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EXHIBIT 10.3
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SERVICING AGREEMENT
Dated as of September 1, 1997
among
FUND AMERICA INVESTORS TRUST 1997-NMC1,
as Issuer,
NATIONAL MORTGAGE CORPORATION,
as Servicer,
and
NORWEST BANK MINNESOTA, NATIONAL ASSOCIATION
as Indenture Trustee and Backup Servicer
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Adjustable Rate Mortgage Loans
Pledged under an Indenture dated as of September 1, 1997
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TABLE OF CONTENTS
ARTICLE I DEFINITIONS.............................................................................................1
Section 1.01. Definitions...............................................................................1
Section 1.02. Interest Calculations....................................................................16
Section 1.03. Determination of Material Adverse Effect.................................................16
ARTICLE II ADMINISTRATION AND SERVICING OF MORTGAGE LOANS........................................................17
Section 2.01. Servicing Generally......................................................................17
Section 2.02. Collection of Certain Mortgage Loan Payments; Collection Account.........................18
Section 2.03. Hazard Insurance Policies................................................................21
Section 2.04. Enforcement of Due-on-Sale Clauses; Assumption and Modification Agreements..............22
Section 2.05. Realization upon Defaulted Mortgage Loans, Options to Purchase Mortgage Loans...........23
Section 2.06. Indenture Trustee to Cooperate; Release of Mortgage Files................................24
Section 2.07. Servicing Compensation; Payment of Certain Expenses by the Servicer;
Compensation Interest.................................................................25
Section 2.08. Annual Statement as to Compliance........................................................26
Section 2.09. Annual Independent Public Accountants' Servicing Report..................................26
Section 2.10. Access to Certain Documentation and Information Regarding the Mortgage Loans............27
Section 2.11. Maintenance of Fidelity Bond and Errors and Omissions Policy.............................27
Section 2.12. Notices to the Issuer, the Rating Agencies, the Indenture Trustee and the Bond
Insurer...............................................................................27
Section 2.13. Reports of Foreclosures and Abandonment of Mortgaged Properties..........................28
Section 2.14. Sub-Servicers and Sub-Servicing Agreements...............................................28
Section 2.15. Servicing for Benefit of the Bond Insurer................................................28
Section 2.16. Annual Lien Opinions; Bond Redemptions...................................................29
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ARTICLE III SERVICER REMITTANCE REPORT; BACK-UP SERVICER.........................................................29
Section 3.01. Servicer Remittance Report...............................................................29
Section 3.02. Reserved.................................................................................29
Section 3.03. Oversight of Servicing...................................................................30
Section 3.04. Back-Up Servicer Compensation............................................................31
Section 3.05. Duties and Responsibilities..............................................................31
ARTICLE IV MONTHLY ADVANCES AND SERVICING ADVANCES...............................................................32
Section 4.01. Monthly Advances; Servicing Advances.....................................................32
ARTICLE V THE SERVICER...........................................................................................33
Section 5.01. Representations and Warranties of the Servicer...........................................33
Section 5.02. Liability of the Servicer................................................................34
Section 5.03. Merger or Consolidation of, or Assumption of the Obligations of, the Servicer...........34
Section 5.04. Limitation on Liability of the Servicer and Others.......................................35
Section 5.05. Servicer Not to Resign...................................................................35
ARTICLE VI DEFAULT...............................................................................................36
Section 6.01. Events of Default........................................................................36
Section 6.02. Indenture Trustee to Act; Appointment of Successor.......................................38
Section 6.03. Notifications to Bondholders.............................................................38
Section 6.04. Assumption or Termination of Sub-Servicing Agreements by the Indenture Trustee
or any Successor Servicer.............................................................39
Section 6.05. Payment of Indenture Trustee's Fees and Expenses.........................................39
ARTICLE VII TERMINATION..........................................................................................40
Section 7.01. Termination..............................................................................40
ARTICLE VIII MISCELLANEOUS PROVISIONS............................................................................41
Section 8.01. Amendment................................................................................41
Section 8.02. Governing Law............................................................................42
Section 8.03. Notices..................................................................................42
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Section 8.04. Severability of Provisions...............................................................42
Section 8.05. Assignment...............................................................................43
Section 8.06. Third Party Beneficiary; Rating..........................................................43
Section 8.07. Counterparts.............................................................................43
Section 8.08. Intention of the Parties.................................................................43
Section 8.09. Waivers and Modifications................................................................43
Section 8.10. Further Agreements.......................................................................44
Section 8.11. Attorney-in-Fact.........................................................................44
SCHEDULES AND EXHIBITS
Schedule I Mortgage Loan Schedule
Exhibit A Form of Annual Statement as to Compliance
Exhibit B Form of Request for Release
Exhibit C Ancillary Servicing Compensation
Exhibit D Summary of Servicer's Collection Procedures
Exhibit E Form of Liquidation Report
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THIS SERVICING AGREEMENT (this "Agreement"), dated as of September 1,
1997, among Fund America Investors Trust 1997-NMC1, as issuer of its
Collateralized Mortgage Obligations, Series 1997-NMC1 (the "Issuer"), National
Mortgage Corporation, as servicer (in such capacity, together with permitted
successors hereunder, the "Servicer"), and Norwest Bank Minnesota, National
Association, not in its individual capacity but as trustee pursuant to that
certain indenture (the "Indenture"), dated as of September 1, 1997 (the
"Indenture Trustee"), between the Issuer and the Indenture Trustee, and Norwest
Bank Minnesota, National Association, as the Back-Up Servicer (the "Back-Up
Servicer") recites and provides as follows:
RECITALS
WHEREAS, the Servicer is engaged in the business of servicing sub-prime
mortgage loans;
WHEREAS, the Issuer desires to pledge to the Indenture Trustee certain
sub-prime residential mortgage loans, identified on Schedule I hereto (the
"Mortgage Loans") in connection with the issuance of the Issuer's Collateralized
Mortgage Obligations, Series 1997-NMC1 (the "Bonds");
WHEREAS, the Issuer desires to contract with the Servicer for the
servicing responsibilities associated with the Mortgage Loans and the Servicer
desires to assume the servicing responsibilities associated with such Mortgage
Loans; and
WHEREAS, the Issuer, the Servicer and the Indenture Trustee desire to
execute this Agreement to define each party's rights, duties and obligations
relating to the servicing of the Mortgage Loans.
NOW, THEREFORE, in consideration of the above premises and of the
mutual agreements hereinafter set forth, and for other good and valuable
consideration, the receipt and adequacy of which are hereby acknowledged, the
Issuer, the Servicer and the Indenture Trustee hereby agree as follows:
ARTICLE I
DEFINITIONS
SECTION 1.01. DEFINITIONS.
Whenever used in this Agreement, the following words and phrases,
unless the context otherwise requires, shall have the meanings specified in this
Section 1.01. Terms capitalized and not otherwise defined herein shall have the
meanings assigned to such terms in the Indenture, even after the Indenture shall
have been terminated.
"AFFILIATE": With respect to any specified Person, any other Person
controlling or controlled by or under common control with such specified Person.
For the purposes of this definition, "control" when used with respect to any
specified Person means the power to direct the management and policies of such
Person, directly or indirectly, whether through the
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ownership of voting securities, by contract or otherwise, and the terms
"controlling" and "controlled" have meanings corresponding to the foregoing.
"AGGREGATE PRINCIPAL BALANCE": As defined in the Indenture.
"AGREEMENT": This Servicing Agreement, dated as of September 1, 1997,
among the Issuer, the Servicer and the Indenture Trustee, and all amendments
hereof and supplements hereto.
"APPRAISAL": A written appraisal of a Mortgaged Property made by an
appraiser holding all state certifications or licenses provided by the state in
which the Mortgaged Property is located, which appraisal must be written, in
form and substance, to FDIC, FNMA and FHLMC standards, and must meet the
appraisal standards of the Uniform Standards of Professional Appraisal Practice.
"APPRAISED VALUE": With respect to any Mortgaged Property, the lesser
of (a) the value thereof as determined by an Appraisal and (b) the purchase
price paid for the related Mortgaged Property by the Mortgagor with the proceeds
of the related Mortgage Loan; provided, however, that in the case of a
Refinanced Mortgage Loan, the Appraised Value of the Mortgaged Property shall be
equal to the value thereof as determined by an Appraisal.
"ANCILLARY SERVICING COMPENSATION": Prepayment fees, assumption fees,
fees for insufficient funds, and other items listed on Exhibit C hereto
collected by the Servicer from Mortgagors.
"BASE NET WORTH": For any fiscal quarter at the end of which the
Servicer's Net Worth is less than $15,000,000, $6,700,000. For any fiscal
quarter after the first fiscal quarter at the end of which the Servicer's Net
Worth equals or exceeds $15,000,000, $11,250,000.
"BOND ACCOUNT": The segregated trust account established and maintained
by the Indenture Trustee pursuant to Section 8.02 of the Indenture.
"BOND BALANCE": As defined in the Indenture.
"BONDHOLDER" or "HOLDER": The Person in whose name a Bond is registered
in the Bond Register, except that, solely for the purpose of taking any action
under Article Six or giving any consent pursuant to this Agreement, any Bond
registered in the name of the Issuer or the Servicer or any Person actually
known to a Responsible Officer of the Indenture Trustee to be an Affiliate of
the Issuer or the Servicer shall be deemed not to be outstanding and the Voting
Interest evidenced thereby shall not be taken into account in determining
whether Holders of the requisite Voting Interests necessary to take any such
action or effect any such consent have acted or consented unless the Issuer, the
Servicer or any such Person is an owner of record of all of the Bonds.
"BOND INSURANCE POLICY": The Financial Guaranty Insurance Policy (No.
24873), dated September 30, 1997, including any endorsements thereto, issued by
the Bond Insurer for the
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benefit of the Bondholders, pursuant to which the Bond Insurer guarantees
payment of Insured Payments.
"BOND INSURER": MBIA Insurance Corporation, a stock insurance company
organized and created under the laws of the State of New York, and any
successors thereto.
"BOND INSURER DEFAULT": The existence and continuance of any of the
following:
(a) an MBIA Payment Default;
(b) entry by a court having jurisdiction in the premises of
(1) a final and nonappealable decree or order for relief in respect of
the Bond Insurer in an involuntary case or proceeding under any
applicable United States federal or state bankruptcy, insolvency,
rehabilitation, reorganization or other similar law or (2) a final and
nonappealable decree or order adjudging the Bond Insurer bankrupt or
insolvent, or approving as properly filed a petition seeking
reorganization, rehabilitation, arrangement, adjustment or composition
of or in respect of the Bond Insurer under any applicable United States
federal or state law, or appointing a custodian, receiver, liquidator,
rehabilitator, assignee, trustee, sequestrator or other similar
official of the Bond Insurer or of any substantial part of its
property, or ordering the winding-up or liquidation of its affairs, and
the continuance of any such decree or order for relief or any such
other decree or order unstayed and in effect for a period of 60
consecutive days; or
(c) the commencement by the Bond Insurer of a voluntary case
or proceeding under any applicable United States federal or state
bankruptcy, insolvency, reorganization or other similar law or of any
other case or proceeding to be adjudicated bankrupt or insolvent, or
the consent of the Bond Insurer to the entry of a decree or order for
relief in respect of the Bond Insurer in an involuntary case or
proceeding under any applicable United States federal or state
bankruptcy, insolvency case or proceeding against Bond Insurer, or the
filing by the Bond Insurer of a petition or answer or consent seeking
reorganization or relief under any applicable United States federal or
state law, or the consent by the Bond Insurer to the filing of such
petition or to the appointment of or the taking possession by a
custodian, receiver, liquidator, assignee, trustee, sequestrator or
similar official of the Bond Insurer or of any substantial part of its
property, or the failure by the Bond Insurer to pay debts generally as
they become due, or the admission by the Bond Insurer in writing of its
inability to pay its debts generally as they become due, or the taking
of corporate action by the Bond Insurer in furtherance of any such
action.
Notwithstanding anything to the contrary contained herein, upon the
existence and continuance of a Bond Insurer Default, the consent by the Bond
Insurer shall not be required for any action or inaction hereunder and the Bond
Insurer shall not have any rights with respect thereto except that the Bond
Insurer shall be entitled to an Opinion of Counsel to the effect that such
amendment does not materially and adversely impair the Bond Insurer's interests
if an amendment is requested while a Bond Insurer Default is continuing.
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"BOND INSURER PARTIES": The Bond Insurer or its respective agents,
representatives, directors, officers or employees.
"BOND REGISTER": The register maintained pursuant to Section 2.06 of
the Indenture.
"BONDS": The Issuer's Collateralized Mortgage Obligations, Series
1997-NMC1, issued pursuant to the Indenture.
"BUSINESS DAY": Any day other than (a) a Saturday or a Sunday or (b) a
day on which banking institutions in the State of Colorado, the State of New
York, the State of Delaware, the State of Minnesota or the state in which the
principal office of the Bond Insurer is located are required or authorized by
law, executive order or governmental decree to be closed.
"CERTIFICATE DISTRIBUTION ACCOUNT": As defined in the Deposit Trust
Agreement.
"CLOSING DATE": On or about September 30, 1997.
"CODE": The Internal Revenue Code of 1986, as amended, and as may be
further amended from time to time, any successor statutes thereto, and
applicable U.S. Department of Treasury regulations issued pursuant thereto in
temporary or final form and proposed regulations thereunder to the extent that,
by reason of their proposed effective date, such proposed regulations would
apply.
"COLLECTION ACCOUNT": The segregated trust account or accounts, which
shall at all times be an Eligible Account, established and maintained pursuant
to Section 2.02(b) and entitled "[Servicer], in trust for the benefit of Holders
of Fund America Investors Trust 1997-NMC1 Collateralized Mortgage Obligations,
Series 1997-NMC1 and MBIA as Bond Insurer, Collection Account". References
herein to the Collection Account shall include any Sub-Servicing Account as the
context requires. If an Event of Default described in Section 6.01(f) hereof
occurs, the Servicer shall close the existing Collection Account and cause it to
be re-established in the name of the Indenture Trustee, and transfer all funds
from the old Collection Account to the new Collection Account.
"COLLECTION PERIOD": As to any Deposit Date, the period beginning on
the first day of the calendar month immediately preceding the month in which
such Deposit Date occurs and ending on the last day of such calendar month.
"COMPENSATING INTEREST": With respect to any Mortgage Loan as to which
a prepayment in whole or in part was received by the Servicer from the related
Mortgagor during a Collection Period, an amount equal to the lesser of (a) the
Monthly Servicing Fee for such Collection Period and (b) the difference between
(1) 30 days' interest at the related Mortgage Interest Rate on the Principal
Balance of such Mortgage Loan (immediately prior to such prepayment) and (2) the
amount of interest actually collected by the Servicer on such Mortgage Loan
during the related Due Period.
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"CUMULATIVE LOSS PERCENTAGE": As of any Payment Date, the percentage
equivalent of the fraction obtained by dividing (1) the principal amount of
cumulative Realized Losses on the Mortgage Loans from the applicable Cut-off
Dates through the end of the related Collection Period by (2) the Initial Pool
Balance.
"CUMULATIVE LOSS RATE TRIGGER": The "Cumulative Loss Rate Trigger"
occurs on a Deposit Date if the Cumulative Loss Percentage exceeds the
percentage specified in the table below for the period in which such Deposit
Date occurs.
