SALE AND SERVICING AGREEMENT
among
UNITED NATIONAL HOME LOAN OWNER TRUST 1999-1,
as Issuer
UNITED NATIONAL BANK,
as Seller
BEAR XXXXXXX ASSET BACKED SECURITIES, INC.,
As Depositor
ADVANTA MORTGAGE CORP. USA,
as Servicer
and
U.S. BANK NATIONAL ASSOCIATION,
as Indenture Trustee, Co-Owner Trustee and Custodian
Dated as of March 1, 1999
UNITED NATIONAL HOME LOAN ASSET-BACKED SECURITIES, SERIES 1999-1
Table of Contents
Page
ARTICLE I
DEFINITIONS
Section 1.01. Definitions.............................................1
Section 1.02. Other Definitional Provisions..........................23
Section 1.03. Interest Calculation...................................24
ARTICLE II
CONVEYANCE OF THE HOME LOANS
Section 2.01. Conveyance of the Home Loans...........................24
Section 2.02. [RESERVED].............................................25
Section 2.03. Ownership and Possession of Home Loan Files............25
Section 2.04. Books and Records......................................25
Section 2.05. Delivery of Home Loan Documents........................25
Section 2.06. Acceptance by the Custodian of the Home
Loans; Initial Certification by Custodian............29
ARTICLE III
REPRESENTATIONS AND WARRANTIES
Section 3.01. Representations and Warranties of the Seller...........31
Section 3.02. Representations, Warranties and Covenants
of the Servicer......................................33
Section 3.03. Individual Home Loans..................................34
Section 3.04. [RESERVED].............................................39
Section 3.05. Purchase and Substitution..............................39
Section 3.06. Representations and Warranties of the Depositor........42
ARTICLE IV
ADMINISTRATION AND SERVICING OF THE HOME LOANS
Section 4.01. Duties of the Servicer.................................42
Section 4.02. Liquidation of Home Loans..............................44
Section 4.03. Maintenance of Hazard Insurance;
Property Protection Expenses..........................45
Section 4.04. Maintenance of Mortgage Impairment Insurance
Policy................................................45
Section 4.05. Fidelity Bond; Errors and Omission Insurance...........46
Section 4.06. Title, Management and Disposition of
Foreclosure Property.................................46
Section 4.07. Access to Certain Documentation and
Information Regarding the Home Loans.................47
Section 4.08. Superior Liens.........................................47
Section 4.09. Subservicing...........................................47
Section 4.10. Successor Servicers....................................48
ARTICLE V
ESTABLISHMENT OF ACCOUNTS
Section 5.01. Collection Account, Note Payment Account
and Certificate Distribution Account.................49
Section 5.02. [RESERVED].............................................54
Section 5.03. [RESERVED].............................................54
Section 5.04. [RESERVED].............................................54
Section 5.05. Certificate Distribution Account.......................54
Section 5.06. Trust Accounts; Trust Account Property.................54
Section 5.07. Allocation of Losses...................................59
ARTICLE VI
STATEMENTS AND REPORTS; SPECIFICATION OF TAX MATTERS
Section 6.01. Statements.............................................60
Section 6.02. Reports of Foreclosure and Abandonment of
Mortgaged Property...................................63
Section 6.03. Specification of Certain Tax Matters...................63
ARTICLE VII
GENERAL SERVICING PROCEDURES
Section 7.01. Assumption Agreements..................................63
Section 7.02. Satisfaction of Mortgages and Release of Home
Loan Files............................................64
Section 7.03. Servicing Compensation.................................65
Section 7.04. Annual Statements as to Compliance.....................65
Section 7.05. Annual Independent Public Accountants'
Servicing Report.....................................66
Section 7.06. Right to Examine Servicer Records......................66
Section 7.07. Reports to the Indenture Trustee; Collection
Account Statements...................................66
ARTICLE VIII
REPORTS TO BE PROVIDED
Section 8.01. [RESERVED].............................................67
Section 8.02. Reports to the Commission..............................67
ARTICLE IX
THE SERVICER
Section 9.01. Indemnification; Third Party Claims....................67
Section 9.02. Merger or Consolidation of the Servicer................68
Section 9.03. Limitation on Liability of the Servicer and Others.....68
Section 9.04. Servicer Not to Resign; Assignment.....................69
Section 9.05. Relationship of Servicer to the Issuer and the
Indenture Trustee....................................69
ARTICLE X
DEFAULT
Section 10.01. Servicer Events of Default............................70
Section 10.02. Indenture Trustee to Act; Appointment of Successor....71
Section 10.03. Waiver of Defaults....................................73
Section 10.04. Accounting Upon Termination of Servicer...............73
ARTICLE XI
TERMINATION
Section 11.01. Termination...........................................74
Section 11.02. Optional Termination by the Residual
Interest Certificateholder or the Servicer..........74
Section 11.03. Notice of Termination.................................75
ARTICLE XII
MISCELLANEOUS PROVISIONS
Section 12.01. Acts of Securityholders...............................75
Section 12.02. Amendment.............................................75
Section 12.03. Recordation of Agreement..............................76
Section 12.04. Duration of Agreement.................................76
Section 12.05. Governing Law.........................................76
Section 12.06. Notices...............................................76
Section 12.07. Severability of Provisions............................77
Section 12.08. No Partnership........................................77
Section 12.09. Counterparts..........................................77
Section 12.10. Successors and Assigns................................77
Section 12.11. Headings..............................................77
Section 12.12. Actions of Securityholders............................77
Section 12.13. Reports to Rating Agencies............................78
Section 12.14. Inconsistencies Among Basic Documents.................79
Section 12.15. No Petition...........................................79
Section 12.16. Beneficiaries.........................................79
Section 12.17. Limitation of Liability...............................79
Section 12.18. Seller Obligations....................................79
EXHIBITS
EXHIBIT A Home Loan Schedule
EXHIBIT B Monthly Statement
EXHIBIT C Request for Release
EXHIBIT D [RESERVED]
EXHIBIT E Form of Lost Note Affidavit
This Sale and Servicing Agreement is entered into effective as of
March 1, among United National Home Loan Owner Trust 1999-1, a Delaware
business trust (the "Issuer" or the "Trust"), United National Bank, a national
banking association, as Seller (the "Seller"), Advanta Mortgage Corp. USA, a
Delaware corporation, as Servicer (the "Servicer"), Bear Xxxxxxx Asset Backed
Securities, Inc., a Delaware corporation, as Depositor (the "Depositor"), and
U.S. Bank, National Association, a national banking association, as Indenture
Trustee on behalf of the Noteholders (in such capacity, the "Indenture
Trustee") and as Co-Owner Trustee on behalf of the Certificateholders (in such
capacity, the "Co-Owner Trustee") and as Custodian (in such capacity, the
"Custodian").
PRELIMINARY STATEMENT
WHEREAS, the Issuer desires to purchase a pool of Home Loans which
were originated or purchased by the Seller and sold by the Seller to the
Depositor in the ordinary course of business of the Seller;
WHEREAS, the Depositor is willing to sell such Home Loans to the
Issuer; and
WHEREAS, the Servicer is willing to service such Home Loans in
accordance with the terms of this Agreement on behalf of the Trust;
NOW, THEREFORE, in consideration of the mutual agreements herein
contained, the parties hereto hereby agree as follows:
ARTICLE I
DEFINITIONS
Section 1.01 Definitions. Whenever used in this Agreement, the
following words and phrases, unless the context otherwise requires, shall have
the meanings specified in this Article.
Accepted Servicing Practices: As defined in Section 4.01(a) hereof.
Accrual Period: With respect to each Class of Securities, the
calendar month preceding the month in which the related Payment Date occurs.
Administration Agreement: The Administration Agreement dated as of
March 1, 1999 among the Issuer, the Co-Administrator, the Owner Trustee and
U.S. Bank National Association, as Administrator, as such may be amended or
supplemented from time to time.
Administrator: U.S. Bank National Association, or any successor in
interest thereto, in its capacity as Administrator under the Administration
Agreement.
Aggregate Liquidation Losses: With respect to any Payment Date, the
aggregate losses incurred with respect to Liquidated Home Loans from the
Cut-off Date through the last day of the related Due Period, after giving
effect to the receipt of any related Net Liquidation Proceeds.
Agreement: This Sale and Servicing Agreement and all amendments
hereof and supplements hereto.
Allocable Loss Amount: With respect to each Payment Date, the excess,
if any, of (a) the aggregate of the Class Principal Balances of the Securities
(after giving effect to all payments and distributions on such Payment Date)
over (b) the Pool Principal Balance as of the end of the related Due Period.
Allocable Loss Amount Priority: With respect to each Payment Date,
any Allocable Loss Amount shall be applied in reduction of the Class Principal
Balance, of, first, the Class B-4 Certificates, until its Class Principal
Balance is reduced to zero, second, the Class B-3 Certificates, until its Class
Principal Balance is reduced to zero, third, the Class B-2 Certificates, until
its Class Principal Balance is reduced to zero, fourth, the Class B-1
Certificates, until its Class Principal Balance is reduced to zero, fifth, the
class M-2 Notes, until its class Principal Balance is reduced to zero, and,
sixth, the class M-1 Notes, until its Class Principal Balance is reduced to
zero. No Allocable Loss Amounts will be allocated to the Class A Notes.
Assignment of Mortgage: With respect to each Home Loan, an
assignment, notice of transfer or equivalent instrument sufficient under the
laws of the jurisdiction where the related Mortgaged Property is located to
reflect of record the assignment of the Mortgage with respect to such Home Loan
to the Indenture Trustee for the benefit of the Securityholders.
Available Collection Amount: With respect to each Payment Date, an
amount equal to the sum of (a) all amounts received in respect of the Home
Loans or paid by the Trust or the Seller pursuant to Section 5.01 (b) (i)
(exclusive of amounts not required to be deposited in the Collection Account
pursuant to Section 5.01 (b)(2)(ii) or withdrawn pursuant to Sections 5.01(b)
(2)(ii) or 5.01(d)) during the related Due Period (and, in the case of amounts
required to be paid by the Seller in connection with the purchase or
substitution of a Defective Home Loan, deposited in the Collection Account on
or before the related Determination Date), and (b) with respect to the final
Payment Date, or an early redemption or purchase of the Securities pursuant to
Section 11.02(b), the Termination Price.
Basic Documents: This Agreement, the Indenture, the Home Loan
Purchase Agreement, the Trust Agreement, the Administration Agreement, the Note
Depository Agreement and the documents and certificates delivered in connection
therewith.
Business Day: Any day other than (i) a Saturday or Sunday, or (ii) a
day on which banking institutions in Xxx Xxxx Xxxx, Xxx Xxxx, Xxx Xxxxx,
Xxxxxxxxxx and Salt Lake City, Utah or in the city in which the corporate trust
office of the Indenture Trustee is located are authorized or obligated by law
or executive order to be closed.
Certificate(s): One or more of the Class A-IO Certificates, Class B-1
Certificates, Class B-2 Certificates, Class B-3 Certificates, Class B-4
Certificates and the Residual Interest Certificate.
Certificate Distribution Account: The Account established pursuant to
Section 5.01(a)(3) and maintained pursuant to Section 5.05.
Certificateholder: The holder of any Certificate.
Certificateholder's Interest Carry-Forward Amount: With respect to
any Payment Date, the excess, if any, of the Certificateholder's Monthly
Interest Distribution Amount for the preceding Payment Date and any
Certificateholder's Interest Carry-Forward Amount remaining outstanding with
respect to prior Payment Dates (together with interest on such unpaid amount at
the applicable Interest Rates to the extent permitted by applicable law) over
the amount in respect of interest that was distributed on the Certificates on
such preceding Payment Date.
Certificateholder's Interest Distribution Amount: With respect to any
Payment Date, the sum of the Certificateholder's Monthly Interest Distribution
Amount for such Payment Date and the Certificateholder's Interest Carry-Forward
Amount for such Payment Date; provided, however, that on the Payment Date, if
any, on which the Principal Balance of the Class B-1 Certificates is reduced to
zero through application of the Allocable Loss Amount, the amount of the
Certificateholder's Interest Distribution Amount will be equal to such amount
calculated without giving effect to this proviso, minus the portion, if any, of
the Allocable Loss Amount that otherwise would be applied to any Class of Notes
on such Payment Date in the absence of this proviso.
Certificateholder's Monthly Interest Distribution Amount: With
respect to any Payment Date, the aggregate of interest accrued for the related
Accrual Period at the applicable Interest Rate on the Class Principal Balance
or Class Notional Balance, as applicable, of each Class of Certificates
immediately preceding such Payment Date.
Class: With respect to the Notes and Certificates, all Notes or
Certificates bearing the same class designation, as applicable.
Class A Noteholders' Interest Carry-Forward Amount: With respect to
the initial Payment Date, zero; with respect to each other Payment Date, the
excess (if any) of (A) the Class A Noteholders' Monthly Interest Payment Amount
for the immediately preceding Payment Date and any Class A Noteholders'
Interest Carry-Forward Amount remaining outstanding with respect to prior
Payment Dates (including interest on such outstanding amount at the applicable
Interest Rate to the extent permitted by applicable law), over (B) the amount
in respect of interest that was paid on such Class A Notes on such immediately
preceding Payment Date.
Class A Noteholders' Interest Payment Amount: With respect to any
Payment Date, the sum of the Class A Noteholders' Monthly Interest Payment
Amount for such Payment Date and the Class A Noteholders' Interest
Carry-Forward Amount for such Payment Date.
Class A Noteholders' Monthly Interest Payment Amount: With respect to
each Payment Date, the aggregate of interest accrued for the related Accrual
Period on the Class A Notes at the applicable Interest Rate on the Class
Principal Balance of the Class A Notes immediately preceding such Payment Date.
Class A Optimal Principal Balance: With respect to any Payment Date
prior to the Stepdown Date, zero; and with respect to any other Payment Date,
an amount equal 10% of the Pool Principal Balance as of the end of the related
Due Period.
Class A-IO Certificateholders' Interest Carry-Forward Amount: With
respect to the initial Payment Date, zero; with respect to each other Payment
Date, the excess (if any) of (A) the Class A-IO Certificateholders' Monthly
Interest Distribution Amount for the immediately preceding Payment Date and any
Class A-IO Certificateholders' Interest Carry-Forward Amount remaining
outstanding with respect to prior Payment Dates (including interest on such
outstanding amount at the applicable Interest Rate to the extent permitted by
applicable law), over (B) the amount in respect of interest that was paid on
such Class A-IO Certificates on such immediately preceding Payment Date.
Class A-IO Certificateholders' Interest Distribution Amount: With
respect to any Payment Date, the sum of the Class A-IO Certificateholders'
Monthly Interest Distribution Amount for such Payment Date and the Class A-IO
Certificateholders' Interest Carry-Forward Amount for such Payment Date.
Class A-IO Certificateholders' Monthly Interest Distribution Amount:
With respect to each Payment Date, the aggregate of interest accrued for the
related Accrual Period on the Class A-IO Certificates at the applicable
Interest Rate on the Class Notional Balance of the Class A-I-O Certificates
immediately preceding such Payment Date.
