This Servicing Agreement, made as of this 1st day of June, 1999, by and
between FREMONT INVESTMENT & LOAN, a California industrial loan company, having
an office at ▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇, as initial owner
and master servicer (the "Owner") and FAIRBANKS CAPITAL CORP., a Utah
corporation, having an office at ▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇ ▇▇▇▇, ▇▇▇▇
▇▇▇▇▇-▇▇▇▇ (the "Servicer"), recites and provides as follows:
R E C I T A L S
WHEREAS, Owner and Servicer executed and delivered that certain Agreement
Regarding Standard Servicing Terms dated March 1, 1999 (the "Standard Terms
Agreement");
WHEREAS, the Standard Terms Agreement sets forth certain standard
provisions for the servicing of residential mortgage loans by Servicer on behalf
of Owner; and
WHEREAS, Owner and Servicer desire that Servicer service the mortgage
loans described on the attached Mortgage Loan Schedule pursuant to the terms
hereof and the terms of the Standard Terms Agreement.
AGREEMENT
NOW, THEREFORE, in consideration of the mutual promises, covenants,
representations and warranties hereinafter set forth and for other good and
valuable consideration, the receipt and adequacy of which is hereby
acknowledged, the Owner and the Servicer agree as follows:
Section 1. DEFINITIONS. Capitalized terms used herein and not otherwise
defined herein shall have the meanings specified in the Standard Terms
Agreement, or if not defined therein, in the Sale and Master Servicing
Agreement, dated as of June 1, 1999, among Fremont Home Loan Owner Trust 1999-2,
as issuer, PaineWebber Mortgage Acceptance Corporation IV, as depositor, Fremont
Investment & Loan, as transferor and master servicer, and First Union National
Bank, as indenture trustee. The following terms shall have the meanings set
forth below:
"Custodian" First Union National Bank
"Custodial Agreement" That certain Custodial Agreement between the
Custodian, Servicer and Owner dated as of
even date herewith.
"Servicing Commencement Close of business, September 30, 1999.
Date"
Section 2. DUTIES AND RESPONSIBILITIES OF THE SERVICER. Servicer agrees to
service the Mortgage Loans on behalf of Owner, its successors and assigns, in
accordance with the provisions of this Servicing Agreement and the Standard
Terms Agreement.
Section 3. TERM OF MORTGAGE LOAN SERVICING AGREEMENT. The duties,
responsibilities, and obligations to be performed and carried out by Servicer
under this Servicing Agreement shall commence upon the execution of this
Servicing Agreement and shall terminate (a) as to any Mortgage Loan upon the
distribution of the final payment or Liquidation Proceeds on the last Mortgage
Loan or REO Property subject to this Servicing Agreement and (b) as to all the
Mortgage Loans (x) in accordance with the Standard Terms Agreement, or (y) if no
servicer renewal notice is received by the Servicer as provided in this Section
3. The Servicer hereby covenants and agrees to act as servicer under this
Servicing Agreement for an initial term commencing on the Servicing Commencement
Date and expiring on December 31, 1999 (the "Initial Term"), thereafter, the
Initial Term shall be extendible by written notice (each, a "Servicer Renewal
Notice") of Financial Security Assurance Inc., as securities insurer (the
"Securities Insurer") (or of the Indenture Trustee if a Securities Insurer Event
of Default is then occurring) for successive three month terms. The Master
Servicer may, with the consent of the Securities Insurer, appoint a replacement
Servicer, which shall be an eligible Servicer approved by the Securities
Insurer. The Servicer hereby agrees that, as of the date hereof and upon its
receipt of any Servicer Renewal Notice, the Servicer shall be bound for the
duration of the Initial Term and the term covered by any such Servicer Renewal
Notice to act as the Servicer, subject to and in accordance with the other
provisions of this Servicing Agreement. The Servicer agrees that if, as of the
last day of the calendar month preceding the last day of any such servicing
term, the Servicer shall not have received a Servicer Renewal Notice, the
Servicer shall, within five days thereafter, give written notice of such
non-receipt to the Master Servicer, the Securities Insurer and the Indenture
Trustee. The failure of the Securities Insurer or any other party to deliver a
Servicer Renewal Notice by the end of any such three-month term shall result in
the automatic termination of the Servicer.
Section 4. COMPENSATION. In consideration of the services rendered
under this Servicing Agreement, the Servicer shall be entitled to such fees
as are provided for in the Standard Terms Agreement.
Section 5. ADDITIONAL SERVICER EVENTS OF DEFAULT. In addition to the
Events of Default set forth in Section 9.4 of the Standard Terms Agreement, the
following shall be additional Events of Default hereunder:
(i) the most recent Three-Month Average Delinquency exceeds 15.00%; and
(ii) cumulative Realized Losses in any year equals or exceeds the percent
set forth below for that month of the Aggregate Pool Principal
Balance as of the Cut-Off Date; and
Cumulative Loss
Month Percentage
----- ----------
0-12 1.25%
13-24 2.00%
25-36 3.15%
37-48 3.85%
49+ 4.35%
(iii) aggregate Realized Losses during the 12 months preceding a Payment
Date, as a percentage of the Pool Principal Balance as of the first
day of such 12 month period, are greater than or equal to 175 basis
points (1.75%).