Deposit Dates Cumulative
from and including to and including Loss Percentage
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October 1997 September 1998 1.00%
October 1998 September 1999 1.75%
October 1999 September 2000 2.50%
October 2000 September 2001 3.25%
October 2001 thereafter 4.00%
"CUT-OFF DATE": For any Mortgage Loan, the later of September 1, 1997
or the date of funding of such Mortgage Loan by National Mortgage Corporation
(which date has occurred prior to the Closing Date).
"DELINQUENCY PERCENTAGE": For any Payment Date, the percentage
equivalent of the fraction obtained by dividing (1) the aggregate of the
Principal Balances of all Mortgage Loans that were 90 days contractually
delinquent, REO Property, in foreclosure, or for which the related Mortgagor was
in a bankruptcy proceeding or paying a reduced Monthly Payment as a result of a
bankruptcy workout, as of the end of the related Collection Period, by (2) the
aggregate of the Principal Balance of all of the Mortgage Loans as of the
related Determination Date.
"DELINQUENCY RATE TRIGGER": The Rolling Delinquency Percentage
equalling or exceeding 14.0% as of any Payment Date.
"DEPOSIT DATE": As to any Payment Date, the 18th day of the month in
which such Payment Date occurs or, if such 18th day is not a Business Day, the
next succeeding Business Day.
"DEPOSIT TRUST AGREEMENT": The Deposit Trust Agreement, dated as of
September 1, 1997, between Fund America Investors Corporation II, as depositor,
Wilmington Trust Company, as owner trustee, Norwest Bank Minnesota, National
Association, as trust paying agent, and the Servicer, pursuant to which the
Issuer was formed.
"DETERMINATION DATE": As to any Deposit Date, the close of business on
the last day of the calendar month preceding the calendar month in which such
Deposit Date occurs.
"DUE PERIOD": As defined in the Indenture.
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"ELIGIBLE ACCOUNT": Either (A) a segregated account or accounts
maintained with an institution the deposits of which are insured by the Bank
Insurance Fund or the Savings Association Insurance Fund of the FDIC, the
unsecured and uncollateralized debt obligations of which shall be rated "AA" or
better by Standard & Poor's and "Aa2" or better by Moody's and in the highest
short-term rating category by Standard & Poor's and Moody's, and that is either
(1) a federal savings and loan association duly organized, validly existing and
in good standing under the federal banking laws, (2) an institution duly
organized, validly existing and in good standing under the applicable banking
laws of any state, (3) a national banking association duly organized, validly
existing and in good standing under the federal banking laws, (4) a principal
subsidiary of a bank holding company or (5) approved in writing by the Bond
Insurer or (B) a trust account maintained with the trust department of a federal
or state chartered depository institution or trust company, having capital and
surplus of not less than $100,000,000, acting in its fiduciary capacity, the
unsecured and uncollateralized debt obligations of which shall be rated "Baa3"
or better by Moody's. Any Eligible Accounts maintained with the Indenture
Trustee shall conform to the preceding clause (B).
"EVENT OF DEFAULT": As defined in Section 6.01.
"FDIC": The Federal Deposit Insurance Corporation and its successors in
interest.
"FEMA": The Federal Emergency Management Agency and its successors in
interest.
"FHLMC": The Federal Home Loan Mortgage Corporation and its successors
in interest.
"FNMA": ▇▇▇▇▇▇ Mae and its successors in interest.
"GROSS MARGIN": With respect to any Mortgage Loan, the fixed percentage
amount set forth in the related Mortgage Note, which amount is added to the
Index in accordance with the terms of the related Mortgage Note to determine the
Mortgage Interest Rate.
"INDENTURE": The indenture, dated as of September 1, 1997, between the
Issuer and the Indenture Trustee pursuant to which the Mortgage Loans and
certain other assets included in the Trust Estate are pledged as collateral for
the Bonds, and any supplements or amendments thereto.
"INDENTURE TRUSTEE": Norwest Bank Minnesota, National Association, a
national banking association, and its successors in interest or any successor
trustee appointed as provided pursuant to the Indenture.
"INDENTURE TRUSTEE FEE": The monthly fee of the Indenture Trustee,
which shall be determined as set forth in the Indenture.
"INDEX": With respect to any Mortgage Loan, the applicable index for
computing the Mortgage Interest Rate as specified in the Mortgage Note. The
Index for each Mortgage Loan shall be Six-Month LIBOR.
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"INFORMATION": As defined in Section 3.02.
"INITIAL POOL BALANCE": The aggregate of the Principal Balances of the
Mortgage Loans determined as of their respective Cut-off Dates (after
application of all payments of principal received in respect of any such
Mortgage Loan before such Cut-off Dates), which aggregate amount is
$123,620,068.92.
"INSURANCE PROCEEDS": With respect to any Deposit Date, proceeds paid
by any insurer (other than the Bond Insurer) and received by the Servicer during
the related Collection Period pursuant to any insurance policy covering a
Mortgage Loan or the related Mortgaged Property, including any deductible
payable by the Servicer with respect to a blanket insurance policy pursuant to
Section 2.03 and the proceeds from any fidelity bond or errors and omission
policy pursuant to Section 2.11, net of any component thereof covering any
expenses incurred by or on behalf of the Servicer and specifically reimbursable
under this Agreement.
"INSURED PAYMENT": As defined in the Indenture.
"ISSUER": Fund America Investors Trust 1997-NMC1, as issuer of the
Bonds pursuant to the Indenture.
"LIQUIDATED MORTGAGE LOAN": As to any Deposit Date, any Mortgage Loan
(1) as to which the Servicer has determined, in accordance with the servicing
procedures specified herein, that all Liquidation Proceeds that it expects to
recover from or on account of such Mortgage Loan have been recovered, (2) that
has been purchased by the Servicer pursuant to Section 2.05 on or prior to such
Deposit Date or (3) that has been repurchased by the Seller pursuant to Section
7 of the Mortgage Loan Sale Agreement on or prior to such Deposit Date.
"LIQUIDATION EXPENSES": Expenses that are incurred by the Servicer in
connection with the liquidation of any Mortgage Loan and not recovered under any
insurance policy or from any Mortgagor. Such expenses with respect to any
Liquidated Mortgage Loan shall include, without limitation, legal fees and
expenses, real estate brokerage commissions, any unreimbursed amount expended by
the Servicer pursuant to Section 2.05 respecting the related Mortgage Loan, and
any other related and previously unreimbursed Servicing Advances.
"LIQUIDATION PROCEEDS": Cash (other than Insurance Proceeds) received
in connection with the liquidation of any Mortgaged Property, whether through
trustee's sale, foreclosure sale, condemnation, taking by eminent domain or
otherwise received in respect of any Mortgage Loan foreclosed upon as described
in Section 2.05 (including, without limitation, proceeds from the rental of the
related Mortgaged Property).
"LIQUIDATION REPORT": A liquidation report in the form of Exhibit E
attached hereto.
"LOAN-TO-VALUE RATIO": With respect to any Mortgage Loan as of its date
of origination, the ratio as of its date of origination borne by the outstanding
principal amount of the Mortgage Loan to the Appraised Value of the related
Mortgaged Property.
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"MAXIMUM RATE": With respect to any Mortgage Loan, any absolute maximum
Mortgage Interest Rate set by provisions in the related Mortgage Note.
"MBIA PAYMENT DEFAULT": As defined in the Indenture.
"MINIMUM RATE": With respect to any Mortgage Loan, any absolute minimum
Mortgage Interest Rate, set by provisions in the related Mortgage Note, subject
to the initial Mortgage Interest Rate first adjusting to a level in excess of
such minimum Mortgage Interest Rate in accordance with the terms of the Mortgage
Note.
"MONTHLY ADVANCE": As defined in Section 4.01(a).
"MONTHLY PAYMENT": With respect to any Mortgage Note, the amount of
each monthly payment payable by the Mortgagor under such Mortgage Note in
accordance with its terms, including one month's accrued interest on the related
Principal Balance at the then applicable Mortgage Interest Rate, but net of any
portion of such monthly payment that represents late payment charges, prepayment
or extension fees or collections allocable to payments to be made by Mortgagors
for payment of insurance premiums or similar items.
"MONTHLY SERVICING FEE": With respect to any Payment Date, 1/12 of the
product of the Servicing Fee Rate and the Aggregate Principal Balance of the
Mortgage Loans as of the first day of the related Due Period (or, in the case of
the first Collection Period, the Initial Pool Balance).
"MOODY'S": ▇▇▇▇▇'▇ Investors Service, Inc. and its successors in
interest.
"MORTGAGE": The mortgage, deed of trust or other instrument creating a
first lien on an estate in fee simple in real property securing a Mortgage Loan.
"MORTGAGE FILE": As defined in the Mortgage Loan Sale Agreement.
"MORTGAGE INTEREST RATE": As defined in the Indenture.
"MORTGAGE LOAN": Each of the mortgage loans pledged to the Indenture
Trustee pursuant to the Indenture that from time to time comprise part of the
Trust Estate, all of which originally so held being identified in the Mortgage
Loan Schedule attached hereto as Schedule I.
"MORTGAGE LOAN DOCUMENTS": As defined in the Mortgage Loan Sale
Agreement and the Indenture.
"MORTGAGE LOAN SALE AGREEMENT": That certain agreement, dated as of
September 1, 1997, between National Mortgage Corporation, as seller, and the
Transferor, as purchaser, pursuant to which the Transferor acquired the Mortgage
Loans.
"MORTGAGE LOAN SCHEDULE": As of any date, the schedule of Mortgage
Loans then subject to this Agreement. The initial schedule of Mortgage Loans as
of the Cut-off Dates therefor is attached hereto as Schedule I. The Mortgage
Loan Schedule shall be amended from
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time to time by the Servicer to reflect the addition of Mortgage Loans to, and
the removal of Mortgage Loans from, the Trust Estate pursuant to the Indenture.
The Mortgage Loan Schedule shall identify each Mortgage Loan by the Servicer's
loan number and address (including the state) of the related Mortgaged Property
and shall set forth as to each Mortgage Loan the initial Loan-to-Value Ratio,
the Cut-off Date, the Index, the Gross Margin, the current Monthly Payment
amount and the stated maturity date of the related Mortgage Note. The Mortgage
Loan Schedule shall be delivered to the Indenture Trustee in both physical and
computer-readable form.
"MORTGAGE NOTE": The note or other instrument evidencing the
indebtedness of a Mortgagor under the related Mortgage Loan.
"MORTGAGED PROPERTY": The underlying property securing a Mortgage
Loan.
"MORTGAGOR": The obligor under a Mortgage Note.
"NET LIQUIDATION PROCEEDS": As to any Mortgage Loan, Liquidation
Proceeds net of Liquidation Expenses. For all purposes of this Agreement, Net
Liquidation Proceeds shall be allocated first to accrued and unpaid interest on
the related Mortgage Loan through the end of the Collection Period in which the
related liquidation occurred, and then to the Principal Balance thereof.
"NET WORTH": For any fiscal quarter, the sum of the Servicer's assets
reflected on a balance sheet for such fiscal quarter prepared in accordance with
GAAP consistently applied minus the sum of the Servicer's liabilities required
to be shown as such on a balance sheet for such fiscal quarter prepared in
accordance with GAAP consistently applied.
"NONRECOVERABLE ADVANCE": Any Servicing Advance or Monthly Advance
that, in the Servicer's reasonable judgment, would not be ultimately recoverable
by the Servicer from late collections, Insurance Proceeds or Liquidation
Proceeds on the related Mortgage Loan or otherwise, as evidenced by an Officer's
Certificate delivered to the Bond Insurer and the Indenture Trustee no later
than the Business Day following the Servicer's determination thereof.
"OFFICER'S CERTIFICATE": A certificate signed by the Chairman of the
Board, the Vice Chairman of the Board, the President, Chief Operating Officer or
a Vice President of the Transferor, the Servicer or, in the case of the Issuer,
an authorized signatory of the Owner Trustee, as the case may be, and delivered
to the Indenture Trustee, Bond Insurer or each Rating Agency, as the case may
be.
"OPINION OF COUNSEL": A written opinion of counsel in form and
substance reasonably acceptable to the Indenture Trustee and, in the case of
opinions delivered to Bond Insurer, in form and substance reasonably acceptable
to it. Any expense related to obtaining an Opinion of Counsel for an action
requested by a party shall be borne by the party required to obtain such opinion
or seeking to effect the action that requires the delivery of such Opinion of
Counsel.
"ORIGINAL PRINCIPAL AMOUNT": With respect to any Mortgage Loan, the
original principal amount due under the related Mortgage Note as of its date of
origination.
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"PAYMENT AHEAD": Any payment remitted by a Mortgagor with respect to a
Mortgage Note during a Due Period in excess of the Monthly Payment due during
such Due Period with respect to such Mortgage Note, which excess sums the
related Mortgagor has instructed the Servicer to apply to Monthly Payments due
in one or more subsequent Due Periods. A Monthly Payment that was a Payment
Ahead shall, for purposes of computing certain amounts under this Agreement, be
deemed to have been received by the Servicer on the date in the related Due
Period on which such Monthly Payment would have been due if such Monthly Payment
had not been paid as part of a Payment Ahead.
"PAYMENT DATE": The date of payment on the Bonds pursuant to the
Indenture, which date is the 25th day of each month or, if such day is not a
Business Day, the Business Day immediately following such 25th day, beginning
October 27, 1997.
"PERCENTAGE INTEREST": As defined in the Indenture.
"PERMITTED INVESTMENTS": One or more of the following obligations,
instruments and securities:
(a) direct obligations of, and obligations fully guaranteed
by, the United States of America, FHLMC, FNMA, the Federal Home Loan Banks or
any agency or instrumentality of the United States of America rated "Aa3" or
higher by ▇▇▇▇▇'▇, the obligations of which are backed by the full faith and
credit of the United States of America;
(b)(i) demand and time deposits in, certificates of deposit
of, banker's acceptances issued by or federal funds sold by any depository
institution or trust company (including the Indenture Trustee or its agent
acting in their respective commercial capacities) incorporated under the laws of
the United States of America or any state thereof and subject to supervision and
examination by federal and/or state authorities, so long as, at the time of such
investment or contractual commitment providing for such investment, such
depository institution or trust company or its ultimate parent has a short-term
unsecured debt rating in one of the two highest available rating categories of
S&P and ▇▇▇▇▇'▇ and provided that each such investment has an original maturity
of no more than 365 days, and (ii) any other demand or time deposit or deposit
which is fully insured by the Federal Deposit Insurance Corporation;
(c) repurchase obligations with a term not to exceed 30 days
with respect to any security described in clause (a) above and entered into with
a depository institution or trust company (acting as a principal) rated "A" or
higher by "S&P" and rated "A2" or higher by ▇▇▇▇▇'▇; provided, however, that
collateral transferred pursuant to such repurchase obligation must be of the
type described in clause (a) above and must (i) be valued daily at current
market price plus accrued interest, (ii) pursuant to such valuation, be equal,
at all times, to 105% of the cash transferred by the Indenture Trustee in
exchange for such collateral and (iii) be delivered to the Indenture Trustee or,
if the Indenture Trustee is supplying the collateral, an agent for the Indenture
Trustee, in such a manner as to accomplish perfection of a security interest in
the collateral by possession of certified securities;
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(d) securities bearing interest or sold at a discount issued
by any corporation incorporated under the laws of the United States of America
or any state thereof which has a long-term unsecured debt rating in the highest
available rating category of each of the Rating Agencies at the time of such
investment;
(e) commercial paper having an original maturity of less than
365 days and issued by an institution having a short-term unsecured debt rating
in the highest available rating category of each of the Rating Agencies at the
time of such investment;
(f) a guaranteed investment contract approved by each of the
Rating Agencies and the Bond Insurer and issued by an insurance company or other
corporation having a long-term unsecured debt rating in the highest available
rating category of each of the Rating Agencies at the time of such investment;
(g) money market funds having ratings in one of the two
highest available rating categories of S&P and in the highest available rating
category by ▇▇▇▇▇'▇ at the time of such investment which invest only in other
Permitted Investments (any such money market funds which provide for demand
withdrawals being conclusively deemed to satisfy any maturity requirements for
Permitted Investments set forth herein), including money market funds of the
Indenture Trustee and any such funds that are managed by the Indenture Trustee
or its affiliates or for which the Indenture Trustee or any affiliate acts as
advisor as long as such money market funds satisfy the criteria of this
subparagraph (g); and
(h) any investment approved in writing by the Bond Insurer;
provided that each Rating Agency must have issued written evidence that any such
investment will not result in a downgrading or withdrawal of the rating by each
Rating Agency on the Bonds.