Class B-1 Certificateholders' Interest Carry-Forward Amount: With
respect to the initial Payment Date, zero; with respect to each other Payment
Date, the excess (if any) of (a) the Class B-1 Certificateholders' Monthly
Interest Distribution Amount for the immediately preceding Payment Date and any
Class B-1 Certificateholders' Interest Carry-Forward Amount remaining
outstanding with respect to prior Payment Dates (including interest on such
outstanding amount at the applicable Interest Rate to the extent permitted by
applicable law), over (b) the amount in respect of interest that was paid on
the Class B-1 Certificates on such immediately preceding Payment Date.
Class B-1 Certificateholders' Interest Distribution Amount: With
respect to any Payment Date, the sum of the Class B-1 Certificateholders'
Monthly Interest Distribution Amount for such Payment Date and the Class B-1
Certificateholders' Interest Carry-Forward Amount for such Payment Date.
Class B-1 Certificateholders' Monthly Interest Distribution Amount:
With respect to any Payment Date, interest accrued for the related Accrual
Period at the applicable Interest Rate on the Class Principal Balance of the
Class B-1 Certificates immediately preceding such Payment Date.
Class B-1 Optimal Principal Balance: With respect to any Payment Date
prior to the Stepdown Date, the Original Class Balance of the Class B-1
Certificates, provided that on and after the Payment Date on which the
aggregate Class Principal Balance of the Notes is reduced to zero, the Class
B-1 Optimal Principal Balance for any Payment Date prior to the Stepdown Date
shall be zero; and with respect to any other Payment Date, the Pool Principal
Balance as of the end of the related Due Period minus the sum of (a) the
aggregate of the Class Principal Balances of the Class A Notes, the Class M-1
Notes and the Class M-2 Notes (after taking into account any payments made on
such Payment Date in reduction thereof) and (b) 38% of the Pool Principal
Balance as of the end of the related Due Period.
Class B-2 Certificateholders' Interest Carry-Forward Amount: With
respect to the initial Payment Date, zero; with respect to each other Payment
Date, the excess (if any) of (a) the Class B-2 Certificateholders' Monthly
Interest Distribution Amount for the immediately preceding Payment Date and any
Class B-2 Certificateholders' Interest Carry-Forward Amount remaining
outstanding with respect to prior Payment Dates, over (b) the amount in respect
of interest that was paid on such Class B-2 Certificates on such immediately
preceding Payment Date.
Class B-2 Certificateholders' Interest Distribution Amount: With
respect to any Payment Date, the sum of the Class B-2 Certificateholders'
Monthly Interest Distribution Amount for such Payment Date and the Class B-2
Certificateholders' Interest Carry-Forward Amount for such Payment Date.
Class B-2 Certificateholders' Monthly Interest Distribution Amount:
With respect to any Payment Date, interest accrued for the related Accrual
Period at the applicable Interest Rate on the Class Principal Balance of the
Class B-2 Certificates immediately preceding such Payment Date.
Class B-2 Optimal Principal Balance: With respect to any Payment Date
prior to the Stepdown Date, the Original Class Balance of the Class B-2
Certificates, provided that on and after the Payment Date on which the
aggregate Class Principal Balance of the Notes and the Class B-1 Certificates
is reduced to zero, the Class B-2 Optimal Principal Balance for any Payment
Date prior to the Stepdown Date shall be zero; and with respect to any other
Payment Date, the Pool Principal Balance as of the end of the related Due
Period minus the sum of (a) the aggregate of the Class Principal Balances of
the Notes and the Class B-1 Certificates (after taking into account any
payments made on such Payment Date in reduction thereof) and (b) 32% of the
Pool Principal Balance as of the end of the related Due Period.
Class B-3 Certificateholders' Interest Carry-Forward Amount: With
respect to the initial Payment Date, zero; with respect to each other Payment
Date, the excess (if any) of (a) the Class B-3 Certificateholders' Monthly
Interest Distribution Amount for the immediately preceding Payment Date and any
Class B-3 Certificateholders' Interest Carry-Forward Amount remaining
outstanding with respect to prior Payment Dates (including interest on such
outstanding amount at the applicable Interest Rate to the extent permitted by
applicable law), over (b) the amount in respect of interest that was paid on
such Class B-3 Certificates on such immediately preceding Payment Date.
Class B-3 Certificateholders' Interest Distribution Amount: With
respect to any Payment Date, the sum of the Class B-3 Certificateholders'
Monthly Interest Distribution Amount for such Payment Date and the Class B-3
Certificateholders' Interest Carry-Forward Amount for such Payment Date.
Class B-3 Certificateholders' Monthly Interest Distribution Amount:
With respect to any Payment Date, interest accrued for the related Accrual
Period at the applicable Interest Rate on the Class Principal Balance of the
Class B-3 Certificates immediately preceding such Payment Date.
Class B-3 Optimal Principal Balance: With respect to any Payment Date
prior to the Stepdown Date, the Original Class Balance of the Class B-3
Certificates, provided that on and after the Payment Date on which the
aggregate Class Principal Balance of the Notes, the Class B-1 Certificates and
the Class B-2 Certificates is reduced to zero, the Class B-3 Optimal Principal
Balance for any Payment Date prior to the Stepdown Date shall be zero; and with
respect to any other Payment Date, the Pool Principal Balance as of the end of
the related Due Period minus the sum of (a) the aggregate of the Class
Principal Balances of the Notes, the Class B-1 Certificates and the Class B-2
Certificates (after taking into account any payments made on such Payment Date
in reduction thereof) and (b) 28% of the Pool Principal Balance as of the end
of the related Due Period.
Class B-4 Certificateholders' Interest Carry-Forward Amount: With
respect to the initial Payment Date, zero; with respect to each other Payment
Date, the excess (if any) of (a) the Class B-4 Certificateholders' Monthly
Interest Distribution Amount for the immediately preceding Payment Date and any
Class B-4 Certificateholders' Interest Carry-Forward Amount remaining
outstanding with respect to prior Payment Dates (including interest on such
outstanding amount at the applicable Interest Rate to the extent permitted by
applicable law), over (b) the amount in respect of interest that was paid on
such Class B-4 Certificates on such immediately preceding Payment Date.
Class B-4 Certificateholders' Interest Distribution Amount: With
respect to any Payment Date, the sum of the Class B-4 Certificateholders'
Monthly Interest Distribution Amount for such Payment Date and the Class B-4
Certificateholders' Interest Carry-Forward Amount for such Payment Date.
Class B-4 Certificateholders' Monthly Interest Distribution Amount:
With respect to any Payment Date, interest accrued for the related Accrual
Period at the applicable Interest Rate on the Class Principal Balance of the
Class B-4 Certificates immediately preceding such Payment Date.
Class B-4 Optimal Principal Balance: With respect to any Payment Date
prior to the Stepdown Date, the Original Class Balance of the Class B-4
Certificates, provided that on and after the Payment Date on which the
aggregate Class Principal Balance of the Notes, the Class B-1 Certificates, the
Class B-2 Certificates and the Class B-3 Certificates is reduced to zero, the
Class B-4 Optimal Principal Balance for any Payment Date prior to the Stepdown
Date shall be zero; and with respect to any other Payment Date, the Pool
Principal Balance as of the end of the related Due Period minus the sum of the
aggregate of the Class Principal Balances of the Notes, the Class B-1
Certificates, the Class B-2 Certificates and the Class B-3 Certificates (after
taking into account any payments made on such Payment Date in reduction
thereof).
Class M-1 Noteholders' Interest Carry-Forward Amount: With respect to
the initial Payment Date, the Original Class Balance of the Class M-1 Notes;
with respect to each other Payment Date, the excess (if any) of (a) the Class
M-1 Noteholders' Monthly Interest Payment Amount for the immediately preceding
Payment Date and any Class M-1 Noteholders' Interest Carry-Forward Amount
remaining outstanding with respect to prior Payment Dates, (including interest
on such outstanding amount at the applicable Interest Rate to the extent
permitted by applicable law) over (b) the amount in respect of interest that
was paid on the Class M-1 Notes on such immediately preceding Payment Date.
Class M-1 Noteholders' Interest Payment Amount: With respect to any
Payment Date, the sum of the Class M-1 Noteholders' Monthly Interest Payment
Amount for such Payment Date and the Class M-1 Noteholders' Interest
Carry-Forward Amount for such Payment Date.
Class M-1 Noteholders' Monthly Interest Payment Amount: With respect
to any Payment Date, interest accrued for the related Accrual Period at the
applicable Interest Rate on the Class Principal Balance of the Class M-1 Notes
immediately preceding such Payment Date.
Class M-1 Optimal Principal Balance: With respect to any Payment Date
prior to the Stepdown Date, the Original Class Balance of the Class M-1 Notes,
provided that on and after the Payment Date on which the Class Principal
Balance of the Class A Notes is reduced to zero, the Class M-1 Optimal
Principal Balance for any Payment Date prior to the Stepdown Date shall be
zero; and with respect to any other Payment Date, the Pool Principal Balance as
of the end of the related Due Period minus the sum of (a) the Class Principal
Balances of the Class A Notes (after taking into account any payments made on
such Payment Date in reduction thereof) and (b) 76% of the Pool Principal
Balance as of the end of the related Due Period.
Class M-2 Noteholders' Interest Carry-Forward Amount: With respect to
the initial Payment Date, the Original Class Balance of the Class M-2 Notes;
with respect to each other Payment Date, the excess (if any) of (a) the Class
M-2 Noteholders' Monthly Interest Payment Amount for the immediately preceding
Payment Date and any Class M-2 Noteholders' Interest Carry-Forward Amount
remaining outstanding with respect to prior Payment Dates, (including interest
on such outstanding amount of the applicable Interest Rate to the extent
permitted by applicable law) over (b) the amount in respect of interest that
was paid on the Class M-2 Notes on such immediately preceding Payment Date.
Class M-2 Noteholders' Interest Payment Amount: With respect to any
Payment Date, the sum of the Class M-2 Noteholders' Monthly Interest Payment
Amount for such Payment Date and the Class M-2 Noteholders' Interest
Carry-Forward Amount for such Payment Date.
Class M-2 Noteholders' Monthly Interest Payment Amount: With respect
to any Payment Date, interest accrued for the related Accrual Period at the
applicable Interest Rate on the Class Principal Balance of the Class M-2 Notes
immediately preceding such Payment Date.
Class M-2 Optimal Principal Balance: With respect to any Payment Date
prior to the Stepdown Date, the Original Class Balance of the Class M-2 Notes,
provided that on and after the Payment Date on which the aggregate Class
Principal Balance of the Class A Notes and the Class M-1 Notes is reduced to
zero, the Class M-2 Optimal Principal Balance for any Payment Date prior to the
Stepdown Date shall be zero, and with respect to any other Payment Date, the
Pool Principal Balance as of the end of the related Due Period minus the sum of
(a) the aggregate of the Class Principal Balances of the Class A Notes and the
Class M-1 Notes (after taking into account any payments made on such Payment
Date in reduction thereof) and (b) 62% of the Pool Principal Balance as of the
end of the related Due Period.
Class Notional Balance: With respect to the Class A-IO Certificates
as of any date of determination will equal the Pool Principal Balance on such
date of determination.
Class Pool Factor: With respect to each Class of Securities and any
Payment Date, the Class Principal Balance or Class Notional Balance thereof
(giving effect to payments thereon on such Payment Date) divided by the
Original Class Balance of such Class.
Class Principal Balance: With respect to each Class of Securities and
any date of determination, the Original Class Balance thereof as reduced by (a)
all amounts previously paid in respect of such Class in reduction of the Class
Principal Balance thereof and (b) any Allocable Loss Amounts previously applied
thereto.
Clearing Agency: An organization registered as a "clearing agency"
pursuant to Section 17A of the Exchange Act.
Clearing Agency Participant: A broker, dealer, bank, other financial
institution or other Person for whom from time to time a Clearing Agency
effects book-entry transfers and pledges of securities deposited with the
Clearing Agency.
Closing Date: March 26, 1999.
Code: The Internal Revenue Code of 1986, as amended from time to
time, and Treasury Regulations promulgated thereunder.
Collection Account: An account established and maintained by the
Indenture Trustee in accordance with Section 5.01(a)(1).
Combination Loan: A loan, the proceeds of which were used by the
related Obligor in combination to finance property improvements, debt
consolidation, cash-out, or other consumer purposes.
Contract: Each of the manufactured housing installment sale contracts
and installment loan agreements transferred and assigned by the Seller to the
Depositor and by the Depositor to the Trust.
Control: The meaning specified in Section 8-106 of the New York UCC.
Co-Administrator: United National Bank, a national banking
association, in its capacity as the Co-Administrator under the Administration
Agreement, or any successor co-administrator under the Administration
Agreement.
Co-Owner Trustee: U.S. Bank National Association, a national banking
association, in its capacity as the Co-Owner Trustee under the Trust Agreement
acting on behalf of the Certificateholders, or any successor co-owner trustee
under the Trust Agreement.
Credit Score: With respect to the obligor on a home loan (including
the Obligor on a Home Loan), a numerical assessment of default risk with
respect to such obligor, determined based on a methodology developed by Fair,
Xxxxx and Company.
Cumulative Losses: With respect to any Payment Date, the aggregate
amount of Realized Losses incurred since the Cut-off Date through the end of
the related Due Period.
Custodian: Any custodian appointed by the Indenture Trustee pursuant
to this Agreement, which shall not be affiliated with the Servicer, the
Depositor, any Subservicer, or the Seller. The Indenture Trustee shall be the
initial Custodian.
Cut-Off Date: Close of business on February 28, 1999.
Debt Consolidation Loan: A loan, the proceeds of which were primarily
used by the related Obligor for debt consolidation purposes or purposes other
than to finance property improvements.
Debt Instrument: With respect to any Home Loan, the note, Contract or
other evidence of indebtedness evidencing the indebtedness of an Obligor under
such Home Loan.
Defaulted Home Loan: A Home Loan with respect to which: (a)
foreclosure proceedings have been commenced, (b) any portion of a Monthly
Payment is more than 180 days past due (without giving effect to any grace
period) or (c) the Servicer has determined in good faith in accordance with
Accepted Servicing Practices that all amounts which it expects to receive from
the related Obligor with respect to the Home Loan have been received.
Defective Home Loan: As defined in Section 3.05 hereof.
Deferred Amount: As of any Payment Date, the amount of Allocable Loss
Amounts previously applied in reduction of the Class Principal Balance thereof,
to the extent not previously reimbursed, plus interest accrued thereon at the
applicable Interest Rate from the date when so applied through the end of the
Due Period immediately preceding such Payment Date.
Deleted Home Loan: A Home Loan replaced by or to be replaced by a
Qualified Substitute Home Loan pursuant to Section 3.05 hereof.
Depositor: Bear Xxxxxxx Asset Backed Securities, Inc., a Delaware
corporation, and any successor thereto.
Determination Date: With respect to a Payment Date in a given month,
the day of such month that is two (2) Business Days prior to such Payment Date.
DTC: The Depository Trust Company.
Due Date: With respect to any Home Loan, the day of the month on
which the related Monthly Payment is due.
Due Period: With respect to each Payment Date, the calendar month
immediately preceding the month in which such Payment Date occurs, with the
first Due Period commencing on March 1, 1999.
Eligible Account: At any time, an account which is any of the
following: (i) an account maintained with a depository institution (A) the
long-term debt obligations of which are at such time rated by each Rating
Agency in one of their two highest long-term rating categories, or (B) the
short-term debt obligations of which are then rated by each Rating Agency in
their highest short-term rating category; (ii) an account or accounts the
deposits in which are fully insured by either the Bank Insurance Fund or the
Savings Association Insurance Fund of the FDIC; (iii) a trust account (which
shall be a "segregated trust account") maintained with the corporate trust
department of a federal or state chartered depository institution or trust
company with trust powers and acting in its fiduciary capacity for the benefit
of the Indenture Trustee and the Issuer, which depository institution or trust
company shall have capital and surplus of not less than $50,000,000; or (iv) an
account that will not cause any Rating Agency to downgrade or withdraw its
then-current rating(s) assigned to the Securities, as evidenced in writing by
such Rating Agency.
Eligible Servicer: A Person that is qualified to act as Servicer of
the Home Loans under applicable federal and state laws and regulations and who
satisfies the criteria of Section 9.04(b) hereof.
Entitlement Order: The meaning specified in Section 8-102(a)(8) of
the New York UCC (i.e., generally, orders directing the transfer or redemption
of any Financial Asset).
Exchange Act: The Securities Exchange Act of 1934, as amended.
FDIC: The Federal Deposit Insurance Corporation and any successor
thereto.
FHLMC: The Federal Home Loan Mortgage Corporation and any successor
thereto.
Fidelity Bond: As described in Section 4.05 hereof.
Financial Asset: The meaning specified in Section 8-102(a)(9) of the
New York UCC.
Fitch: Fitch IBCA, Inc., or any successor thereto.
FNMA: The Federal National Mortgage Association and any successor
thereto.
Foreclosure Property: Any real or personal property securing a Home
Loan that has been acquired by the Servicer through foreclosure, deed in lieu
of foreclosure or similar proceedings in respect of such Home Loan.
Home Improvement Loan: A loan, the net proceeds of which were or will
be used by the Obligor to finance property improvements.
Home Loan: A Home Improvement Loan, Debt Consolidation Loan, or
Combination Loan that is included in the Home Loan Pool. As applicable, "Home
Loan" shall be deemed to refer to the related Debt Instrument, Mortgage, and
any related Foreclosure Property.
Home Loan File: As defined in Section 2.05.
Home Loan Interest Rate: With respect to any Home Loan, the fixed
annual rate of interest borne by the related Debt Instrument, as shown on the
Home Loan Schedule, as such rate of interest may be modified from time to time
by the Servicer in accordance with Section 4.01(c) hereof.
Home Loan Pool: As of any date, all of the Home Loans that are
subject to the lien of the Indenture as of such date, as identified in the Home
Loan Schedule.
Home Loan Purchase Agreement: The loan purchase agreement dated as of
March 1, 1999, between the Seller, as seller, and the Depositor, as purchaser,
pursuant to which the Depositor has acquired the Home Loans.
Home Loan Schedule: The schedule of Home Loans attached hereto as
Exhibit A, as amended from time to time pursuant to the terms of this
Agreement, such schedule identifying each Home Loan by address of the related
Mortgaged Property, if any, and the name(s) of each Obligor and setting forth
as to each Home Loan the following information: (i) the Principal Balance as of
the Cut-Off Date, (ii) the account number, (iii) the original principal amount,
(iv) the Due Date, (v) the Home Loan Interest Rate, (vi) the first date on
which a Monthly Payment is due under the related Debt Instrument, (vii) the
Monthly Payment, (viii) the maturity date of the related Debt Instrument, (ix)
the remaining number of months to maturity as of the Cut-Off Date and (x) the
product type.
Indenture: The Indenture dated as of March 1, 1999 between the Issuer
and the Indenture Trustee, as such may be amended or supplemented from time to
time.
Indenture Event of Default: Any event of default specified in 5.01 of
the Indenture.
Indenture Trustee: U.S. Bank National Association, a national banking
association, as Indenture Trustee under the Indenture, or any successor
indenture trustee under the Indenture.
Indenture Trustee Fee: The annual fee payable to the Indenture
Trustee, calculated and payable monthly on each Payment Date, except that with
respect to the first Payment Date such monthly amount shall be pro rated for
the first Due Period.
Indenture Trustee Fee Rate: 0.0175% per annum.
Insurance Proceeds: With respect to each Payment Date, an amount
equal to, with respect to any Home Loan, the proceeds paid during the
immediately preceding Due Period to the Servicer by any insurer pursuant to any
insurance policy covering a Home Loan, Mortgaged Property or REO Property or
any other insurance policy that relates to a Home Loan, net of any expenses
incurred by the Servicer in connection with the collection of such proceeds and
not otherwise reimbursed, but excluding the proceeds of any insurance policy
that are to be applied to the restoration or repair of the Mortgaged Property
or released to the borrower in accordance with Accepted Servicing Practices.
Interest Rate: With respect to each Class of Securities, the per
annum rate of interest applicable to Securities of such Class, as specified
below:
Class/Interest Note Rate
-------------- ---------
Class A Notes 6.91%(1)
Class A-IO Certificates (2)
Class M-1 Notes 6.91%(1)
Class M-2 Notes 6.91%(1)
Class B-1 Certificates 6.91%(1)
Class B-2 Certificates 6.91%(1)
Class B-3 Certificates 6.91%(1)
Class B-4 Certificates 6.91%(1)
Residual Interest Certificate N/A
(1) On the Payment Date upon which an optional redemption may be
exercised pursuant to Section 11.02, the Note Rate will increase by 0.50% if
such option is not exercised.
(2) Excess of the Net Weighted Average Rate over 6.91%.
Keystone: The First National Bank of Keystone, a national banking
association.
KMC: Keystone Mortgage Corp., Inc., a West Virginia corporation.
Liquidated Home Loan: A Defaulted Home Loan as to which the Servicer
has determined that all recoverable liquidation and insurance proceeds have
been received, which will be deemed to occur upon the earlier of: (a) the
liquidation of the related Mortgaged Property acquired through foreclosure or
similar proceedings, (b) the Servicer's determination in accordance with
Accepted Servicing Practices that no further amounts are collectible from the
Home Loan and any related collateral securing such Home Loan, or (c) any
portion of a scheduled monthly payment of principal and interest is in excess
of 180 days past due.
Liquidation Proceeds: With respect to a Liquidated Home Loan, any
cash amounts received in connection with the liquidation of such Liquidated
Home Loan, whether through trustee's sale, foreclosure sale or other
disposition, and any other amounts required to be deposited in the Collection
Account pursuant to Sections 4.02 or 4.06, in each case other than
Post-Liquidation Proceeds, Insurance Proceeds and Released Mortgaged Property
Proceeds.
Majority Securityholders: (i) Until such time as the sum of the Class
Principal Balances of all Classes of Securities has been reduced to zero, the
holder or holders of in excess of 50% of the Outstanding Amount of all Classes
of Securities (accordingly, the holder of the Residual Interest Certificate
shall be excluded from any rights or actions of the Majority Securityholders
during such period); and (ii) thereafter, the holder of the Residual Interest
Certificate.
Manufactured Home: A unit of manufactured housing which meets the
requirements of Section 25(e)(10 of the Code, including all accessions thereto,
securing the indebtedness of the Obligor under the related Contract.
Monthly Payment: With respect to a Home Loan, the scheduled monthly
payment of principal and/or interest required to be made by the related Obligor
on the related Home Loan, as set forth in the related Debt Instrument.
Monthly Statement: As defined in Section 6.01(b).
Moody's: Xxxxx'x Investors Service, Inc., or any successor thereto.
Mortgage: The mortgage, deed of trust or other security instrument
creating a lien in accordance with applicable law on a Mortgaged Property to
secure the Debt Instrument which evidences a Home Loan.
Mortgaged Property: The property (real, personal or mixed) encumbered
by the Mortgage which secures the Debt Instrument evidencing a Home Loan.
Mortgaged Property State: Each state in which any Mortgaged Property
securing a Home Loan is located as set forth in the Home Loan Schedule.
Most Senior Class: With respect to each Class of Securities, the
following order of seniority; first, the Class A Notes, second, the Class M-1
Notes, third, the Class M-2 Notes, fourth, the Class B-1 Certificates, fifth,
the Class B-2 Certificates, sixth, the Class B-3 Certificates, and seventh, the
Class B-4 Certificates.
Net Liquidation Proceeds: With respect to each Payment Date, an
amount equal to any cash amounts received during the related Due Period from
Liquidated Home Loans, whether through trustee's sale, foreclosure sale,
disposition of REO Property, whole loan sales or otherwise (other than
Insurance Proceeds and Released Mortgaged Property Proceeds), and any other
cash amounts received during the related Due Period in connection with the
management of the Mortgaged Properties from Defaulted Home Loans, in each case,
net of any reimbursements to the Servicer made from such amounts for any
unreimbursed Servicing Advances made and unpaid Servicing Fees relating to such
Liquidated Home Loan, and any other fees and expenses paid in connection with
the foreclosure, conservation and liquidation of the related Liquidated Home
Loans or Mortgaged Properties pursuant to Sections 4.02 and 4.06 hereof.
Net Loan Losses: With respect to a Payment Date, the sum of (A) with
respect to the Home Loans that became Liquidated Home Loans during the
immediately preceding Due Period, an amount (but not less than zero) determined
as of the related Determination Date equal to:
(i) the aggregate uncollected Principal Balances of such
Liquidated Home Loans as of the related Determination Date and
without the application of any amounts included in clause (ii) below,
minus
(ii) the aggregate amount of any recoveries attributable to
principal from whatever source received during any Due Period, with
respect to such Liquidated Home Loans, including any subsequent Due
Period, and including without limitation any Net Liquidation
Proceeds, any Insurance Proceeds, any Released Mortgaged Property
Proceeds, any payments from the related Obligor and any payments made
pursuant to Section 3.05, less the amount of any expenses incurred in
connection with such recoveries; and (B) with respect to any
Defaulted Home Loan that is subject to a modification by the
Servicer, an amount equal to the portion of the Principal Balance, if
any, released in connection with such modification.
Net Weighted Average Rate: With respect to any Accrual Period, the per
annum rate equal to the weighted average (by Principal Balance) of the interest
rates of the Home Loans as of the first day of the related Due Period, as
reduced by the Servicing Fee Rate, the Owner Trustee Fee Rate and the Indenture
Trustee Fee Rate.
New York UCC: The Uniform Commercial Code as in effect in the State
of New York.
Non-Recordation State: Any state with respect to which the Seller
shall have delivered to the Indenture Trustee (and to each Rating Agency, in
the case of any state in which 5% or more by Principal Balance as of the
Cut-Off Date of the Mortgaged Properties are located) on or prior to April 30,
1999 an opinion, memorandum or other written assurance of counsel in a form
reasonably acceptable to the Indenture Trustee (and, where applicable, to each
Rating Agency), to the effect that, as to any Home Loan with respect to which
the related Mortgaged Property is located in such state, recordation of an
Assignment of Mortgage in such state is not necessary to transfer title to the
related Mortgage Note to the Issuer or to pledge to the Indenture Trustee the
issuer's rights under such Mortgage Note in respect of which the Mortgaged
Property is located in such state.
Nonrecoverable Servicing Advance: With respect to any Home Loan, any
Servicing Advance (a) previously made and not reimbursed from proceeds on the
related Home Loan or (b) a Servicing Advance proposed to be made in respect of
a Home Loan or REO Property either of which, in the good faith business
judgment of the Servicer, as evidenced by an Officer's Certificate delivered to
the Indenture Trustee, would not be ultimately recoverable pursuant to this
Agreement.
Note(s): One or more of the Class A Notes, the Class M-1 Notes and
the Class M-2 Notes.
Note Payment Account: The account established pursuant to Section
5.01(a)(2).
Noteholder: A holder of a Note.
Noteholders' Interest Carry-Forward Amount: With respect to any
Payment Date, the excess, if any, of the Noteholders' Monthly Interest Payment
Amount for the preceding Payment Date and any Noteholders' Interest
Carry-Forward Amount remaining outstanding with respect to prior Payment Dates
(together with interest on such unpaid amount at the applicable Interest Rate
to the extent permitted by applicable law), over the amount in respect of
interest that was paid on the Notes on such preceding Payment Date.
Noteholders' Interest Payment Amount: With respect to any Payment
Date, the sum of the Noteholders' Monthly Interest Payment Amount for such
Payment Date and the Noteholders' Interest Carry-Forward Amount for such
Payment Date.
Noteholders' Monthly Interest Payment Amount: With respect to any
Payment Date, the aggregate of interest accrued for the related Accrual Period
at the applicable Interest Rate on the Class Principal Balance of each Class of
Notes immediately preceding such Payment Date.
Obligor: Each obligor on a Debt Instrument.
Officer's Certificate: A certificate delivered to the Indenture
Trustee or the Issuer signed by the President or a Vice President or Assistant
Vice President of the Seller, the Servicer or the Issuer, in each case, as
required by this Agreement.
Original Class Balance: With respect to each Class of Securities, the
original principal balance or notional balance of such Class, as set forth
below:
Original
Principal or
Class Notional Balance
----- ----------------
A $112,893,000
A-IO $205,259,057
M-1 $ 14,368,000
M-2 $ 14,368,000
B-1 $ 24,631,000
B-2 $ 6,158,000
B-3 $ 4,105,000
B-4 $ 28,737,000
Residual Interest Certificate N/A
Original Pool Principal Balance: $205,259,057
Outstanding Amount: As of any date of determination, the aggregate
principal amount of a Class of Securities outstanding as of such date of
determination.
Ownership Interest: As to any Security, any ownership or security
interest in such Security, including any interest in such Security as the
holder thereof and any other interest therein, whether direct or indirect,
legal or beneficial, as owner or as pledgee.
Owner Trustee: Wilmington Trust Company, as owner trustee under the
Trust Agreement, and any successor owner trustee under the Trust Agreement.
Owner Trustee Fee: The annual fee of $2,500 payable to the Owner
Trustee on the Payment Date occurring in March each year during the term of
this Agreement commencing in March, 2000; provided that the initial Owner
Trustee Fee shall be paid on the Closing Date.
Owner Trustee Fee Rate: As of the date of calculation a per annum
rate equal to the Owner Trustee Fee divided by the Pool Principal Balance.
Payment Accounts: The accounts established pursuant to Sections
5.01(a)(2) and 5.01(a)(3).
Payment Date: The 25th day of any month or if such 25th day is not a
Business Day, the first Business Day immediately following such day, commencing
in April 1999 and ending upon termination of this Agreement.
Permitted Investments: Each of the following:
(1) obligations of, or guaranteed as to principal and interest by,
the United States or any agency or instrumentality thereof when such
obligations are backed by the full faith and credit of the United States;
(2) a repurchase agreement that satisfies the following criteria: (1)
must be between the Indenture Trustee and either (a) primary dealers on the
Federal Reserve reporting dealer list which are rated in one of the two highest
ratings for short-term unsecured debt obligations by each Rating Agency, or (b)
banks rated in one of the two highest categories for short-term unsecured debt
obligations by each Rating Agency; and (2) the written repurchase agreement
must include the following: securities which are acceptable for the transfer
and are either (I) direct U.S. governments obligations, or (II) obligations of
a Federal agency that are backed by the full faith and credit of the U.S.
government, or FNMA or FHLMC; (b) a term no greater than 60 days for any
repurchase transaction; (c) the collateral must be delivered to the Indenture
Trustee or a third party custodian acting as agent for the Indenture Trustee by
appropriate book entries and confirmation statements and must have been
delivered before or simultaneous with payment (i.e., perfection by possession
of certificated securities); and (d) the securities sold thereunder must be
valued weekly, marked-to-market at current market price plus accrued interest
and the value of the collateral must be equal to at least 104% of the amount of
cash transferred by the Indenture Trustee under the repurchase agreement and if
the value of the securities held as collateral declines to an amount below 104%
of the cash transferred by the Indenture Trustee plus accrued interest (i.e., a
margin call), then additional cash and/or acceptable securities must be
transferred to the Indenture Trustee to satisfy such margin call; provided,
however, that if the securities used as collateral are obligations of FNMA or
FHLMC, then the value of the securities held as collateral must equal at least
105% of the cash transferred by the Indenture Trustee under such repurchase
agreement;
(3) certificates of deposit, time deposits and bankers acceptances of
any United States depository institution or trust company incorporated under
the laws of the United States or any state, including the Indenture Trustee;
provided that the debt obligations of such depository institution or trust
company at the date of the acquisition thereof have been rated by each Rating
Agency in one of its two highest short-term ratings;
(4) deposits, including deposits with the Indenture Trustee, which
are fully insured by the Bank Insurance Fund or the Savings Association
Insurance Fund of the FDIC, as the case may be;
(5) commercial paper of any corporation incorporated under the laws of
the United States or any state thereof, including corporate affiliates of the
Indenture Trustee, which at the date of acquisition is rated by each Rating
Agency in its highest short-term rating category and which has an original
maturity of not more than 365 days;
(6) debt obligations rated by each Rating Agency at the time at which
the investment is made in its highest short-term rating category (or those
investments specified in (iii) above with depository institutions which have
debt obligations rated by each Rating Agency in one of its two highest
short-term ratings);
(7) money market funds which are rated by each Rating Agency at the
time at which the investment is made in its highest short-term rating category,
any such money market funds which provide for demand withdrawals being
conclusively deemed to satisfy any maturity requirements for Permitted
Investments set forth in this Agreement; or
(8) any other demand, money market or time deposit obligation,
security or investment as may be acceptable to each Rating Agency at the time at
which the investment is made; provided that no instrument described in the
foregoing subparagraphs shall evidence either the right to receive (a) only
interest with respect to the obligations underlying such instrument or (b) both
principal and interest payments derived from obligations underlying such
instrument where the interest and principal payments with respect to such
instrument provide a yield to maturity at par greater than 120% of the yield to
maturity at par of the underlying obligations; and provided, further, that no
instrument described in the foregoing subparagraphs may be purchased at a price
greater than par if such instrument may be prepaid or called at a price less
than its purchase price prior to stated maturity.
Person: Any individual, corporation, partnership, joint venture,
limited liability company, association, joint-stock company, trust, national
banking association, unincorporated organization or government or any agency or
political subdivision thereof.
Pool Principal Balance: As of any Determination Date, the aggregate
of the Principal Balances as of the close of business on the last day of the
immediately preceding Due Period of all Home Loans in the Home Loan Pool as of
the close of such Due Period.
Post-Liquidation Proceeds: As defined in Section 4.02(b).
Principal Balance: With respect to any date of determination and with
respect to any Home Loan or related Foreclosure Property, an amount equal to
the Cut-Off Date principal balance of such Home Loan minus all principal
reductions credited against the Principal Balance of such Home Loan since such
Cut-Off Date through the end of the immediately preceding Due Period. For
purposes of this definition, a Liquidated Home Loan shall be deemed to have a
Principal Balance equal to the Principal Balance of the related Home Loan
immediately prior to the final recovery of related Liquidation Proceeds and a
Principal Balance of zero as of the end of the Due Period in which such Home
Loan becomes a Liquidated Home Loan.
Principal Prepayment: With respect to any Home Loan and with respect
to any Due Period, any principal amount received on a Home Loan in excess of
the scheduled principal amount included in the Monthly Payment due on the Due
Date in such Due Period.
Prospectus: The final Prospectus, dated March 10, 1999, as
supplemented by the Prospectus Supplement.
Prospectus Supplement: The Prospectus Supplement dated March 10,
1999, in connection with the offer and sale of the Notes.
Purchase Price: As defined in Section 3.05 herein.
Qualified Substitute Home Loan: A home loan or home loans substituted
for a Deleted Home Loan pursuant to Section 3.05, which (i) has or have an
interest rate or rates not more than 0.50% lower than the Home Loan Interest
Rate for the Deleted Home Loan, (ii) matures or mature not more than one year
later than and not more than one year earlier than the Deleted Home Loan, (iii)
has or have a principal balance or principal balances (after application of all
payments received on or prior to the date of substitution) equal to or less
than the Principal Balance of the Deleted Home Loan as of such date, (iv) has
or have a lien priority no lower than the Deleted Home Loan, (v) has a related
obligor with a Credit Score equal to or greater than the Credit Score of the
Obligor with respect to the Deleted Home Loan, and (vi) complies or comply as
of the date of substitution with each representation and warranty set forth in
Section 3.03 and is not more than 30 days delinquent as of the date of
substitution for such loan; and (vii) has a related obligor with a Credit Score
at origination of not less than 620. For purposes of determining whether
multiple home loans proposed to be substituted for one or more Deleted Home
Loans pursuant to Section 3.05 are in fact "Qualified Substitute Home Loans" as
provided above, the criteria specified in clauses (i), (ii), (iii), (v) and
(vii) above may be considered on an aggregate or weighted average basis, rather
than on a loan-by-loan basis (e.g., so long as the weighted average Home Loan
Interest Rate of any loans proposed to be substituted is not less than nor more
than one percentage point different from the Home Loan Interest Rate for the
designated Deleted Home Loan or Home Loans and the weighted average Credit
Score of any Qualified Substitute Home Loans cumulatively substituted is equal
to the weighted average Credit Score of the Deleted Home Loans, the
requirements of clauses (i) and (v) above would be deemed satisfied), except
that, with respect to any such substitution, the lowest Credit Score of any
home loan substituted shall not be lower than the lowest Credit Score of the
related Deleted Home Loans.
Rating Agency: Each of Fitch, Moody's and S&P and their respective
successors; provided, however, that if no such organization or successor is any
longer in existence, "Rating Agency" shall be a nationally recognized
statistical rating organization or other comparable person designated by the
Issuer, notice of which designation shall have been given to the Indenture
Trustee, the Depositor and the Servicer.
Ratings: The ratings initially assigned to the rated Securities by
the Rating Agencies, as evidenced by letters from the Rating Agencies.
Realized Losses: With respect to any Home Loan that becomes a
Liquidated Home Loan, the amount by which the Principal Balance thereof
immediately prior to such Home Loan becoming a Liquidated Home Loan exceeds the
proceeds (net of related expenses and reimbursements), including Insurance
Proceeds, that are allocable to principal of such Home Loan, applying such
proceeds first to accrued and unpaid interest, and are received by the Servicer
in connection with the liquidation or the disposition of the related Mortgaged
Property.
Record Date: With respect to each Payment Date, the close of business
on the last Business Day of the calendar month immediately preceding the month
in which such Payment Date occurs.
Regular Payment Amount: With respect to any Payment Date, the lesser
of (a) the Available Collection Amount and (b) the sum of (i) the Noteholders'
Interest Payment Amount, (ii) the Certificateholder's Interest Distribution
Amount and (iii) the Regular Principal Payment Amount.
Regular Principal Payment Amount: With respect to each Payment Date,
an amount equal to the lesser of:
(a) the sum of (i) each scheduled payment of principal collected
by the Servicer in the related Due Period, (ii) all partial and full
principal prepayments applied by the Servicer during such Due Period,
(iii) the principal portion of all Net Liquidation Proceeds, Insurance
Proceeds and Released Mortgaged Property Proceeds received by the
Servicer during such Due Period in respect of any Home Loan, to the
extent received on or prior to the date on which such Home Loan became
a Liquidated Home Loan, (iv) that portion of the Purchase Price of any
repurchased Home Loan allocable to principal and (v) the principal
portion of any Substitution Adjustments required to be deposited in
the Collection Account as of the related Determination Date; and
(b) the aggregate of the outstanding principal balances of the
Securities immediately prior to such Payment Date.
Released Mortgaged Property Proceeds: With respect to any Payment
Date and any Home Loan, the proceeds received by the Servicer in connection
with (a) a taking of an entire Mortgaged Property by exercise of the power of
eminent domain or condemnation or (b) any release of part of the Mortgaged
Property from the lien of the related Mortgage, whether by partial
condemnation, sale or otherwise, which in either case are not released to the
borrower in accordance with applicable law, Accepted Servicing Practices and
this Agreement.
REO Property: A Mortgaged Property that is acquired by the Indenture
Trustee in foreclosure or by deed in lieu of foreclosure.
Residual Interest Certificate: The Residual Interest Certificate
issued pursuant to the Trust Agreement.
Responsible Officer: When used with respect to the Indenture Trustee,
any officer within the Corporate Trust Office of the Indenture Trustee,
including any Vice President, Assistant Vice President, Secretary, Assistant
Secretary or any other officer of the Indenture Trustee customarily performing
functions similar to those performed by any of the above designated officers
and also, with respect to a particular matter, any other officer to whom such
matter is referred because of such officer's knowledge of and familiarity with
the particular subject. When used with respect to the Issuer, the Depositor,
the Seller, or the Servicer, the President or any Vice President, Assistant
Vice President, or any Secretary or Assistant Secretary thereof.
S&P: Standard & Poor's Rating Services, a division of The XxXxxx-Xxxx
Companies, Inc., or any successor thereto.
Securities Act: The Securities Act of 1933, as amended.
Securities Intermediary: The Person acting as Securities Intermediary
under this Agreement (which is U.S. Bank National Association), its successor
in interest, and any successor Securities Intermediary appointed pursuant to
Section 5.06(d).
Security or Securities: Any of the Notes or the Certificates, as
applicable.
Security Entitlement: The meaning specified in Section 8-102(a)(17)
of the New York UCC.
Securityholder: A Holder of a Note or Certificate, as applicable.
Seller: United National Bank, a national banking association, and any
successor thereto.
Series or Series 1999-1: United National Home Loan Owner Trust
0000-0, Xxxxx Backed Securities, Series 1999-1.
Servicer: Advanta Mortgage Corp. USA as the servicer, or any
successor appointed as herein provided.
Servicer Event of Default: As specified in Section 10.01 hereof.
Servicing Advances: Subject to Section 4.01(b), all reasonable,
customary and necessary "out of pocket" costs and expenses advanced or paid by
the Servicer with respect to the Home Loans in accordance with the performance
by the Servicer of its servicing obligations hereunder, including, but not
limited to, the costs and expenses for (i) the preservation, restoration and
protection of the Mortgaged Property, including without limitation advances in
respect of real estate taxes, hazard insurance premiums, flood insurance
premiums and assessments, (ii) any collection, enforcement or judicial
proceedings, including without limitation foreclosures, collections and
liquidations pursuant to Section 4.02 or other legal actions and costs
associated therewith that potentially affect the existence, validity, priority,
enforceability or collectability of the Home Loans, including collection agency
fees and costs of pursuing or obtaining personal judgments, garnishments,
levies, attachments and similar actions incurred in accordance with Accepted
Servicing Practices, (iii) the conservation, management, liquidation, sale or
other disposition of any Foreclosure Property pursuant to Section 4.06,
including reasonable fees paid to any independent contractor in connection
therewith incurred in accordance with Accepted Servicing Practices, (iv)
advances to keep senior liens current.
Servicing Compensation: With respect to a Payment Date, the Servicing
Fee and other amounts to which the Servicer is entitled pursuant to Sections
5.01(b)(1), 5.01(b)(2), 7.01 and 7.03.
Servicing Fee: As to each Home Loan (including any Home Loan that has
been foreclosed and has become a Foreclosure Property, but excluding any
Liquidated Home Loan), the fee payable monthly to the Servicer on each Payment
Date, which shall be (a) the product of the Servicing Fee Rate and the
Principal Balance of such Home Loan as of the beginning of the related Due
Period (or, in the case of the first Payment Date, the Principal Balance as of
the Cut-Off Date) divided by (b) 12. The Servicing Fee includes any servicing
fees owed or payable to any Subservicer which fees shall be paid from the
Servicing Fee.
Servicing Fee Rate: 0.75%.
Servicing Officer: Any officer of the Servicer or Subservicer
involved in, or responsible for , the administration and servicing of the Home
Loans whose name and specimen signature appears on a list of servicing officer
annexed to an Officer's Certificate furnished by the Servicer or the
Subservicer , respectively, to the Issuer and the Indenture Trustee, on behalf
of the Securityholders, as such list may from time to time be amended.
Servicing Report: A magnetic tape or computer disk providing such
information regarding the Servicer's activities in servicing Home Loans and
information with respect to the Home Loans during the related Due Period as the
Indenture Trustee may reasonably require in order for the Indenture Trustee to
prepare its Monthly Statement.
Servicing Report Date: With respect to a Payment Date in a given
month, the 15th day of such month; provided, however, if such date is not a
Business Day, the next succeeding Business Day.
Stepdown Date: The Payment Date occurring on the later of (i) the
first Payment Date after the Payment Date in March 2002 and (ii) the Payment
Date on which the Class Principal Balance of the Class A Notes, after giving
effect to payments of principal on such Payment Date, is less than or equal to
10% of the Pool Principal Balance as of the end of the related Due Period;
provided, however, if the Aggregate Liquidation Losses for such Payment Date
exceed 28% of the Original Pool Principal Balance, then the Stepdown Date will
be the Payment Date on which the Class Principal Balance of the Class A Notes,
after giving effect to payments of principal on such Payment Date, is less than
or equal to 4% of the Pool Principal Balance as of the end of the related Due
Period.
Subordinate Security: Any Class M-1 Note, Class M-2 Note, Class B-1
Certificate, Class B-2 Certificate, Class B-3 Certificate, Class B-4
Certificate or Residual Interest Certificate.
Subservicer: Any Person with whom the Servicer has entered into a
Subservicing Agreement and who is an Eligible Servicer and who satisfies any
requirements set forth in Section 4.09(a) in respect of the qualifications of a
Subservicer which may be an affiliate of the Servicer.
Subservicing Agreement: Any agreement between the Servicer and any
Subservicer relating to subservicing and/or administration of any or all Home
Loans as provided in Section 4.09(a), copies of which shall be made available,
along with any modifications thereto, to the Issuer and the Indenture Trustee,
except that copies of such agreements between the Servicer and a Subservicer
which is an affiliate of the Servicer need not be provided.
Substitution Adjustment: As to any date on which a substitution
occurs pursuant to Section 3.05, the amount, if any, by which (a) the aggregate
of the Principal Balances after application of principal payments received
through the close of the preceding Due Period of any Qualified Substitute Home
Loans plus any accrued and unpaid interest thereon that is scheduled to be paid
during the Due Period in which such substitution occurs, is less than (b) the
aggregate of the Principal Balances, together with accrued and unpaid interest
scheduled to be paid during the Due Period in which such substitution occurs,
of the related Deleted Home Loans.
Superior Lien: With respect to any Home Loan which is secured by
other than a first priority lien, the mortgage(s) relating to the corresponding
Mortgaged Property having a superior priority lien.
Termination Price: An amount equal to the sum of (i) the then
outstanding aggregate Class Principal Balances of the Securities being redeemed
or purchased plus all accrued and unpaid interest thereon at the applicable
Interest Rates, (ii) any unreimbursed Deferred Amounts owed to a Class of
Notes, (iii) any Servicing Compensation due and unpaid, (iv) any unreimbursed
Servicing Advances including Nonrecoverable Servicing Advances and (v) any due
and unpaid Indenture Trustee Fees, Owner Trustee Fees or Co-Owner Trustee Fees.
Trust: The Issuer.
Trust Account Property: The Trust Accounts, all amounts and
investments (excluding any investment income from such amounts or investments
thereof (net of investment losses)) held from time to time in any Trust Account
or in the Certificate Distribution Account and all proceeds of the foregoing.
Trust Accounts: The Note Payment Account and the Collection Account.
Trust Agreement: The Trust Agreement dated as of March 1, 1999 among
the Depositor, the Co-Owner Trustee and the Owner Trustee, as such may be
amended or supplemented from time to time.
Trust Estate: The assets subject to this Agreement and the Indenture
pledged by the Issuer to the Indenture Trustee, which assets consist of all of
the Depositor's right, title and interest in and to: (i) such Home Loans as
from time to time are subject to this Agreement, as the same may be amended or
supplemented from time to time (including to reflect the removal of Deleted
Home Loans and the addition of Qualified Substitute Home Loans), together with
the Home Loan Files relating thereto and all proceeds thereof (other than
prepayment penalties and prepayment fees with respect to the Home Loans), (ii)
the related Mortgages and security interests in the properties, (iii) all
payments and proceeds received on or with respect to the Home Loans after the
Cut-Off Date, (excluding interest due on the Home Loans on or prior to the
Cut-Off Date) (iv) such assets as from time to time are identified as
Foreclosure Property, (v) all assets and funds as are from time to time
deposited in any Trust Account (excluding any investment income from amounts on
deposit in the Collection Account (net of investment losses)), (vi) all
insurance policies with respect to the Home Loans and any Insurance Proceeds,
(vii) Net Liquidation Proceeds, Post-Liquidation Proceeds and Released
Mortgaged Property Proceeds, and (viii) that certain Home Loan Purchase
Agreement under which the Depositor acquired the Home Loans from the Seller.
Withdrawal Date: With respect to a Payment Date, the Business Day
prior to such Payment Date.
Section 1.02 Other Definitional Provisions. (a) Capitalized terms
used herein and not otherwise defined herein have the meanings assigned to them
in the Indenture and the Trust Agreement.
(b) All terms defined in this Agreement shall have the defined
meanings when used in any certificate or other document made or delivered
pursuant hereto unless otherwise defined therein.
(c) As used in this Agreement and in any certificate or other
document made or delivered pursuant hereto or thereto, accounting terms not
defined in this Agreement or in any such certificate or other document, and
accounting terms partly defined in this 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 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 Agreement or in any such certificate or other document shall control.
(d) The words "hereof," "herein," "hereunder" and words of similar
import when used in this Agreement shall refer to this Agreement as a whole and
not to any particular provision of this Agreement; Article, Section, Schedule
and Exhibit references contained in this Agreement are references to Articles,
Sections, Schedules and Exhibits in or to this Agreement unless otherwise
specified; and the term "including" shall mean "including without limitation."
(e) The definitions contained in this Agreement are applicable to the
singular as well as the plural forms of such terms and to the masculine as well
as to the feminine and neuter genders of such terms.
(f) 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 Calculation. Unless otherwise specified, all
calculations of accrued interest and accrued fees shall be made on the basis of
a 360-day year consisting of twelve 30-day months.
ARTICLE II
CONVEYANCE OF THE HOME LOANS
Section 2.01 Conveyance of the Home Loans. (a) As of the Closing
Date, in consideration of the Issuer's delivery of the Securities to the
Depositor or its designee, upon the order of the Depositor, the Depositor, as
of the Closing Date and concurrently with the execution and delivery hereof,
does hereby sell, transfer, assign, set over and otherwise convey to the
Issuer, without recourse, but subject to the other terms and provisions of this
Agreement, all of the right, title and interest of the Depositor in and to the
Trust Estate and the Certificate Distribution Account. The foregoing sale,
transfer, assignment, set over and conveyance does not and is not intended to
result in a creation or an assumption by the Issuer of any obligation of the
Depositor, the Seller or any other Person in connection with the Trust Estate
or under any agreement or instrument relating thereto except as specifically
set forth in the Basic Documents.
(b) As of the Closing Date, the Issuer acknowledges the conveyance to
it by the Depositor of all of the Depositor's right, title and interest in and
to the Trust Estate, receipt of which is hereby acknowledged by the Issuer.
Concurrently with such delivery, the Issuer has pledged to the Indenture
Trustee the Trust Estate, and in exchange for the conveyance to it by the
Depositor of all of the Depositor's right, title and interest in and to the
Trust Estate (i) the Owner Trustee (not in its individual capacity, but solely
as Owner Trustee on behalf of the Issuer) has executed the Notes and (ii) the
Issuer has caused the Indenture Trustee to authenticate and deliver the Notes
to the Depositor or its designee, upon the order of the Issuer. In addition,
concurrently with the delivery to the Issuer of all of the Depositor's right,
title and interest in and to the Trust Estate and in exchange therefor, the
Owner Trustee, pursuant to the instructions of the Depositor, has executed (not
in its individual capacity, but solely as Owner Trustee on behalf of the
Issuer) and caused to be authenticated and delivered the Certificates to the
Depositor or its designee, upon the order of the Depositor.
(c) The Depositor agrees to take or cause to be taken such actions
and execute such documents (including without limitation the filing of all
necessary continuation statements for the UCC-1 financing statements filed in
the State of New York (which shall have been filed on or before the Closing
Date)) describing the Home Loans and the Cut-Off Date Principal Balances and
naming the Depositor as debtor and the Indenture Trustee as secured party and
any amendments to UCC-1 financing statements as are necessary to perfect and
protect the Trust's, the Indenture Trustee's on behalf of the Noteholders and
the Owner Trustee's on behalf of the Certificateholders' interests in each Home
Loan and the Cut-Off Date Principal Balance and the proceeds thereof and all
other items described in Section 2.01(a).
(d) The Seller agrees to take or cause to be taken such actions and
execute such documents (including without limitation the filing of all
necessary continuation statements for the UCC-1 financing statements filed in
the State of West Virginia (which shall have been filed on or before the
Closing Date)) describing the Home Loans and the Cut-Off Date Principal
Balances and naming the Seller, as debtor and the Depositor, as secured party
and any amendments to UCC-1 financing statements as are necessary to perfect
and protect from any entity claiming by or through the Seller the Depositor's,
the Trust's, the Indenture Trustee's on behalf of the Noteholders and the Owner
Trustee's on behalf of the Certificateholders' interests in each Home Loan and
the Cut-Off Date Principal Balance and the proceeds thereof and all other items
described in Section 2.01(a).
(e) It is the intention of the parties hereto that the transfers and
assignments contemplated by this Agreement shall constitute a sale of the Trust
Estate from the Depositor to the Issuer and upon the execution of this
Agreement by the parties hereto, the Trust Estate shall no longer be owned by
the Depositor. If the assignment, transfer and conveyance of the Trust Estate
to the Issuer pursuant to this Agreement is held or deemed not to be a sale or
is held or deemed to be a pledge of security for a loan, the Depositor intends
that the rights and obligations of the parties to this Agreement shall be
established by the terms of this Agreement and that, in such event, (i) the
Depositor shall be deemed to have granted to the Issuer a first priority
security interest in the entire right, title and interest of the Depositor in
and to the Trust Estate and all proceeds thereof, and (ii) this Agreement shall
constitute a security agreement under applicable law. Prior to or promptly
after the Closing Date, the Depositor shall cause to be filed a UCC-1 financing
statement with the Secretary of State of Delaware naming the Depositor as
"debtor" and the Issuer as "secured party" and describing the Trust Estate.
Section 2.0 [RESERVED]
Section 2.03. Ownership and Possession of Home Loan Files. Upon the
issuance of the Securities, with respect to the Home Loans, the ownership of
each Debt Instrument, the related Mortgage and the contents of the related Home
Loan File shall be vested in the Issuer, subject to the lien created by the
Indenture in favor of the Indenture Trustee for the benefit of the
Securityholders, although possession of the Home Loan Files will be with the
Custodian.
Section 2.04. Books and Records. The Servicer shall be responsible
for maintaining, and shall maintain, a complete set of books and records for
each Home Loan which shall be clearly marked to reflect the record ownership of
each Home Loan by the Issuer, subject to the lien created by the Indenture in
favor of the Indenture Trustee for the benefit of the Securityholders.
Section 2.05. Delivery of Home Loan Documents.
(a) With respect to each Home Loan, on the Closing Date the Seller
shall have delivered or caused to be delivered to the Custodian each of the
following documents (collectively, the "Home Loan Files"):
(A) With respect to any Home Loan which is not evidenced by a
Contract:
(i) The original Debt Instrument, endorsed "Pay to the order of
U.S. Bank National Association, as Indenture Trustee for the United
National Home Loan Owner Trust 1999-1 Asset Backed Notes, Series
1999-1, without recourse" and signed, by facsimile or manual
signature, in the name of the Seller by a Responsible Officer
thereof, together with all intervening endorsements that evidence a
complete chain of title from the originator thereof to the Seller;
provided that any of the foregoing endorsements may be contained on
an allonge which shall be firmly affixed to such Debt Instrument;
(ii) With respect to each Debt Instrument, either: (A) the
original Mortgage, with evidence of recording thereon, (B) a copy of
the Mortgage certified as a true copy by a Responsible Officer of the
Seller or by the closing attorney, if the original has been
transmitted for recording but has not, at the time of delivery of
this Agreement, been returned or (C) a copy of the Mortgage certified
by the public recording office in those instances where the original
recorded Mortgage has been lost or has been retained by the public
recording office;
(iii) With respect to each Debt Instrument, either (A) the
original Assignment of Mortgage assigned to "U.S. Bank National
Association, as Indenture Trustee for the United National Home Loan
Owner Trust 1999-1 Asset Backed Notes, Series 1999-1" and signed in
the name of the Seller by a Responsible Officer with evidence of
recording thereon, (B) a copy of the Assignment of Mortgage,
certified as a true copy by a Responsible Officer of the Seller where
the original has been transmitted for recording but has not, at the
time of delivery of this Agreement, been returned or (C) a copy of
the Assignment of Mortgage certified by the public recording office
in those instances where the original recorded Assignment of Mortgage
has been lost or has been retained by the public recording office
(provided, however, that where the original Assignment of Mortgage is
not being delivered to the Custodian, such Responsible Officer may
complete one or more blanket certificates attaching copies of one or
more Assignments of Mortgage relating thereto); provided that any
such Assignments of Mortgage may be made by blanket assignments for
Home Loans secured by Mortgaged Properties located in the same
county, if permitted by applicable law; provided, however, that the
recordation of such Assignment of Mortgage shall not be required in
Non-Recordation States;
(iv) With respect to each Debt Instrument, either: (A) originals
of all intervening assignments of the Mortgage, with evidence of
recording thereon, (B) if the original intervening assignments have
not yet been returned from the recording office, a copy of the
originals of such intervening assignments together with a certificate
of a Responsible Officer of the Seller or the closing attorney
certifying that the copy is a true copy of the original of such
intervening assignments or (C) a copy of the intervening assignment
certified by the public recording office in those instances where the
original recorded intervening assignment has been lost or has been
retained by the public recording office; provided that the chain of
intervening recorded assignments shall not be required to match the
chain of intervening endorsements of the Debt Instrument, so long as
the chain of intervening recorded assignments, if applicable,
evidences one or more assignments of the Mortgage from the original
mortgagee ultimately to the person who has executed the Assignment of
Mortgage referred to in clause (iii) above;
(v) for each Home Loan either an original title insurance policy
or a title search or guaranty of title, provided that if any such
original policy of title insurance has not yet been received by the
Seller, the Seller shall have delivered, or cause to be delivered, a
copy of such policy or a title insurance binder or commitment for the
issuance of such policy with respect to the related Mortgaged
Property promptly upon any such document coming into the possession
of the Seller;
(vi) the original of any guaranty executed in connection with
the Mortgage Note;
(vii) the original of each assumption, modification,
consolidation or substitution agreement, if any, relating to the Home
Loan;
(viii) any security agreement, chattel mortgage or equivalent
instrument executed in connection with the Mortgage; and
(ix) any insurance policies relating to the Home Loan.
(B)With respect to each Home Loan evidenced by a Contract:
(i) The original Contract stamped as follows: "This Contract has
been assigned to U.S. Bank National Association, as Indenture Trustee
for United National Home Loan Owner Trust 1999-1 Asset-Backed Notes,
or to any successor Indenture Trustee thereunder";
(ii) The original title document for the related Manufactured
Home or a duplicate certified by the appropriate governmental
authority which issued the original thereof or the application for
such title document or, if the laws of the jurisdiction in which the
related Manufactured Home is located do not provide for the issuance
of title documents for manufactured housing, other evidence of
ownership of the related Manufactured Home which is customarily
relied upon in such jurisdiction as evidence of title to a
manufactured housing unit;
(iii) Evidence of one or more of the following types of
perfection of the security interest in the related Manufactured Home
granted by such Contract, as appropriate: (a) notation of such
security interest on the title document, (b) a financing statement
meeting the requirements of the UCC, with evidence of recording
indicated thereon, or (c) such other evidence of perfection of a
security interest in a manufactured housing unit as is customarily
relied upon in the jurisdiction in which the related Manufactured
Home is located;
(iv) The assignment of the Contract to the Indenture Trustee
(which may be in a blanket form that also covers other Contracts);
(v) Any extension, modification or waiver agreements;
(vi) With respect to any Land-and-Home Contract, the original
Mortgage with evidence of recording indicated thereon; provided,
however, that if the Mortgage with evidence of recording thereon
cannot be delivered concurrently with the execution and delivery of
this Agreement solely because of a delay caused by the public
recording office where such Mortgage has been delivered for
recordation, there shall be delivered to the Grantor Trustee a copy
of such Mortgage certified as a true copy in an Officer's
Certificate, which Officer's Certificate shall certify that such
Mortgage has been delivered to the appropriate public recording
office for recordation, and there shall be promptly delivered to the
Grantor Trustee such Mortgage with evidence of recording indicated
thereon upon receipt thereof from the public recording official (or a
true copy thereof certified by an appropriate public official may be
delivered to the Grantor Trustee); and
(vii) With respect to any Land-and-Home Contract, the original
assignment of Mortgage to the Grantor Trustee, in recordable form.
Such assignments may be blanket assignments, to the extent such
assignments are effective under applicable law, for Mortgage Loans
covering Mortgaged Properties situated within the same county. If the
assignment of Mortgage is in blanket form an assignment of Mortgage
need not be included in the individual Mortgage File.
Notwithstanding the foregoing, if the original Debt Instrument with
respect to a Home Loan cannot be located, the Seller may deliver a lost note
affidavit substantially in the form attached as Exhibit E hereto; provided,
that the aggregate of Home Loans as to which lost note affidavits are delivered
shall not exceed 1.0% (by aggregate principal balance) of the Home Loans.
Notwithstanding the foregoing, the Seller shall not be required to
deliver to the Indenture Trustee, as Custodian, on or before the Closing Date
with respect to a Home Loan (a) the original Assignment of Mortgage pursuant to
clause (A)(iii) above or (b) an intervening assignment of the Mortgage from
Keystone or KMC, as the case may be, to the Seller pursuant to clause (A)(iv)
above if, in either case, the Indenture Trustee has agreed to prepare such
Assignment of Mortgage or intervening assignment of the Mortgage, as the case
may be. The Indenture Trustee shall endeavor to prepare and deliver to the
Seller, Keystone or KMC, as applicable, for execution each such Assignment of
Mortgage and intervening assignment of the Mortgage within 30 days following
the Closing Date and in any event shall prepare and deliver each such
Assignment of Mortgage and intervening assignment of the Mortgage no later than
90 days following the Closing Date with respect to each Home Loan for which the
related Home Loan File contains, as of date of the review conducted by the
Custodian pursuant to Section 2.06(a) hereof, the information necessary for the
Indenture Trustee to prepare the Assignment of Mortgage and the intervening
assignment of the Mortgage to the Seller. The Seller shall, and shall use its
best efforts to cause Keystone and KMC to, cooperate with Indenture Trustee in
the prompt execution and return to the Indenture Trustee of each such
Assignment of Mortgage or intervening assignment of the Mortgage, as
applicable, properly prepared by the Indenture Trustee; provided, that all such
executed Assignments of Mortgage and intervening assignments of the Mortgage
described in this paragraph shall be returned to the Indenture Trustee within
10 Business Days of receipt of the same from the Indenture Trustee. With
respect to any Home Loan, the Seller shall be deemed to have satisfied its
obligations under clause (A)(iii) or clause (A)(iv) of this Section 2.05(a) in
regard to the Assignment of Mortgage from the Seller to the Indenture Trustee
or the intervening assignment of the Mortgage from Keystone or KMC, as the case
may be, to the Seller, upon return to the Indenture Trustee of a properly
executed Assignment of Mortgage or intervening assignment of the Mortgage, as
applicable, in accordance with the terms of this paragraph or the following
paragraph. All Assignments of Mortgage (other than those with respect to the
Non-Recordation States) and all intervening assignments of the Mortgage to the
Seller described in this paragraph shall be submitted for recordation by the
Indenture Trustee to the applicable public recording office promptly following
receipt of such documents properly executed by the Seller, Keystone or KMC, as
the case may be, but in no event later than 10 days following the date of
receipt thereof by the Indenture Trustee.
If, as of the date of the review conducted by the Custodian pursuant
to Section 2.06(a) hereof, the Mortgage or other documentation necessary for
the Indenture Trustee to prepare the Assignment of Mortgage and the intervening
assignment of the Mortgage to the Seller is not contained in the Home Loan File
because the Mortgage or other document has not been returned from the
applicable public filing office, the Indenture Trustee shall, within 30 days
following the receipt of such Mortgage or other documentation from the
applicable public filing office, prepare and deliver such Assignment of
Mortgage and intervening assignment of the Mortgage, as the case may be, to the
Seller, and to Keystone or KMC, as applicable, for execution. The Seller shall,
and shall use its best efforts to cause Keystone and KMC to, cooperate with
Indenture Trustee in the prompt execution and return to the Indenture Trustee
of each such Assignment of Mortgage or intervening assignment of the Mortgage,
as applicable, properly prepared by the Indenture Trustee; provided, that all
such executed Assignments of Mortgage and intervening assignments of the
Mortgage to the Seller described in this paragraph shall be returned to the
Indenture Trustee within 10 Business Days of receipt from the Indenture
Trustee. All such Assignments of Mortgage (other than those with respect to the
Non-Recordation States) and all such intervening assignments of the Mortgage to
the Seller described in this paragraph shall be submitted for recordation by
the Indenture Trustee to the applicable public recording office promptly
following receipt of such documents properly executed by the Seller, Keystone
or KMC, as the case may be, but in no event later than 10 days following the
date of receipt thereof by the Indenture Trustee.
With respect to each Home Loan, the Seller shall, within five
Business Days after the receipt thereof, and in any event, within twelve months
of the Closing Date, deliver or cause to be delivered to the Custodian: (i) the
original recorded Mortgage in those instances where a copy thereof certified by
the Seller was delivered to the Custodian; (ii) the original recorded
Assignment of Mortgage, except with respect to Non-Recordation States; (iii)
any original recorded intervening assignments of Mortgage in those instances
where copies thereof certified by the Seller were delivered to the Custodian;
and (iv) the original recorded assumption and modification agreement in those
instances in which a copy was delivered. Notwithstanding anything to the
contrary contained in this Section 2.05, in those instances where the public
recording office retains the original Mortgage or, if applicable, the
Assignment of Mortgage, the intervening assignments of the Mortgage or the
original recorded assumption and modification agreement after it has been
recorded, or where any such original has been lost or destroyed, the Seller
shall be deemed to have satisfied its obligations hereunder with respect to the
delivery of any such document upon delivery to the Custodian of a copy, as
certified by the public recording office to be a true copy of the recorded
original of such Mortgage or, if applicable, the Assignment of Mortgage,
intervening assignments of Mortgage or assumption and modification agreement,
respectively.
The Seller shall not be required to record Assignments of Mortgages
for any Home Loan with respect to which the related Mortgaged Property is
located in a Non-Recordation State, and the delivery of the Assignments of
Mortgages for such Home Loans to the Custodian in recordable form on the
Closing Date or the agreement by the Indenture Trustee to prepare the same
shall constitute full compliance with subsection (b)(A)(iii) above and the
Seller shall retain record title to such Mortgages on behalf of the Indenture
Trustee and the holders of the Securities.
(b) All recordings required pursuant to this Section 2.05 shall be
accomplished by or on behalf of and at the expense of the Seller.
Section 2.06. Acceptance by the Custodian of the Home Loans; Initial
Certification by Custodian. (a) The Custodian shall execute and deliver on the
Closing Date an acknowledgment of receipt of the Home Loan File for each Home
Loan. The Custodian shall hold such documents and any amendments, replacements
or supplements thereto, as well as any other assets included in the Trust
Estate, delivered to the Custodian in trust, upon and subject to the conditions
set forth herein for the benefit of the Securityholders. The Custodian shall
review each Home Loan File within 30 days after the Closing Date (or, with
respect to any Qualified Substitute Home Loan, within 30 days after the
conveyance of the related Home Loan to the Issuer) and shall deliver to the
Seller, the Indenture Trustee, the Issuer and the Servicer an interim
certification to the effect that, as to each Home Loan listed in the Home Loan
Schedule (other than any Home Loan paid in full or any Home Loan specifically
identified in such certification as not covered by such certification), (i) all
documents required to be delivered pursuant to this Agreement are in its
possession, (ii) all documents delivered by the Seller to the Custodian
pursuant to Section 2.05 have been reviewed by the Custodian and have not been
mutilated or damaged and appear regular on their face (handwritten additions,
changes or corrections shall not constitute irregularities if initialed by the
Obligor) and relate to such Home Loan, (iii) based on the examination of the
Custodian, and only as to the foregoing documents, the information set forth on
the Home Loan Schedule accurately reflects the information set forth in the
Home Loan File and (iv) each Debt Instrument has been endorsed as provided in
Section 2.05. Neither the Issuer nor the Custodian shall be under any duty or
obligation (i) to inspect, review or examine any such documents, instruments,
certificates or other papers to determine that they are genuine, enforceable,
or appropriate for the represented purpose or that they are other than what
they purport to be on their face or (ii) to determine whether any Home Loan
File should include any of the documents specified in Section 2.05(a)(v). Prior
to the first anniversary of the Closing Date, the Custodian shall deliver to
the Seller, the Indenture Trustee, the Issuer and the Servicer a final
certification evidencing the completeness of the Home Loans in its possession
or control.
(b) If the Custodian, during the process of reviewing the Home Loan
Files, finds any document constituting a part of the Home Loan File which is
not executed, has not been received, is unrelated to any Home Loan identified
in the Home Loan Schedule, does not conform to the requirements of Section 2.05
or does not conform, in all material respects, to the description thereof as
set forth in the Home Loan Schedule, then the Custodian shall promptly so
notify the Servicer, the Indenture Trustee, the Issuer and the Seller. In
performing any such review, the Custodian may conclusively rely on the Seller
as to the purported genuineness of any such document and any signature thereon.
It is understood that the scope of the Custodian's review of the Home Loan
Files is limited solely to confirming that the documents listed in Section 2.05
have been received and further confirming that any and all documents delivered
pursuant to Section 2.05 have been executed and relate to the Home Loans
identified in the Home Loan Schedule. Neither the Issuer nor the Custodian
shall have any responsibility for determining whether any document is valid and
binding, whether the text of any assignment or endorsement is in proper or
recordable form, whether any document has been recorded in accordance with the
requirements of any applicable jurisdiction, or whether a blanket assignment is
permitted in any applicable jurisdiction. If a material defect in a document
constituting part of a Home Loan File is discovered, then the Seller shall
comply with the cure, substitution and repurchase provisions of Section 3.05
hereof.
(c) On the Payment Date in December of each year commencing in 1999,
the Custodian shall deliver to the Seller, the Indenture Trustee and the
Servicer a certification listing all Home Loan Files held by the Custodian on
such Payment Date.
ARTICLE III
REPRESENTATIONS AND WARRANTIES
Section 3.01 Representations and Warranties of the Seller. The Seller
hereby represents, warrants and covenants with and to the Issuer, the
Depositor, the Indenture Trustee, the Servicer and the Securityholders as of
the Closing Date:
(a) The Seller is a national banking association duly organized,
validly existing, and in good standing under the laws of the jurisdiction of
its creation and has all licenses necessary to carry on its business as now
being conducted and is licensed, qualified and in good standing in each
Mortgaged Property State if the laws of such state require licensing or
qualification in order to conduct business of the type conducted by the Seller
and perform its obligations as Seller hereunder except where the failure to be
so licensed, qualified or in good standing, either singularly or in the
aggregate, would not have a material adverse effect on its business or its
ability to perform its obligations hereunder; the Seller has the power and
authority to execute and deliver this Agreement and to perform in accordance
herewith; the execution, delivery and performance of this Agreement (including
all instruments of transfer to be delivered pursuant to this Agreement) by the
Seller and the consummation of the transactions contemplated hereby have been
duly and validly authorized by all necessary action of the Seller; this
Agreement evidences the valid, binding and enforceable obligation of the
Seller; and all requisite action has been taken by the Seller to make this
Agreement valid, binding and enforceable upon the Seller in accordance with its
terms, subject to the effect of bankruptcy, insolvency, reorganization,
moratorium and other, similar laws relating to or affecting creditors' rights
generally or the application of equitable principles in any proceeding, whether
at law or in equity.
(b) All actions, approvals, consents, waivers, exemptions, variances,
franchises, orders, permits, authorizations, rights and licenses required to be
taken, given or obtained, as the case may be, by or from any federal, state or
other governmental authority or agency (other than any such actions, approvals,
etc. under any state securities laws, real estate syndication or "Blue Sky"
statutes, as to which the Seller makes no such representation or warranty) that
are necessary in connection with the purchase and sale of the Securities and
the execution and delivery by the Seller of this Agreement and the other
related documents to which it is a party, have been duly taken, given or
obtained, as the case may be, are in full force and effect, are not subject to
any pending proceedings or appeals (administrative, judicial or otherwise) and
either the time within which any appeal therefrom may be taken or review
thereof may be obtained has expired or no review thereof may be obtained or
appeal therefrom taken, and are adequate to authorize the consummation of the
transactions contemplated by this Agreement and such other documents on the
part of the Seller and the performance by the Seller of its obligations as
Seller under this Agreement and such other documents to which it is a party.
(c) The consummation of the transactions contemplated by this
Agreement will not result in (i) the breach of any terms or provisions of the
Articles of Association or Bylaws of the Seller, (ii) the breach of any term or
provision of, or conflict with or constitute a default under or result in the
acceleration of any obligation under, any material agreement, indenture or loan
or credit agreement or other material instrument to which the Seller, or its
property is subject, or (iii) the violation of any law, rule, regulation,
order, judgment or decree to which the Seller or its respective property is
subject.
(d) Neither the Prospectus Supplement nor any statement, report or
other document prepared by the Seller and furnished or to be furnished in
connection with the transactions contemplated hereby contains or will contain
any untrue statement of material fact or omits or will omit to state a material
fact necessary to make the statements contained herein or therein not
misleading.
(e) There is no action, suit, proceeding or investigation pending or,
to the best of the Seller's knowledge, threatened against the Seller which,
either in any one instance or in the aggregate, may result in any material
adverse change in the business, operations, financial condition, properties or
assets of the Seller in any material impairment of the right or ability of the
Seller to carry on its business substantially as now conducted, or in any
material liability on the part of the Seller which would draw into question the
validity of this Agreement or the Home Loans or of any action taken or to be
taken in connection with the obligations of the Seller contemplated herein, or
which would be likely to impair materially the ability of the Seller to perform
under the terms of this Agreement.
(f) The Seller is not in default with respect to any order or decree
of any court or any order, regulation or demand of any federal, state,
municipal or other governmental agency, which default might have consequences
that would materially and adversely affect the condition (financial or
otherwise) or operations of the Seller or its properties or might have
consequences that would materially and adversely affect its performance
hereunder.
(g) The Seller shall not solicit any refinancing of any of the Home
Loans; provided, that this covenant shall not prevent or restrict either (1)
the Seller from making general solicitations, by mail, advertisement or
otherwise of the general public or persons on a targeted list, so long as the
list was not generated from the Home Loan Schedule or (2) any refinancing in
connection with an Obligor's unsolicited request for refinancing.
