IMPAC FUNDING CORPORATION,
as Master Servicer,
and
IMPAC SECURED ASSETS CMN TRUST SERIES 1998-1,
as Issuer
----------------------
SERVICING AGREEMENT
Dated as of March 1, 1998
----------------------
Fixed-Rate Mortgage Loans
Impac Secured Assets CMN Trust Series 1998-1
TABLE OF CONTENTS
Page
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ARTICLE I
Definitions
Section 1.01. DEFINITIONS..........................................................................-1-
Section 1.02. OTHER DEFINITIONAL PROVISIONS........................................................-2-
Section 1.03. INTEREST CALCULATIONS................................................................-2-
ARTICLE II
Representations and Warranties
Section 2.01. REPRESENTATIONS AND WARRANTIES REGARDING THE MASTER SERVICER.........................-3-
Section 2.02. EXISTENCE............................................................................-4-
Section 2.03. ENFORCEMENT OF REPRESENTATIONS AND WARRANTIES........................................-4-
ARTICLE III
Administration and Servicing of Mortgage Loans
Section 3.01. MASTER SERVICER TO ASSURE SERVICING..................................................-6-
Section 3.02. SUBSERVICING AGREEMENTS BETWEEN MASTER SERVICER AND SUBSERVICERS
.............................................................................................-8-
Section 3.03. SUCCESSOR SUBSERVICERS...............................................................-9-
Section 3.04. LIABILITY OF THE MASTER SERVICER.....................................................-9-
Section 3.05. ASSUMPTION OR TERMINATION OF SUBSERVICING AGREEMENTS BY INDENTURE
TRUSTEE......................................................................................-10-
Section 3.06. COLLECTION OF MORTGAGE LOAN PAYMENTS................................................-10-
Section 3.07. WITHDRAWALS FROM THE COLLECTION ACCOUNT.............................................-13-
Section 3.08. ACCESS TO CERTAIN DOCUMENTATION AND INFORMATION REGARDING THE MORTGAGE
LOANS........................................................................................-14-
Section 3.09. MAINTENANCE OF FIDELITY COVERAGE....................................................-15-
Section 3.10. DUE-ON-SALE CLAUSES; ASSUMPTION AGREEMENTS..........................................-15-
Section 3.11. REALIZATION UPON DEFAULTED MORTGAGE LOANS...........................................-16-
Section 3.12. INDENTURE TRUSTEE TO COOPERATE; RELEASE OF MORTGAGE FILES...........................-17-
Section 3.13. MASTER SERVICING COMPENSATION.......................................................-19-
Section 3.14. ANNUAL STATEMENTS OF COMPLIANCE.....................................................-20-
Section 3.16. OPTIONAL PURCHASE OF DEFAULTED MORTGAGE LOANS.......................................-21-
Section 3.17. INFORMATION REQUIRED BY THE INTERNAL REVENUE SERVICE GENERALLY AND
REPORTS OF FORECLOSURES AND ABANDONMENTS OF MORTGAGED PROPERTY......................-21-
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ARTICLE IV
Servicing Certificate
Section 4.01. REMITTANCE REPORTS..................................................................-22-
Section 4.02. RESERVED............................................................................-22-
Section 4.03. PAYMENT ACCOUNT.....................................................................-22-
Section 4.04. ADVANCES............................................................................-23-
Section 4.05. COMPENSATING INTEREST PAYMENTS......................................................-23-
ARTICLE V
The Master Servicer
Section 5.01. LIABILITY OF THE MASTER SERVICER....................................................-24-
Section 5.02. MERGER OR CONSOLIDATION OF, OR ASSUMPTION OF THE OBLIGATIONS OF, THE
MASTER SERVICER..............................................................................-24-
Section 5.03. LIMITATION ON LIABILITY OF THE MASTER SERVICER AND OTHERS...........................-24-
Section 5.04. MASTER SERVICER NOT TO RESIGN.......................................................-25-
Section 5.05. DELEGATION OF DUTIES................................................................-25-
Section 5.06. MASTER SERVICER TO PAY INDENTURE TRUSTEE'S AND OWNER TRUSTEE'S FEES AND
EXPENSES; INDEMNIFICATION....................................................................-26-
ARTICLE VI
Default
Section 6.01. SERVICING DEFAULT...................................................................-28-
Section 6.02. INDENTURE TRUSTEE TO ACT; APPOINTMENT OF SUCCESSOR..................................-30-
Section 6.03. NOTIFICATION TO NOTEHOLDERS.........................................................-31-
Section 6.04. WAIVER OF DEFAULTS..................................................................-31-
ARTICLE VII
Miscellaneous Provisions
Section 7.01. AMENDMENT...........................................................................-32-
Section 7.02. GOVERNING LAW.......................................................................-32-
Section 7.03. NOTICES.............................................................................-32-
Section 7.04. SEVERABILITY OF PROVISIONS..........................................................-33-
Section 7.05. THIRD-PARTY BENEFICIARIES...........................................................-33-
Section 7.06. COUNTERPARTS........................................................................-33-
Section 7.07. EFFECT OF HEADINGS AND TABLE OF CONTENTS............................................-33-
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Section 7.08. TERMINATION.........................................................................-33-
Section 7.09. NO PETITION.........................................................................-33-
Section 7.10. NO RECOURSE.........................................................................-33-
ARTICLE VIII
ADMINISTRATIVE DUTIES OF THE MASTER SERVICER
Section 8.01. ADMINISTRATIVE DUTIES...............................................................-34-
Section 8.02. RECORDS.............................................................................-35-
Section 8.03. ADDITIONAL INFORMATION TO BE FURNISHED..............................................-35-
EXHIBIT A - MORTGAGE LOAN SCHEDULE..............................................................................A-1
EXHIBIT B - FORM OF REQUEST FOR RELEASE.........................................................................B-1
iii
This Servicing Agreement, dated as of March 1, 1998, between
Impac Funding Corporation, as Master Servicer (the "Master Servicer") and Impac
Secured Assets CMN Trust Series 1998-1, as Issuer (the "Issuer").
W I T N E S S E T H T H A T:
------------------------------
WHEREAS, pursuant to the terms of the Mortgage Loan Purchase
Agreement, Impac Secured Assets Corp. (the "Company") will acquire the Mortgage
Loans;
WHEREAS, the Company will create Impac Secured Assets CMN
Trust Series 1998-1, a Delaware business trust, and will transfer the Mortgage
Loans and all of its rights under the Mortgage Loan Purchase Agreement to the
Issuer;
WHEREAS, pursuant to the terms of a Trust Agreement dated as
of March 1, 1998 (the "Trust Agreement") between the Company, as depositor, and
Wilmington Trust Company, as owner trustee (the "Owner Trustee"), the Company
will convey the Mortgage Loans to the Issuer in exchange for the Certificates
(as defined below);
WHEREAS, pursuant to the terms of the Trust Agreement between
the Depositor and the Owner Trustee, the Issuer will issue and transfer to or at
the direction of the Depositor, the Trust Certificates, Series 1998-1 (the
"Certificates");
WHEREAS, pursuant to the terms of an Indenture dated as of
March 1, 1998 (the "Indenture") between the Issuer and Bankers Trust Company of
California, N.A. (the "Indenture Trustee"), the Issuer will pledge the Mortgage
Loans and issue and transfer to or at the direction of the Purchaser the
Collateralized Asset-Backed Notes, Series 1998-1 (the "Notes"); and
WHEREAS, pursuant to the terms of this Servicing Agreement,
the Master Servicer will service the Mortgage Loans set forth on the Mortgage
Loan Schedule attached hereto as Exhibit A directly or through one or more
Subservicers;
NOW, THEREFORE, in consideration of the mutual covenants
herein contained, the parties hereto agree as follows:
ARTICLE I
Definitions
Section 1.01. DEFINITIONS. For all purposes of this Servicing
Agreement, except as otherwise expressly provided herein or unless the context
otherwise requires, capitalized terms not otherwise defined herein shall have
the meanings assigned to such terms in the Definitions contained in Appendix A
to the Indenture which is incorporated by reference herein. All other
capitalized terms used herein shall have the meanings specified herein.
Section 1.02. OTHER DEFINITIONAL PROVISIONS. (a) All terms
defined in this Servicing Agreement shall have the defined meanings when used in
any certificate or other document made or delivered pursuant hereto unless
otherwise defined therein.
(b) As used in this Servicing Agreement and in any certificate or other
document made or delivered pursuant hereto or thereto, accounting terms not
defined in this Servicing Agreement or in any such certificate or other
document, and accounting terms partly defined in this Servicing Agreement or in
any such certificate or other document, to the extent not defined, shall have
the respective meanings given to them under generally accepted accounting
principles. To the extent that the definitions of accounting terms in this
Servicing Agreement or in any such certificate or other document are
inconsistent with the meanings of such terms under generally accepted accounting
principles, the definitions contained in this Servicing Agreement or in any such
certificate or other document shall control.
(c) The words "hereof," "herein," "hereunder" and words of similar
import when used in this Servicing Agreement shall refer to this Servicing
Agreement as a whole and not to any particular provision of this Servicing
Agreement; Section and Exhibit references contained in this Servicing Agreement
are references to Sections and Exhibits in or to this Servicing Agreement unless
otherwise specified; and the term "including" shall mean "including without
limitation".
(d) The definitions contained in this Servicing Agreement are
applicable to the singular as well as the plural forms of such terms and to the
masculine as well as the feminine and neuter genders of such terms.
(e) Any agreement, instrument or statute defined or referred to herein
or in any instrument or certificate delivered in connection herewith means such
agreement, instrument or statute as from time to time amended, modified or
supplemented and includes (in the case of agreements or instruments) references
to all attachments thereto and instruments incorporated therein; references to a
Person are also to its permitted successors and assigns.
Section 1.03. INTEREST CALCULATIONS. All calculations of interest
hereunder that are made in respect of the Principal Balance of a Mortgage Loan
shall be made on the basis of a 360-day year consisting of twelve 30-day months,
notwithstanding the terms of the related Mortgage Note and Mortgage. The
calculation of the Servicing Fee shall be made on the basis of a 360-day year
consisting of twelve 30-day months.
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ARTICLE II
Representations and Warranties
Section 2.01. REPRESENTATIONS AND WARRANTIES REGARDING THE MASTER
SERVICER. The Master Servicer represents and warrants to the Issuer and for the
benefit of the Indenture Trustee, as pledgee of the Mortgage Loans and the
Noteholders, as of the Closing Date, that:
(i) The Master Servicer is a corporation duly
organized, validly existing and in good standing under the laws of the
State of California and has the corporate power to own its assets and
to transact the business in which it is currently engaged. The Master
Servicer is duly qualified to do business as a foreign corporation and
is in good standing in each jurisdiction in which the character of the
business transacted by it or properties owned or leased by it requires
such qualification and in which the failure to so qualify would have a
material adverse effect on the business, properties, assets, or
condition (financial or other) of the Master Servicer or the validity
or enforceability of the Mortgage Loans;
(ii) The Master Servicer has the power and authority to
make, execute, deliver and perform this Servicing Agreement and all of
the transactions contemplated under this Servicing Agreement, and has
taken all necessary corporate action to authorize the execution,
delivery and performance of this Servicing Agreement. When executed and
delivered, this Servicing Agreement will constitute the legal, valid
and binding obligation of the Master Servicer enforceable in accordance
with its terms, except as enforcement of such terms may be limited by
bankruptcy, insolvency or similar laws affecting the enforcement of
creditors' rights generally and by the availability of equitable
remedies;
(iii) The Master Servicer is not required to obtain the
consent of any other Person or any consent, license, approval or
authorization from, or registration or declaration with, any
governmental authority, bureau or agency in connection with the
execution, delivery, performance, validity or enforceability of this
Servicing Agreement, except for such consent, license, approval or
authorization, or registration or declaration, as shall have been
obtained or filed, as the case may be;
(iv) The execution and delivery of this Servicing
Agreement and the performance of the transactions contemplated hereby
by the Master Servicer will not violate any provision of any existing
law or regulation or any order or decree of any court applicable to the
Master Servicer or any provision of the certificate of incorporation or
bylaws of the Master Servicer, or constitute a material breach of any
mortgage, indenture, contract or other agreement to which the Master
Servicer is a party or by which the Master Servicer may be bound; and
(v) No litigation or administrative proceeding of or
before any court, tribunal or governmental body is currently pending,
or to the knowledge of the Master Servicer threatened, against the
Master Servicer or any of its properties or with respect to
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this Servicing Agreement or the Notes or the Certificates which, to the
knowledge of the Master Servicer, has a reasonable likelihood of
resulting in a material adverse effect on the transactions contemplated
by this Servicing Agreement.
The foregoing representations and warranties shall survive any
termination of the Master Servicer hereunder.
Section 2.02. EXISTENCE. The Issuer will keep in full effect its
existence, rights and franchises as a business trust under the laws of the State
of Delaware (unless it becomes, or any successor Issuer hereunder is or becomes,
organized under the laws of any other state or of the United States of America,
in which case the Issuer will keep in full effect its existence, rights and
franchises under the laws of such other jurisdiction) and will obtain and
preserve its qualification to do business in each jurisdiction in which such
qualification is or shall be necessary to protect the validity and
enforceability of this Servicing Agreement.
Section 2.03. ENFORCEMENT OF REPRESENTATIONS AND WARRANTIES. The Master
Servicer, on behalf of and subject to the direction of the Indenture Trustee, as
pledgee of the Mortgage Loans, shall enforce the representations and warranties
and related obligations for breaches thereof of the Seller pursuant to the
Mortgage Loan Purchase Agreement. Upon the discovery by the Seller, the Master
Servicer, the Indenture Trustee or the Company of a breach of any of the
representations and warranties made in the Mortgage Loan Purchase Agreement, in
respect of any Mortgage Loan which materially and adversely affects the
interests of the Noteholders or the Certificateholders, the party discovering
such breach shall give prompt written notice to the other parties. The Master
Servicer shall promptly notify the Seller of such breach and request that,
pursuant to the terms of the Mortgage Loan Purchase Agreement, the Seller either
(i) cure such breach in all material respects or (ii) purchase such Mortgage
Loan, in each instance in accordance with the Mortgage Loan Purchase Agreement;
PROVIDED that the Seller shall, subject to the conditions set forth in the
Mortgage Loan Purchase Agreement, have the option to substitute an Eligible
Substitute Mortgage Loan or Eligible Substitute Mortgage Loans for such Mortgage
Loan. Monthly Payments due with respect to Eligible Substitute Mortgage Loans in
the month of substitution shall not be part of the Trust Estate and will be
retained by the Master Servicer and remitted by the Master Servicer to the
Seller on the next succeeding Payment Date. For the month of substitution,
distributions to the Payment Account pursuant to the Servicing Agreement will
include the Monthly Payment due on a Deleted Mortgage Loan for such month and
thereafter the Seller shall be entitled to retain all amounts received in
respect of such Deleted Mortgage Loan. The Master Servicer shall amend or cause
to be amended the Mortgage Loan Schedule to reflect the removal of such Mortgage
Loan and the substitution of the Eligible Substitute Mortgage Loans and the
Master Servicer shall promptly deliver the amended Mortgage Loan Schedule to the
related Subservicer, Owner Trustee and Indenture Trustee.
In connection with the substitution of one or more Eligible Substitute
Mortgage Loans for one or more Deleted Mortgage Loans, the Master Servicer will
determine the amount (such amount, a "Substitution Adjustment Amount"), if any,
by which the aggregate principal balance of all such Eligible Substitute
Mortgage Loans as of the date of substitution is less than the aggregate
principal balance of all such Deleted Mortgage Loans (after application of the
principal
-4-
portion of the Monthly Payments due in the month of substitution that are to be
distributed to the Payment Account in the month of substitution). The Seller
shall pay the Substitution Adjustment Amount to the Master Servicer and the
Master Servicer shall deposit such Substitution Adjustment Amount into the
Collection Account upon receipt.
-5-
ARTICLE III
Administration and Servicing of Mortgage Loans
Section 3.01. MASTER SERVICER TO ASSURE SERVICING. (a) The Master
Servicer shall supervise, or take such actions as are necessary to ensure, the
servicing and administration of the Mortgage Loans and any REO Property in
accordance with this Servicing Agreement and its normal servicing practices,
which generally shall conform to the standards of an institution prudently
servicing mortgage loans for its own account and shall have full authority to do
anything it reasonably deems appropriate or desirable in connection with such
servicing and administration. The Master Servicer may perform its
responsibilities relating to servicing through other agents or independent
contractors, but shall not thereby be released from any of its responsibilities
as hereinafter set forth. The authority of the Master Servicer, in its capacity
as master servicer, and any Subservicer acting on its behalf, shall include,
without limitation, the power to (i) consult with and advise any Subservicer
regarding administration of a related Mortgage Loan, (ii) approve any
recommendation by a Subservicer to foreclose on a related Mortgage Loan, (iii)
supervise the filing and collection of insurance claims and take or cause to be
taken such actions on behalf of the insured Person thereunder as shall be
reasonably necessary to prevent the denial of coverage thereunder, and (iv)
effectuate foreclosure or other conversion of the ownership of the Mortgaged
Property securing a related Mortgage Loan, including the employment of
attorneys, the institution of legal proceedings, the collection of deficiency
judgments, the acceptance of compromise proposals, and any other matter
pertaining to a delinquent Mortgage Loan. The authority of the Master Servicer,
an any Subservicer acting on its behalf, shall include, in addition, the power
on behalf of the Noteholders, the Indenture Trustee, or any of them to (i)
execute and deliver customary consents or waivers and other instruments and
documents, (ii) consent to transfer of any related Mortgaged Property and
assumptions of the related Mortgage Notes and Security Instruments (in the
manner provided in this Servicing Agreement) and (iii) collect any Liquidation
Proceeds. Without limiting the generality of the foregoing, the Master Servicer
and any Subservicer acting on its behalf may, and is hereby authorized, and
empowered by the Indenture Trustee to, execute and deliver, on behalf of itself,
the Noteholders, the Indenture Trustee or any of them, any instruments of
satisfaction, cancellation, release, discharge and all other comparable
instruments, with respect to the related Mortgage Loans, the Insurance Policies
and the accounts related thereto, and the Mortgaged Properties. The Master
Servicer may exercise this power in its own name or in the name of a
Subservicer.
If the Mortgage relating to a Mortgage Loan did not have a
lien senior to the Mortgage Loan on the related Mortgaged Property as of the
Cut-off Date or Subsequent Cut-off Date, as applicable, then the Master
Servicer, in such capacity, may not consent to the placing of a lien senior to
that of the Mortgage on the related Mortgaged Property. If the Mortgage relating
to a Mortgage Loan had a lien senior to the Mortgage Loan on the related
Mortgaged Property as of the Cut-off Date or Subsequent Cut-off Date, as
applicable, then the Master Servicer, in such capacity, may consent to the
refinancing of the prior senior lien, provided that the following requirements
are met:
-6-
(i) the resulting Combined Loan-to-Value Ratio of such Mortgage Loan is
no higher than the Combined Loan-to-Value Ratio prior to such refinancing;
PROVIDED, HOWEVER, if such refinanced mortgage loan is a "rate and term"
mortgage loan (meaning, the borrower does not receive any cash from the
refinancing), the Combined Loan-to-Value Ratio may increase to the extent of
either (a) the reasonable closing costs of such refinancing or (b) any decrease
in the value of the related Mortgaged Property, if the borrower is in good
standing;
(ii) the interest rate for the loan evidencing the refinanced senior
lien is no higher than the interest rate on the loan evidencing the existing
senior lien immediately prior to the date of such refinancing; PROVIDED, HOWEVER
if the loan evidencing the existing senior lien prior to the date of refinancing
has an adjustable rate and the loan evidencing the refinanced senior lien has a
fixed rate, then the loan evidencing the refinanced senior lien may be up to
2.0% higher than the then-current mortgage rate of the loan evidencing the
existing senior lien; and
(iii) the loan evidencing the refinanced senior lien is not subject to
negative amortization.
(b) The Master Servicer or the related Subservicer, as the case may be,
shall be entitled to (A) execute assumption agreements, substitution agreements,
and instruments of satisfaction or cancellation or of full release or discharge,
or any other document contemplated by this Servicing Agreement and other
comparable instruments with respect to the Mortgage Loans and with respect to
the Mortgaged Properties subject to the Mortgages (and the Issuer and the
Indenture Trustee each shall promptly execute any such documents on request of
the Master Servicer) and (B) approve the granting of an easement thereon in
favor of another Person, any alteration or demolition of the related Mortgaged
Property or other similar matters, if it has determined, exercising its good
faith business judgment in the same manner as it would if it were the owner of
the related Mortgage Loan, that the security for, and the timely and full
collectability of, such Mortgage Loan would not be adversely affected thereby.
An assumption pursuant to this Section 3.01 is permitted solely if the
creditworthiness of the prospective purchaser of a Mortgaged Property meets the
same or better underwriting guidelines of the original borrower and the security
for such Mortgage Loan is not impaired by the assumption. Any fee collected by
the Master Servicer or the related Subservicer for processing such request will
be retained by the Master Servicer or such Subservicer as additional servicing
compensation.
(c) Certain of the Mortgage Notes related to the Mortgage Loans contain
a rider allowing the related Mortgagor to transfer the lien on the related
Mortgage Property to another, new Mortgaged Property. In the event that a
Mortgagor requests such a transfer, the Master Servicer shall allow such
transfer only if the following requirements are met: (i) the Combined
Loan-to-Value Ratio of the Mortgage Loan after such transfer must be less than
or equal to the original Combined Loan-to-Value Ratio, (ii) the Loan-to-Value
Ratio of the first lien on the new Mortgaged Property must be less than or equal
to the Loan-to-Value Ratio of the first lien on the prior Mortgage Property at
the time the related Mortgage Loan was originated, (iii) both the original and
the new Mortgaged Property must be a single-family owner occupied property and
(iv) following such transfer, the aggregate Principal Balance of Mortgage Loans
included in the Trust Fund which have been similarly transferred is equal to 5%
or less of the aggregate Principal Balance of the Mortgage Loans at such time.
-7-
Furthermore, any such transfer is subject to the additional condition
that following such transfer not more than 40% of the aggregate Principal
Balance of the Mortgage Loans will be: (i) obligations secured by real estate
the fair market value of which equaled at least eighty percent (80%) of the
adjusted issue price of such obligation at the time of origination; or (ii)
obligations substantially all of the proceeds of which were used to acquire,
improve or protect an interest in real property that, at the origination date,
was the only security for such obligation. For purposes of applying these
criteria: "substantially all of the proceeds" shall mean at least sixty-six and
two-thirds percent (66 2/3%) of such proceeds; and the fair market value of real
estate shall first be reduced by the amount of any lien senior to the lien
securing a Mortgage Loan (or reduced proportionately by the amount of any lien
in parity with such lien).
(d) Notwithstanding the provisions of Subsections 3.01(a) and 3.01(b),
the Master Servicer shall not take any action inconsistent with the interests of
the Indenture Trustee or the Noteholders or with the rights and interests of the
Indenture Trustee or the Noteholders under this
Servicing Agreement.
(e) The Indenture Trustee shall furnish the Master Servicer with any
powers of attorney and other documents in form as provided to it necessary or
appropriate to enable the Master Servicer to service and administer the related
Mortgage Loans and REO Property.
Section 3.02. SUBSERVICING AGREEMENTS BETWEEN MASTER SERVICER AND
SUBSERVICERS. (a) The Master Servicer may enter into Subservicing Agreements
with Subservicers for the servicing and administration of the Mortgage Loans and
for the performance of any and all other activities of the Master Servicer
hereunder. Each Subservicer shall be either (i) an institution the accounts of
which are insured by the FDIC or (ii) another entity that engages in the
business of originating or servicing mortgage loans comparable to the Mortgage
Loans, and in either case shall be authorized to transact business in the state
or states in which the related Mortgaged Properties it is to service are
situated, if and to the extent required by applicable law to enable the
Subservicer to perform its obligations hereunder and under the Subservicing
Agreement, and in either case shall be a FHLMC or FNMA approved mortgage
servicer. Any Subservicing Agreement entered into by the Master Servicer shall
include the provision that such Agreement may be immediately terminated (x) with
cause and without any termination fee by any Master Servicer hereunder or (y)
without cause in which case the Master Servicer (and not the Indenture Trustee
as successor Master Servicer) shall be responsible for any termination fee or
penalty resulting therefrom. In addition, each Subservicing Agreement shall
provide for servicing of the Mortgage Loans consistent with the terms of this
Servicing Agreement. With the consent of the Indenture Trustee, which consent
shall not be unreasonably withheld, the Master Servicer and the Subservicers may
enter into Subservicing Agreements and make amendments to the Subservicing
Agreements or enter into different forms of Subservicing Agreements providing
for, among other things, the delegation by the Master Servicer to a Subservicer
of additional duties regarding the administration of the Mortgage Loans.
The Master Servicer has entered into Subservicing Agreements with the
Initial Subservicers for the servicing and administration of the Mortgage Loans
and may enter into additional Subservicing Agreements with Subservicers with the
consent of the Indenture Trustee, which
-8-
consent shall not be unreasonably withheld, for the servicing and administration
of certain of the Mortgage Loans.
(b) As part of its servicing activities hereunder, the Master Servicer,
for the benefit of the Indenture Trustee and the Noteholders, shall enforce the
obligations of each Subservicer under the related Subservicing Agreement. Such
enforcement, including, without limitation, the legal prosecution of claims,
termination of Subservicing Agreements and the pursuit of other appropriate
remedies, shall be in such form and carried out to such an extent and at such
time as the Master Servicer, in its good faith business judgment, would require
were it the owner of the related Mortgage Loans. The Master Servicer shall pay
the costs of such enforcement at its own expense, but shall be reimbursed
therefor only (i) from a general recovery resulting from such enforcement only
to the extent, if any, that such recovery exceeds all amounts due in respect of
the related Mortgage Loan or (ii) from a specific recovery of costs, expenses or
attorneys' fees against the party against whom such enforcement is directed.
Section 3.03. SUCCESSOR SUBSERVICERS. The Master Servicer shall be
entitled to terminate any Subservicing Agreement that may exist in accordance
with the terms and conditions of such Subservicing Agreement and without any
limitation by virtue of this Servicing Agreement; PROVIDED, HOWEVER, that upon
termination, the Master Servicer shall either act as servicer of the related
Mortgage Loan or enter into an appropriate contract with a successor Subservicer
acceptable to the Indenture Trustee pursuant to which such successor Subservicer
will be bound by all relevant terms of the related Subservicing Agreement
pertaining to the servicing of such Mortgage Loan.
Section 3.04. LIABILITY OF THE MASTER SERVICER. (a) Notwithstanding any
Subservicing Agreement, any of the provisions of this Servicing Agreement
relating to agreements or arrangements between the Master Servicer and a
Subservicer or reference to actions taken through a Subservicer or otherwise,
the Master Servicer shall under all circumstances remain obligated and primarily
liable to the Indenture Trustee and the Noteholders for the servicing and
administering of the Mortgage Loans and any REO Property in accordance with this
Servicing Agreement. The obligations and liability of the Master Servicer shall
not be diminished by virtue of Subservicing Agreements or by virtue of
indemnification of the Master Servicer by any Subservicer, or any other Person.
The obligations and liability of the Master Servicer shall remain of the same
nature and under the same terms and conditions as if the Master Servicer alone
were servicing and administering the related Mortgage Loans. The Master Servicer
shall, however, be entitled to enter into indemnification agreements with any
Subservicer or other Person and nothing in this Servicing Agreement shall be
deemed to limit or modify such indemnification. For the purposes of this
Servicing Agreement, the Master Servicer shall be deemed to have received any
payment on a Mortgage Loan on the date the Subservicer received such payment;
PROVIDED, HOWEVER, that this sentence shall not apply to the Indenture Trustee
acting as the Master Servicer; PROVIDED, FURTHER, however, that the foregoing
provision shall not affect the obligation of the Master Servicer if it is also
the Indenture Trustee to advance amounts which are not Nonrecoverable Advances.
(b) Any Subservicing Agreement that may be entered into and any
transactions or services relating to the Mortgage Loans involving a Subservicer
in its capacity as such and not as
-9-
an originator shall be deemed to be between the Subservicer and the Master
Servicer alone, and the Indenture Trustee and the Noteholders shall not be
deemed parties thereto and shall have no claims, rights, obligations, duties or
liabilities with respect to the Subservicer except as set forth in Section 3.05.
Section 3.05. ASSUMPTION OR TERMINATION OF SUBSERVICING AGREEMENTS BY
INDENTURE TRUSTEE. (a) If the Indenture Trustee or its designee shall assume the
master servicing obligations of the Master Servicer in accordance with Section
6.02 below, the Indenture Trustee, to the extent necessary to permit the
Indenture Trustee to carry out the provisions of Section 6.02 with respect to
the Mortgage Loans, shall succeed to all of the rights and obligations of the
Master Servicer under each of the Subservicing Agreements; provided, that the
Indenture Trustee shall succeed to the obligation to pay a termination fee
solely with respect to the Wendover Subservicing Agreement. In such event, the
Indenture Trustee or its designee as the successor master servicer shall be
deemed to have assumed all of the Master Servicer's rights and obligations
therein and to have replaced the Master Servicer as a party to such Subservicing
Agreements to the same extent as if such Subservicing Agreements had been
assigned to the Indenture Trustee or its designee as a successor master
servicer, except that the Indenture Trustee or its designee as a successor
master servicer shall not be deemed to have assumed any obligations or
liabilities of the Master Servicer arising prior to such assumption (other than
the obligation to make any Advances) and the Master Servicer shall not thereby
be relieved of any liability or obligations under such Subservicing Agreements
arising prior to such assumption. Nothing in the foregoing shall be deemed to
entitle the Indenture Trustee or its designee as a successor master servicer at
any time to receive any portion of the servicing compensation provided under
Section 3.13 except for such portion as the Master Servicer would be entitled to
receive.
(b) In the event that the Indenture Trustee or its designee as
successor master servicer for the Indenture Trustee assumes the servicing
obligations of the Master Servicer under Section 6.02, upon the reasonable
request of the Indenture Trustee or such designee as successor master servicer
the Master Servicer shall at its own expense deliver to the Indenture Trustee,
or at its written request to such designee, photocopies of all documents, files
and records, electronic or otherwise, relating to the Subservicing Agreements
and the related Mortgage Loans or REO Property then being serviced and an
accounting of amounts collected and held by it, if any, and will otherwise
cooperate and use its reasonable efforts to effect the orderly and efficient
transfer of the Subservicing Agreements, or responsibilities hereunder to the
Indenture Trustee, or at its written request to such designee as successor
master servicer.
Section 3.06. COLLECTION OF MORTGAGE LOAN PAYMENTS. (a) The Master
Servicer will coordinate and monitor remittances by Subservicers to it or its
designee, which shall be designated in writing to each Subservicer, with respect
to the Mortgage Loans in accordance with this Servicing Agreement.
(b) The Master Servicer shall make its best reasonable efforts to
collect or cause to be collected all payments required under the terms and
provisions of the Mortgage Loans and shall follow, and use its best reasonable
efforts to cause Subservicers to follow, collection procedures comparable to the
collection procedures of prudent mortgage lenders servicing mortgage loans for
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their own account to the extent such procedures shall be consistent with this
Servicing Agreement. Consistent with the foregoing, the Master Servicer or the
related Subservicer may in its discretion (i) waive or permit to be waived any
late payment charge, assumption fee, or any penalty interest in connection with
the prepayment of a Mortgage Loan and (ii) suspend or reduce or permit to be
suspended or reduced regular monthly payments for a period of up to six months,
or arrange or permit an arrangement with a Mortgagor for a scheduled liquidation
of delinquencies; provided, however, that the Master Servicer or the related
Subservicer may permit the foregoing only if it believes, in good faith, that
recoveries of Monthly Payments will be maximized; provided further, however,
that Monthly Payments may not be suspended during the twelve months prior to the
final maturity of the Notes. In the event the Master Servicer or related
Subservicer shall consent to the deferment of the due dates for payments due on
a Mortgage Note, the Master Servicer shall nonetheless make an Advance or shall
cause the related Subservicer to make an advance to the same extent as if such
installment were due, owing and delinquent and had not been deferred through
liquidation of the Mortgaged Property; PROVIDED, HOWEVER, that the obligation of
the Master Servicer or the related Subservicer to make an Advance shall apply
only to the extent that the Master Servicer believes, in good faith, that such
advances are not Nonrecoverable Advances.
(c) Promptly, but no later than twenty Business Days after the Master
Servicer has determined that all amounts which it expects to recover from or on
account of a Mortgage Loan have been recovered and that no further Liquidation
Proceeds will be received in connection therewith, the Master Servicer shall
provide to the Indenture Trustee a certificate of a Servicing Officer that such
Mortgage Loan became a Liquidated Mortgage Loan as of the date of such
determination.
(d) The Master Servicer shall establish a segregated account in the
name of the Indenture Trustee (the "Collection Account"), which shall be an
Eligible Account, in which the Master Servicer shall deposit or cause to be
deposited any amounts representing payments on and any collections in respect of
the Initial Mortgage Loans received by it subsequent to the Cut-off Date and
interest due after the Cut-off Date but received prior to the Cut-off Date or,
with respect to the Subsequent Mortgage Loans, the Subsequent Cut-off Date
(other than in respect of the payments referred to in the following paragraph)
within two Business Days following receipt thereof (or otherwise on or prior to
the Closing Date), including the following payments and collections received or
made by it (without duplication):
(i) all payments of principal and interest on the
Mortgage Loans received by the Master Servicer directly from Mortgagors
or from the respective Subservicer, net of any portion of the interest
thereof retained by the Subservicer as Subservicing Fees;
(ii) the aggregate Repurchase Price of the Mortgage
Loans purchased by the Master Servicer pursuant to Section 3.16;
(iii) Net Liquidation Proceeds;
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(iv) all proceeds of any Mortgage Loans repurchased by
the Seller pursuant to the Mortgage Loan Purchase Agreement, and all
Substitution Adjustment Amounts required to be deposited in connection
with the substitution of an Eligible Substitute Mortgage Loan pursuant
to the Mortgage Loan Purchase Agreement; and
(v) any other amounts received by the Master Servicer,
including any fees or penalties not retained by a Subservicer, or the
Indenture Trustee required to be deposited in the Collection Account
pursuant to this Servicing Agreement.
PROVIDED, HOWEVER, that with respect to each Collection Period, the Master
Servicer shall be permitted to retain from payments in respect of interest on
the Mortgage Loans, the Servicing Fee for such Collection Period. The foregoing
requirements respecting deposits to the Collection Account are exclusive, it
being understood that, without limiting the generality of the foregoing, the
Master Servicer need not deposit in the Collection Account fees (including
annual fees or assumption fees) or late charge and prepayment penalties, payable
by Mortgagors, each as further described in Section 3.13. In the event any
amount not required to be deposited in the Collection Account is so deposited,
the Master Servicer may at any time (prior to being terminated under this
Agreement) withdraw such amount from the Collection Account, any provision
herein to the contrary notwithstanding. The Master Servicer shall keep records
that accurately reflect the funds on deposit in the Collection Account that have
been identified by it as being attributable to the Mortgage Loans and shall hold
all collections in the Collection Account for the benefit of the Owner Trustee,
the Indenture Trustee, the Noteholders, as their interests may appear. The
Master Servicer shall retain all Foreclosure Profits.
Funds in the Collection Account shall not be commingled with the Master
Servicer's own funds or general assets or with funds respecting payments on
mortgage loans or with any other funds not related to the Notes. Funds in the
Collection Account shall be invested solely in Eligible Investments, designated
in the name of the Indenture Trustee, which shall mature not later than the
Business Day next preceding the third Business Day prior to each Payment Date
next following the date of such investment and shall not be sold or disposed of
prior to maturity. All income and gain realized from any such investment shall
be for the benefit of the Master Servicer. The amount of any losses incurred
with respect to any such investments shall be deposited in the Collection
Account by the Master Servicer.
(e) The Master Servicer will require each Subservicer to hold all funds
constituting collections on the Mortgage Loans, pending remittance thereof to
the Master Servicer or its designee, which shall be designated in writing to
each Subservicer, in one or more accounts meeting the requirements of an
Eligible Account, invested in Eligible Investments, and in the name of the
Indenture Trustee. The Subservicer shall segregate and hold all funds collected
and received pursuant to each Mortgage Loan separate and apart from any of its
own funds and general assets and any other funds. Each Subservicer shall make
remittances to the Master Servicer no later than the eighteenth (18th) day of
each month, commencing on the eighteenth (18th) day of the month next following
the Cut-off Date, or if such eighteenth (18th) day is not a Business Day, the
first Business Day immediately succeeding such eighteenth (18th) day.