"PERSON": Any individual, corporation, partnership, joint venture,
association, joint-stock company, trust, limited liability company,
unincorporated organization or government or any agency or political subdivision
thereof.
"PRINCIPAL BALANCE": As to any Mortgage Loan and any Determination
Date, the actual outstanding principal amount thereof as of the close of
business on the Determination Date in the preceding month (or, in the case of
the first Determination Date, as of the applicable Cut-off Date) less (1) all
scheduled payments of principal received or advanced in respect of such Mortgage
Loan and due during the related Due Period, (2) all other amounts collected,
received or otherwise recovered in respect of principal on the Mortgage Loans
(including Principal Prepayments, but not including Payments Ahead that are not
allocable to principal for the related Due Period) during or in respect of the
related Collection Period, (3) Net Liquidation Proceeds and Trust Insurance
Proceeds allocable to principal recovered or collected in respect of such
Mortgage Loan during the related Collection Period, (4) the portion of the
Purchase Price allocable to principal to be remitted to the Indenture Trustee on
or prior to the next succeeding Deposit Date in connection with a release and
removal of such Mortgage Loan pursuant to the Indenture, to the extent such
amount is actually remitted on or prior to such Deposit Date, and (5) the amount
to be remitted by the Seller to the Indenture Trustee on the next succeeding
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Deposit Date in connection with a substitution of a Qualified Replacement
Mortgage Loan for such Mortgage Loan pursuant to the Indenture, to the extent
such amount is actually remitted on or prior to such Deposit Date; provided,
however, that a Mortgage Loan that has become a Liquidated Mortgage Loan since
the preceding Determination Date (or, in the case of the first Determination
Date, since the applicable Cut-off Date) will be deemed to have a Principal
Balance of zero on the current Determination Date.
"PRINCIPAL PREPAYMENT": As to any Mortgage Loan and Collection Period,
any payment by a Mortgagor or other recovery in respect of principal on a
Mortgage Loan (including Net Liquidation Proceeds) that, in the case of a
payment by a Mortgagor, is received in advance of its scheduled due date and is
not a Payment Ahead.
"PURCHASE PRICE": As defined in the Indenture.
"RATING AGENCIES": Standard & Poor's and ▇▇▇▇▇'▇ (each, a "Rating
Agency"). If either such agency or a successor is no longer in existence,
"Rating Agency" shall be such nationally recognized statistical credit rating
agency, or other comparable Person, designated by the Servicer, notice of which
designation shall be given to the Indenture Trustee.
"REALIZED LOSS": With respect to any Liquidated Mortgage Loan, the
amount, if any, by which the Principal Balance of such Mortgage Loan and accrued
and unpaid interest thereon (determined as of the Determination Date immediately
prior to such Mortgage Loan becoming a Liquidated Mortgage Loan) exceeds the Net
Liquidation Proceeds, if any, in respect of such Mortgage Loan, which amount
shall in no event exceed the Principal Balance of such Mortgage Loan (determined
as of the Determination Date immediately prior to such Mortgage Loan becoming a
Liquidated Mortgage Loan).
"REFINANCED MORTGAGE LOAN": A Mortgage Loan the proceeds of which were
not used to purchase the related Mortgaged Property.
"REMITTABLE FUNDS": With respect to any Deposit Date, the amount equal
to the aggregate of the following amounts:
(a) all payments in respect of or allocable to interest
received (or deemed to have been received in the case of Payments Ahead) with
respect to the Mortgage Loans and due during the related Due Period and all
other interest payments on or in respect of the Mortgage Loans received by or on
behalf of the Servicer during the related Collection Period, net of amounts
representing interest accrued on such Mortgage Loans in respect of any period
prior to the applicable Cut-off Dates, plus any Compensating Interest payments
made by the Servicer and any net income from related REO Properties collected
during the related Collection Period;
(b) all scheduled payments of principal received (or deemed to
have been received, in the case of Payments Ahead) with respect to the Mortgage
Loans and due during the related Due Period, and all other principal payments
(including Principal Prepayments) received or deemed to have been received
during the related Collection Period;
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(c) all Trust Insurance Proceeds and Net Liquidation Proceeds
received during the related Collection Period; and
(d) the amount of Monthly Advances made by the Servicer in
respect of such Deposit Date pursuant to Section 4.01(a);
but net of the following amounts:
(1) the Monthly Servicing Fee and any other
compensation payable to the Servicer pursuant to
Section 2.07 for the related Collection Period
(except to the extent used to pay Compensating
Interest) to the extent not previously paid to or
retained by the Servicer;
(2) the aggregate amount of Monthly
Advances, if not theretofore recovered from the
Mortgagor on whose behalf such Monthly Advance was
made, from subsequent collections on the related
Mortgage Loan (other than those included in the
related Liquidation Expenses or netted out by the
Servicer from related Insurance Proceeds);
(3) the aggregate amount of Servicing
Advances, if not theretofore recovered from the
Mortgagor on whose behalf such Servicing Advance was
made, from subsequent collections on the related
Mortgage Loan (other than those included in the
related Liquidation Expenses or netted out by the
Servicer from related Insurance Proceeds);
(4) the aggregate amount of Nonrecoverable
Advances not previously reimbursed to the Servicer;
(5) any amount deposited into the Collection
Account that may not be withdrawn therefrom pursuant
to a final and nonappealable order of a United States
bankruptcy court of competent jurisdiction imposing a
stay pursuant to ▇▇▇▇▇▇▇ ▇▇▇ ▇▇ ▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇
Bankruptcy Code and that would otherwise have been
included in Remittable Funds on such Deposit Date;
and
(6) excess Net Liquidation Proceeds as
described in the second paragraph of Section 2.05.
"REO PROPERTY": As defined in Section 4.01(a).
"RESPONSIBLE OFFICER": When used with respect to the Indenture Trustee,
the Chairman or Vice Chairman of the Board of Directors or Trustees, the
Chairman or Vice Chairman of the Executive or Standing Committee of the Board of
Directors or Trustees, the President, the Chairman of the Committee on Trust
Matters, any Vice President, the Secretary, any Assistant Secretary, the
Treasurer, any Assistant Treasurer, the Cashier, any Assistant Cashier, any
Trust Officer or Assistant Trust Officer, the Controller and any Assistant
Controller or any other officer
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of the Indenture Trustee customarily performing functions similar to those
performed by any of the above designated officers and to whom, with respect to a
particular matter, such matter is referred because of such officer's knowledge
of and familiarity with the particular subject.
"ROLLING DELINQUENCY PERCENTAGE": As of any Payment Date, the average
of the Delinquency Percentages as of the last day of each of the six (or one,
two, three, four and five in the case of the first five Deposit Dates, as
applicable) most recently ended Collection Periods.
"ROLLING LOSS PERCENTAGE": As of any Payment Date, the percentage
equivalent of a fraction, the numerator of which is the aggregate amount of
Realized Losses incurred during the preceding 12 Collection Periods, and the
denominator of which is the aggregate Principal Balances of the Mortgage Loans
as of the first day of the 12th preceding Collection Period.
"ROLLING LOSS RATE TRIGGER": The Rolling Loss Percentage equalling or
exceeding 1.25% as of any Deposit Date on or after the Deposit Date occurring in
September 1998.
"SELLER": National Mortgage Corporation, as seller of the Mortgage
Loans pursuant to the Mortgage Loan Sale Agreement.
"SERVICER": National Mortgage Corporation or any successor servicer
appointed as provided pursuant to this Agreement.
"SERVICER MORTGAGE FILE": As to each Mortgage Loan, a file maintained
by the Servicer that contains (1) an original hazard insurance policy (and flood
insurance policy, if required pursuant to Section 2.03 hereof) relating to the
underlying Mortgaged Property or a certificate of insurance issued by the
insurer or its agent indicating that a hazard insurance policy (and flood
insurance policy, if required pursuant to Section 2.03 hereof) is in effect with
respect to such Mortgaged Property, (2) the originals of all RESPA and
Regulation Z disclosure statements executed by the related Mortgagors, (3) the
appraisal report made in connection with the origination of the Mortgage Loan
(4) the settlement statement for the purchase and/or refinancing of the
underlying Mortgaged Property by the related Mortgagor under the related
Mortgage Note and Mortgage, (5) the originals of any tax service contracts, (6)
documentation relating to any approvals by the Servicer of any modifications of
the original related Mortgage Loan Documents and any releases of collateral
supporting the related Mortgage Loan, together with copies of the documentation
effecting any such modifications or releases, (7) collection notices or form
notices sent to the related Mortgagor, (8) foreclosure correspondence and legal
notifications, if applicable, (9) water and irrigation company stock
certificates, if applicable, and (10) all other documents relating to such
Mortgage Loan which would customarily be maintained in a mortgage loan file by
the Servicer in order to service the mortgage loan properly, as well as any
other documents relating to such Mortgage Loan (other than Mortgage Loan
documents) that come into the Servicer's possession.
"SERVICER REMITTANCE REPORT": The monthly report prepared by the
Servicer and delivered to the parties specified in Section 3.01.
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"SERVICING ADVANCES": All reasonable and customary "out-of-pocket"
costs and expenses incurred in the performance by the Servicer of its servicing
obligations, including, but not limited to, the cost of (1) the preservation,
restoration and protection of the Mortgaged Properties, including without
limitation advances in respect of real estate taxes and assessments and
insurance premiums on fire, hazard and, if applicable, flood insurance policies,
to the extent not paid by the related Mortgagors, (2) any enforcement or
judicial proceedings with respect to the Mortgage Loans or Mortgaged Properties,
including foreclosures, (3) the management and liquidation of any REO Property
and (4) compliance with the Servicer's obligations under Section 2.03 (other
than its obligation to deposit in the Collection Account amounts representing
the deductible in respect of any blanket hazard insurance policy).
"SERVICING FEE RATE": 0.50%.
"SERVICING OFFICER": Any officer of the Servicer involved in, or
responsible for, the administration and servicing of the Mortgage Loans whose
name and specimen signature appear on a list of servicing officers annexed to an
Officer's Certificate furnished to the Indenture Trustee by the Servicer, as
such list may from time to time be amended.
"SIX-MONTH LIBOR": For any Mortgage Loan as of an interest rate
adjustment date for such loan, a per annum rate equal to the average of
interbank offered rates for six-month U.S. dollar-denominated deposits in the
London market based on quotations of major banks as published in The Wall Street
Journal and as most recently available (i) as of the first business day of the
month immediately preceding the month in which the adjustment date occurs or
(ii) as of the date 45 days prior to the adjustment date.
"STANDARD & POOR'S" OR "S&P": Standard & Poor's Ratings Services, a
Division of The ▇▇▇▇▇▇-▇▇▇▇ Companies, Inc., and its successors in interest.
"SUB-SERVICER": Any Person, including an Affiliate of the Servicer,
with whom the Servicer has entered into a Sub-Servicing Agreement and who
satisfies the requirements set forth in Section 2.14 hereof in respect of the
qualification of a Sub-Servicer.
"SUB-SERVICING ACCOUNT": Any segregated trust account, which shall at
all times be an Eligible Account, established and maintained as though it were a
Collection Account pursuant to Section 2.02(b) and entitled "[Sub-Servicer], in
trust for the benefit of Holders of Fund America Investors Trust 1997-NMC1
Collateralized Mortgage Obligations, Series 1997-NMC1, and MBIA as Bond Insurer
Collection Account". References herein to the Collection Account shall include
any Sub-Servicing Account as the context requires.
"SUB-SERVICING AGREEMENT": A written contract between the Servicer and
any Sub-Servicer relating to the servicing and/or administration of certain
Mortgage Loans.
"TARGET NET WORTH": As of the end of any fiscal quarter, the lesser of
(1) $20,000,000 or (ii) the applicable Base Net Worth plus 75% of all cumulative
after tax net income earned by the Servicer from the later of June 30, 1997 or
the date such Base Net Worth was established, through the end of such quarter.
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"TRANSFEROR": Fund America Investors Corporation II, as transferor of
the Mortgage Loans to the Issuer pursuant to the terms of that certain Mortgage
Loan Contribution Agreement, dated as of September 1, 1997, between Fund America
Investors Corporation II and the Issuer.
"TRUST CERTIFICATES": The certificates of beneficial ownership of the
Issuer.
"TRUST ESTATE": As defined in the Indenture.
"TRUST INSURANCE PROCEEDS": Insurance Proceeds that (1) are applied by
the Servicer to reduce the Principal Balance of the related Mortgage Loan and
(2) not applied to the restoration or repair of the related Mortgaged Property
or released to the related Mortgagor in accordance with the Servicer's normal
servicing procedures, applicable law or the terms of the related Mortgage Loan.
"TRUST PAYING AGENT": As defined in the Deposit Trust Agreement.
"UNDERWRITERS": ContiFinancial Services, Inc. and Greenwich Capital
Markets, Inc.
"UNDERWRITING AGREEMENT": The underwriting agreement, dated as of
September 17, 1997, between Fund America Investors Corporation II and the
Underwriters.
"VICE PRESIDENT": Any vice president, whether or not designated by a
number or a word or words added before or after the title "vice president".
"VOTING INTEREST": With respect to any provisions hereof providing for
the action, consent or approval of the Holders of all Bonds evidencing specified
Voting Interests in the Trust Estate, the Bondholders will collectively be
entitled to 100% of the aggregate Voting Interests represented by all Bonds.
Voting Interests allocated to the Bonds shall be allocated in proportion to the
Bond Balance. With respect to any provision hereof providing for action, consent
or approval of the Bonds, each Holder of the Bonds will have a Voting Interest
in the Bonds equal to such Holder's Percentage Interest in the Bonds.
SECTION 1.02. INTEREST CALCULATIONS.
All calculations of interest at the Mortgage Loan Rate that are made in
respect of the Principal Balance of a Mortgage Loan, shall be made on a daily
basis using a 360-day year of twelve 30-day months.
SECTION 1.03. DETERMINATION OF MATERIAL ADVERSE EFFECT.
Whenever a determination is to be made under this agreement as to
whether a given action, course of conduct, event or set of facts or
circumstances could or would have a material adverse effect on the Trust Estate,
the Bond Insurer or any Bondholder (or any similar or analogous determination),
such determination shall be made without giving effect to the insurance provided
by the Bond Insurance Policy.
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ARTICLE II
ADMINISTRATION AND SERVICING OF MORTGAGE LOANS
SECTION 2.01. SERVICING GENERALLY.
(a) General Duties; Licensing. Acting directly or through one
or more Sub-Servicers as provided in Section 2.14, the Servicer, as servicer,
shall administer the Mortgage Loans with reasonable care, using that degree of
skill and attention that the Servicer exercises with respect to all comparable
mortgage loans that it services for itself or others. The Servicer shall follow
its customary standards, policies and procedures in performing its duties as
Servicer, to the extent not in conflict with the provisions of this Agreement.
Notwithstanding the appointment of any Sub-Servicer, the Servicer shall remain
liable for the performance of all of the servicing obligations and
responsibilities under this Agreement. The Servicer shall maintain all licenses
and qualifications necessary under the laws of any jurisdiction where Mortgaged
Properties are located for it to perform the servicing obligations hereunder
legally. The Servicer shall cause any Sub-Servicer to maintain for it all
licenses and qualifications necessary to perform its servicing obligations in
the states where the Mortgaged Properties to which the applicable Sub-Servicing
Agreement relates are located. The Servicer shall cooperate with the Issuer and
the Indenture Trustee and furnish to the Issuer and the Indenture Trustee such
information in its possession as may be necessary or otherwise reasonably
requested to enable the Issuer and the Indenture Trustee to perform their
respective tax reporting duties under the Indenture. The Issuer and the
Indenture Trustee 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 hereunder.
(b) Interest Rate and Monthly Payment Adjustments. The
Servicer shall enforce each Mortgage Loan and shall timely calculate, record,
report and apply all Mortgage Interest Rate adjustments in accordance with the
related Mortgage Note. The Servicer's records shall, at all times, reflect the
then-current Mortgage Interest Rate and Monthly Payment and the Servicer shall
timely notify the Mortgagor of any changes to the Mortgage Interest Rate and the
Monthly Payment.
(c) Servicer Authority. Without limiting the generality of the
foregoing, the Servicer (1) shall continue, and is hereby authorized and
empowered by the Issuer and the Indenture Trustee, to execute and deliver, on
behalf of itself, the Issuer, the Bondholders, the Bond Insurer and the
Indenture Trustee or any of them, any and all instruments of satisfaction or
cancellation, or of partial or full release or discharge and all other
comparable instruments, with respect to the Mortgage Loans and with respect to
the related Mortgaged Properties and (2) subject to Section 2.05, to institute
foreclosure proceedings or obtain deeds in lieu of foreclosure so as to convert
ownership of Mortgaged Properties into the name of the Indenture Trustee
pursuant to Section 2.05 of this Agreement. The Servicer may ▇▇▇ to enforce or
collect on any of the Mortgage Loans or any insurance policy covering a Mortgage
Loan, in its own name if possible, or on behalf of the Issuer or the Indenture
Trustee. If the Servicer commences a legal proceeding to enforce a Mortgage Loan
or any such insurance policy, the Issuer and the Indenture Trustee shall
thereupon be deemed to have automatically assigned the Mortgage Loan or the
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rights under such insurance policy to the Servicer for purposes of collection
only. If, however, in any suit or legal proceeding for enforcement, it is held
that the Servicer may not enforce or collect on a Mortgage Loan or any insurance
policy covering a Mortgage Loan on the ground that it is not a real party in
interest or a holder entitled to enforce such Mortgage Loan or such insurance
policy, as the case may be, then the Issuer and the Indenture Trustee shall,
upon the written request of a Servicing Officer, execute and return to the
Servicer such powers of attorney and other documents as are necessary or
appropriate to enable the Servicer to enforce such Mortgage Loan or insurance
policy, as the case may be, and which are prepared by the Servicer and submitted
to the Issuer or the Indenture Trustee for execution.
The Servicer, on behalf of the Issuer, the Bondholders and the Bond
Insurer, shall prepare, execute, deliver and take all actions reasonably
necessary to protect the Trust Estate pursuant to Section 3.05 of the Indenture
and shall, on behalf of the Issuer, execute and deliver and take any additional
actions as shall be deemed necessary to effect the administrative obligations of
the Issuer under the Indenture.
(d) Independent Contractor Relationship. The relationship of
the Servicer to the Issuer and the Indenture Trustee under this Agreement is
intended by the parties to be that of an independent contractor and not that of
a joint venturer, partner or agent.
SECTION 2.02. COLLECTION OF CERTAIN MORTGAGE LOAN PAYMENTS; COLLECTION
ACCOUNT.
(a) Collection Procedures. The Servicer shall, to the extent
such procedures shall be consistent with this Agreement, follow such collection
procedures as it follows from time to time with respect to mortgage loans in its
servicing portfolio that are comparable to the Mortgage Loans. A summary of the
Servicer's collection procedures is attached hereto as Exhibit D. The Servicer
shall not amend or modify these procedures, policies and practices with respect
to the Mortgage Loans (other than as required by applicable laws and
regulations) without the prior consent of the Bond Insurer, and a copy of any
such amendment or modification shall be furnished to the Indenture Trustee.
Consistent with the foregoing, the Servicer may in its discretion (1) waive any
assumption fees, late payment charges, charges for checks returned for
insufficient funds, prepayment fees, if any, or other fees that may be collected
in the ordinary course of servicing the Mortgage Loans, (2) if a Mortgagor is in
default or appears about to be in default because of a Mortgagor's financial
condition, arrange with the Mortgagor a schedule for the payment of delinquent
payments due on the related Mortgage Loan or (3) modify payments of monthly
principal and interest on any Mortgage Loan becoming subject to the terms of the
Soldiers' and Sailors' Civil Relief Act of 1940, as amended (the "Relief Act"),
in accordance with the Servicer's general policies for comparable mortgage loans
subject to the Relief Act; provided, however, that the Servicer shall not,
without the prior written consent of the Bond Insurer, permit any waiver,
modification or variance of a Mortgage Loan which would (1) change the Mortgage
Interest Rate, (2) forgive the payment of any principal or interest, (3) impair
the priority of the lien represented by the related Mortgage or (4) extend the
final maturity date of the Mortgage Loan beyond March 2028, in any case except
to the extent required under the Relief Act. The Servicer will not consent to
the placement of a deed of trust or mortgage, as applicable, on any Mortgaged
Property that has a priority equal to or higher than the lien securing the
related
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Mortgage Loan unless such Mortgage Loan is prepaid in full. No partial release
of a Mortgage Loan shall be made if it would cause the Loan-to-Value Ratio of
the Mortgage Loan (taking into account the partial release) to be higher than
the Loan-to-Value Ratio of the Mortgage Loan at origination.
(b) Collection Account. The Servicer shall establish and
maintain, or cause to be established and maintained, one or more Eligible
Accounts that in the aggregate are the Collection Account. At the Servicer's
option, amounts held in the Collection Account shall be invested by the
depository institution or trust company then maintaining the account at the
written direction of the Servicer in Permitted Investments that mature not later
than the Deposit Date next succeeding the date of investment. The Servicer shall
not retain any cash or investment in the Collection Account for a period in
excess of 12 months and cash therein shall be considered transferred on a
first-in, first-out basis to the Indenture Trustee for inclusion in the Bond
Account, as described in Section 2.02(d). All net income and gain realized from
any such investment shall be for the benefit of the Servicer as additional
servicing compensation and shall be subject to its withdrawal or order from time
to time. Any losses realized in connection with any such investment shall be for
the account of the Servicer and the Servicer shall deposit or cause to be
deposited the amount of such loss (to the extent not offset by income from other
investments) in the Collection Account immediately upon the realization of such
loss and shall have no right to reimbursement therefor. Any benefit resulting
from deposits, maintenance or investment of funds in the Collection Account
shall be for the Servicer's benefit.
(c) Deposits to Collection Account. Subject to the last
paragraph of this Section 2.02(c), the Servicer shall deposit in the Collection
Account each of the following payments on and collections in respect of the
Mortgage Loans as soon as practicable, but in no event later than the close of
business on the second Business Day after its receipt thereof:
(i) all payments in respect of or allocable to interest on
the Mortgage Loans (including any net income from REO Properties), net
of the Monthly Servicing Fees attributable to such payments;
(ii) all collections of principal on or with respect to the
Mortgage Loans;
(iii) all Payments Ahead;
(iv) all Net Liquidation Proceeds; and
(v) all Trust Insurance Proceeds (including, for this
purpose, any amounts required to be credited by the Servicer pursuant
to the last sentence of Section 2.03).
in any case net of its Monthly Servicing Fees, Ancillary Servicing Compensation,
and reimbursable outstanding Servicing Advances and Monthly Advances, to the
extent the Servicer's automated system deducts such amounts from collected funds
prior to deposit of such collected funds into the Collection Account.
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The Servicer shall replace all amounts previously withdrawn from the
Collection Account and applied by the Servicer towards the payment of a Monthly
Advance pursuant to Section 4.01(a) or towards the payment of a Servicing
Advance pursuant to Section 4.01(b) by depositing into the Collection Account on
or prior to the Deposit Date immediately following such withdrawal an amount
equal to the total of all such amounts so applied since the immediately
preceding Deposit Date.
The foregoing requirements respecting deposits to the Collection
Account are exclusive, it being understood that, without limiting the generality
of the foregoing, the Servicer need not deposit in the Collection Account
amounts representing fees, late payment charges, charges for checks returned for
insufficient funds, prepayment fees, if any, or extension or other
administrative charges paid by Mortgagors or amounts received by the Servicer
for the account of Mortgagors for application towards the payment of taxes,
insurance premiums, assessments and similar items. The amounts deposited in the
Collection Account are subject to withdrawal by the Servicer, from time to time,
(1) to make transfers to the Indenture Trustee for deposit into the Bond Account
pursuant to Section 2.02(d), (2) to pay itself the Monthly Servicing Fee, to the
extent not already paid to or retained by the Servicer, pursuant to Section
2.07, Ancillary Servicing Compensation, and investment income on Permitted
Investments, (3) to make Servicing Advances or to reimburse itself for Servicing
Advances, as applicable, in either case in accordance with Section 4.01(b), (4)
to make Monthly Advances in accordance with Section 4.01(a) or to reimburse
itself for payments of Monthly Advances as described in Section 4.01(a), and (5)
to clear and terminate the Collection Account. In addition, if the Servicer
deposits in the Collection Account any amount not required to be so deposited or
any amount in respect of payments by Mortgagors made by checks subsequently
returned for insufficient funds or other reason for non-payment, it may at any
time withdraw such amount from the Collection Account, any provision herein to
the contrary notwithstanding.
Upon such terms as the Bond Insurer, Standard & Poor's and ▇▇▇▇▇'▇ may
approve, the Servicer may make the deposits to the Collection Account referred
to in Section 2.02(c) on a later day than the second Business Day after receipt
of the amounts required to be so deposited, which terms and later day shall be
specified by the Bond Insurer, Standard & Poor's and ▇▇▇▇▇'▇ and confirmed to
the Indenture Trustee and the Servicer in writing; provided, however, that in
any event such amounts shall be deposited into the Collection Account no later
than the next succeeding Deposit Date.
(d) Remittances to Indenture Trustee. At or before 12:00 noon Denver
time on each Deposit Date, the Servicer shall withdraw from the Collection
Account all amounts on deposit therein that constitute any portion of Remittable
Funds for the related Deposit Date (including any amounts therein that are being
held for remittance on a subsequent Deposit Date and are applied toward the
Monthly Advance for the related Deposit Date pursuant to Section 4.01(a)) and
remit such amounts to the Indenture Trustee for deposit into the Bond Account.
In addition, any amounts required pursuant to the Indenture to be deposited into
the Bond Account in connection with a purchase of any Mortgage Loans by the
Servicer pursuant to the Indenture and any other amounts (including Monthly
Advances and Compensating Interest for such Deposit Date) required by this
Agreement to be deposited by the Servicer with the Indenture Trustee shall
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be remitted to the Indenture Trustee for deposit into the Bond Account on the
applicable Deposit Date. On each Deposit Date after the Indenture has been
satisfied and released for so long as the Deposit Trust Agreement remains in
effect, the Servicer shall remit all Remittable Funds to the Trust Paying Agent,
for deposit into the Certificate Distribution Account in accordance with the
Deposit Trust Agreement.
In the event that the Servicer does not remit all Remittable Funds for
the related Payment Date on the Deposit Date, the Servicer also shall pay to the
Indenture Trustee on demand, for its own account and not for the account of the
Bondholders, an amount equal to the income that the Indenture Trustee would have
received on the investment of such funds in Permitted Investments, as reasonably
calculated by the Indenture Trustee, from the Deposit Date until the date that
such Remittable Funds have been remitted to the Indenture Trustee.
SECTION 2.03. HAZARD INSURANCE POLICIES.
The Servicer shall cause to be maintained for each Mortgage Loan
(including any Mortgage Loan as to which the related Mortgaged Property has been
acquired on behalf of the Indenture Trustee upon foreclosure, by deed in lieu of
foreclosure or comparable conversion), hazard insurance (including flood
insurance coverage, if obtainable, to the extent such property is located in a
federally designated flood area in such amount as is required under applicable
FEMA guidelines) with extended coverage in an amount that is not less than the
lesser of (1) the maximum insurable value from time to time of the improvements
that are a part of such property or a replacement cost basis, or (2) the
principal balance of such Mortgage Loan, determined in the case of a Mortgage
Loan that has been foreclosed at the time of such foreclosure; provided,
further, that such hazard insurance shall be in an amount not less than such
amount as is necessary to avoid the application of any coinsurance clause
contained in the related hazard insurance policy. Each such hazard insurance
policy shall contain a standard mortgagee loss payable clause naming the
originator, its successors and assigns, as mortgagee. The Servicer shall be
under no obligation to require that any Mortgagor maintain earthquake or other
additional insurance and shall be under no obligation itself to maintain any
such additional insurance on property acquired in respect of a Mortgage Loan,
other than pursuant to such applicable laws and regulations as shall at any time
be in force and as shall require such additional insurance. Amounts collected by
the Servicer under any such policies shall be deposited into the Collection
Account in accordance with Section 2.02 to the extent that they constitute Net
Liquidation Proceeds or Trust Insurance Proceeds. If the Servicer shall obtain
and maintain a blanket policy, issued by an insurer acceptable to each Rating
Agency and the Bond Insurer, insuring against such hazard losses, it shall
conclusively be deemed to have satisfied its obligations as set forth in the
first sentence of this Section, it being understood and agreed that such policy
may contain a deductible clause that is in form and substance consistent with
standard industry practice, in which case the Servicer shall, in the event that
there shall not have been maintained on the related Mortgaged Property a policy
complying with the first sentence of this Section 2.03, and there shall have
been a loss that would have been covered by such policy, deposit in the
Collection Account in accordance with Section 2.02 the amount not otherwise
payable under the blanket policy because of such deductible clause from its own
funds, and such amount shall not be reimbursable to the Servicer.
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SECTION 2.04. ENFORCEMENT OF DUE-ON-SALE CLAUSES; ASSUMPTION AND
MODIFICATION AGREEMENTS.