(h) The transactions contemplated by this Agreement are in the
ordinary course of business of Seller;
(i) The Seller is not insolvent, nor will it be made insolvent by the
transfer of the Home Loans, nor is it aware of any pending insolvency; and it
did not sell the Home Loans to the Trust with any intent to hinder, delay or
defraud any of its creditors;
(j) The Seller's place of business and chief executive office is in
West Virginia;
(k) The Seller has not caused, permitted, or suffered any financing
statement other than the financing statement naming it as debtor with respect
to the Home Loans to be filed in the Office of the Secretary of State of West
Virginia before the filing of such financing statement; and
(l) None of the Seller, the Depositor, nor the Trust is the Custodian
for the Indenture Trustee.
Section 3.02 Representations, Warranties and Covenants of the
Servicer. The Servicer hereby represents, warrants and covenants with and to
the Seller, the Depositor, the Issuer, the Indenture Trustee and the
Securityholders as of the Closing Date:
(a) The Servicer is a corporation duly organized, validly existing,
and in good standing under the laws of the State of Delaware and has all
licenses necessary to carry on its business as now being conducted and is
licensed, qualified and in good standing in each Mortgaged Property State if
the laws of such state require licensing or qualification in order to conduct
business of the type conducted by the Servicer and perform its obligations as
Servicer hereunder except where the failure to be so licensed, qualified or in
good standing, either singularly or in the aggregate, would not have a material
adverse effect on its business or its ability to perform its obligations
hereunder; the Servicer has the power and authority to execute and deliver this
Agreement and to perform in accordance herewith; the execution, delivery and
performance of this Agreement by the Servicer and the consummation of the
transactions contemplated hereby have been duly and validly authorized by all
necessary action of the Servicer; this Agreement evidences the valid, binding
and enforceable obligation of the Servicer; and all requisite action has been
taken by the Servicer to make this Agreement valid, binding and enforceable
upon the Servicer in accordance with its terms, subject to the effect of
bankruptcy, insolvency, reorganization, moratorium and other, similar laws
relating to or affecting creditors' rights generally or the application of
equitable principles in any proceeding, whether at law or in equity;
(b) All actions, approvals, consents, waivers, exemptions, variances,
franchises, orders, permits, authorizations, rights and licenses required to be
taken, given or obtained, as the case may be, by or from any federal, state or
other governmental authority or agency (other than any such actions, approvals,
etc. under any state securities laws, real estate syndication or "Blue Sky"
statutes, as to which the Servicer makes no such representation or warranty)
that are necessary in connection with the execution and delivery by the
Servicer of this Agreement and the other related documents to which it is a
party, have been duly taken, given or obtained, as the case may be, are in full
force and effect, are not subject to any pending proceedings or appeals
(administrative, judicial or otherwise) and either the time within which any
appeal therefrom may be taken or review thereof may be obtained has expired or
no review thereof may be obtained or appeal therefrom taken, and are adequate
to authorize the consummation of the transactions contemplated by this
Agreement and such other documents on the part of the Servicer and the
performance by the Servicer of its obligations as Servicer under this Agreement
and such other documents to which it is a party;
(c) The consummation of the transactions contemplated by this
Agreement will not result in (i) the breach of any terms or provisions of the
charter or by-laws of the Servicer, (ii) the breach of any term or provision
of, or conflict with or constitute a default under or result in the
acceleration of any obligation under, any material agreement, indenture or loan
or credit agreement or other material instrument to which the Servicer or its
property is subject, or (iii) the violation of any law, rule, regulation,
order, judgment or decree to which the Servicer or its property is subject;
(d) All statements contained in the Prospectus Supplement relating to
the Servicer set forth under the caption "THE SERVICER--The Servicer" starting
at the next to last paragraph on page S-24 and continuing through the fourth
paragraph on page S-25 and the last paragraph on page S-25 in the Prospectus
Supplement are accurate in all material respects.
(e) All statements, reports or other documents prepared by the
Servicer to be furnished in connection with the transactions contemplated
hereby will be accurate in all material respects;
(f) There is no action, suit, proceeding or investigation pending or,
to the best of the Servicer's knowledge, threatened against the Servicer which,
either in any one instance or in the aggregate, may result in any material
adverse change in the business, operations, financial condition, properties or
assets of the Servicer or in any material impairment of the right or ability of
the Servicer to carry on its business substantially as now conducted, or in any
material liability on the part of the Servicer or which would draw into
question the validity of this Agreement or the Home Loans or of any action
taken or to be taken in connection with the obligations of the Servicer
contemplated herein, or which would be likely to impair materially the ability
of the Servicer to perform under the terms of this Agreement;
(g) The Servicer is not in default with respect to any order or
decree of any court or any order, regulation or demand of any federal, state,
municipal or other governmental agency, which default might have consequences
that would materially and adversely affect the condition (financial or
otherwise) or operations of the Servicer or its properties or might have
consequences that would materially and adversely affect its performance
hereunder;
(h) The Servicer shall not solicit any refinancing of any of the Home
Loans; provided, that this covenant shall not prevent or restrict promotions
undertaken by the Servicer or any Affiliate thereof which are directed to the
general public at large, including, without limitation, mass mailing based on
commercially acquired mailing lists, newspaper, radio and television
advertisements. The foregoing shall not constitute solicitation. Nor is the
Servicer prohibited from responding to unsolicited requests or inquiries made
by an Obligor or an agent of an Obligor; provided, further, that the Servicer
may solicit any Obligor for whom the Servicer has received a request for
verification of mortgage from an originator of mortgage loan products similar
to the Home Loans that indicates that such Obligor intends to refinance his or
her Home Loan. In addition, the Servicer may solicit the Obligors for insurance
products; and
(i) The Servicer shall not disclose, sell, transfer, assign or
otherwise dispose of a customer or similar list comprised of the names of the
Obligors under the Home Loans to any third party without the Seller's consent,
unless such list was obtained independently from its role as Servicer.
Section 3.03 Individual Home Loans. The Seller hereby represents and
warrants to the Depositor, the Issuer, the Indenture Trustee, the Servicer and
the Securityholders, with respect to the Home Loans, as of the Closing Date:
(a) The information pertaining to each Home Loan set forth in the
Home Loan Schedule was true and correct in all material respects as of the
Cut-Off Date;
(b) As of the Cut-Off Date, approximately 0.60% of the Home Loans by
Cut-Off Date Principal Balance were 30-59 days delinquent in payment as of the
Cut-Off Date (calculated from Due Date to Due Date with respect to each Home
Loan and without giving effect to any grace period). Approximately 0.36% of the
Home Loans by Cut-Off Date Principal Balance were 60 days or more delinquent in
payment as of the Cut-Off Date (calculated from Due Date to Due Date with
respect to each Home Loan and without giving effect to any grace period). None
of the Home Loans were more than 120 days delinquent in payment as of the
Cut-Off Date (calculated from Due Date to Due Date with respect to each Home
Loan and without giving effect to any grace period). Neither the Seller nor the
relevant approved home loan originator has advanced funds, induced, solicited
or knowingly received any advance of funds from a party other than the Obligor,
directly or indirectly, for the payment of any amount required by the Home
Loan;
(c) The terms of the Debt Instrument and any related Mortgage have
not been impaired, waived, altered or modified in any respect, except by
written instruments reflected in the related Home Loan File; no instrument of
waiver, alteration or modification has been executed, and no Obligor has been
released, in whole or in part, except in connection with an assumption
agreement which assumption agreement is part of the related Home Loan File and
the payment terms of which are reflected in the related Home Loan Schedule;
(d) The Debt Instrument and any related Mortgage are not subject to
any set-off, counterclaim or defense, including the defense of usury or of
fraud in the inducement, nor will the operation of any of the terms of the Debt
Instrument and any related Mortgage, or the exercise of any right thereunder,
render such Mortgage unenforceable, in whole or in part, or subject to any Debt
Instrument or right of rescission, set-off, counterclaim or defense, including
the defense of usury, and no such right of rescission, set-off, counterclaim or
defense has been asserted with respect thereto;
(e) Any and all material requirements of any federal, state or local
law applicable to the Home Loan (including all origination and collection
practices with respect thereto) have been complied with;
(f) Any related Mortgage has not been satisfied or cancelled in
whole, rescinded or subordinated, and the Mortgaged Property has not been
released from the lien of the Mortgage, in whole or in part, nor has any
instrument been executed that would effect any such release, cancellation or
rescission;
(g) Any related Mortgage is a valid, subsisting and enforceable lien
on the Mortgaged Property, including the land and all buildings on the
Mortgaged Property;
(h) The Debt Instrument and any related Mortgage are genuine and each
is the legal, valid and binding obligation of the maker thereof, enforceable in
accordance with its terms, except as enforceability may be limited by
bankruptcy, insolvency, reorganization or other similar laws affecting
creditors' rights generally and by general principles of equity;
(i) All parties to the Debt Instrument and any related Mortgage had
legal capacity at the time to enter into the Home Loan and to execute and
deliver the Debt Instrument and any related Mortgage, and the Debt Instrument
and any related Mortgage have been duly and properly executed by such parties;
(j) As of the applicable Cut-Off Date, the proceeds of the Home Loan
have been fully disbursed and there is no requirement for future advances
thereunder, and any and all applicable requirements set forth in the Home Loan
documents have been complied with;
(k) With respect to each Home Loan, immediately prior to the sale,
transfer and assignment to the Depositor, the Seller had good and indefeasible
legal title to the Home Loan, the related Debt Instrument and any related
Mortgage, and the Seller was the sole owner thereof, subject to no liens,
pledges, charges, mortgages, encumbrances or rights of others, except for such
liens as will be released simultaneously with the transfer and assignment of
the Home Loan to the Depositor; and immediately upon the sale, transfer and
assignment contemplated herein, the Trust will hold good title to, and be the
sole owner with respect to the Home Loan, the related Note and any related
Mortgage, subject to no liens, pledges, charges, mortgages, encumbrances or
rights of others;
(l) There is no default, breach, violation or event of acceleration
existing under the Home Loan, the related Debt Instrument and any related
Mortgage and there is no event which, with the passage of time or with notice
and the expiration of any grace or cure period, would constitute a default,
breach, violation or event of acceleration;
(m) Any related Mortgage contains customary and enforceable
provisions such as to render the rights and remedies of the holder thereof
adequate for the realization against the Mortgaged Property of the benefits of
the security provided thereby, including, (A) in the case of a Mortgage
designated as a deed of trust, by trustee's sale, and (B) otherwise by judicial
foreclosure;
(n) Each Home Loan is a fixed rate loan; each Debt Instrument shall
mature within not more than 25 years and 32 days from the date of origination
of the Home Loan; each Debt Instrument is payable in substantially equal
Monthly Payments, with interest payable in arrears, and requires a Monthly
Payment which if paid on the related Due Date is sufficient to amortize the
original principal balance over the original term and to pay interest at the
related Home Loan Rate; and the Debt Instrument does not provide for any
extension of the original term;
(o) The related Debt Instrument is not and has not been secured by
any collateral, except, the lien of the corresponding Mortgage and/or security
interest in the related Manufactured Home, as applicable;
(p) If the related Mortgage constitutes a deed of trust, a trustee,
duly qualified under applicable law to serve as such, has been properly
designated and currently so serves and is named in the Mortgage, or a valid
substitution of trustee has been recorded or may be recorded and no
extraordinary fees or expenses are or will become payable to the trustee under
the deed of trust, except in connection with default proceedings and a
trustee's sale after default by the Mortgagor;
(q) The Seller has no knowledge of any circumstances or conditions
not reflected in the representations set forth herein, or in the Home Loan
Schedule, or in the related Home Loan File with respect to any related
Mortgage, the related Mortgaged Property or the Obligor which in the opinion of
the Seller could reasonably be expected to materially and adversely affect the
value of the related Mortgaged Property, or the marketability of the Home Loan
or cause the Home Loan to become delinquent or otherwise in default;
(r) There exists a Home Loan File relating to each Home Loan and such
Home Loan File contains all of the original or certified documentation listed
in Section 2.05 for such type of Home Loan. Each Home Loan File has been
delivered to the Custodian. Each document included in the Home Loan File which
is required to be executed by the Obligor has been executed by the Obligor in
the appropriate places. All blanks on any form required to be completed have
been completed;
(s) Each Home Loan is in respect of a home improvement loan, debt
consolidation loan, installment loan agreement or a retail installment sales
contract and each related Mortgaged Property with respect thereto is improved
by a residential dwelling which is the principal residence or an investment of
property of the related Obligor;
(t) If the related Mortgaged Property is in an area identified by the
Federal Emergency Management Agency ("FEMA") as having special flood hazards,
unless the community in which the area is situated is participating in the
National Flood Insurance Program and the regulations thereunder or less than a
year has passed since FEMA notification regarding such hazards, a flood
insurance policy is in effect with respect to such property with a generally
acceptable carrier which complies with Section 102(a) of the Flood Disaster
Protection Act of 1973;
(u) The aggregate Cut-Off Date Principal Balances of the Home Loans
which are multi-units (two to four units) is less than 0.48% of the aggregate
Original Pool Principal Balance;
(v) All costs, fees and expenses incurred in originating, closing or
recording (except as specified in Section 2.05(b)) the Home Loans were paid;
(w) There is no obligation on the part of the Seller or any other
party other than the Obligor to make payments with respect to the Home Loan;
(x) At the time of origination of the Home Loan, each related prior
lien, if any, was not 30 or more days delinquent;
(y) All parties which have had any interest in the Home Loan, whether
as mortgagee, assignee, pledgee or otherwise, are (or, during the period in
which they held and disposed of such interest, were) (i) in compliance with any
and all applicable licensing requirements of the laws of the state wherein the
Mortgaged Property is located, and (ii) (A) organized under the laws of such
state, or (B) qualified to do business in such state, or (C) federal savings
associations or national banks having principal offices in such state, or (D)
not doing business in such state;
(z) Any related Mortgage contains an enforceable provision either (i)
requiring the consent of the Mortgagee to assumption of the related Home Loan
upon sale of the Mortgaged Property or (ii) permitting the assumption of the
related Home Loan upon the sale of the Mortgaged Property provided that certain
conditions are satisfied;
(aa) Except with respect to Home Loans where the related Mortgaged
Property is located in the state of Florida, there is no homestead or other
exemption available to the Mortgagor which would materially interfere with the
right to sell the related Mortgaged Property at a trustee's sale or to
foreclose the Mortgage;
(bb) The related Home Loan File with respect to each Home Loan
contains a document reflecting that title to the related Mortgaged Property is
vested at least 50% in the Obligor under such Home Loan;
(cc) Each Mortgaged Property (including each residential dwelling
improvement thereon) is free of damage which materially and adversely affects
the value thereof, other than damage to be corrected pursuant to the Home Loan
with some or all of the proceeds of such Home Loan;
(dd) No Home Loan was adversely selected as to credit risk from the
pool of home improvement loans, debt consolidation loans and manufactured
housing loans owned by the Seller;
(ee) Each Contract, together with the related certificate of title,
creates a valid, subsisting and enforceable first priority security interest in
favor of the Indenture Trustee in the Manufactured Home;
(ff) There is only one original executed Contract, and each original
Contract is in the custody of the Custodian;
(gg) If the related Manufactured Home is located in a state in which
notation of a security interest on the title document is required or permitted
to perfect such security interest, the title document shows, or if a new or
replacement title document with respect to such Manufactured Home is required,
such title document has been applied for and when issued by the applicable
governmental agency, will show, the Seller or Keystone or KMC, as applicable,
as the holder of a first priority security interest in such Manufactured Home.