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Section 3.07. WITHDRAWALS FROM THE COLLECTION ACCOUNT. (a) The
Master Servicer shall, from time to time as provided herein, make withdrawals
from the Collection Account of amounts on deposit therein pursuant to Section
3.06 that are attributable to the Mortgage Loans for the following purposes
(without duplication):
(i) to deposit in the Payment Account, by the third
Business Day prior to each Payment Date, the Payment Account Available
Funds for such Payment Date;
(ii) to the extent deposited to the Collection Account,
to reimburse itself or the related Subservicer for previously
unreimbursed Liquidation Expenses, paid pursuant to Section 3.13 or
otherwise reimbursable pursuant to the terms of this Servicing
Agreement, such withdrawal right being limited to amounts received on
particular Mortgage Loans (other than any Repurchase Price in respect
thereof) which represent late recoveries of the payments for which such
advances were made, or from related Liquidation Proceeds;
(iii) to pay to itself out of each payment received on
account of interest on a Mortgage Loan as contemplated by Section 3.13,
an amount equal to the related Master Servicing Fee (to the extent not
retained pursuant to Section 3.06), and to pay to any Subservicer any
Subservicing Fees not previously withheld by the Subservicer;
(iv) to pay to itself or the Seller, with respect to any
Mortgage Loan or property acquired in respect thereof that has been
purchased or otherwise transferred to the Seller, the Master Servicer
or other entity, all amounts received thereon and not required to be
distributed to Noteholders as of the date on which the related Purchase
Price or Repurchase Price is determined;
(v) to reimburse the Master Servicer or any Subservicer
for any Advance of its own funds or any advance of such Subservicer's
own funds, the right of the Master Servicer or a Subservicer to
reimbursement pursuant to this subclause (v) being limited to amounts
received on a particular Mortgage Loan (including, for this purpose,
the Repurchase Price therefor, Liquidation Proceeds) which represent
late payments or recoveries of the principal of or interest on such
Mortgage Loan respecting which such Advance or advance was made;
(vi) to pay the Master Servicer or any Subservicer
(payment to any Subservicer to be subject to prior payment to the
Master Servicer of an amount equal to the Master Servicing Fee), as
appropriate, from Liquidation Proceeds received in connection with the
liquidation of any Mortgage Loan, the amount which it or such
Subservicer would have been entitled to receive under subclause (x) of
this Subsection 3.07(a) as servicing compensation on account of each
defaulted scheduled payment on such Mortgage Loan if paid in a timely
manner by the related Mortgagor, but only to the extent that the
aggregate of Liquidation Proceeds with respect to such Mortgage Loan,
after any reimbursement to the Master Servicer or any Subservicer,
pursuant to other subclauses of this Subsection 3.07(a), exceeds the
outstanding Principal Balance of such Mortgage Loan
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plus accrued and unpaid interest thereon at the related Mortgage Rate
less the Servicing Fee to but not including the date of payment (in any
event, the amount of servicing compensation received by a Subservicer
and the Master Servicer with respect to any defaulted scheduled payment
shall not exceed the applicable Servicing Fee);
(vii) to reimburse the Master Servicer or any Subservicer
for advances of funds pursuant to Article III, the right to
reimbursement pursuant to this subclause being limited to amounts
received on the related Mortgage Loan (including, for this purpose, the
Repurchase Price therefor, Liquidation Proceeds) which represent late
recoveries of the payments for which such advances were made;
(viii) to reimburse the Master Servicer or any Subservicer
for any Nonrecoverable Advance previously made, and not reimbursed
pursuant to this Subsection
3.07(a);
(ix) to deposit in the Payment Account, by the third
Business Day prior to each Payment Date, the Owner Trustee Fee and the
Indenture Trustee Fee;
(x) to withdraw any other amount deposited in the
Collection Account that was not required to be deposited therein
pursuant to Section 3.06;
(xi) to reimburse the Master Servicer for costs
associated with the environmental report specified in Section 3.11(c);
and
(xii) clear and terminate the Collection Account pursuant
to Section 7.08.
In connection with withdrawals pursuant to clauses (ii), (iii), (iv), (v), (vi),
(vii) and (viii), the Master Servicer's entitlement thereto is limited to
collections or other recoveries on the related Mortgage Loan, and the Master
Servicer shall keep and maintain separate accounting, on a Mortgage Loan by
Mortgage Loan basis, for the purpose of justifying any withdrawal from the
Collection Account pursuant to such clauses. Notwithstanding any other provision
of this Servi cing Agreement, the Master Servicer shall be entitled to reimburse
itself for any previously unreimbursed expenses incurred pursuant to Section
3.13 or otherwise reimbursable expenses incurred pursuant to the terms of this
Servicing Agreement, but only to the extent of collections or other recoveries
on the related Mortgage Loan.
(b) Notwithstanding the provisions of this Section 3.07, the Master
Servicer may, but is not required to, allow the Subservicers to deduct from
amounts received by them or from the related account maintained by a
Subservicer, prior to deposit in the Collection Account, any portion to which
such Subservicers are entitled as servicing compensation (including income on
Eligible Investments) or reimbursement of any reimbursable Advances made by such
Subservicers.
Section 3.08. ACCESS TO CERTAIN DOCUMENTATION AND INFORMATION
REGARDING THE MORTGAGE LOANS. The Master Servicer shall provide, and shall cause
any Subservicer to provide, to the Indenture Trustee and the Owner Trustee
access to the documentation regarding the related
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Mortgage Loans and REO Property and to the Noteholders, the FDIC, and the
supervisory agents and examiners of the FDIC (to which the Indenture Trustee
shall also provide) access to the documentation regarding the related Mortgage
Loans required by applicable regulations, such access being afforded without
charge but only upon reasonable request and during normal business hours at the
offices of the Master Servicer or the Subservicers that are designated by these
entities; PROVIDED, HOWEVER, that, unless otherwise required by law, the
Indenture Trustee, the Master Servicer or the Subservicer shall not be required
to provide access to such documentation if the provision thereof would violate
the legal right to privacy of any Mortgagor; PROVIDED, FURTHER, HOWEVER, that
the Indenture Trustee and the Owner Trustee shall coordinate their requests for
such access so as not to impose an unreasonable burden on, or cause an
unreasonable interruption of, the business of the Master Servicer or any
Subservicer. The Master Servicer, the Subservicers and the Indenture Trustee
shall allow representatives of the above entities to photocopy any of the
documentation and shall provide equipment for that purpose at a charge that
covers their own actual out-of-pocket costs.
Section 3.09. MAINTENANCE OF FIDELITY COVERAGE. The Master Servicer
shall obtain and maintain at its own expense and for the duration of this
Servicing Agreement a blanket fidelity bond and shall cause each Subservicer to
obtain and maintain an errors and omissions insurance policy covering such
Subservicer's officers, employees and other persons acting on its behalf in
connection with its activities under this Servicing Agreement. The amount of
coverage shall be at least equal to the coverage maintained by the Master
Servicer acceptable to FNMA or FHLMC to service loans for it or otherwise in an
amount as is commercially available at a cost that is generally not regarded as
excessive by industry standards. The Master Servicer shall promptly notify the
Indenture Trustee of any material change in the terms of such bond or policy.
The Master Servicer shall provide annually to the Indenture Trustee a
certificate of insurance that such bond and policy are in effect. If any such
bond or policy ceases to be in effect, the Master Servicer shall, to the extent
possible, give the Indenture Trustee ten days' notice prior to any such
cessation and shall use its reasonable best efforts to obtain a comparable
replacement bond or policy, as the case may be. Any amounts relating to the
Mortgage Loans collected under such bond or policy shall be deposited initially
in a Collection Account for transmittal to the Payment Account, subject to
withdrawal pursuant to Section 3.07.
Section 3.10. DUE-ON-SALE CLAUSES; ASSUMPTION AGREEMENTS. (a) Subject
to Section 3.06(b), in any case in which the Master Servicer is notified by any
Mortgagor or Subservicer that a Mortgaged Property relating to a Mortgage Loan
has been or is about to be conveyed by the Mortgagor, the Master Servicer shall
enforce, or shall instruct such Subservicer to enforce, any due-on-sale clause
contained in the related Security Instrument to the extent permitted under the
terms of the related Mortgage Note and by applicable law. The Seller, the Master
Servicer or the related Subservicer may repurchase a Mortgage Loan at the
Repurchase Price when the Master Servicer requires acceleration of the Mortgage
Loan, but only if the Master Servicer is satisfied, as evidenced by an Officer's
Certificate delivered to the Indenture Trustee, that either (i) such Mortgage
Loan is in default or default is reasonably foreseeable or (ii) if such Mortgage
Loan is not in default or default is not reasonably foreseeable, such repurchase
will have no adverse tax consequences for the Trust Estate or any
Securityholder. If the Master Servicer reasonably believes that such due-on-sale
clause cannot be enforced under applicable law or if the Mortgage
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Loan does not contain a due-on-sale clause, the Master Servicer is authorized,
and may authorize any Subservicer, to consent to a conveyance subject to the
lien of the Mortgage, and to take or enter into an assumption agreement from or
with the Person to whom such property has been or is about to be conveyed,
pursuant to which such Person becomes liable under the related Mortgage Note and
unless prohibited by applicable state law, such Mortgagor remains liable
thereon. In connection with any such assumption, no material term of the related
Mortgage Note may be changed. The Master Servicer shall notify the Indenture
Trustee, whenever possible, before the completion of such assumption agreement,
and shall forward to the Indenture Trustee the original copy of such assumption
agreement, which copy shall be added by the Indenture Trustee to the related
Mortgage File and which shall, for all purposes, be considered a part of such
Mortgage File to the same extent as all other documents and instruments
constituting a part thereof. A portion, equal to up to 2% of the Principal
Balance of the related Mortgage Loan, of any fee or additional interest
collected by the related Subservicer for consenting in any such conveyance or
entering into any such assumption agreement may be retained by the related
Subservicer as additional servicing compensation.
(b) Notwithstanding the foregoing paragraph or any other provision of
this Servicing Agreement, the Master Servicer shall not be deemed to be in
default, breach or any other violation of its obligations hereunder by reason of
any assumption of a Mortgage Loan by operation of law or any conveyance by the
Mortgagor of the related Mortgaged Property or assumption of a Mortgage Loan
which the Master Servicer reasonably believes it may be restricted by law from
preventing, for any reason whatsoever or if the exercise of such right would
impair or threaten to impair any recovery under any applicable insurance policy.
Section 3.11. REALIZATION UPON DEFAULTED MORTGAGE LOANS. (a) With
respect to such of the Mortgage Loans as come into and continue in default, the
Master Servicer shall, or shall direct the related Subservicer to decide whether
to (i) foreclose upon the Mortgaged Properties securing such Mortgage Loans,
(ii) write off the unpaid principal balance of the Mortgage Loans as bad debt,
(iii) take a deed in lieu of foreclosure, (iv) accept a short sale, (v) arrange
for a repayment plan, (vi) agree to a modification in accordance with this
Servicing Agreement, or (vii) take an unsecured note, in the case of (i) subject
to the rights of any related first lien holder, and in the case of (vii) subject
to the provisions of Section 3.16, except that the Master Servicer shall not,
and shall not direct the related Subservicer to, foreclose upon or otherwise
comparably convert a Mortgaged Property if the Master Servicer has actual
knowledge that any Mortgaged Property is affected by hazardous or toxic wastes
or other substances and the acquisition or such property would not be
commercially reasonable, which determination shall be made in accordance with
the procedures in Subsection (c) below. In connection with such decision, the
Master Servicer shall follow such practices (including, in the case of any
default on a related senior mortgage loan, the advancing of funds to correct
such default if deemed to be appropriate by the Master Servicer) and procedures
as it shall deem necessary or advisable and as shall be normal and usual in its
general mortgage servicing activities (including any analysis and decisions
regarding whether to realize a gain pursuant to Section 1001 of the Code);
PROVIDED that the Master Servicer shall not be liable in any respect hereunder
if the Master Servicer is acting in connection with any such foreclosure or
attempted foreclosure which is not completed or other conversion in a manner
that is consistent with the provisions of this Servicing Agreement. In
connection with any foreclosure or other
-16-
conversion, the Master Servicer in conjunction with the related Subservicer, if
any, shall use its best reasonable efforts to preserve REO Property and to
realize upon defaulted Mortgage Loans in such manner as to maximize the receipt
of principal and interest by the Noteholders, taking into account, among other
things, the timing of foreclosure and the considerations set forth in Subsection
3.13(b). The foregoing is subject to the proviso that the Master Servicer shall
not be required to expend its own funds in connection with any foreclosure or
towards the restoration of any property unless it determines in good faith (i)
that such restoration or foreclosure will increase the proceeds of liquidation
of the Mortgage Loan to Noteholders after reimbursement to itself for such
expenses and (ii) that such expenses will be recoverable to it through
Liquidation Proceeds (respecting which it shall have priority for purposes of
reimbursements from the Collection Account pursuant to Section 3.07). The Master
Servicer shall be responsible for all other costs and expenses incurred by it in
any such proceedings; PROVIDED, HOWEVER, that it shall be entitled to
reimbursement thereof (as well as its normal servicing compensation), and in
respect of the Master Servicer only, to receive Foreclosure Profits as
additional servicing compensation to the extent that transfers or withdrawals
from the Collection Account with respect thereto are permitted under Section
3.07. Any income from or other funds (net of any income taxes) generated by REO
Property shall be deemed for purposes of this Servicing Agreement to be
Liquidation Proceeds.
(b) The Trust Estate shall not acquire any real property (or any
personal property incident to such real property) except in connection with a
default or reasonably foreseeable default of a Mortgage Loan. In the event that
the Trust Estate acquires any real property (or personal property incident to
such real property) in connection with a default or imminent default of a
Mortgage Loan, such property shall be disposed of by the Indenture Trustee on
behalf of the Trust Estate within two years after its acquisition by the Trust
Estate.
(c) With respect to any Mortgage Loan as to which the Master Servicer
or a Subservicer has received notice of, or has actual knowledge of, the
presence of any toxic or hazardous substance on the Mortgaged Property, the
Master Servicer shall promptly notify the Indenture Trustee and the Owner
Trustee. The Master Servicer may, in its sole discretion, obtain an
environmental audit report prepared by a Person who regularly conducts
environmental audits using customary industry standards, a copy of which shall
be delivered to the Issuer and the Indenture Trustee. The Master Servicer shall
be entitled to reimbursement for such report pursuant to Section 3.07. The
Master Servicer shall take such action as it deems to be in the best economic
interest of the Trust Estate (other than proceeding against the Mortgaged
Property) and is hereby authorized at such time as it deems appropriate to
release such Mortgaged Property from the lien of the related Mortgage. The
parties hereto acknowledge that the Master Servicer shall not obtain on behalf
of the Issuer a deed as a result or in lieu of foreclosure, and shall not
otherwise acquire possession of or title to, or commence any proceedings to
acquire possession of or title to, or take any other action with respect to, any
Mortgage Property, if the Owner Trustee could reasonably be considered to be a
responsible party for any liability arising from the presence of any toxic or
hazardous substance on the Mortgaged Property, unless the Owner Trustee has been
indemnified to its reasonable satisfaction against such liability.
Section 3.12. INDENTURE TRUSTEE TO COOPERATE; RELEASE OF MORTGAGE
FILES. (a) Upon payment in full of any Mortgage Loan or the receipt by the
Master Servicer of a notification that
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payment in full will be escrowed in a manner customary for such purposes, the
Master Servicer will immediately notify the Indenture Trustee by a certification
signed by a Servicing Officer in the form of the request for release ("Request
for Release") attached hereto as Exhibit B (which certification shall include a
statement to the effect that all amounts received or to be received in
connection with such payment which are required to be deposited in the Payment
Account have been or will be so deposited) and shall request delivery to the
Master Servicer or Subservicer, as the case may be, of the Mortgage File. Upon
receipt of such certification and request, the Indenture Trustee shall promptly
release the related Mortgage File to the Master Servicer or Subservicer and
execute and deliver to the Master Servicer, without recourse, the request for
reconveyance, deed of reconveyance or release or satisfaction of mortgage or
such instrument releasing the lien of the Security Instrument (furnished by the
Master Servicer), together with the Mortgage Note with written evidence of
cancellation thereon.
(b) From time to time as is appropriate, for the servicing or
foreclosure of any Mortgage Loan or collection under an insurance policy, the
Master Servicer may deliver to the Indenture Trustee a Request for Release
signed by a Servicing Officer on behalf of the Master Servicer in substantially
the form attached as Exhibit B hereto. Upon receipt of the Request for Release,
the Indenture Trustee shall deliver the Mortgage File or any document therein to
the Master Servicer or Subservicer, as the case may be, as bailee for the
Indenture Trustee.
Each Request for Release may be delivered to the Indenture Trustee (i)
via mail or courier, (ii) via facsimile or (iii) by such other means, including,
without limitation, electronic or computer readable medium, as the Master
Servicer and the Indenture Trustee shall mutually agree. The Indenture Trustee
shall promptly release the related Mortgage File(s) within five (5) to seven (7)
Business Days of receipt of a properly completed Request for Release pursuant to
clauses (i), (ii) or (iii) above shall be authorization to the Indenture Trustee
to release such Mortgage Files, provided the Indenture Trustee has determined
that such Request for Release has been executed, with respect to clauses (i) or
(ii) above, or approved, with respect to clause (iii) above, by an authorized
Servicing Officer of the Master Servicer, and so long as the Indenture Trustee
complies with its duties and obligations under this Agreement. If the Indenture
Trustee is unable to release the Mortgage Files within the time frames
previously specified, the Indenture Trustee shall immediately notify the Master
Servicer indicating the reason for such delay, but in no event shall such
notification be later than five Business Days after receipt of a Request for
Release. If the Master Servicer is required to pay penalties or damages due to
the Indenture Trustee's negligent failure to release the related Mortgage File
or the Indenture Trustee's negligent failure to execute and release documents in
a timely manner, the Indenture Trustee shall be liable for such penalties or
damages.
On each day that the Master Servicer remits to the Indenture Trustee
Requests for Releases pursuant to clauses (ii) or (iii) above, the Master
Servicer shall also submit to the Indenture Trustee a summary of the total
amount of such Requests for Releases requested on such day by the same method as
described in such clauses (ii) and (iii) above.
(c) The Master Servicer shall cause each Mortgage File or any document
therein released pursuant to Subsection 3.14(b) to be returned to the Indenture
Trustee when the need
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therefor no longer exists, and in any event within 21 days of the Master
Servicer's receipt thereof, unless the Mortgage Loan has become a Liquidated
Mortgage Loan and the Liquidation Proceeds relating to the Mortgage Loan have
been deposited in the Collection Account or such Mortgage File is being used to
pursue foreclosure or other legal proceedings. Prior to return of a Mortgage
File or any document to the Indenture Trustee, the Master Servicer, the related
insurer or Subservicer to whom such file or document was delivered shall retain
such file or document in its respective control as bailee for the Indenture
Trustee unless 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, to
initiate or pursue legal action or other proceedings for the foreclosure of the
Mortgaged Property either judicially or non-judicially, and the Master Servicer
has delivered to the Indenture Trustee a certificate of a Servicing Officer
certifying as to the name and address of the Person to which such Mortgage File
or such document was delivered and the purpose or purposes of such delivery. If
a Mortgage Loan becomes a Liquidated Mortgage Loan, the Indenture Trustee shall
deliver a copy of the Request for Release with respect thereto to the Master
Servicer upon deposit of the related Liquidation Proceeds in the Collection
Account.
(d) The Indenture Trustee shall execute and deliver to the Master
Servicer any court pleadings, requests for trustee's sale or other documents
necessary to (i) the foreclosure or trustee's sale with respect to a Mortgaged
Property; (ii) any legal action brought to obtain judgment against any Mortgagor
on the Mortgage Note or Security Instrument; (iii) obtain a deficiency judgment
against the Mortgagor; or (iv) enforce any other rights or remedies provided by
the Mortgage Note or Security Instrument or otherwise available at law or
equity. Together with such documents or pleadings the Master Servicer shall
deliver to the Indenture Trustee a certificate of a Servicing Officer in which
it requests the Indenture Trustee to execute the pleadings or documents. The
certificate shall certify and explain the reasons for which the pleadings or
documents are required.
Section 3.13. MASTER SERVICING COMPENSATION. (a) As compensation for
its activities hereunder, the Master Servicer shall be entitled to receive the
Master Servicing Fee (plus the Subservicing Fee paid to the Master Servicer as
the direct servicer of a Mortgage Loan for which there is no Subservicer) from
full payments of accrued interest on each Mortgage Loan. In addition, the Master
Servicer shall be entitled to all prepayment penalties on the Mortgage Loans.
The Master Servicer shall be solely responsible for paying any and all fees with
respect to a Subservicer and the Trust Estate shall not bear any fees, expenses
or other costs directly associated with any Subservicer.
(b) The related Subservicer may retain additional servicing
compensation in the form of assumption fees up to 2% of the Principal Balance of
the related Mortgage Loan, fees for statement of account or payoff, late payment
charges, or otherwise, to the extent such fees are collected from the related
Mortgagors or, with respect to a Liquidated Mortgage Loan, to the extent such
fees have accrued and interest earned on the Collection Account. The Master
Servicer shall not be entitled to servicing compensation other than its Master
Servicing Fee and prepayment charges. The Master Servicer shall be required to
pay all expenses it incurs in connection with servicing activities under this
Servicing Agreement and shall not be entitled in connection with servicing
activities under this Servicing Agreement to reimbursement except as provided in
this
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Servicing Agreement. Expenses to be paid by the Master Servicer under this
Subsection 3.13(b) shall include payment of the expenses of the accountants
retained pursuant to Section 3.15.
Section 3.14. ANNUAL STATEMENTS OF COMPLIANCE. Within 120 days after
December 31 of each year, commencing December 1998, the Master Servicer at its
own expense shall deliver to the Indenture Trustee, with a copy to the Rating
Agencies, an Officer's Certificate stating, as to the signer thereof, that (i) a
review of the activities of the Master Servicer during the preceding calendar
year and of performance under this Servicing Agreement has been made under such
officer's supervision, (ii) to the best of such officer's knowledge, based on
such review, the Master Servicer has fulfilled all its obligations under this
Servicing Agreement for such year, 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 including the steps being taken by the
Master Servicer to remedy such default; (iii) a review of the activities of each
Subservicer during the Subservicer's most recently ended calendar year on or
prior to such December 31 and its performance under its Subservicing Agreement
has been made under such officer's supervision; and (iv) to the best of the
Servicing Officer's knowledge, based on his review and the certification of an
officer of the Subservicer (unless the Servicing Officer has reason to believe
that reliance on such certification is not justified), either each Subservicer
has performed and fulfilled its duties, responsibilities and obligations under
this Servicing Agreement and its Subservicing Agreement in all material respects
throughout the year, or, if there has been a default in performance or
fulfillment of any such duties, responsibilities or obligations, specifying the
nature and status of each such default known to the Servicing Officer. Copies of
such statements shall be provided by the Master Servicer to the Noteholders upon
written request or by the Indenture Trustee at the expense of the Master
Servicer should the Master Servicer fail to provide such copies.
Section 3.15. ANNUAL INDEPENDENT PUBLIC ACCOUNTANTS' SERVICING REPORT.
(a) Within 120 days after December 31 of each year, commencing in December 1998,
the Master Servicer, at its expense, shall cause a firm of Independent public
accountants who are members of the American Institute of Certified Public
Accountants to furnish a statement to the Master Servicer, which will be
provided to the Indenture Trustee and the Rating Agencies, to the effect that,
in connection with the firm's examination of the Master Servicer's financial
statements as of the end of such calendar year, nothing came to their attention
that indicated that the Master Servicer was not in compliance with Sections
3.06, 3.07 and 3.08 except for (i) such exceptions as such firm believes to be
immaterial and (ii) such other exceptions as are set forth in such statement.
(b) Within 120 days after December 31 of each year, commencing
in December 1998, the Master Servicer, at its expense, shall or shall cause each
Subservicer to cause a nationally recognized firm of independent certified
public accountants to furnish to the Master Servicer or such Subservicer a
report stating that (i) it has obtained a letter of representation regarding
certain matters from the management of the Master Servicer or such Subservicer
which includes an assertion that the Master Servicer or such Subservicer has
complied with certain minimum mortgage loan servicing standards (to the extent
applicable to commercial and multifamily mortgage loans) identified in the
Uniform Single Attestation Program for Mortgage Bankers established by the
Mortgage Bankers Association of America with respect to the servicing of first
and second lien conventional single family mortgage loans during the most
recently
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completed calendar year and (ii) on the basis of an examination conducted by
such firm in accordance with standards established by the American Institute of
Certified Public Accountants, such representation is fairly stated in all
material respects, subject to such exceptions and other qualifications that may
be appropriate. Immediately upon receipt of such report, the Master Servicer
shall or shall cause each Subservicer to furnish a copy of such report to the
Indenture Trustee, the Rating Agencies.
Section 3.16. OPTIONAL PURCHASE OF DEFAULTED MORTGAGE LOANS. The Master
Servicer may, but is not obligated to, repurchase any Mortgage Loan delinquent
in payment for a period of 90 days or longer for a price equal to the Repurchase
Price. In addition, the Master Servicer must repurchase any Mortgage Loan for
which an unsecured Mortgage Note is given to the borrower in connection with
Section 3.11(a) or otherwise. Any such purchase shall be accomplished as
provided in Subsection 2.03 hereof. Notwithstanding the foregoing, the Indenture
Trustee, whether acting as Indenture Trustee or in the capacity of successor
Master Servicer, shall have no obligation to repurchase any Mortgage Loan.
Section 3.17. INFORMATION REQUIRED BY THE INTERNAL REVENUE SERVICE
GENERALLY AND REPORTS OF FORECLOSURES AND ABANDONMENTS OF MORTGAGED PROPERTY.
The Master Servicer shall prepare and deliver all federal and state information
reports when and as required by all applicable state and federal income tax
laws. In particular, with respect to the requirement under Section 6050J of the
Code to the effect that the Master Servicer or Subservicer shall make reports of
foreclosures and abandonments of any mortgaged property for each year beginning
in 1997, the Master Servicer or Subservicer shall file reports relating to each
instance occurring during the previous calendar year in which the Master
Servicer (i) acquires an interest in any Mortgaged Property through foreclosure
or other comparable conversion in full or partial satisfaction of a Mortgage
Loan, or (ii) knows or has reason to know that any Mortgaged Property has been
abandoned. The reports from the Master Servicer or Subservicer shall be in form
and substance sufficient to meet the reporting requirements imposed by Section
6050J, Section 6050H (reports relating to mortgage interest received) and
Section 6050P of the Code (reports relating to cancellation of indebtedness).
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ARTICLE IV
Servicing Certificate
Section 4.01. REMITTANCE REPORTS. On the second Business Day following
each Determination Date, the Master Servicer shall deliver to the Indenture
Trustee a report, prepared as of the close of business on the Determination Date
(the "Determination Date Report"), in the form of a magnetic tape or disk or pc
file or such other method as to which the Master Servicer and Indenture Trustee
shall agree. The Determination Date Report and any written information
supplemental thereto shall include such information with respect to the Mortgage
Loans that is reasonably available to the Master Servicer and that is required
by the Indenture Trustee for purposes of making the calculations and providing
the reports referred to in the Indenture, as set forth in written specifications
or guidelines issued by the Indenture Trustee from time to time. Such
information shall include the aggregate amounts required to be withdrawn from
the Collection Account and deposited into the Payment Account pursuant to 3.07.
In addition, prior to each Payment Date, the Master Servicer shall
determine the total number of Realized Losses, if any, that resulted from any
Cash Liquidation or REO Disposition that occurred during the related Collection
Period and the total amount of Realized Losses incurred due to a Mortgage Loan
(or REO Property) being 180 days or more delinquent. The amount of each Realized
Loss shall be evidenced by an Officer's Certificate delivered to the Indenture
Trustee with the related Determination Date Report.
The determination by the Master Servicer of such amounts shall, in the
absence of obvious error, be presumptively deemed to be correct for all purposes
hereunder and the Owner Trustee and Indenture Trustee shall be protected in
relying upon the same without any independent check or verification.
Section 4.02. RESERVED.
Section 4.03. PAYMENT ACCOUNT. The Indenture Trustee shall establish
and maintain a separate account (the "Payment Account") in accordance with the
Indenture. The Payment Account shall be an Eligible Account. On each Payment
Date, amounts on deposit in the Payment Account will be distributed by the
Indenture Trustee in accordance with Section 3.05 of the Indenture. The
Indenture Trustee shall, upon written request from the Master Servicer, invest
or cause the institution maintaining the Payment Account to invest the funds in
the Payment Account in Eligible Investments designated in the name of the
Indenture Trustee, which shall mature not later than the Business Day next
preceding the Payment Date next following the date of such investment (except
that (i) any investment in the institution with which the Payment Account is
maintained may mature on such Payment Date and (ii) any other investment may
mature on such Payment Date if the Indenture Trustee shall advance funds on such
Payment Date to the Payment Account in the amount payable on such investment on
such Payment Date, pending receipt thereof to the extent necessary to make
distributions on the Notes) and shall not be sold or disposed of prior to
maturity. All income and gain realized from any such investment shall be for the
benefit
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of the Master Servicer. The amount of any losses incurred with respect to any
such investments shall be deposited in the Payment Account by the Master
Servicer.
Section 4.04. ADVANCES. If any Monthly Payment (together with any
advances from the Subservicers with respect thereto) on a Mortgage Loan that was
due during the related Collection Period and delinquent on the Determination
Date is delinquent other than as a result of application of the Relief Act, the
Master Servicer will deposit in the Collection Account not later than the third
Business Day immediately preceding the related Payment Date an amount equal to
the interest portion of such Monthly Payment net of the related Servicing Fee
(each, an "Advance") for such Mortgage Loan, except to the extent the Master
Servicer determines any such advance to be a Nonrecoverable Advance. Subject to
the foregoing and in the absence of such a determination, the Master Servicer
shall continue to make such Advances through the date that the related Mortgaged
Property has, in the judgment of the Master Servicer, been completely
liquidated. If applicable, no later than the fourth Business Day preceding each
Payment Date, the Master Servicer shall promptly present an Officer's
Certificate to the Indenture Trustee (i) stating that the Master Servicer elects
not to make an Advance in a stated amount and (ii) detailing the reason it deems
the advance to be a Nonrecoverable Advance.
Such Advances may be made in whole or in part from funds in the
Collection Account being held for future distribution or withdrawal on or in
connection with Payment Dates in subsequent months. Any funds being held for
future distribution to Securityholders and so used shall be replaced by the
Master Servicer from its own funds by deposit in the Collection Account on or
before the fourth Business Day preceding any Payment Date to the extent that
funds in the Collection Account with respect to such Payment Date shall be less
than payments to Securityholders required to be made on such date.
Section 4.05. COMPENSATING INTEREST PAYMENTS. The Master Servicer shall
deposit in the Collection Account not later than the third Business Day
preceding the Payment Date an amount equal to the Compensating Interest related
to the related Determination Date. The Master Servicer shall not be entitled to
any reimbursement of any Compensating Interest payment.
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ARTICLE V
The Master Servicer
Section 5.01. LIABILITY OF THE MASTER SERVICER. The Master
Servicer shall be liable in accordance herewith only to the extent of the
obligations specifically imposed upon and undertaken by the Master Servicer
herein.
Section 5.02. MERGER OR CONSOLIDATION OF, OR ASSUMPTION OF THE
OBLIGATIONS OF, THE MASTER SERVICER. Any corporation into which the Master
Servicer may be merged or converted or with which it may be consolidated, or any
corporation resulting from any merger, conversion or consolidation to which the
Master Servicer shall be a party, or any corporation succeeding to the business
of the Master Servicer, shall be the successor of the Master Servicer,
hereunder, without the execution or filing of any paper or any further act on
the part of any of the parties hereto, anything herein to the contrary
notwithstanding.
The Master Servicer may assign its rights and delegate its duties and
obligations under this Servicing Agreement; PROVIDED, that the Person accepting
such assignment or delegation shall be a Person which is qualified to service
mortgage loans on behalf of FNMA or FHLMC, is reasonably satisfactory to the
Indenture Trustee (as pledgee of the Mortgage Loans) and the Company (in its
sole discretion), is willing to service the Mortgage Loans and executes and
delivers to the Indenture Trustee and the Company an agreement, in form and
substance reason ably satisfactory to the Indenture Trustee and the Company,
which contains an assumption by such Person of the due and punctual performance
and observance of each covenant and condition to be performed or observed by the
Master Servicer under this Servicing Agreement; PROVIDED, FURTHER, that each
Rating Agency's rating of the Notes in effect immediately prior to such
assignment and delegation will not be qualified, reduced, or withdrawn as a
result of such assignment and delegation (as evidenced by a letter to such
effect from each Rating Agency) or considered to be below investment grade.
Section 5.03. LIMITATION ON LIABILITY OF THE MASTER SERVICER AND
OTHERS. Neither the Master Servicer nor any of the directors or officers or
employees or agents of the Master Servicer shall be under any liability to the
Company, the Issuer, the Owner Trustee, the Indenture Trustee or the Noteholders
for any action taken or for refraining from the taking of any action in good
faith pursuant to this Servicing Agreement, PROVIDED, HOWEVER, that this
provision shall not protect the Master Servicer or any such Person against any
liability which would otherwise be imposed by reason of its willful misfeasance,
bad faith or gross negligence in the performance of its duties hereunder or by
reason of its reckless disregard of its obligations and duties hereunder. The
Master Servicer and any director or officer or employee or agent of the Master
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 Master Servicer and any director or officer or employee or agent of the
Master Servicer shall be indemnified by the Company and held harmless against
any loss, liability or expense incurred in connection with any legal action
relating to this Servicing Agreement or the Notes, including any amount paid to
the Owner Trustee or the Indenture Trustee pursuant to Section 5.06(b), other
than any loss, liability or expense related to
-24-
any specific Mortgage Loan or Mortgage Loans (except as any such loss, liability
or expense shall be otherwise reimbursable pursuant to this Servicing Agreement)
and any loss, liability or expense incurred by reason of its willful
misfeasance, bad faith or gross negligence in the performance of its duties
hereunder or by reason of its reckless disregard of its obligations and duties
hereunder. The Master Servicer shall not be under any obligation to appear in,
prosecute or defend any legal action which is not incidental to its duties to
service the Mortgage Loans in accordance with this Servicing Agreement, and
which in its opinion may involve it in any expense or liability; PROVIDED,
HOWEVER, that the Master Servicer may in its sole discretion undertake any such
action which it may deem necessary or desirable in respect of this Servicing
Agreement, and the rights and duties of the parties hereto and the interests of
the Noteholders hereunder. In such event, the reasonable legal expenses and
costs of such action and any liability resulting therefrom shall be expenses,
costs and liabilities of the Company, and the Master Servicer shall be entitled
to be reimbursed therefor. The Master Servicer's right to indemnity or
reimbursement pursuant to this Section 5.03 shall survive any resignation or
termination of the Master Servicer pursuant to Section 5.04 or 6.01 with respect
to any losses, expenses, costs or liabilities arising prior to such resignation
or termination (or arising from events that occurred prior to such resignation
or termination).
Section 5.04. MASTER SERVICER NOT TO RESIGN. Subject to the provisions
of Section 5.02, the Master Servicer shall not resign from the obligations and
duties hereby imposed on it except (i) upon determination that the performance
of its obligations or duties hereunder are no longer permissible under
applicable law or (ii) upon satisfaction of the following conditions: (a) the
Master Servicer has proposed a successor servicer to the Company and the
Indenture Trustee in writing and such proposed successor servicer is reasonably
acceptable to the Company and the Indenture Trustee; and (b) each Rating Agency
shall have delivered a letter to the Company and the Indenture Trustee prior to
the appointment of the successor servicer stating that the proposed appointment
of such successor servicer as Master Servicer hereunder will not result in the
reduc tion or withdrawal of the then current rating of the Notes or the then
current rating of the Class B-2 Certificates; PROVIDED, HOWEVER, that no such
resignation by the Master Servicer shall become effective until such successor
servicer or, in the case of (i) above, the Indenture Trustee, as pledgee of the
Mortgage Loans, shall have assumed the Master Servicer's responsibilities and
obligations hereunder or the Indenture Trustee, as pledgee of the Mortgage
Loans, shall have designated a successor servicer in accordance with Section
6.02. Any such resignation shall not relieve the Master Servicer of
responsibility for any of the obligations specified in Sections 6.01 and 6.02 as
obligations that survive the resignation or termination of the Master Servicer.
The Master Servicer shall have no claim (whether by subrogation or otherwise) or
other action against any Noteholder for any amounts paid by the Master Servicer
pursuant to any provision of this Servicing Agreement. Any such determination
permitting the resignation of the Master Servicer shall be evidenced by an
Opinion of Counsel to such effect delivered to the Indenture Trustee.
Section 5.05. DELEGATION OF DUTIES. In the ordinary course of business,
the Master Servicer at any time may delegate any of its duties hereunder to any
Person, including any of its Affiliates, who agrees to conduct such duties in
accordance with standards comparable to those with which the Master Servicer
complies pursuant to Section 3.01. Such delegation shall not
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relieve the Master Servicer of its liabilities and responsibilities with respect
to such duties and shall not constitute a resignation within the meaning of
Section 5.04.
Section 5.06. MASTER SERVICER TO PAY INDENTURE TRUSTEE'S AND OWNER
TRUSTEE'S FEES AND EXPENSES; INDEMNIFICATION. (a) The Master Servicer covenants
and agrees to pay to the Owner Trustee, the Indenture Trustee and any co-trustee
of the Indenture Trustee from time to time, and the Owner Trustee, the Indenture
Trustee and any such co-trustee shall be entitled to, reasonable compensation
(which shall not be limited by any provision of law in regard to the
compensation of a trustee of an express trust) for all services rendered by each
of them in the execution of the trusts created under the Trust Agreement and the
Indenture and in the exercise and performance of any of the powers and duties
under the Trust Agreement or the Indenture, as the case may be, of the Owner
Trustee, the Indenture Trustee and any co-trustee of the Indenture Trustee, and
the Master Servicer will pay or reimburse (i) the Indenture Trustee and any
co-trustee upon request for all reasonable expenses, disbursements and advances
incurred or made by the Indenture Trustee or any co-trustee of the Indenture
Trustee in accordance with any of the provisions of this Servicing Agreement
except any such expense, disbursement or advance as may arise from its
negligence or bad faith and (ii) the Owner Trustee upon request for all
reasonable expenses, disbursements and advances incurred or made by the Owner
Trustee in accordance with any of the provisions of this Servicing Agreement
except any such expense, disbursement or advance as may arise from its willful
misconduct, gross negligence or bad faith or grossly negligent failure to act.
(b) The Master Servicer agrees to indemnify the Indenture Trustee and
the Owner Trustee for, and to hold the Indenture Trustee and the Owner Trustee,
as the case may be, harmless against, any claim, tax, penalty, loss, liability
or expense of any kind whatsoever, incurred without negligence or willful
misconduct on its part, arising out of, or in connection with, the failure by
the Master Servicer to perform its duties in compliance with this Servicing
Agreement, or its duties and obligations which arise out of any other Basic
Document, including the costs and expenses (including reasonable legal fees and
expenses) of defending itself against any claim in connection with the exercise
or performance of any of its powers or duties under any Basic Document, provided
that:
(i) with respect to any such claim, the Indenture
Trustee or Owner Trustee, as the case may be, shall have given the
Master Servicer written notice thereof promptly after the Indenture
Trustee or Owner Trustee, as the case may be, shall have actual
knowledge thereof;
(ii) while maintaining control over its own defense, the
Company, the Indenture Trustee or Owner Trustee, as the case may be,
shall cooperate and consult fully
with the Master Servicer in preparing such defense; and
(iii) notwithstanding anything in this Servicing
Agreement to the contrary, the Master Servicer shall not be liable for
settlement of any claim by the Indenture Trustee or the Owner Trustee,
as the case may be, entered into without the prior consent of the
Master Servicer, which consent shall not be unreasonably withheld.
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No termination of this Servicing Agreement shall affect the obligations created
by this Section 5.06 of the Master Servicer to indemnify the Indenture Trustee
and the Owner Trustee under the condi tions and to the extent set forth herein.
This section shall survive the termination of this Servicing Agreement and the
resignation or removal of the Master Servicer. Any amounts to be paid by the
Master Servicer pursuant to this Subsection may not be paid from the Trust
Estate.
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ARTICLE VI
Default
Section 6.01. SERVICING DEFAULT. If any one of the following events
("Servicing Default") shall occur and be continuing:
(i) Any failure by the Master Servicer to deposit in
the Collection Account or Payment Account any deposit required to be
made under the terms of this Servicing Agreement, including any
Advances and Compensating Interest (other than Servicing Advances),
which continues unremedied for a period of five Business Days after the
date upon which written notice of such failure shall have been given to
the Master Servicer by the Company, the Issuer or the Indenture
Trustee; or
(ii) Failure on the part of the Master Servicer duly to
observe or perform in any material respect any other covenants or
agreements of the Master Servicer (including Servicing Advances) set
forth in the Notes or in this Servicing Agreement, which failure, in
each case, materially and adversely affects the interests of
Noteholders and which continues unremedied for a period of 30 days
after the date on which written notice of such failure, requiring the
same to be remedied, and stating that such notice is a "Notice of
Default" hereunder, shall have been given to the Master Servicer by the
Company, the Issuer or the Indenture Trustee; or
(iii) The entry against the Master 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, conservatorship,
receivership, readjustment of debt, marshalling of assets and
liabilities or similar proceed ings, 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; or
(iv) The Master Servicer shall voluntarily go into
liquidation, consent to the appointment of a conservator, receiver,
liquidator or similar person in any insolvency, readjustment of debt,
marshalling of assets and liabilities or similar proceedings of or
relating to the Master Servicer or of or relating to all or
substantially all of its property, or a decree or order of a court,
agency or supervisory authority having jurisdiction in the premises for
the appointment of a conservator, receiver, liquidator or similar
person in any insolvency, readjustment of debt, marshalling of assets
and liabilities or similar proceed ings, or for the winding-up or
liquidation of its affairs, shall have been entered against the Master
Servicer and such decree or order shall have remained in force
undischarged, unbonded or unstayed for a period of 60 days; or the
Master Servicer shall admit in writing its inability to pay its debts
generally as they become due, file a petition to take advantage of any
applicable insolvency or reorganization statute, make an assignment for
the benefit of its creditors or voluntarily suspend payment of its
obligations.
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then, and in every such case, so long as a Servicing Default shall not have been
remedied by the Master Servicer, the Issuer, subject to the direction of the
Indenture Trustee as pledgee of the Mortgage Loans, with the consent of the
holders of at least 51% of the aggregate Note Principal Balance of the Notes, by
notice then given in writing to the Master Servicer (and to the Indenture
Trustee), terminate all of the rights and obligations of the Master Servicer as
servicer under this Servicing Agreement other than its right to receive
servicing compensation and expenses for servicing the Mortgage Loans hereunder
during any period prior to the date of such termination and the Company, subject
to the direction of the Indenture Trustee as pledgee of the Mortgage Loans, may
exercise any and all other remedies available at law or equity. Any such notice
to the Master Servicer shall also be given to each Rating Agency, the Company
and the Issuer. On or after the receipt by the Master Servicer of such written
notice, all authority and power of the Master Servicer under this Servicing
Agreement, whether with respect to the Notes or the Mortgage Loans or otherwise,
shall pass to and be vested in the Indenture Trustee, pursuant to and under this
Section 6.01; and, without limitation, the Indenture Trustee is hereby
authorized and empowered to execute and deliver, on behalf of the Master
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 each Mortgage Loan and related
documents, or other wise. The Master Servicer agrees to cooperate with the
Indenture Trustee in effecting the termination of the responsibilities and
rights of the Master Servicer hereunder, including, without limitation, the
transfer to the Indenture Trustee for the administration by it of all cash
amounts relating to the Mortgage Loans that shall at the time be held by the
Master Servicer and to be deposited by it in the Collection Account, or that
have been deposited by the Master Servicer in the Collection Account or
thereafter received by the Master Servicer with respect to the Mortgage Loans.
All reasonable costs and expenses (including, but not limited to, attorneys'
fees) incurred in connection with amending this Servicing Agreement to reflect
such succession as Master Servicer pursuant to this Section 6.01 shall be paid
by the predecessor Master Servicer (or if the predecessor Master Servicer is the
Indenture Trustee, the initial Master Servicer) upon presen tation of reasonable
documentation of such costs and expenses.
Notwithstanding any termination of the activities of the Master
Servicer hereunder, the Master Servicer shall be entitled to receive, out of any
late collection of a payment on a Mortgage Loan which was due prior to the
notice terminating the Master Servicer's rights and obligations hereunder and
received after such notice, that portion to which the Master Servicer would have
been entitled pursuant to Sections 3.07 and 3.13 as well as its Servicing Fee in
respect thereof, and any other amounts payable to the Master Servicer hereunder
the entitlement to which arose prior to the termination of its activities
hereunder.
Notwithstanding the foregoing, a delay in or failure of performance
under Section 6.01(i) or under Section 6.01(ii) after the applicable grace
periods specified in such Sections, shall not constitute a Servicing Default if
such delay or failure could not be prevented by the exercise of reasonable
diligence by the Master Servicer and such delay or failure was caused by an act
of God or the public enemy, acts of declared or undeclared war, public disorder,
rebellion or sabotage, epidemics, landslides, lightning, fire, hurricanes,
earthquakes, floods or similar causes. The pre ceding sentence shall not relieve
the Master Servicer from using reasonable efforts to perform its
-29-
respective obligations in a timely manner in accordance with the terms of this
Servicing Agreement and the Master Servicer shall provide the Indenture Trustee
and the Noteholders with notice of such failure or delay by it, together with a
description of its efforts to so perform its obligations. The Master Servicer
shall immediately notify the Indenture Trustee and the Owner Trustee in writing
of any Servicing Default.
Section 6.02. INDENTURE TRUSTEE TO ACT; APPOINTMENT OF SUCCESSOR. (a)
On and after the time the Master Servicer receives a notice of termination
pursuant to Section 6.01 or sends a notice pursuant to Section 5.04, the
Indenture Trustee on behalf of the Noteholders shall be the successor in all
respects to the Master Servicer in its capacity as servicer under this Servicing
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 Master Servicer by the terms and provisions hereof, including but
not limited to the provisions of Article VIII. Nothing in this Servicing
Agreement shall be construed to permit or require the Indenture Trustee to (i)
succeed to the responsibilities, duties and liabilities of the initial Master
Servicer in its capacity as the Seller under the Mortgage Loan Purchase
Agreement, (ii) be responsible or accountable for any act or omission of the
Master Servicer prior to the issuance of a notice of termination hereunder,
(iii) require or obligate the Indenture Trustee, in its capacity as successor
Master Servicer, to purchase, repurchase or substitute any Mortgage Loan, (iv)
fund any losses on any Eligible Investment directed by any other Master
Servicer, or (v) be responsible for the representations and warranties of the
Master Servicer; PROVIDED, HOWEVER, that the Indenture Trustee, as successor
Master Servicer, shall be required to make any Advances to the extent that the
Master Servicer failed to make such Advances. As compensation therefor, the
Indenture Trustee shall be entitled to such compensation as the Master Servicer
would have been entitled to hereunder if no such notice of termination had been
given. Notwithstanding the above, (i) if the Indenture Trustee is unwilling to
act as successor Master Servicer, or (ii) if the Indenture Trustee is legally
unable so to act, the Indenture Trustee on behalf of the Noteholders may (in the
situation described in clause (i)) or shall (in the situation described in
clause (ii)) appoint or petition a court of competent jurisdiction to appoint
any established housing and home finance institution, bank or other mortgage
loan servicer having a net worth of not less than $20,000,000 as the successor
to the Master Servicer hereunder in the assumption of all or any part of the
responsibilities, duties or liabilities of the Master Servicer hereunder;
PROVIDED, that any such successor Master Servicer will not result in the
qualification, reduction or withdrawal of the ratings assigned to the Notes by
the Rating Agencies or the ratings assigned to the Notes. Pending appointment of
a successor to the Master 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 successor shall be entitled to receive compensation out of
payments on Mortgage Loans in an amount equal to the compensation which the
Master Servicer would other wise have received pursuant to Section 3.13 (or such
lesser compensation as the Indenture Trustee and such successor shall agree).
The appointment of a successor Master Servicer shall not affect any liability of
the predecessor Master Servicer which may have arisen under this Servicing
Agreement prior to its termination as Master Servicer (including, without
limitation, the obligation to purchase Mortgage Loans pursuant to Section 3.01
of the Mortgage Loan Purchase Agreement or to indemnify the Indenture Trustee
pursuant to Section 5.06), nor shall any successor Master Servicer be liable for
any acts or omissions of the predecessor Master Servicer or for any breach
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by such Master Servicer of any of its representations or warranties contained
herein or in any related document or agreement. The Indenture Trustee and such
successor shall take such action, consistent with this Servicing Agreement, as
shall be necessary to effectuate any such succession.