In any case in which property subject to a Mortgage is voluntarily
conveyed by the Mortgagor, the Servicer may enter into an assumption agreement
with the Person to whom such Mortgaged Property has been or is about to be
conveyed, pursuant to which such Person becomes liable under the related
Mortgage Note and, to the extent permitted by applicable law or the related
mortgage documents, the Mortgagor remains liable thereon. The Servicer shall not
enter into any assumption agreement which modifies the Mortgage Interest Rate or
payment terms of the Mortgage Note without the consent of the Bond Insurer. If
the Person to whom such Mortgaged Property has been or is about to be conveyed
satisfies the Servicer's then-current underwriting standards as to borrower
creditworthiness for mortgage loans similar to the Mortgage Loans and is in the
same Seller credit rating category as that which was assigned to the borrower
under the Mortgage Loan being replaced, the Servicer may enter into a
substitution of liability agreement with such person, under which the previous
Mortgagor is released from liability thereon and the transferee is substituted
as a Mortgagor and becomes liable under the Mortgage Note. The Servicer shall
not permit an assumption agreement or a substitution of liability agreement with
respect to a Mortgage Loan unless permitted by applicable law and unless the
Servicer determines that such action would not materially increase the risk of
default or delinquency on such Mortgage Loan or materially impair the security
for such Mortgage Loan. The Servicer will not enter into any assumption
agreement or substitution of liability agreement unless such agreement complies
with the Servicer's standard servicing procedures and the Servicer would enter
into such agreement with respect to a mortgage loan in its own portfolio. The
Servicer shall notify the Indenture Trustee that any assumption agreement or
substitution of liability agreement has been completed and the Servicer shall
forward to the Indenture Trustee the original of such assumption agreement or
substitution of liability agreement. Such assumption agreement or substitution
of liability agreement shall, for all purposes, be considered a part of the
related Mortgage File to the same extent as all other documents and instruments
constituting a part thereof. In connection with any such agreement, the Mortgage
Interest Rate shall not be reduced (but may be increased), the Principal Balance
of such Mortgage Loan shall not be changed and the term of such Mortgage Loan
will not be extended beyond the existing term of such Mortgage Loan. Any fee
collected by the Servicer for entering into any such agreement shall be retained
by the Servicer as Ancillary Servicing Compensation.
In the event the Servicer does not approve an assumption of a Mortgage
Loan as described above, the Servicer will enforce any related due-on-sale
clause to the extent permitted by the related Mortgage Note and Mortgage and by
all applicable laws and regulations, but only to the extent the Servicer does
not believe that such enforcement will (1) adversely affect or jeopardize
coverage under any related insurance policy, (2) result in legal action by the
Mortgagor, or (3) materially increase the risk of default or delinquency on, or
materially impair the security for, such Mortgage Loan.
Notwithstanding the foregoing paragraph of this Section 2.04 or any
other provision of this Agreement, the Servicer shall not be deemed to be in
default, breach or any other violation of its obligations hereunder by reasons
of any assumption of a Mortgage Loan, or transfer of any
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Mortgaged Property without the assumption thereof, by operation of law or any
assumption or transfer that the Servicer reasonably believes it may be
restricted by law from preventing, for any reason whatsoever.
SECTION 2.05. REALIZATION UPON DEFAULTED MORTGAGE LOANS, OPTIONS TO
PURCHASE MORTGAGE LOANS.
The Servicer, on behalf of and as the agent of the Indenture Trustee,
shall foreclose upon or otherwise comparably convert the ownership of Mortgaged
Properties securing such of the Mortgage Loans as come into and continue in
default and as to which no satisfactory arrangements can be made for collection
of delinquent payments pursuant to Section 2.02(a) into the name of the
Indenture Trustee; provided, however, that if the Servicer has actual knowledge
or reasonably believes that any Mortgaged Property is affected by hazardous or
toxic wastes or substances, then the Servicer will cause to be undertaken an
environmental inspection of the Mortgaged Property that complies with ▇▇▇▇▇▇
Mae's selling and servicing guide applicable to single family homes and its
servicing procedures. If the environmental inspection reveals any potentially
hazardous substances, the Servicer will notify the Indenture Trustee and the
Bond Insurer, and the Servicer will not foreclose or accept a deed in lieu of
foreclosure on the Mortgaged Property without the consent of the Indenture
Trustee and the Bond Insurer. In connection with such foreclosure or other
conversion, the Servicer shall follow such practices and procedures as it shall
deem necessary or advisable and as shall be normal and usual in its general
first lien one- to four-family mortgage loan servicing activities. The foregoing
is subject to the proviso that the Servicer shall not be required to expend its
own funds in connection with any foreclosure or restoration of any Mortgaged
Property unless, in the reasonable judgment of the Servicer, such foreclosure,
correction or restoration will increase Net Liquidation Proceeds (taking into
account the reimbursement of such expenses to the Servicer and any unreimbursed
Servicing Advances and Monthly Advances made or expected to be made with respect
to such Mortgage Loan).
To the extent the Net Liquidation Proceeds derived from any such
foreclosure or conversion exceed the Principal Balance of the related Mortgage
Loan and accrued interest thereon at the applicable Mortgage Interest Rate
through the Determination Date during the Collection Period in which such
foreclosure or conversion occurs (net of any Monthly Advances or Servicing
Advances made by the Servicer with respect to such Mortgage Loan and that were
unreimbursed prior to the receipt of such Net Liquidation Proceeds), such excess
shall be paid directly to the Servicer as additional Servicing Compensation and
shall be free from the lien of the Indenture.
The Servicer must determine, as to each defaulted Mortgage Loan, when
such Mortgage Loan has become a Liquidated Mortgage Loan.
The Servicer, at its sole option, may purchase from the Trust Estate on
any Deposit Date any Mortgage Loan as to which the related Mortgagor has failed
to make full Monthly Payments as required under the related Mortgage Note for
three consecutive months at any time following the applicable Cut-off Date and
prior to such Deposit Date at a price equal to the Purchase Price
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by transferring such amount to the Indenture Trustee for deposit into the Bond
Account on such Deposit Date pursuant to Section 2.02; provided, however, that
the aggregate Principal Balances of the Mortgage Loans purchased by the Servicer
pursuant to the exercise of the option granted in this sentence shall not exceed
10% of the Initial Pool Balance, unless otherwise approved by the Bond Insurer.
On any Deposit Date following the Determination Date as of which the aggregate
of the Principal Balances of the Mortgage Loans is equal to or less than 10% of
the Initial Pool Balance, if the holders of more than 50% of the Trust
Certificates shall not have elected to redeem the Bonds pursuant to the
Indenture, the Servicer, in its sole discretion, may purchase from the Trust
Estate all, but not less than all, of the Mortgage Loans then included in the
Trust Estate at a price equal to the Purchase Price for each such Mortgage Loan
by transferring such amount to the Indenture Trustee for deposit in the Bond
Account on such Deposit Date pursuant to Section 2.02. Upon the receipt by the
Indenture Trustee of the Purchase Price for any Mortgage Loan as to which the
Servicer has exercised its option to purchase pursuant to this paragraph, the
Indenture Trustee shall release to the Servicer the Mortgage File pertaining to
each such Mortgage Loan and the Indenture Trustee and the Issuer shall execute
and deliver such instruments of transfer and all other documents furnished by
the Servicer as are necessary to transfer their respective interests in such
Mortgage Loans to the Servicer. For purposes of this Agreement, any purchase
effected in accordance with this paragraph shall be deemed to be a prepayment of
each Mortgage Loan so purchased.
In the event that title to any Mortgaged Property is acquired as REO
Property by the Indenture Trustee in foreclosure or by deed in lieu of
foreclosure, the deed or certificate of sale shall be issued to the Indenture
Trustee, or to its nominee, on behalf of the Bondholders and the Bond Insurer,
and the Servicer shall manage, conserve, protect and operate each such REO
Property for the Bondholders solely for the purpose of its prompt disposition
and sale. The Servicer shall use its best efforts to dispose of each such REO
Property as expeditiously as possible consistent with the goal of maximizing Net
Liquidation Proceeds (taking into account any unreimbursed Servicing Advances
and Monthly Advances made or expected to be made with respect to such REO
Property). None of the Issuer, the Indenture Trustee or the Servicer, acting on
behalf of the Trust Estate, shall provide financing from the Trust Estate to any
purchaser of any such REO Property.
SECTION 2.06. INDENTURE TRUSTEE TO COOPERATE; RELEASE OF MORTGAGE
FILES.
(a) Upon the payment in full of the principal balance of any
Mortgage Loan, the Servicer shall notify the Indenture Trustee by a
certification in the form of Exhibit B hereto (a "Request for Release") (which
certification shall include a statement to the effect that all amounts received
in connection with such payment which are required to be deposited to the
Collection Account pursuant to Section 2.02 have been so deposited) of a
Servicing Officer. Such notification shall be made each month at the time that
the Servicer delivers its Servicer Remittance Report to the Issuer and the
Indenture Trustee pursuant to Section 3.01. Upon any such payment in full, the
Servicer is authorized to procure a deed of full reconveyance covering the
related Mortgaged Property encumbered by such Mortgage, which deed, except as
otherwise provided in applicable law, shall be recorded in the office of the
County Recorder in which the Mortgage is recorded, or, as the case may be, to
procure an instrument of satisfaction or, if the related
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Mortgagor so requests, an assignment without recourse, in each case prepared by
the Servicer at its expense and executed by the Indenture Trustee, which deed of
reconveyance, instrument of satisfaction or assignment shall be delivered by the
Servicer to the Person entitled thereto, it being understood and agreed that no
expenses incurred in connection with such deed of reconveyance, assignment or
instrument of satisfaction shall be reimbursed from amounts at the time on
deposit in the Collection Account.
(b) From time to time and as appropriate for the servicing or
foreclosure of any Mortgage Loan or to effect a partial release of any Mortgaged
Property from the lien of the related Mortgage, the Servicer shall deliver to
the Indenture Trustee a Request for Release requesting the related Trustee
Mortgagee Loan File or specified documents included therein. The Indenture
Trustee shall, within five Business Days after its receipt of such Request for
Release, release the related Mortgage File or the specified documents to the
Servicer. Any such Request for Release shall obligate the Servicer to return
each and every document previously requested from the Mortgage File to the
Trustee by the twenty-first day following the release thereof, unless (1) the
Mortgage Loan has been liquidated and the Net Liquidation Proceeds relating to
the Mortgage Loan have been deposited in the Collection Account or the Bond
Account or (2) the Mortgage File or such document has been delivered to an
attorney, or to a public trustee or other public official as required by law,
for the purposes of initiating or pursuing legal action or other proceedings for
the foreclosure of the Mortgaged Property either judicially or non-judicially,
and the Servicer has delivered to the Indenture Trustee a certificate of the
Servicer certifying as to the name and address of the Person to which such
Mortgage File or such document was delivered and the purpose or purposes of such
delivery. Upon receipt of an officer's certificate of the Servicer stating that
such Mortgage Loan was liquidated and that all amounts received or to be
received in connection with such liquidation which are required to be deposited
into the Collection Account or the Bond Account have been so deposited, or that
such Mortgage Loan has become an REO Property (each, a "Servicing Officer's
Certificate"), the Request for Release shall be released by the Indenture
Trustee to the Servicer.
(c) Upon receipt of a Servicing Officer's Certificate, the
Indenture Trustee shall execute any documents prepared by the Servicer and
delivered to it as necessary or appropriate to enable the Servicer to perform
its obligations hereunder, including, without limitation, documents to enable
the Servicer to convey title to a Mortgaged Property to the Mortgagor or its
designee upon payment of the Mortgage Loan in full or to convey title to an REO
Property to the purchaser thereof, or to convey title to a Mortgaged Property
into the name of the Indenture Trustee pursuant to Section 2.05.
SECTION 2.07. SERVICING COMPENSATION; PAYMENT OF CERTAIN EXPENSES BY
THE SERVICER; COMPENSATION INTEREST.
On each Deposit Date, the Servicer shall be entitled to receive, by
withdrawal by the Servicer from the Collection Account, out of collections of
interest on the Mortgage Loans for the related Collection Period, as servicing
compensation for such Collection Period, the Monthly Servicing Fee, to the
extent not retained by the Servicer from amounts remitted to the Collection
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Account pursuant to Section 2.02(c)(i). The Servicer shall also be entitled to
retain any Ancillary Servicing Compensation when received.
The Servicer shall pay Compensating Interest to the Indenture Trustee
on behalf of the Bondholders out of the related Monthly Servicing Fee on each
Deposit Date, to the extent of the amount of the Monthly Servicing Fee, and
shall not be entitled to reimbursement therefor. The Servicer shall be required
to pay all expenses incurred by it in connection with its activities hereunder
(including payment of the fees and expenses relating to the Annual Independent
Public Accountant's Servicing Report described in Section 2.09, and all other
fees and expenses not otherwise expressly stated hereunder for the account of
the Bondholders) and shall not be entitled to reimbursement therefor except as
specifically provided herein.
SECTION 2.08. ANNUAL STATEMENT AS TO COMPLIANCE.
(a) The Servicer will deliver to the Issuer, the Indenture
Trustee, the Bond Insurer and each Rating Agency, with a copy to each of the
Underwriters, on or before March 31 of each year, beginning with March 31, 1998,
an Officer's Certificate of the Servicer substantially in the form set forth in
Exhibit A hereto stating that (1) a review of the activities of the Servicer
during the preceding calendar year (or since the Closing Date in the case of the
first such statement) and of its performance under this Agreement has been made
under such officer's supervision and (2) to the best of such officer's
knowledge, based on such review, the Servicer has fulfilled all its material
obligations under this Agreement throughout such year (or since the Closing Date
in the case of the first such statement), or, if there has been a default in the
fulfillment of any such obligation, specifying each such default known to such
officer and the nature and status thereof.
(b) The Servicer shall deliver to the Issuer and the Indenture
Trustee, with a copy to the Bond Insurer, each Rating Agency and each of the
Underwriters, promptly after having obtained knowledge thereof, but in no event
later than ten Business Days thereafter, written notice by means of an Officer's
Certificate of any event that with the giving of notice or the lapse of time, or
both, would become an Event of Default. Without duplication of the foregoing,
the Servicer will deliver to the Indenture Trustee a copy of any information it
provides to the Bond Insurer under Section 2.02(f) of the Insurance Agreement.
SECTION 2.09. ANNUAL INDEPENDENT PUBLIC ACCOUNTANTS' SERVICING REPORT.
On or before March 31 of each year, beginning with March 31, 1998, the
Servicer at its expense shall cause a firm of nationally recognized independent
public accountants (who may also render other services to the Servicer) to
furnish a report to the Issuer, the Indenture Trustee, the Bond Insurer and each
Rating Agency, with a copy to each of the Underwriters, to the effect that such
firm has examined certain documents and records relating to the servicing
activities of the Servicer for the period covered by such report, and that such
examination, which has been conducted substantially in compliance with the
Uniform Single Attestation Program for Mortgage Bankers (to the extent that the
procedures in such audit guide are applicable to the servicing obligations set
forth in this Agreement), has disclosed no exceptions or errors in records
relating
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to the servicing activities of the Servicer that, in the opinion of such firm,
are material, except for such exceptions as shall be set forth in such report.
SECTION 2.10. ACCESS TO CERTAIN DOCUMENTATION AND INFORMATION REGARDING
THE MORTGAGE LOANS.
