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EXHIBIT 10.56
FLOOD COMPLIANCE SERVICE AGREEMENT
THIS AGREEMENT is entered into effective April 9, 1997, by and between SMS
Geotrac, a Delaware Corporation located at 3900 Laylin Road, Norwalk, Ohio
("Company") and MidAm, Inc. (Client) 221 S. Church Street, Bowling Green Ohio
43402.
WHEREAS, Client desires a Flood Compliance program for compliance with
regulations passed pursuant to the 1973 Flood Disaster Protection Act as
amended to determine whether improved real estate securing a loan from Client
to a borrower is or is not in a FEMA defined Special Flood Hazard Area ("Flood
Area"), and other National Flood Insurance Program (NFIP) information, and
whereas Company is in the business of supplying such information.
WHEREAS, Client wishes to retain Company upon the terms and conditions
contained in this Agreement;
NOW THEREFORE, for mutual consideration, the parties do hereby agree as follows:
A. Geotrac NFIP Compliance Packet
In consideration of Company's fee schedule in section Z and pursuant to the
terms of this Agreement, Client will submit mortgage or trust deed loan
origination applications to Company for the purpose of making Flood
Determinations and certain other NFIP Compliance work commencing April 9, 1997.
Company will provide to Client on each application a Geotrac NFIP Compliance
Packet containing the following information:
1. Current-In-Force NFIP Community Status Information
Company will supply Current-In-Force NFIP Community Status Information
consisting of NFIP Community Number, Program or Suspension/Sanction Date, and
NFIP Program Status (Emergency, Regular, Non-Participating,
Suspended/Sanctioned).
2. Detailed FEMA Flood Zone Code
Company will supply the Detailed FEMA Flood Zone Code of the location of the
structure(s) securing the loan. Company will use Client supplied location
information and location information it derives to locate structures. In those
cases where neither Client nor Company has sufficient information to locate the
structure, Company will gather information on-site at its expense. While the
Company assumes no responsibility for incorrect or incomplete location
information supplied by Client, Company will make its best effort to assure
location information is correct and complete.
3. Current-In-Force NFIP Flood Map Panel
Company will identify the Current-In-Force NFIP Flood Map Panel consisting of
the full eleven digit FEMA map number and panel date.
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4. Requirement for and Availability of NFIP Flood Insurance.
Company will indicate the requirement for and the availability of NFIP Flood
Insurance.
5. Secondary Market/Government Program Loan Restrictions
Company will designate loans which do not qualify for secondary market resale
or Government program lending based on NFIP Community Status and NFIP Flood
Zone problems.
6. Borrower Notification Forms
On each Geotrac NFIP Compliance Packet Company will supply to Client a borrower
notification form which complies with all federal statutory and regulatory
requirements.
B. Flood Risk Assessment in Non-Participating Non-Mapped Communities
Company will prepare an appendix attached to the standard Geotrac NFIP
Compliance Packet containing a flood risk assessment in NFIP non-participating
non-mapped communities.
C. HMDA Data Elements
Company will supply HMDA State Code and County Code on all loans, and MSA Code
and 1990 Census Tract on each loan where: a) 1990 Tracts are published, and b)
the Federal Reserve indicates that Tract reporting is required. All HMDA data
elements will be edited against government supplied information (i.e. Census
Bureau's file of 1990 Census Tract and the Federal Reserve's list of State,
County and MSA designations). In the event of an error Company's obligation
shall be limited to correction of the error.
D. GeoLife-of-Loan(R)
For mortgage or trust deed loans Company will track both NFIP Community Status
and FEMA Flood Map changes on a daily basis for the lifetime of the loan on
Client's servicing system. Lists (hard copy or electronic) of loans affected
will be generated monthly. From the supplied lists Client will inform Company
of loans still active and Company will generate new Flood Determinations or
other reports as needed. If NFIP Community Status changes affect the required
flood insurance amount of a loan, Company will notify Client of the need to
require changed amounts.
GeoLife-of-Loan(R) service is available for transfer at no additional charge
should Client sell or transfer the loan or servicing. Client is obligated to
inform Company of the sale or transfer and if GeoLife-of-Loan(R) service is to
transfer with the loan(s). In addition, Client shall supply Company a listing
of affected loans, identified by loan number or another mutually agreeable
item, in a mutually agreeable format on a media acceptable to both parties.
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Geotrac NFIP Compliance Packets will be produced free of charge on Client
recaptured refinances, home equity, and other secured loans where the original
loan is already secured by the same property covered by GeoLife-of-Loan(R)
service. It is Client's obligation to inform Company that these loans are
covered by GeoLife-of-Loan(R) service and to supply either a copy of the
original Geotrac NFIP Compliance Packet or its identifying number (GeoNumber).