(b) Any successor, including the Indenture Trustee on behalf of the
Noteholders, to the Master Servicer as servicer shall during the term of its
service as servicer (i) continue to service and administer the Mortgage Loans
for the benefit of the Noteholders, (ii) maintain in force a policy or policies
of insurance covering errors and omissions in the performance of its obligations
as Master Servicer hereunder and a fidelity bond in respect of its officers,
employees and agents to the same extent as the Master Servicer is so required
pursuant to Section 3.11.
(c) Any successor Master Servicer, including the Indenture Trustee on
behalf of the Noteholders, shall not be deemed to be in default or to have
breached its duties hereunder if the predecessor Master Servicer shall fail to
deliver any required deposit to the Collection Account or otherwise cooperate
with any required servicing transfer or succession hereunder.
Section 6.03. NOTIFICATION TO NOTEHOLDERS. Upon any termination or
appointment of a successor to the Master Servicer pursuant to this Article VI or
Section 5.04, the Indenture Trustee shall give prompt written notice thereof to
the Noteholders, the Owner Trustee, the Company, the Issuer and each Rating
Agency.
Section 6.04. WAIVER OF DEFAULTS. The Indenture Trustee shall transmit
by mail to all Noteholders, within 10 days after the occurrence of any Servicing
Default known to the Indenture Trustee, unless such Servicing Default shall have
been cured, notice of each such Servicing Default hereunder known to the
Indenture Trustee. The holders of at least 51% of the aggregate Note Principal
Balance of the Notes may waive any default by the Master Servicer in the
performance of its obligations hereunder and the consequences thereof, except a
default in the making of or the causing to be made any required distribution on
the Notes. Upon any such waiver of a past default, such default shall be deemed
to cease to exist, and any Servicing Default arising therefrom shall be deemed
to have been timely remedied for every purpose of this Servicing Agreement. No
such waiver shall extend to any subsequent or other default or impair any right
consequent thereon except to the extent expressly so waived. The Master Servicer
shall give notice of any such waiver to the Rating Agencies.
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ARTICLE VII
Miscellaneous Provisions
Section 7.01. AMENDMENT. This Servicing Agreement may be amended from
time to time by the parties hereto with the consent of the Indenture Trustee,
which consent shall not be unreasonably withheld, provided that any amendment be
accompanied by a letter from the Rating Agencies that the amendment will not
result in the downgrading or withdrawal of the rating then assigned to the
Notes.
Section 7.02. GOVERNING LAW. THIS SERVICING AGREEMENT SHALL BE
CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK AND THE
OBLIGATIONS, RIGHTS AND REMEDIES OF THE PARTIES HEREUNDER SHALL BE DETERMINED IN
ACCORDANCE WITH SUCH LAWS.
Section 7.03. 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 Master Servicer: Impac Funding Corporation
20371 Irvine Avenue
Santa Ana Heights, CA 92707
Attention: Mary Glass-Schannault
(b) in the case of Rating Agencies: Moody's Investors Service, Inc.
99 Church Street, 4th Floor
New York, NY 10007
Fitch IBCA, Inc.
One State Street Plaza, 33rd Floor
New York, NY 10004
(c) in the case of the Owner Trustee,
the Corporate Trust Office: Wilmington Trust Company
Rodney Square North
1100 North Market Street
Wilmington, Delaware 19890
Attention: Corporate Trust
Administration
(d) in the case of the Issuer, to Impac Secured Assets CMN Trust
Series 1998-1:
c/o Impac Secured Assets Corp.
20371 Irvine Avenue
Santa Ana Heights, California 92707
Attention: Richard Johnson
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or, as to each party, at such other address as shall be designated by such party
in a written notice to each other party. Any notice required or permitted to be
mailed to a Noteholder shall be given by first class mail, postage prepaid, at
the address of such Noteholder as shown in the Note Register. Any notice so
mailed within the time prescribed in this Servicing Agreement shall be
conclusively presumed to have been duly given, whether or not the Noteholder
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
reasonable 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 Rating Agency.
Section 7.04. SEVERABILITY OF PROVISIONS. If any one or more of the
covenants, agreements, provisions or terms of this Servicing 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 this Servicing Agreement and shall in no way
affect the validity or enforceability of the other provisions of this Servicing
Agreement or of the Notes or the rights of the Noteholders thereof.
Section 7.05. THIRD-PARTY BENEFICIARIES. This Servicing Agreement will
inure to the benefit of and be binding upon the parties hereto, the Noteholders,
the Owner Trustee, the Indenture Trustee and their respective successors and
permitted assigns. Except as otherwise provided in this Servicing Agreement, no
other Person will have any right or obligation hereunder. The Indenture Trustee
shall have the right to exercise all rights of the Issuer under this Agreement.
Section 7.06. COUNTERPARTS. This instrument may be executed in any
number of counterparts, each of which so executed shall be deemed to be an
original, but all such counterparts shall together constitute but one and the
same instrument.
Section 7.07. EFFECT OF HEADINGS AND TABLE OF CONTENTS. The Article
and Section headings herein and the Table of Contents are for convenience only
and shall not affect the construction hereof.
Section 7.08. TERMINATION. The respective obligations and
responsibilities of the Master Servicer and the Issuer created hereby shall
terminate upon the satisfaction and discharge of the Indenture pursuant to
Section 4.10 thereof.
Section 7.09. NO PETITION. The Master Servicer, by entering into this
Servicing Agreement, hereby covenants and agrees that it will not at any time
institute against the Issuer, or join in any institution against the Issuer, any
bankruptcy proceedings under any United States federal or state bankruptcy or
similar law in connection with any obligations of the Issuer. This section shall
survive the termination of this Servicing Agreement by one year.
Section 7.10. NO RECOURSE. The Master Servicer acknowledges that no
recourse may be had against the Issuer, except as may be expressly set forth in
this Servicing Agreement.
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ARTICLE VIII
ADMINISTRATIVE DUTIES OF THE MASTER SERVICER
Section 8.01. ADMINISTRATIVE DUTIES. (a) DUTIES WITH
RESPECT TO THE INDENTURE. The Master Servicer shall perform all its duties and
the duties of the Issuer under the Indenture. In addition, the Master Servicer
shall consult with the Owner Trustee as the Master Servicer deems appropriate
regarding the duties of the Issuer under the Indenture. The Master Servicer
shall monitor the performance of the Issuer and shall advise the Owner Trustee
when action is necessary to comply with the Issuer's duties under the Indenture.
The Master Servicer shall prepare for execution by the Issuer or shall cause the
preparation by other appropriate Persons of all such documents, reports,
filings, instruments, certificates and opinions as it shall be the duty of the
Issuer to prepare, file or deliver pursuant to the Indenture. In furtherance of
the foregoing, the Master Servicer shall take all necessary action that is the
duty of the Issuer to take pursuant to the Indenture.
(b) DUTIES WITH RESPECT TO THE ISSUER.
(i) In addition to the duties of the Master Servicer
set forth in this Servicing Agreement or any of the Basic Documents, the Master
Servicer shall perform such calculations and shall prepare for execution by the
Issuer or the Owner Trustee or shall cause the preparation by other appropriate
Persons of all such documents, reports, filings, instruments, certificates and
opinions as it shall be the duty of the Issuer or the Owner Trustee to prepare,
file or deliver pursuant to this Servicing Agreement or any of the Basic
Documents or under state and federal tax and securities laws, and at the request
of the Owner Trustee shall take all appropriate action that it is the duty of
the Issuer to take pursuant to this Servicing Agreement or any of the Basic
Documents. In accordance with the directions of the Issuer or the Owner Trustee,
the Master Servicer shall administer, perform or supervise the performance of
such other activities in connection with the Notes (including the Basic
Documents) as are not covered by any of the foregoing provisions and as are
expressly requested by the Issuer or the Owner Trustee and are reasonably within
the capability of the Master Servicer.
(ii) Notwithstanding anything in this Servicing
Agreement or any of the Basic Documents to the contrary, the Master Servicer
shall be responsible for promptly notifying the Owner Trustee in the event that
any withholding tax is imposed on the Issuer's payments (or allocations of
income) to an Owner (as defined in the Trust Agreement) as contemplated in
Section 5.03 of the Trust Agreement. Any such notice shall be in writing and
specify the amount of any withholding tax required to be withheld by the Owner
Trustee pursuant to such provision.
(iii) In carrying out the foregoing duties or any of
its other obligations under this Servicing Agreement, the Master Servicer may
enter into transactions with or otherwise deal with any of its Affiliates;
PROVIDED, HOWEVER, that the terms of any such transactions or dealings shall be
in accordance with any directions received from the Issuer and shall be, in the
Master Servicer's opinion, no less favorable to the Issuer in any material
respect than with terms made available to unrelated third-parties.
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(c) TAX MATTERS. The Master Servicer shall prepare and file
(or cause to be prepared and filed), on behalf of the Owner Trustee, all tax
returns and information reports, tax elections, financial statements and such
annual or other reports of the Issuer as are necessary for preparation of tax
returns and information reports as provided in Section 5.03 of the Trust
Agreement, including without limitation Form 1099. All tax returns and
information reports shall be signed by the Owner Trustee as provided in Section
5.03 of the Trust Agreement.
(d) NON-MINISTERIAL MATTERS. With respect to matters that in
the reasonable judgment of the Master Servicer are non-ministerial, the Master
Servicer shall not take any action pursuant to this Article VIII unless within a
reasonable time before the taking of such action, the Master Servicer shall have
notified the Owner Trustee and the Indenture Trustee of the proposed action and
the Owner Trustee and, with respect to items (A), (B), (C) and (D) below, the
Indenture Trustee shall not have withheld consent or provided an alternative
direction. For the purpose of the preceding sentence, "non-ministerial matters"
shall include:
(A) the amendment of or any supplement to the
Indenture;
(B) the initiation of any claim or lawsuit by the
Issuer and the compromise of any action, claim or lawsuit
brought by or against the Issuer (other than in connection
with the collection of the Mortgage Loans);
(C) the amendment, change or modification of this
Agreement or any of the Basic Documents;
(D) the appointment of successor Certificate Paying
Agents and successor Indenture Trustees pursuant to the
Indenture or the appointment of successor Servicers or the
consent to the assignment by the Certificate Registrar, Paying
Agent or Trustee of its obligations under the Indenture; and
(E) the removal of the Indenture Trustee.
Section 8.02. RECORDS. The Master Servicer shall maintain
appropriate books of account and records relating to services performed under
this Servicing Agreement, which books of account and records shall be accessible
for inspection by the Issuer at any time during normal business hours.
Section 8.03. ADDITIONAL INFORMATION TO BE FURNISHED. The
Master Servicer shall furnish to the Issuer from time to time such additional
information regarding the Notes as the Issuer shall reasonably request.
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IN WITNESS WHEREOF, the Master Servicer and the Issuer have caused this
Servicing Agreement to be duly executed by their respective officers or
representatives all as of the day and
year first above written.
IMPAC FUNDING CORPORATION,
as Master Servicer
By
--------------------------------------
Name: Mary Glass-Schannault
Title: Senior Vice President
IMPAC SECURED ASSETS CMN TRUST
SERIES 1998-1,
as Issuer
Wilmington Trust Company, not in its
capacity but solely as Owner Trustee
By
--------------------------------------
Name:
Title:
EXHIBIT A
MORTGAGE LOAN SCHEDULE
EXHIBIT B
FORM OF REQUEST FOR RELEASE
DATE:
TO:
RE:REQUEST FOR RELEASE OF DOCUMENTS
In connection with your administration of the Mortgage Loans, we request the
release of the Mortgage File described below.
Servicing Agreement Dated:
Series #:
Account #:
Pool #:
Loan #:
Borrower Name(s):
Reason for Document Request: (circle one) Mortgage Loan
Prepaid in Full
Mortgage Loan Repurchased
Please deliver the Mortgage File to:
--------------------------------------
- --------------------------------------------------------------------------
"We hereby certify that all amounts received or to be received in connection
with such payments which are required to be deposited have been or will be so
deposited as provided in the Servicing Agreement."
- -------------------------------------
[Name of Master Servicer]
Authorized Signature
******************************************************************
TO CUSTODIAN/Indenture Trustee: Please acknowledge this request, and check off
documents being enclosed with a copy of this form. You should retain this form
for your files in accordance with the terms of the Servicing Agreement.
Enclosed Documents: [ ] Promissory Note
[ ] Mortgage or Deed of Trust
[ ] Assignment(s) of Mortgage or
Deed of Trust
[ ] Title Insurance Policy
[ ] Other:
---------------------
- --------------------
Name
- --------------------
Title
B-1
- --------------------
Date
B-1