(a) The Servicer shall provide to Bondholders that are
federally insured savings associations and the FDIC and its supervisory agents
and examiners access to the documentation regarding the Mortgage Loans required
by applicable regulations of the Office of Thrift Supervision, and to the
Issuer, the Indenture Trustee and the Bond Insurer and their respective agents
all documentation relating to the Mortgage Loans that is in the possession of
the Servicer, such access being afforded without charge but only upon reasonable
request and during normal business hours at the offices of the Servicer. Nothing
in this Section 2.10(a) shall derogate from the obligation of the Servicer to
observe any applicable law prohibiting disclosure of information regarding the
Mortgagors, and the failure of the Servicer to provide access as provided in
this Section as a result of such obligation shall not constitute a breach of
this Section.
(b) The Servicer shall supply information to the Indenture
Trustee, upon reasonable advance notice, in such form as the Indenture Trustee
shall reasonably request, as is required in the Indenture Trustee's reasonable
judgment to enable the Indenture Trustee to make required payments and to
furnish the certificates, statements and reports to Bondholders and the Bond
Insurer as required of the Indenture Trustee pursuant to the Indenture, it being
understood that the Servicer is responsible for supplying information concerning
the Mortgage Loans and not for any other information, including, without
limitation, calculation of payments due on the Bonds. The Servicer shall also
supply information upon reasonable advance notice, in such form as the Bond
Insurer shall reasonably request, as is reasonably requested by the Bond Insurer
to enable the Bond Insurer to monitor the performance of the Mortgage Loans.
SECTION 2.11. MAINTENANCE OF FIDELITY BOND AND ERRORS AND OMISSIONS
POLICY.
The Servicer shall during the term of its service as Servicer maintain
in force a (1) policy or policies of insurance covering errors and omissions in
the performance of its obligations as Servicer hereunder and (2) fidelity bond
in respect of its officers, employees and agents, in each case having coverage
amounts deemed by the Servicer to be adequate to its operations.
SECTION 2.12. NOTICES TO THE ISSUER, THE RATING AGENCIES, THE INDENTURE
TRUSTEE AND THE BOND INSURER.
In addition to the other notices required to be given to the Issuer,
the Rating Agencies, the Indenture Trustee, the Bond Insurer and the
Underwriters by the provisions of this Agreement, the Servicer shall give prompt
notice to the Issuer, each Rating Agency, the Indenture Trustee and the Bond
Insurer of (1) any amendment to this Agreement, (2) the occurrence of an Event
of Default and (3) the purchase of any Mortgage Loan pursuant to Section 2.01 or
2.05 by the Servicer, as the case may be.
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SECTION 2.13. REPORTS OF FORECLOSURES AND ABANDONMENT OF MORTGAGED
PROPERTIES.
On or before February 28 of each year beginning in 1998, the Servicer
shall file the reports of foreclosures and abandonments of any Mortgaged
Property required by Code Section 6050J with the Internal Revenue Service and
provide a copy of such filing to the Indenture Trustee. The reports from the
Servicer shall be in form and substance sufficient to meet the reporting
requirements imposed by such Section 6050J.
SECTION 2.14. SUB-SERVICERS AND SUB-SERVICING AGREEMENTS.
(a) The Servicer may enter into Sub-Servicing Agreements for
any servicing and administration of Mortgage Loans with any institution that is
acceptable to the Bond Insurer and the Indenture Trustee and that is in
compliance with the laws of each state necessary to enable it to perform its
obligations under such Sub-Servicing Agreement. The Servicer shall give notice
to the Bond Insurer of the appointment of any Sub-Servicer. The Servicer shall
not enter into any Sub-Servicing Agreement that does not provide for the
servicing of the Mortgage Loans specified therein on a basis consistent with the
terms of this Agreement or that otherwise violates the provisions of this
Agreement. The Servicer may enter into, and make amendments to, any
Sub-Servicing Agreement or enter into different forms of Sub-Servicing
Agreements; provided, however, that any such amendments or forms shall be
consistent with and not violate the provisions of this Agreement.
(b) For purposes of this Agreement the Servicer shall be
deemed to have received payments on Mortgage Loans when any Sub-Servicer has
received such payments. With respect to the Servicer's obligations under Section
2.01 to make deposits into the Collection Account, the Servicer shall be deemed
to have made such deposits when any Sub-Servicer has made such deposits into a
Sub-Servicing Account if permitted by the related Sub-Servicing Agreement.
(c) Any Sub-Servicing Agreement and any other transactions or
services relating to the Mortgage Loans involving a Sub-Servicer shall be deemed
to be between the Sub-Servicer and the Servicer alone and the Bond Insurer and
the Indenture Trustee shall not be deemed parties thereto and shall have no
claims, rights, obligations, duties or liabilities with respect to any
Sub-Servicer, except that the Indenture Trustee shall have such claims or rights
that arise as a result of any funds held by a Sub-Servicer in trust for or on
behalf of the Trust Estate, the Bondholders and the Bond Insurer.
Notwithstanding the execution of any Sub-Servicing Agreement, the Servicer shall
not be relieved of any liability hereunder and shall remain obligated and liable
for the servicing and administration of the Mortgage Loans.
SECTION 2.15. SERVICING FOR BENEFIT OF THE BOND INSURER.
Provided there does not exist a Bond Insurer Default, the Servicer
hereby acknowledges and agrees that it shall service and administer the Mortgage
Loans and any REO Properties, and shall maintain the Collection Account for the
benefit of the Bondholders and for the benefit of the Bond Insurer, and all
references in this Agreement to the benefit of or actions on behalf of the
Bondholders shall be deemed to include the Bond Insurer.
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All notices, statements, reports, certificates or opinions required by
this Agreement to be sent to any other party hereto or to the Bondholders shall
also be sent to the Bond Insurer.
SECTION 2.16. ANNUAL LIEN OPINIONS; BOND REDEMPTIONS.
(a) The Servicer shall procure, at its own expense, the
Opinions of Counsel required to be delivered annually to the Indenture Trustee
pursuant to Section 3.06 of the Indenture.
(b) In the event the Servicer exercises its right to redeem
the Bonds pursuant to Section 10.01 of the Indenture, the Servicer shall, at its
own expense, prepare all documents necessary for the Issuer to sign in
connection with such redemption, and deposit amounts required to be deposited by
the Issuer in connection with such redemption, in each case pursuant to Section
4.01 and Article X of the Indenture, and shall advise the Issuer as to the
actions it must take in accordance with the Indenture in order to effect such
redemption. The Issuer shall follow all such directions of the Servicer.
ARTICLE III
SERVICER REMITTANCE REPORT; BACK-UP SERVICER
SECTION 3.01. SERVICER REMITTANCE REPORT.
Not later than the third Business Day prior to each Deposit Date, the
Servicer shall deliver to the Issuer, the Indenture Trustee, the Bond Insurer
and each of the Underwriters a computer-readable magnetic tape (the "Tape" for
such month) and a series of hard copy reports generally including the same
information included on the Tape (the "Report," and, together with the Tape, the
"Servicer Remittance Report" for such month) detailing the payments and
collections received in respect of the Mortgage Loans during the immediately
preceding Collection Period. The Servicer Remittance Report shall include
loan-by-loan information that specifies account number, borrower name,
outstanding principal balance and activity for the preceding Collection Period
and Due Period, as applicable, and any other information sufficient to enable
the Indenture Trustee to report the items specified in clauses (vi) through
(xiii) of the definition of "Payment Date Statement" in the Indenture, as well
as (a) the information set forth on Exhibit E hereto as to Mortgage Loans that
became Liquidated Mortgage Loans during the related Collection Period, and may
be delivered in a separate report in the form of Exhibit E hereto or as part of
the Servicer Remittance Report and (b) any other information regarding the
Mortgage Loans as may be required to enable the Back-Up Servicer to perform its
obligations under this Article III or as may from time to time be agreed to by
the Servicer, the Indenture Trustee and the Bond Insurer. The Servicer shall
only be required to report information concerning the Mortgage Loans, and shall
not be required to calculate any required payments on the Bonds or to the Bond
Insurer.
SECTION 3.02. RESERVED.
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SECTION 3.03. OVERSIGHT OF SERVICING.
(a) Prior to each Payment Date, the Back-Up Servicer shall review
the Reports and shall determine the following:
(i) that the Report is complete in all material respects
on its face for the purpose of calculating the
amounts and making the comparisons set forth in
subsection (b) below; and
(ii) (ii) that the amount withdrawn from the Collection
Account and remitted to the Indenture Trustee is the
same as the amount set forth in the Report.
(b) Prior to each Payment Date, the Back-Up Servicer shall, based
solely on the information contained in the Tape for such
Payment Date:
(i) calculate the aggregate amount of principal and
interest due in the Due Period relating to such
Payment Date and verify the aggregate Principal
Balance as of the end of such Due Period; and
(ii) calculate the number and aggregate principal balance
of Mortgage Loans that are (1) 30 days delinquent,
(2) 60 days delinquent, (3) 90 days delinquent or
more than 90 days delinquent, (4) under foreclosure
proceedings and (5) REO Properties.
The Back-Up Servicer shall then compare its calculations pursuant to clauses (i)
and (ii) above to the comparable information provided by the Servicer in the
Report for such Payment Date.
(c) If, based on its calculations and comparisons under subsection (b)
above, the Back-Up Servicer identifies any discrepancy of $100.00 or more (a
"Material Discrepancy"), the Back-Up Servicer shall promptly notify the Servicer
and the Trustee of such Material Discrepancy and shall attempt to resolve it
with the Servicer. If prior to the related Payment Date, the Servicer and the
Back-Up Servicer are unable to resolve such Material Discrepancy, the Back-Up
Servicer shall promptly notify in writing the Rating Agencies, the Indenture
Trustee and the Bond Insurer of such Material Discrepancy.
(d) Other than as specifically set forth in this Article III, the
Back-Up Servicer shall have no obligation to supervise, verify, monitor or
administer the performance of the Servicer and shall have no liability for any
action taken or omitted by the Servicer.
(e) The Back-Up Servicer may consult fully with the Servicer as the
Back-Up Servicer may deem it in its sole discretion to be necessary from time to
time to perform or carry out the Back-Up Servicer's obligations hereunder.
(f) The obligation of the Back-Up Servicer to perform its obligations
pursuant to subsections (a) through (e) of this Section 3.03 shall continue
until at least the first anniversary of the Closing Date. At the end of the
first calendar year, the Bond Insurer will evaluate the
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performance of the Servicer and in its sole discretion determine whether the
obligations of the Back-Up Servicer pursuant to subsections (a) through (e)
shall continue for another calendar year. If the Bond Insurer determines that
such obligations of the Back-Up Servicer shall cease, the Bond Insurer shall
promptly give written notice to the Back-Up Servicer, the Indenture Trustee, the
Servicer and the Rating Agencies specifying the date of cessation. Following
notice from the Bond Insurer that the Back-Up Servicer is no longer required to
perform its obligations pursuant to subsections (a) through (e), the Servicer
every month shall continue to deliver the Report and the Tape referenced in
subsections (b) above to the Back-Up Servicer, provided, however, that the
Back-Up Servicer shall have no obligations to load the Tape onto its computer
system or verify or compare any amounts in the Reports or Tape. It is understood
by the parties hereto that pursuant to the preceding sentence the role of the
Back-Up Servicer shall be solely to receive the Report and the Tapes.
(g) Notwithstanding anything to the contrary provided for in this
Agreement, if on or following the first anniversary of the Closing Date the
Back-Up Servicer is still performing the back-up servicer obligations pursuant
to subsections (a) through (e) of this Section 3.03 and no Material Discrepancy
has been identified by the Back-Up Servicer in the preceding twelve months, all
responsibilities of the Back-Up Servicer pursuant to subsections (a) through (e)
of this Section 3.03 shall terminate on the first day after the first
anniversary of the last date such a Material Discrepancy was identified;
provided, however, that the Servicer every month shall continue to deliver the
Report and the Tape referenced in subsection (b) above to the Back-Up Servicer;
provided, further, that the Back-Up Servicer shall have no obligation to load
the Tape onto its computer system or verify or compare any amounts in the Report
or Tape.
SECTION 3.04. BACK-UP SERVICER COMPENSATION.
As compensation for the performance of its obligations as Back-Up
Servicer under this Agreement, the Servicer shall pay a monthly fee to be agreed
upon between the Servicer and the Back-Up Servicer, payable out of the
Servicer's own funds and not out of the Trust Estate.
SECTION 3.05. DUTIES AND RESPONSIBILITIES.
(a) The Back-Up Servicer may conclusively rely, without
investigation on its part, as to the truth and accuracy of the information and
data contained in any Report or Tape furnished to the Back-Up Servicer and the
Servicer shall be fully responsible for such information and data and for its
conforming to the requirements of this Agreement.
(b) The Back-Up Servicer shall upon reasonable notice and
during normal business hours from the Bond Insurer, permit the Bond Insurer to
review any books, records or reports of the Back-Up Servicer relating to its
obligations under this Agreement.
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ARTICLE IV
MONTHLY ADVANCES AND SERVICING ADVANCES
SECTION 4.01. MONTHLY ADVANCES; SERVICING ADVANCES.
(a) Monthly Advances. On or before each Deposit Date, the
Servicer will transfer to the Indenture Trustee for deposit in the Bond Account,
in same day funds, an amount (a "Monthly Advance") equal to the sum of (1) with
respect to all Mortgage Loans for which the Monthly Payment due on the first day
of the month in which the Deposit Date occurs has not yet been paid, the amount
of such late Monthly Payment (net of the Monthly Servicing Fee attributable to
such Mortgage Loan), plus (2) with respect to each Mortgaged Property that was
acquired in foreclosure or similar action (each, an "REO Property") during or
prior to the related Collection Period and as to which a final sale did not
occur during the related Collection Period, an amount equal to the excess, if
any, of the Monthly Payment that would have been due on the related Mortgage
Loan (net of the Monthly Servicing Fee attributable to such REO Property) over
the net income from such REO Property transferred to the Bond Account for such
Payment Date; provided, however, that in no case will the Servicer be required
to make advances with respect to any period following the final due date with
respect to any Mortgage Loan. All or a portion of any Monthly Advance required
to be made on a Deposit Date may be paid out of amounts on deposit in the
Collection Account that are not required to be transferred on such Deposit Date
to the Indenture Trustee for deposit into the Bond Account as any portion of
Remittable Funds for the related Deposit Date; provided, however, that the
Servicer shall be required to replace any such amounts by deposit into the
Collection Account on or before the next Deposit Date and the amount of such
deposit shall thereafter be considered a Monthly Advance for purposes of
reimbursement under this Agreement.
The Servicer may recover Monthly Advances, if not theretofore recovered
from the Mortgagor on whose behalf such Monthly Advance was made, from
collections on the related Mortgage Loan, including Liquidation Proceeds,
Insurance Proceeds and such other amounts as may be collected by the Servicer
from the Mortgagor or otherwise relating to the Mortgage Loan. In addition, if
the Servicer determines, in its good faith business judgment, that a previously
made Monthly Advance has become a Nonrecoverable Advance, the Servicer may
reimburse itself for such Nonrecoverable Advances from amounts on deposit in the
Collection Account, regardless of whether such amounts are attributable to such
Mortgage Loan. Notwithstanding anything herein to the contrary, no Monthly
Advance need be made hereunder if such Monthly Advance would, if made,
constitute a Nonrecoverable Advance.