Section 6. STANDARD TERMS. Servicer acknowledges that the Standard Terms
Agreement prescribes additional terms and conditions under which Servicer is to
service the Mortgage Loans. The terms of the Standard Terms Agreement are
incorporated herein by reference and are made a part hereof. Servicer agrees to
perform and observe the duties, responsibilities and obligations that are to be
performed and observed by Servicer under the Standard Terms Agreement as said
Agreement may be amended from time to time, and further agrees that the Standard
Terms Agreement, as amended or supplemented, is and shall be a part of this
Servicing Agreement to the same extent as if set forth herein in full. If any
provision of the Standard Terms Agreement conflicts with any provision of this
Servicing Agreement, the terms of this Servicing Agreement shall govern.
Section 7. REPRESENTATIONS AND WARRANTIES. Servicer and Owner hereby
remake the representations and warranties contained in the Standard Terms
Agreement with respect to this Servicing Agreement.
Section 8. ASSIGNMENT AND DELEGATION OF DUTIES BY SERVICER. Except as
otherwise expressly provided in the Standard Terms Agreement, Servicer shall not
assign or transfer any of its duties, rights, benefits or privileges under this
Servicing Agreement.
Section 9. ASSIGNMENT BY OWNER. Except as provided in the Standard Terms
Agreement, Servicer agrees that Owner, its successors and assigns, may at any
time, without the consent of Servicer, assign and transfer its right, title and
interest under this Servicing Agreement to any other Person. The parties hereto
acknowledge that the Owner will assign its rights under this Servicing Agreement
to Fremont Home Loan Owner Trust 1999-2, a Delaware business trust, as the
issuer in a securitization financing, on or about June 24, 1999.
Section 10. NOTICES. All notices under this Servicing Agreement shall
be made as provided in the Standard Terms Agreement.
Section 11. SEVERABILITY. Each part of this Servicing Agreement is
intended to be severable. If any term, covenant, condition or provision hereof
is unlawful, invalid, or unenforceable for any reason whatsoever, and such
illegality, invalidity, or unenforceability does not affect the remaining parts
of this Servicing Agreement, then all such remaining parts hereof shall be valid
and enforceable and have full force and effect as if the invalid or
unenforceable part had not been included.
Section 12. RIGHTS CUMULATIVE; WAIVERS. The rights of each of the parties
under this Servicing Agreement are cumulative and may be exercised as often as
any party considers appropriate. The rights of each of the parties hereunder
shall not be capable of being waived or varied otherwise than by an express
waiver or variation in writing. Any failure to exercise or any delay in
exercising any of such rights shall not operate as a waiver or variation of that
or any other such right. Any defective or partial exercise of any of such rights
shall not preclude any other or further exercise of that or any other such
right. No act or course of conduct or negotiation on the part of any party shall
in any way preclude such party from exercising any such right or constitute a
suspension or any variation of any such right.
Section 13. HEADINGS. The headings of the Sections contained in this
Servicing Agreement are inserted for convenience only and shall not affect the
meaning or interpretation of this Servicing Agreement or any provision hereof.
Section 14. CONSTRUCTION. Unless the context otherwise requires, singular
nouns and pronouns, when used herein, shall be deemed to include the plural of
such noun or pronoun and pronouns of one gender shall be deemed to include the
equivalent pronoun of the other gender.
Section 15. ASSIGNMENT. This Servicing Agreement and the terms, covenants,
conditions, provisions, obligations, undertakings, rights and benefits hereof,
including any Exhibits and Schedules hereto, shall be binding upon, and shall
inure to the benefit of, the undersigned parties and their respective heirs,
executors, administrators, representatives, successors, and assigns.
Section 16. COUNTERPARTS. This Servicing Agreement may be executed in any
number of counterparts, each of which shall constitute one and the same
instrument, and either party hereto may execute this Servicing Agreement by
signing any such counterpart.
Section 17. GOVERNING LAW. This Servicing Agreement shall be construed,
and the rights and obligations of the Servicer and the Owner hereunder
determined, in accordance with the laws of the State of New York determined
without regard to its laws concerning conflicts of laws.
Section 18. THIRD PARTY BENEFICIARY. The parties hereto agree and
acknowledge that in respect of the securitization financing into which the
Mortgage Loans will be transferred on or about June 24, 1999, Financial Security
Assurance Inc., as securities insurer, First Union National Bank, as indenture
trustee and Fremont Home Loan Owner Trust 1999-2, as issuer, each are express
third party beneficiaries hereof entitled to enforce any rights reserved to it
hereunder as if it were actually a party hereto.
Section 19. AMENDMENT. The Master Servicer shall not change the duties
and obligations of the Servicer hereunder without the prior consent of the
Servicer.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of
the date first written above.
Servicer: FAIRBANKS CAPITAL CORP.,
a Utah corporation
By:___________________________________
Name:
Its:
Owner: FREMONT INVESTMENT & LOAN
a California industrial loan company
By:___________________________________
Name:
Title: