMI Obligations. 28
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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
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, 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;
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(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 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.
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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 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.
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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 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.
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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 benefit of the Owner as the
owner of the Mortgage Loans pursuant to the terms of this Agreement.
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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 restoration and repair of the
Mortgaged Property or released to the Mortgagor in accordance
with Section 3.17) and Section 3.17;
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(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 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.
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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 such that the proceeds thereof shall be sufficient to prevent the
Mortgagor or the loss payee from becoming a co-insurer.
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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 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.
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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.
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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.
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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.
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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 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.
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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 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.
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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.
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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 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.
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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.
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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
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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 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.
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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, 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;
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(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 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.
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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 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.
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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 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;
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(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
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
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(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 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.
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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.
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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
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.
-47-
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.
-49-
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 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.
-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.
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 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-
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 Cer- tificate 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 originals, the genuineness of all signatures, the
legal capacity of natural persons and the conformity to the originals of all
documents.
Exh G-1
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 under the terms of
the Assignment and Assumption Agreement or the Master Servicing Agreement.
Exh G-2
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 Lehman 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 Lehman 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