E. Transmissions of Information
Client will transmit requests to Company EDI, fax or via Geotrac's PC based
on-line system GeoCompass(SM) one or more times a day. It is Client's
obligation to supply, at a minimum: loan/application identification number;
borrower name; location-State, County, City/Place, full street address, and 5
digit zip code. Client shall provide a valid street address. Valid street
addresses are defined as those found in the quarterly update of the USPS Zip +4
data base, and do not include P.O. Box or Rural Route and box. In those
instances where Client does not supply a valid address, Company will place the
order on hold, and inform Client's ordering location of the invalid address. It
is Client's obligation to supply to Company, as soon as possible, the completed
or corrected address information. Orders placed on hold will be reactivated the
day valid address information is supplied. All turn time and other parameters
will be calculated based on the date valid address information is supplied.
Company will transmit key data elements to Client EDI or Fax. The full Geotrac
NFIP Compliance Packet can be faxed to Client. Average turn around shall be
two business days. Both parties recognize that it is not in Client's best
interest to emphasize speed of turn around over accuracy of flood
certifications. Each party agrees to work in good faith to meet the data and
turn around needs of the other.
F. Portfolio Audit
Customized portfolio audit options, if selected, are documented in section Z
attached.
G. Client Service
It is recognized that it is Clients' obligation to service its customers needs.
However, Company will assist Client by providing the following services at no
additional charge:
1. National 800 service for use by Client or Client's customers.
2. Letter of Map Amendment (LOMA)/Letter of Map Revision (LOMR) assistance to
Client or Client's customers. Company will supply the necessary forms and
directions and assist the borrower in filing the application.
3. Company will assist Client's customers in finding an agent to write flood
insurance.
4. Advise the Client's customers or Client on ways to lower the flood premium
within the context of investor/lender parameters and regulator requirements.
5. Company will supply free re-checks on disputed determinations.
6. Company will provide Client with educational seminars on NFIP Compliance
and will answer Client's NFIP Compliance questions.
7. Company will assist Client's customers in procuring elevation certificates.
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8. Company will, in general, replace the lender's flood determination customer
service function.
H. Use of Services
Client agrees that during the term hereof it will use the services of Company
for the purpose of providing Flood Compliance and Flood Determinations for
mortgage or trust deed loan origination applications.
I. Cost of Services
Services to be provided by Company and the cost for services hereunder are
described in Section Z.
J. Term
This Agreement shall have an initial term of three (3) years, commencing on the
date of this Agreement. The term shall be automatically renewed thereafter for
successive one (1) year periods, unless either party shall provide to the other
no less than thirty (30) days written notice of the intention to terminate this
Agreement as of the end of the said initial or extended term.
K. Termination
Either party may terminate this Agreement for non-performance or upon voluntary
or involuntary bankruptcy proceedings by the other party. In the event of the
failure of performance by either party hereunder, the non-performing party
shall have a period of thirty (30) days from the date of receiving written
notice from the other party to cure any such breach. If such breach is not
cured within 30 days the other party may terminate this contract with 10 days
written notice to the non-performing company.
L. Confidential Information
Company acknowledges that it may gain access to certain information regarding
Borrowers of Client. Company agrees that this information shall not be
disclosed or made available to any third person or entity, except that in the
instance of loan applications where the applicant(s) is also the owner(s) of
the real property that will secure the loan, the Company may disclose to a
third party the name of a mortgage loan applicant(s) for the sole purpose of
obtaining information necessary to determine the location of buildings located
upon the property that will secure the loan without the specific authorization
of Client. Company agrees that when information is disclosed to a third party,
Company will notify Client of this disclosure.
In like manner Client acknowledges that it may gain access to certain
information regarding business practices, technology and pricing of Company.
Client agrees that this information shall not be disclosed or made available to
any third person or entity, except as necessary for Client to perform its
obligations under this Agreement or for auditing or regulatory purposes without
the specific authorization of Company.
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M. Use of Information
Information supplied by Company to Client is to be used by Client for Client's
compliance with the Flood Disaster Protection Act of 1973 as amended within the
context of the NFIP and/or for HMDA/CRA compliance and for no other purposes.
N. Systems Used in Services
Client has been advised that the computer software used or employed by Company
in making and/or printing Geotrac NFIP Compliance Packets hereunder, and in
tracking the loan portfolio of Client for the Life of Loan service referred to
above if included within this Agreement (collectively referred to as the
"Systems") are and shall remain at all times the sole property of Company and
constitute material and confidential trade secrets of Company. This includes,
without limitation, its source codes, screens, documentation and any
improvements or modifications of the Systems. Client agrees for itself and its
employees to protect the confidentiality of the Systems.
O. Indemnification
Flood Zone Determinations made by Company represent a good faith interpretation
of Federal Flood Insurance Rate Maps, or Federal Flood Hazard Boundary Maps,
and information from government and private sources along with the lender.
Although Company does not guarantee the accuracy of these outside information
sources, it does assume responsibility for the completeness and timeliness of
this information.
Company shall hold Client safe and harmless from and against any and all loss
or expense arising from claims or actions by any customer of Client based upon
the negligence of Company in interpreting the above referenced Federal Flood
Maps and hence failing to correctly identify and report to Client that a
particular insurable structure securing a loan by Client is within (false flood
negative) or outside (false flood positive) a Federally defined NFIP Special
Flood Hazard Area; provided however, that such liability shall in no event
exceed the actual loss and expenses to client less any insurance or recovery
from another source. This indemnification provision is only applicable to
claims made by Client or customer's of Client against Client, resulting from
damage to Client or customer's improved real property caused by flooding as
defined by the NFIP (false flood negative) or customer or Client's payment of
unnecessary NFIP flood insurance premiums (false flood positive), provided
Client supplies verbal notice as soon as is practicable and written notice
within 30 days of Client's first becoming aware of such claims, and further
provided the Company has full and fair opportunity to participate in any
adjusting, settlement negotiation and litigation.
P. Arbitration
Any controversy or claim arising out of or related to this Agreement or the
breach thereof, shall be settled in Ohio by binding arbitration in accordance
with the Arbitration Rules of the American Arbitration Association then
prevailing, and judgment upon the award rendered by the arbitration arbitrators
may be entered in any court having jurisdiction thereof.
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Q. Independent Contractor
Company shall perform services under this Agreement as an independent
contractor and not as the agent of Client. Company shall not be authorized to
act on behalf of Client except as provided herein or as otherwise specifically
directed by Client.
R. Entire Agreement
This Agreement constitutes the entire understanding between the parties with
respect to the subject matter of this Agreement. This Agreement may only be
modified by a written document executed by both parties.
S. Severability
If any term or provision of this Agreement is held by a court of competent
jurisdiction to be unenforceable or void, such term or provision shall be
severed from the remaining provisions and such remaining provisions shall
remain in full force and effect.
T. Notices
Any notice or other communication to be given under the terms of this
Agreement, shall be in writing and shall be delivered in person, or mailed by
certified mail, return receipt requested, postage prepaid, addressed as follows:
If to Company: Geotrac
3900 Laylin Rd.
Norwalk, OH 44857
Attention: Daniel J. White
If to Client: Mid Am, Inc.
221 S. Church Street, P.O. Box 428
Bowling Green, Ohio 43402
Attention: John Reisner, VP
U. Waiver
Waiver by one party of the performance of any covenant, condition or obligation
of another party shall not invalidate this Agreement, nor shall such waiver be
considered to be a waiver by such party of any other covenant, condition or
obligation contained in this Agreement.
V. Attorney's Fees
In the event any party to this Agreement institutes an action or other
proceeding to enforce any rights arising under this Agreement, the party
prevailing in any such action or other proceeding shall be paid all reasonable
costs and attorney's fees by the other party.
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W. Time is of the Essence
Time is of the essence in performance under this Agreement.
X. Governing Law
This Agreement is made pursuant to and shall be construed and governed by the
laws of the State of Ohio.
Y. Headings
The subject headings of this Agreement are included for the purposes of
convenience only and shall not effect the construction or interpretation of any
of the provisions of this Agreement.
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Z. PRICING
Origination Services
Geotrac NFIP Compliance Packet $ 11.50/ea.
GeoLife-of-Loan(R) $ 4.50/additional ea.
HMDA/CRA (optional) $ 1.00/additional ea.
Priority Rush Service (Same day service) $ 5.00/additional ea.
Portfolio Service
Portfolio services will be offered by Company to Client with pricing to be
negotiated on a case by case basis.
IN WITNESS WHEREOF, the parties have executed this Agreement as of the date
first written above.
Company: Geotrac
By /s/ John Marion
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Title Assistant to the President
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Date 5/5/97
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Client: MidAm, Inc.
By /s/ Illegible
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Title EVP/General Counsel
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Date 5/16/97
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