(b) Servicing Advances. The Servicer shall from time to time
during the term of this Agreement make such Servicing Advances as the Servicer
shall deem appropriate or advisable under the circumstances and are required
pursuant to the terms of this Agreement. Servicing Advances may be paid by the
Servicer out of amounts on deposit in the Collection Account from time to time;
provided, however, that the Servicer shall be required to replace any such
amounts by deposit into the Collection Account on or before the first Deposit
Date occurring after the payment of a Servicing Advance with such amounts, and
the amount of such deposit shall thereafter be considered a Servicing Advance
for purposes of reimbursement under
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this Agreement. All Servicing Advances made by the Servicer shall be
reimbursable from collections or recoveries relating to the Mortgage Loans in
respect of which such Servicing Advances have been made including Liquidation
Proceeds and Insurance Proceeds, and such other amounts as may be collected by
the Servicer from the Mortgagor, or from other amounts on deposit in the
Collection Account after the Servicer shall have determined, in its good faith
business judgment that such Servicing Advance has become a Nonrecoverable
Advance. Notwithstanding anything herein to the contrary, no Servicing Advances
need be made hereunder if such Servicing Advance would, if made, constitute a
Nonrecoverable Advance.
ARTICLE V
THE SERVICER
SECTION 5.01. REPRESENTATIONS AND WARRANTIES OF THE SERVICER.
(a) The Servicer hereby represents and warrants to the Issuer,
the Indenture Trustee, the Bond Insurer and the Bondholders that, as of the
Closing Date:
(i) The Servicer is a corporation duly organized, validly
existing and in good standing under the laws of the State of Colorado.
The Servicer is in compliance with the laws of each state in which it
is acting as Servicer with respect to a Mortgage Loan to the extent
necessary to perform all servicing obligations with respect to the
related Mortgaged Property hereunder. The Servicer has the power and
authority to execute and deliver this Agreement and to perform its
obligations 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 by all necessary corporate action. This Agreement
evidences the valid and binding obligation of the Servicer enforceable
against the Servicer in accordance with its terms, subject to the
effect of bankruptcy, insolvency, reorganization, moratorium and other
similar laws relating to or affecting creditors' rights generally or
the application of equitable principles in any proceeding, whether at
law or in equity. The consummation of the transactions contemplated
hereby will not result in the breach of any terms or provisions of the
articles of incorporation or by-laws of the Servicer or result in the
breach of any term or provision of, or conflict with or constitute a
default under or result in the acceleration of any obligation under,
any material agreement, indenture or loan or credit agreement or other
material instrument to which the Servicer or its property is subject,
or result in the violation of any law, rule, regulation, order,
judgment or decree to which the Servicer or its property is subject.
(ii) All actions, approvals, consents, waivers, exemptions,
variances, franchises, orders, permits, authorizations, rights and
licenses required to be taken, given or obtained, as the case may be,
by or from any federal, state or other governmental authority or
agency, that are necessary in connection with the execution and
delivery by the Servicer of this Agreement, have been duly taken, given
or obtained, as the case may be, are in full force and effect, are not
subject to any pending proceedings (administrative,
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judicial or otherwise) with respect to which the time within which any
appeal therefrom may be taken or review thereof may be obtained has
expired or no review thereof may be obtained or appeal therefrom taken,
and are adequate to authorize the consummation of the transactions
contemplated by this Agreement on the part of the Servicer and the
performance by the Servicer of its obligations under this Agreement.
(iii) There is no action, suit, proceeding or investigation
pending or, to the best of the Servicer's knowledge, threatened against
the Servicer that, either in any one instance or in the aggregate,
should reasonably be expected 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
that would draw into question the validity of this Agreement or the
Mortgage Loans or of any action taken or to be taken in connection with
the obligations of the Servicer contemplated herein, or that should be
reasonably expected to impair the ability of the Servicer to perform
under the terms of this Agreement.
(iv) The Servicer is not in default with respect to any order
or decree of any court or any order, regulation or demand of any
federal, state, municipal or governmental agency, which default should
reasonably be expected to have consequences that would materially and
adversely affect the condition (financial or other) or operations of
the Servicer or its properties or to have consequences that should
reasonably be expected to adversely affect its performance hereunder;
(v) The collection practices used by the Servicer are in all
material respects legal and customary in the non-conforming mortgage
loan servicing business.
(b) Upon discovery by any party hereto of a breach of any of
the foregoing representations and warranties that materially and adversely
affects the interests of the Bondholders, the party discovering such breach
shall give prompt written notice to the other parties hereto and the Bond
Insurer. Within 30 days of its discovery or its receipt of notice of breach, the
Servicer shall cure such breach in all material respects.
SECTION 5.02. LIABILITY OF THE SERVICER.
The Servicer shall be liable in accordance herewith only to the extent
of the obligations specifically imposed upon and undertaken by the Servicer
herein.
SECTION 5.03. MERGER OR CONSOLIDATION OF, OR ASSUMPTION OF THE
OBLIGATIONS OF, THE SERVICER.
Any corporation or other entity (1) into which the Servicer may be
merged or consolidated, (2) that may result from any merger, conversion or
consolidation to which the Servicer shall be a party, or (3) that may succeed to
all or substantially all of the business of the Servicer, which corporation or
other entity shall be the successor to the Servicer under this Agreement without
the execution or filing of any document or any further act by any of the
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parties to this Agreement; provided that if the Servicer is not the surviving
entity, or if the assumption by the surviving entity is not effective by
operation of law, then the surviving entity shall execute and deliver to the
Issuer and the Indenture Trustee an agreement of assumption to perform every
obligation of the Servicer hereunder and provided further that if the surviving
entity is not the Servicer, the surviving entity must (A) have a net worth of
not less than $10,000,000, (B) be acceptable to the Bond Insurer and (C) each
Rating Agency must have issued written confirmation that the succession of such
successor will not result in a downgrading of the implied rating then assigned
by such Rating Agency to the Bonds (without taking into account the Bond
Insurance Policy).
SECTION 5.04. LIMITATION ON LIABILITY OF THE SERVICER AND OTHERS.
Neither the Servicer nor any of its directors, officers, employees or
agents shall be under any liability to the Issuer, the Indenture Trustee, the
Trust Estate, the Bond Insurer or the Bondholders for any action taken or for
refraining from the taking of any action by the Servicer 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 liability that
would otherwise be imposed by reason of willful misfeasance, bad faith or
negligence in the performance of the duties of the Servicer or by reason of
reckless disregard of the obligations and duties of the Servicer hereunder. 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 that is not incidental to its duties to service the Mortgage Loans in
accordance with this Agreement, and that in its opinion may involve it in any
expense or liability.
SECTION 5.05. SERVICER NOT TO RESIGN.
Subject to the provisions of Section 5.03 regarding the merger or
consolidation of the Servicer into or with another entity, the Servicer shall
not resign from the obligations and duties hereby imposed on it except upon
determination that the performance of its duties or obligations hereunder is no
longer permissible under applicable law or regulation or are in material
conflict by reason of applicable law or regulation with any other activities
carried on by it at the date of this Agreement. Any such determination
permitting the resignation of the Servicer pursuant to this Section shall be
evidenced by an Opinion of Counsel to such effect delivered to the Issuer, the
Indenture Trustee and the Bond Insurer obtained by the Servicer at its own
expense. No resignation pursuant to this Section 5.05(a) shall become effective
until the Indenture Trustee or a successor servicer shall have assumed the
responsibilities and obligations of the Servicer in accordance with Section 6.02
or (b) shall relieve the Servicer of responsibility for any obligations pursuant
to this Agreement that specifically survive the resignation or termination of
the Servicer. Each of the Rating Agencies shall be given written notice of a
resignation of the Servicer pursuant to this Section.
Notwithstanding the foregoing, the Servicer may resign effective upon
its appointment of a successor the appointment of whom has been approved by the
Bond Insurer and the Indenture
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Trustee in writing, but only if each Rating Agency shall have confirmed in
writing that the appointment of such successor will not result in the
downgrading of the then-current implied ratings assigned by them to the Bonds
(without taking into account the Bond Insurance Policy).
ARTICLE VI
DEFAULT
SECTION 6.01. EVENTS OF DEFAULT.
If any one of the following events (each an "Event of Default") shall
occur and be continuing:
(a) Any failure by the Servicer to (1) make a required Monthly
Advance on the related Deposit Date or (2) deposit into the Collection Account
or transfer to the Indenture Trustee for deposit in the Bond Account any other
amount required to be deposited therein under this Agreement on the related
Deposit Date, which failure, in the case of only clause (2) hereof, is not
remedied by the close of business on the Business Day after the date upon which
written notice of such failure shall have been given to the Servicer by the
Indenture Trustee or the Bond Insurer or to the Servicer, the Bond Insurer and
the Indenture Trustee by Holders of Bonds evidencing Voting Interests
represented by all Bonds aggregating not less than 51%;
(b) Failure on the part of the Servicer duly to observe or
perform in any material respect any other covenants or agreements of the
Servicer set forth in this Agreement or in the Mortgage Loan Sale Agreement,
which failure (1) materially and adversely affects the Bondholders or the Bond
Insurer and (2) continues unremedied for a period of 30 days after the date on
which written notice of such failure (which notice shall refer specifically to
this Section), requiring the same to be remedied, shall have been given to the
Servicer by the Indenture Trustee, at the direction of the Bond Insurer, or by
the Bond Insurer, or, with the consent of the Bond Insurer, to the Servicer by
the Holders of Bonds evidencing Voting Interests represented by all Bonds
aggregating not less than 51%.
(c) The entry against the Servicer of a decree or order by a
court or agency or supervisory authority having jurisdiction in the premises for
the appointment of a trustee, conservator, receiver or liquidator in any
insolvency, readjustment of debt, marshalling of assets and liabilities or
similar proceedings, or for the winding up or liquidation of its affairs, and
the continuance of any such decree or order unstayed and in effect for a period
of 60 consecutive days;
(d) The consent by the Servicer to the appointment of a
trustee, conservator or receiver or liquidator in any bankruptcy, insolvency,
readjustment of debt, marshalling of assets and liabilities or similar
proceedings of or relating to the Servicer or of or relating to substantially
all of its property; or the admission by the Servicer in writing of its
inability to pay its debts generally as they become due, the Servicer's filing
of a petition to take advantage of any applicable bankruptcy, insolvency or
reorganization statute, the Servicer's making of an assignment for the benefit
of its creditors, or the Servicer's voluntary suspension of payment of its
obligations;
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(e) The occurrence of a Delinquency Rate Trigger, a Cumulative
Loss Rate Trigger or a Rolling Loss Rate Trigger;
(f) the Servicer's Net Worth as of the end of any fiscal
quarter, commencing with the fiscal quarter ended December 31, 1997, being less
than the Target Net Worth for such quarter; provided, however, that this default
test shall not apply to any quarter ended after December 31, 2002; or
(g) breach by the Servicer in any material respect of any of
its representations and warranties made herein or in the Mortgage Loan Sale
Agreement (not including Section 4(b) thereof), or in any certificate delivered
pursuant hereto or thereto, and the failure of the Servicer to cure such breach
in all material respects within 30 days after the notice of such breach shall
have been given to the Servicer by the Issuer, the Indenture Trustee or the Bond
Insurer;
then, and in each and every such case, so long as such Event of Default shall
not have been remedied by the Servicer, either (1) the Bond Insurer or (2) with
the prior written consent of the Bond Insurer, either the Indenture Trustee or
the Holders of Bonds evidencing Voting Interests represented by all Bonds
aggregating not less than 51%, by notice then given in writing to the Servicer
with a copy to the Bond Insurer and to the Indenture Trustee, may terminate all
of the rights, responsibilities and obligations of the Servicer as servicer
under this Agreement. On or after the 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
the Indenture Trustee (unless a successor Servicer has been appointed pursuant
to Section 6.02) pursuant to and under this Section and, without limitation, the
Indenture Trustee or successor Servicer is hereby authorized and empowered to
execute and deliver, on behalf of the Servicer, as attorney-in-fact or
otherwise, any and all documents and other instruments, and to do or accomplish
all other acts or things necessary or appropriate to effect the purposes of such
notice of termination, whether to complete the transfer and endorsement of the
Mortgage Notes and related documents, or otherwise. The Servicer agrees to
cooperate with the Indenture Trustee in effecting the termination of its
responsibilities and rights as Servicer hereunder, including, without
limitation, the transfer to the Indenture Trustee or successor Servicer for the
administration by it of all cash amounts that shall at the time be held by the
Servicer that have been deposited by the Servicer in the Collection Account or
transferred to the Indenture Trustee for deposit into the Bond Account or
thereafter received by the Servicer with respect to the Mortgage Loans.
The Indenture Trustee shall notify the Servicer in writing immediately
upon its becoming aware of a default described in Section 6.01(a).
All reasonable costs and expenses (including attorneys' fees) incurred
in connection with transferring the Servicer Mortgage Files to a successor
Servicer, amending this Agreement to reflect the appointment of a successor as
Servicer pursuant to this Section 6.01 or otherwise in connection with the
assumption by a successor Servicer of the duties of the predecessor Servicer
hereunder shall be paid by the predecessor Servicer upon presentation of
reasonable documentation of such costs and expenses.
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SECTION 6.02. INDENTURE TRUSTEE TO ACT; APPOINTMENT OF SUCCESSOR.
On and after the time the Servicer receives a notice of termination
pursuant to Section 6.01, the Indenture Trustee shall appoint a successor
Servicer meeting the criteria described below and, if it does not appoint a
successor, or until the successor's appointment takes effect, the Indenture
Trustee shall be the successor in all respects to the Servicer in its capacity
as servicer under this Agreement and the transactions set forth or provided for
herein and shall be subject to all the responsibilities, duties and liabilities
relating thereto placed on the Servicer by the terms and provisions hereof,
including without limitation, the obligation to make Monthly Advances and to pay
Compensating Interest. As compensation therefor, the Indenture Trustee shall be
entitled to such compensation as the Servicer would have been entitled to
hereunder if no such notice of termination had been given. In the event the
Indenture Trustee fails to appoint a successor Servicer, and the Indenture
Trustee is unwilling or legally unable to act as successor Servicer itself, it
may petition a court of competent jurisdiction to appoint, any established
housing and home finance institution or any institution that regularly services
non-conforming residential mortgage loans that is then servicing a
non-conforming residential mortgage loan portfolio and having all licenses,
permits and approvals required by applicable law, and having a net worth of not
less than $10,000,000, as the successor to the Servicer hereunder in the
assumption of all or any part of the responsibilities, duties or liabilities of
the Servicer hereunder; provided that any such successor Servicer (other than
the Indenture Trustee) shall be acceptable to the Bond Insurer, which acceptance
shall not be unreasonably withheld and provided further that the appointment of
any such successor Servicer will not result in the qualification, reduction or
withdrawal of the implied rating assigned to the Bonds by any Rating Agency,
without taking into account the existence of the Bond Insurance Policy. Pending
appointment of a successor to the Servicer hereunder, unless the Indenture
Trustee is prohibited by law from so acting, the Indenture Trustee shall act in
such capacity as hereinabove provided. In connection with such appointment and
assumption, the Indenture Trustee may make such arrangements for the
compensation of such successor out of payments on Mortgage Loans as it and such
successor shall agree; provided, however, that no such compensation shall be in
excess of that permitted the Servicer hereunder. The Indenture Trustee and such
successor shall take such action, consistent with this Agreement, as shall be
necessary to effect any such succession. The appointment of a successor Servicer
shall not affect any liability of the predecessor Servicer that may have arisen
under this Agreement prior to its termination as Servicer, nor shall any
successor Servicer be liable for any acts or omissions of the predecessor
Servicer or for any breach by such Servicer or the Issuer of any of its
representations or warranties contained herein or in any related document or
agreement. Each of the Rating Agencies shall be given written notice of the
appointment of a successor Servicer pursuant to this Section.
SECTION 6.03. NOTIFICATIONS TO BONDHOLDERS.
Upon any termination or appointment of a successor to the Servicer
pursuant to this Article Six, the Indenture Trustee shall give prompt written
notice thereof to Bondholders at their respective addresses appearing in the
Bond Register, the Issuer, the Bond Insurer and to each Rating Agency.
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Within 60 days of obtaining actual knowledge of the occurrence of any
Event of Default that remains uncured, the Indenture Trustee shall transmit by
mail to all Bondholders notice of such Event of Default.
SECTION 6.04. ASSUMPTION OR TERMINATION OF SUB-SERVICING AGREEMENTS BY
THE INDENTURE TRUSTEE OR ANY SUCCESSOR SERVICER.
Upon the termination of the Servicer as servicer under this Agreement,
the Indenture Trustee as successor to the Servicer hereunder or any other
successor to the Servicer hereunder may, subject to the terms of any
Sub-Servicing Agreement, in its sole and absolute discretion elect to assume or
terminate any Sub-Servicing Agreement then in force and effect between the
Servicer and the Sub-Servicer. Notwithstanding the foregoing, any termination
fee due to a Sub-Servicer because of its termination by the Indenture Trustee
hereunder shall be the responsibility of the terminated Servicer and not the
Indenture Trustee. Upon the assumption of any Sub-Servicing Agreement, the
terminated Servicer agrees to deliver to the assuming party any and all
documents and records relating to the applicable Sub-Servicing Agreement and an
accounting of amounts collected and held by it and otherwise use its best
reasonable efforts to effectuate the orderly transfer of the Sub-Servicing
Agreement.
SECTION 6.05. PAYMENT OF INDENTURE TRUSTEE'S FEES AND EXPENSES.
(a) On each Payment Date, the Indenture Trustee will be
entitled to retain its Indenture Trustee Fee from amounts deposited into the
Bond Account on the related Deposit Date. The Indenture Trustee Fee constitutes
compensation for all services rendered by the Indenture Trustee in the exercise
and performance of any of the powers and duties hereunder or under the
Indenture. The Indenture Trustee does not and will not have any lien on the
Trust Estate for payment of any such fees or expenses.
(b) The Servicer shall pay or reimburse the Indenture Trustee,
from its own funds, upon its request for all reasonable expenses, disbursements
and advances incurred or made by the Indenture Trustee in accordance with any of
the provisions of this Agreement, the Indenture and the Management Agreement,
dated as of September 1, 1997, between the Issuer and Norwest Bank Minnesota,
National Association, as manager (the "Management Agreement"), (including but
not limited to the reasonable compensation and the expenses and disbursements of
its counsel and of all persons not regularly in its employ) except any such
expense, disbursement or advance as may arise from its negligence or bad faith
or that is otherwise reimbursed to the Indenture Trustee, and except for
routine, recurring or nominal expenses, disbursements and advances; provided,
however, that the Indenture Trustee shall not refuse to perform any of its
duties hereunder or under the Indenture or the Management Agreement solely as a
result of the failure of the Servicer to pay or reimburse such expenses,
disbursements or advances.
(c) The Servicer agrees to indemnify the Indenture Trustee,
Back-Up Servicer, Paying Agent, and their respective agents, directors,
employees and officers (each an "Indemnified Party") from, and hold it harmless
against, any and all losses and liabilities, damages, claims or expenses
(including reasonable attorneys' fees, expenses and disbursements), incurred or
in
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connection with this Agreement, the Indenture, the Bonds or the Management
Agreement, including, but not limited to, any such loss, liability or expense
incurred, arising in respect of or in connection with any legal action against
the Trust Estate, the Issuer or the Indenture Trustee or any director, officer,
employee or agent thereof, or the performance of any of the Indenture Trustee's
duties hereunder (except in the event it assumes the duties and obligations of
the Servicer hereunder as the result of an Event of Default), the Indenture or
the Management Agreement, other than any loss, liability or expense incurred by
reason of the negligence, bad faith or intentional misconduct of the Indenture
Trustee. Notwithstanding the generality of the foregoing, if any action, suit or
other proceeding is brought against an Indemnified Party for which the
Indemnified Party seeks indemnification hereunder, the Indemnified Party shall
promptly notify the Servicer of the commencement thereof, whereupon the Servicer
will be entitled to participate therein, and to assume the defense thereof, with
counsel selected by the Servicer and reasonably satisfactory to such Indemnified
Party, provided, that, if in the Indemnified Party's reasonable judgment the
Indemnified Party has any claims or defenses that conflict with or differ from
the interests of the Servicer, the Indemnified Party shall be entitled to select
counsel of its choosing and pursue such claims and defenses separately and all
related costs, expenses and liabilities associated with such separate claims or
defenses will continue to be covered by the Servicer's indemnification
obligation hereunder. The Servicer shall not be entitled to settle any
proceeding without the consent of any Indemnified Party with any right of
indemnification hereunder with respect to such proceeding except upon such terms
as will provide each such Indemnified Party reasonable assurance of full
indemnity hereunder.
(d) This Section 6.05 shall survive the termination of this
Agreement or the resignation or removal of the Indenture Trustee or the Servicer
as regards rights accrued prior to such resignation or removal.
(e) Amounts required to be paid by the Servicer to the
Indenture Trustee under subsections (b) and (c) above shall be paid by the
Servicer out of its own funds, and shall not be reimbursable to the Servicer
from the Collection Account or netted by the Servicer out of funds it is
required to deposit into the Collection Account.
ARTICLE VII
TERMINATION
SECTION 7.01. TERMINATION.
Except as otherwise specifically set forth herein, the obligations and
responsibilities of the Servicer shall terminate upon the earliest to occur of
(1) the final payment or other liquidation of the Mortgage Loans and the
disposition of all REO Properties and the remittance of all funds due hereunder
with respect to such Mortgage Loans and REO Properties and (2) the satisfaction
and discharge of the indebtedness evidenced by the Bonds and the payment of all
amounts due the Bond Insurer under the Insurance Agreement and the termination
of the Deposit Trust Agreement.
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ARTICLE VIII
MISCELLANEOUS PROVISIONS
SECTION 8.01. AMENDMENT.
This Agreement may be amended from time to time by the Servicer, the
Issuer and the Indenture Trustee, without the consent of any of the Bondholders
but only with the prior written consent of the Bond Insurer (which consent shall
not be unreasonably withheld), (1) to cure any error or any ambiguity or to
correct or supplement any provisions herein which may be inconsistent with any
other provisions herein, or (2) to comply with the requirements of the Code;
provided that in all such cases the Indenture Trustee shall have received
written confirmation from each Rating Agency that any such modifications to this
Agreement will not result in a qualification, reduction or withdrawal of the
implied rating assigned to the Bonds by such Rating Agency (without taking into
account the Bond Insurance Policy); provided, further, that in all such cases
such action shall not, as evidenced by an Opinion of Counsel furnished by and at
the expense of the party requesting such amendment, adversely affect in any
material respect the interests of any Bondholder or the Bond Insurer.
This Agreement may also be amended from time to time by the Servicer,
the Issuer and the Indenture Trustee, with the consent of the Bond Insurer
(which consent shall not be unreasonably withheld) and the Holders of Bonds
evidencing Voting Interests of the Bonds affected thereby aggregating greater
than 50%, for the purpose of adding any provisions to or changing in any manner
or eliminating any of the provisions of this Agreement, or of modifying in any
manner the rights of the Holders of Bonds of such Bonds; provided, however, that
no such amendment shall (1) reduce in any manner the amount of, or delay the
timing of, collections of payments on Mortgage Loans or payments which are
required to be deposited into the Bond Account without the consent of all
Bondholders or (2) reduce the aforesaid percentage of the Bonds the Holders of
which are required to consent to any such amendment, without the consent of the
Holders of all Bonds then outstanding.
Promptly after the execution of any such amendment or consent pursuant
to the second preceding paragraph, the Indenture Trustee shall furnish written
notification of the substance of such amendment to each Bondholder and an
executed copy of such amendment to each Rating Agency, with a copy to each of
the Underwriters.
It shall not be necessary for the consent of Bondholders under this
Section to approve the particular form of any proposed amendment or consent, but
it shall be sufficient if such consent shall approve the substance thereof. The
manner of obtaining such consents and of evidencing the authorization of the
execution thereof by Bondholders shall be subject to such reasonable
requirements as the Indenture Trustee may prescribe.
Prior to the execution of any amendment to this Agreement, the
Indenture Trustee and the Bond Insurer shall be entitled to receive and rely
upon an Opinion of Counsel furnished by and at the expense of the party
requesting such amendment stating that the execution of such amendment is
authorized or permitted by this Agreement. The Indenture Trustee may, but shall
not be
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obligated to, enter into any such amendment that affects the Indenture Trustee's
own rights, duties or immunities under this Agreement.
SECTION 8.02. GOVERNING LAW.
This Agreement shall be construed in accordance with the laws of the
State of New York (without regard to conflict of laws principles and the
application of the laws of any other jurisdiction), and the obligations, rights
and remedies of the parties hereunder shall be determined in accordance with
such laws.
SECTION 8.03. NOTICES.
All demands, notices and communications hereunder shall be in writing
and shall be deemed to have been duly given when delivered to (a) in the case of
the Issuer, to Wilmington Trust Company at ▇▇▇▇ ▇. ▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇,
▇▇▇▇▇▇▇▇ ▇▇▇▇▇, Attention: ▇▇▇▇▇▇ ▇▇▇▇▇▇, with copies to the Indenture Trustee,
as Manager, and to ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇, Esq., at Plaza Tower One, Suite 1200,
▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇'▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇, Telecopy (303)
741- 6944, (b) in the case of the Servicer, at National Mortgage Corporation,
Harlequin Plaza, Suite 3305, ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇,
▇▇▇▇▇-▇▇▇▇, Telecopy (▇▇▇) ▇▇▇-▇▇▇▇, Attention: ▇▇▇▇▇ ▇▇▇▇▇; (c) in the case of
the Indenture Trustee, at its Corporate Trust Office at Norwest Bank Minnesota,
National Association, as trustee, ▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇
▇▇▇▇▇, Telecopy (▇▇▇) ▇▇▇-▇▇▇▇ Attention: Fund America 1997-NMC1; (d) in the
case of the Bond Insurer, MBIA Insurance Corporation, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇,
▇▇▇ ▇▇▇▇, ▇▇▇▇▇, Telecopy (▇▇▇) ▇▇▇-▇▇▇▇, Attention: Insured Portfolio
Management - Structured Finance (IPM-SF) (Fund America Investors Trust 1997-NMC1
Collateralized Mortgage Obligations, Series 1997-NMC1); (e) in the case of S&P,
to Standard & Poor's, ▇▇ ▇▇▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇,
Attention: Mortgage Surveillance Group; and (f) in the case of Moody's, to
▇▇▇▇▇'▇ Investors Service Inc., ▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇, or,
as to each party, at such other address as shall be designated by such party in
a written notice to each other party; and (g) in the case of the Underwriters,
to the respective addresses specified in the Indenture. Any notice required or
permitted to be mailed to a Bondholder shall be given by first class mail,
postage prepaid, at its address shown in the Bond Register. Any notice so mailed
within the time prescribed in this Agreement shall be conclusively presumed to
have been duly given, whether or not the Bondholder receives such notice. Any
notice or other document required to be delivered or mailed by the Indenture
Trustee to any Rating Agency shall be given on a best efforts basis and only as
a matter of courtesy and accommodation and the Indenture Trustee shall have no
liability for failure to deliver such notice or document to any such Rating
Agency.
SECTION 8.04. SEVERABILITY OF PROVISIONS.
If any one or more of the covenants, agreements, provisions or terms of
this Agreement shall be for any reason whatsoever held invalid, then such
covenants, agreements, provisions or terms shall be deemed severable from the
remaining covenants, agreements, provisions or terms of
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this Agreement and shall in no way affect the validity or enforceability of the
other provisions of this Agreement or of the Bonds or the rights of the Holders
thereof.
SECTION 8.05. ASSIGNMENT.
Notwithstanding anything to the contrary contained herein, except as
provided in Sections 5.03 and 5.05, this Agreement may not be assigned by the
Issuer or the Servicer without the prior written consent of the Bond Insurer and
the Holders of Bonds evidencing not less than 66% of the Voting Interests of all
Bonds.
SECTION 8.06. THIRD PARTY BENEFICIARY; RATING.
(a) The Bond Insurer is an intended third-party beneficiary of
this Agreement. This Agreement shall be binding upon and inure to the benefit of
the Bond Insurer; provided that, notwithstanding the foregoing, for so long as a
Bond Insurer Default is continuing, the Bondholders shall succeed to the Bond
Insurer's rights hereunder. Without limiting the generality of the foregoing,
all covenants and agreements in this Agreement that expressly confer rights upon
the Bond Insurer shall be for the benefit of and run directly to the Bond
Insurer, and the Bond Insurer shall be entitled to rely on and enforce such
covenants to the same extent as if it were a party to this Agreement.
(b) In the event the rating of the Bond Insurer by any of the
Rating Agencies is reduced to a rating that is below "investment grade" (as that
term is then commonly used), the Servicer shall, at its own expense, seek to
obtain ratings of the Bonds (apart from the rating related to the Bond Insurance
Policy) from such Rating Agency.
SECTION 8.07. 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 8.08. INTENTION OF THE PARTIES.
It is the intention of the parties that the Issuer is conveying, and
the Servicer is receiving, only a contract for servicing and administering the
Mortgage Loans. Accordingly, the parties hereby acknowledge that the Indenture
Trustee remains the sole and absolute record holder of the Mortgage Loans and
all rights related thereto.
SECTION 8.09. WAIVERS AND MODIFICATIONS.
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.
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SECTION 8.10. FURTHER AGREEMENTS.
The Servicer and the Issuer 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 8.11. ATTORNEY-IN-FACT.
The Issuer hereby designates the Servicer its agent and
attorney-in-fact to execute any financing statement, continuation statement or
other instrument required pursuant to this Agreement or the Indenture.
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IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed by their respective officers, all as of the day and year first
above written.
FUND AMERICA INVESTORS
TRUST 1997-NMC1,
AS ISSUER
By: Wilmington Trust Company, not in its
individual capacity, but solely
as Owner Trustee
By:
------------------------
Authorized Signatory
NATIONAL MORTGAGE CORPORATION,
AS SERVICER
By:
------------------------
Name: ▇▇▇▇▇ ▇. ▇▇▇▇▇
Title: Executive Vice President
NORWEST BANK MINNESOTA, NATIONAL
ASSOCIATION
AS INDENTURE TRUSTEE AND BACKUP
SERVICER AND NOT IN ITS
INDIVIDUAL CAPACITY
By:
--------------------------
Name:
Title:
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