If the related Manufactured Home is located in a state in which the filing of a
financing statement or the making of a fixture filing under the UCC is required
to perfect a security interest in manufactured housing, such filings or
recordings have been duly made and show the Seller or Keystone or KMC, as
applicable, as secured party;
(hh) Each Contract is secured by a "single family residence" within
the meaning of Section 25(e)(10) of the Code;
(ii) The Home Loans have a weighted average remaining term to
maturity of approximately 242 months;
(jj) All of the Home Loans are "actuarial/interest" Home Loans;
(kk) On the Closing Date, 55% or more (by aggregate Principal
Balance) of the Home Loans do not constitute "real estate mortgages" for the
purpose of Treasury Regulation ss.301.7701(i) - 1(d) under the Code. For this
purpose a Home Loan constitutes a "real estate mortgage" if the Home Loan is an
"obligation principally secured by an interest in real property." For this
purpose an "obligation is principally secured by an interest in real property"
if it satisfies either test set out in paragraph (i) or paragraph (ii) below.
(i) The 80-percent test. An obligation is principally secured by
an interest in real property if the fair market value of the interest in real
property securing the obligation was at least equal to 80 percent of the
adjusted issue price of the obligation at the time the obligation was
originated (or, if later, the time the obligation was significantly modified).
For purposes of this paragraph (i), the fair market value of
the real property interest must be first reduced by the
amount of any lien on the real property interest that is
senior to the obligation being tested, and must be further
reduced by a proportionate amount of any lien that is in
parity with the obligation being tested. The adjusted issue
price of an obligation is its issue price plus the amount of
accrued original issue discount, if any, as of the date of
determination.
(ii) Alternative test. An obligation is principally secured by an
interest in real property if substantially all of the proceeds of the
obligation were used to acquire or to improve or protect an interest in real
property that, at the origination date, is the only security for the
obligation. For purposes of this test, loan guarantees made by the United
States or any state (or any political subdivision, agency, or instrumentality
of the United States or of any state), or other third party credit enhancement
are not viewed as additional security for a loan. An obligation is not
considered to be secured by property other than real property solely because
the obligor is personally liable on the obligation. For this purpose only,
substantially all of the proceeds of the obligations," means 66 2/3% or more
of the gross proceeds.
Section 3.04 [RESERVED]
Section 3.05. Purchase and Substitution. (a) It is understood and
agreed that the representations and warranties set forth in Section 3.03 shall
survive the conveyance of the Home Loans from the Seller to the Depositor and
from the Depositor to the Issuer, the Grant of the Home Loans to the Indenture
Trustee and the delivery of the Securities to the Securityholders. Upon
discovery by the Seller, the Servicer, the Custodian, the Issuer, the Indenture
Trustee or any Securityholder of a breach of any of such representations and
warranties which materially and adversely affects the value of the Home Loans
or the interest of the Securityholders, or which materially and adversely
affects the interests of the Securityholders in the related Home Loan in the
case of a representation and warranty relating to a particular Home Loan
(notwithstanding that such representation and warranty may have been made to
the Seller's best knowledge), the party discovering such breach shall give
prompt written notice to the others. The Seller shall within 60 days of the
earlier of its discovery or its receipt of notice of any breach of a
representation or warranty, or of its discovery or its receipt of notice of a
material defect in a document contained in an Home Loan File as referred to in
the last sentence of Section 2.06(b), promptly cure such breach in all material
respects. If, however, within 60 days after the Seller's discovery of or
receipt of notice of such a breach or defective document, as applicable, such
breach or defective document, as applicable, has not been remedied by the
Seller and such breach or defective document, as applicable, materially and
adversely affects the interests of the Securityholders generally or in the
related Home Loan (the "Defective Home Loan"), the Seller shall on or before
the Determination Date next succeeding the end of such 60 day period either (i)
remove such Defective Home Loan from the Trust Estate (in which case it shall
become a Deleted Home Loan) and substitute one or more Qualified Substitute
Home Loans in the manner and subject to the conditions set forth in this
Section 3.05 or (ii) purchase such Defective Home Loan at a purchase price
equal to the Purchase Price (as defined below) by depositing such Purchase
Price in the Collection Account. In the event the Seller is notified that any
Mortgaged Property was, as of the Closing Date, not free of damage or not in
good repair, regardless of the Seller's knowledge, the Seller shall substitute
or purchase the related Home Loan in accordance with clauses (i) and (ii),
respectively, above. The Seller shall provide the Servicer, the Indenture
Trustee and the Issuer with a certification of a Responsible Officer on the
Determination Date next succeeding the end of such 60 day period indicating
whether the Seller is purchasing the Defective Home Loan or substituting in
lieu of such Defective Home Loan a Qualified Substitute Home Loan. With respect
to the purchase of a Defective Home Loan pursuant to this Section, the
"Purchase Price" shall be equal to the Principal Balance of such Defective Home
Loan as of the date of purchase, plus all accrued and unpaid interest on such
Defective Home Loan to but not including the Due Date in the Due Period in
which such repurchase occurs computed at the applicable Home Loan Interest
Rate, plus the amount of any unreimbursed Servicing Advances, including any
Nonrecoverable Servicing Advances, made by the Servicer with respect to such
Defective Home Loan, which Purchase Price shall be deposited in the Collection
Account (after deducting therefrom any amounts received in respect of such
repurchased Defective Home Loan and being held in the Collection Account for
future payment to the extent such amounts represent recoveries of principal not
yet applied to reduce the related Principal Balance or interest (net of the
Servicing Fee) for the period from and after the Due Date in the Due Period
most recently ended prior to such Determination Date).
Any substitution of Home Loans pursuant to this Section 3.05(a) shall
be accompanied by payment by the Seller of the Substitution Adjustment, if any,
to be deposited in the Collection Account. For purposes of calculating the
Available Collection Amount for any Payment Date, amounts paid by the Seller
pursuant to this Section 3.05 in connection with the repurchase or substitution
of any Defective Home Loan that are on deposit in the Collection Account as of
the Determination Date for such Payment Date shall be deemed to have been paid
during the related Due Period and shall be transferred to the Note Payment
Account to be retained therein or transferred to the Certificate Distribution
Account pursuant to Section 5.01(c).
As to any Home Loan for which the Seller substitutes a Qualified
Substitute Home Loan or Loans, the Seller shall effect such substitution by
delivering (i) to the Issuer a certification executed by a Responsible Officer
of the Seller to the effect that the Substitution Adjustment has been credited
to the Collection Account, and (ii) to the Custodian, the documents
constituting the Home Loan File for such Qualified Substitute Home Loan or
Loans.
(b) The Trust shall have the option, exercisable in its sole
discretion at any time, to deposit monies into the Collection Account pursuant
to Section 5.01(b)(i) and release from the lien of the Indenture any Home Loan
that is delinquent or is in foreclosure or default; provided that any
repurchase pursuant to this paragraph is conducted in the same manner as the
repurchase by the Seller of a Defective Home Loan pursuant to Section 3.05(a).
(c) The Servicer shall deposit in the Collection Account all payments
received in connection with such Qualified Substitute Home Loan or Loans on or
after the beginning of the Due Period in which such substitution occurs. All
payments received with respect to Qualified Substitute Home Loans on or before
the beginning of the Due Period in which such substitution occurs will be
retained by the Seller. The Issuer will be entitled to all payments received on
the Deleted Home Loan on or before the beginning of the Due Period in which
such substitution occurs, and the Seller shall thereafter be entitled to retain
all amounts subsequently received in respect of such Deleted Home Loan. The
Seller shall give written notice to the Issuer, the Servicer and the Indenture
Trustee that such substitution has taken place. Upon such substitution, such
Qualified Substitute Home Loan or Loans shall be subject to the terms of this
Agreement in all respects, and the Seller shall be deemed to have made with
respect to such Qualified Substitute Home Loan or Loans, as of the date of
substitution, the covenants, representations and warranties set forth in
Section 3.03. On the date of such substitution, the Seller will deposit into
the Collection Account an amount equal to the related Substitution Adjustment,
if any. In addition, on the date of such substitution, (i) the Issuer shall
cause such Qualified Substitute Home Loan to be pledged to the Indenture
Trustee under the Indenture as part of the Trust Estate and (ii) the Indenture
Trustee shall (A) release the applicable Deleted Home Loan from the lien of the
Indenture, (B) cause the Custodian to release to the Seller the Home Loan File
for such Deleted Home Loan and (C) execute, without recourse, representation or
warranty, and deliver such instruments of transfer and release presented to it
by the Servicer as shall be necessary to transfer such Deleted Home Loan to the
Seller and to evidence such release.
(d) It is understood and agreed that the obligations of the Seller
set forth in this Section 3.05 to cure, purchase or substitute for a Defective
Home Loan constitute the sole remedies of the Depositor, the Issuer, the
Indenture Trustee and the Securityholders hereunder respecting a breach of the
representations and warranties contained in Section 3.03. Any cause of action
against the Seller relating to or arising out of a material defect in a
document contained in an Home Loan File as contemplated by Section 2.06(b) or
arising out of a breach of any representations and warranties made in Section
3.03 shall accrue as to any Home Loan upon (i) discovery of such defect or
breach by any party and notice thereof to the Seller, (ii) failure by the
Seller to cure such defect or breach or purchase or substitute such Defective
Home Loan as specified above, and (iii) demand upon the Seller by the Issuer,
Indenture Trustee or a majority of the Holders of the Outstanding Amount of
Securities for all amounts payable in respect of such Home Loan.
(e) The Issuer shall not have any duty to conduct any affirmative
investigation other than as specifically set forth in this Agreement as to the
occurrence of any condition requiring the repurchase or substitution of any
Home Loan pursuant to this Section or the eligibility of any Home Loan for
purposes of this Agreement.
(f) In connection with a repurchase of or substitution for a Home
Loan pursuant to this Section 3.05, the Seller shall amend the Home Loan
Schedule to reflect (i) the removal of the applicable Deleted Home Loan from
the terms of this Agreement and (ii) if applicable, the substitution of the
applicable Qualified Substitute Home Loan. The Seller shall promptly deliver to
the Issuer, the Servicer and the Indenture Trustee a copy of the Home Loan
Schedule as so amended.
Section 3.06 Representations and Warranties of the Depositor. The
Depositor represents and warrants to the Issuer and the Indenture Trustee on
behalf of the Noteholders:
(i) this Agreement and the other Basic Documents to which the
Depositor is a party have been duly authorized, executed and
delivered by the Depositor and constitute legal, valid and binding
obligations of the Depositor, enforceable against the Depositor in
accordance with their terms, except as enforceability may be limited
by applicable bankruptcy, insolvency, reorganization, moratorium or
other similar laws now or hereafter in effect affecting the
enforcement of creditors' rights in general and except as such
enforceability may be limited by general principles of equity
(whether considered in a proceeding at law or in equity);
(ii) immediately prior to the transfer by the Depositor to the
Issuer of each Home Loan, the Depositor had good and equitable title
to each Home Loan (insofar as such title was conveyed to it by the
Seller) subject to no prior lien, claim, participation interest,
mortgage, security interest, pledge, charge or other encumbrance or
other interest of any nature;
(iii) as of the Closing Date, the Depositor has transferred all
right, title and interest in the Home Loans to the Issuer;
(iv) the Depositor has not transferred the Home Loans to the
Issuer with any intent to hinder, delay or defraud any of its
creditors; and
(v) the Depositor has been duly incorporated and is validly
existing as a corporation in good standing under the laws of
Delaware, with full corporate power and authority to own its assets
and conduct its business as presently being conducted.
ARTICLE IV
ADMINISTRATION AND SERVICING OF THE HOME LOANS
Section 4.01. Duties of the Servicer. (a) Servicing Standard. The
Servicer, as an independent contractor, shall service and administer the Home
Loans and shall have full power and authority, acting alone, to do any and all
things in connection with such servicing and administration which the Servicer
may deem necessary or desirable and consistent with the terms of this
Agreement. Notwithstanding anything to the contrary contained herein, the
Servicer, in servicing and administering the Home Loans, shall employ or cause
to be employed procedures (including collection, foreclosure, liquidation and
Foreclosure Property management and liquidation procedures) and exercise the
same care that it customarily employs and exercises in servicing and
administering loans of the same type as the Home Loans for its own account, all
in accordance with accepted servicing practices of prudent lending institutions
and Servicers of loans of the same type as the Home Loans and giving due
consideration to the Securityholders' reliance on the Servicer (the foregoing
being "Accepted Servicing Practices"). The Servicer has and shall maintain the
facilities, procedures and experienced personnel necessary to comply with the
servicing standard set forth in this subsection (a) and the duties of the
Servicer set forth in this Agreement relating to the servicing and
administration of the Home Loans.
(b) Servicing Advances. In accordance with Accepted Servicing
Practices, the Servicer, or any Subservicer on behalf of the Servicer, shall
make all Servicing Advances in connection with the servicing of each Home Loan
hereunder. Notwithstanding any provision to the contrary herein, neither the
Servicer, nor any Subservicer on behalf of the Servicer, shall have any
obligation to advance its own funds for any delinquent scheduled payments of
principal and interest on any Home Loan or to satisfy or keep current the
indebtedness secured by any Superior Liens on the related Mortgaged Property.
No costs incurred by the Servicer or any Subservicer in respect of Servicing
Advances shall, for the purposes of payments or distributions to
Securityholders, be added to the amount owing under the related Home Loan. The
Servicer shall only make a Servicing Advance with respect to a Home Loan to the
extent that the Servicer determines in its reasonable, good faith judgment that
such Servicing Advance would likely be recoverable, all in accordance with
Accepted Servicing Practices.
(c) Waivers, Modifications and Extensions. Consistent with the terms
of this Agreement, the Servicer may waive, modify or vary any provision of any
Home Loan or consent to the postponement of strict compliance with any such
provision or in any manner grant indulgence to any Obligor if in the Servicer's
reasonable determination such waiver, modification, postponement or indulgence
is not materially adverse to the interests of the Securityholders; provided,
however, unless the Obligor is in default with respect to the Home Loan, or
such default is, in the judgment of the Servicer, reasonably foreseeable, the
Servicer may not permit any modification with respect to any Home Loan that
would change the Home Loan Interest Rate, defer (subject to the following
paragraph) or forgive the payment of any principal or interest (unless in
connection with the liquidation of the related Home Loan) or extend the final
maturity date on the Home Loan. The Servicer may grant a waiver or enter into a
subordination agreement with respect to the refinancing of the indebtedness
secured by a Superior Lien on the related Mortgaged Property, provided that the
Obligor is in a better financial or cash flow position as a result of such
refinancing, which may include a reduction in the Obligor's scheduled monthly
payment on the indebtedness secured by such Superior Lien. The Servicer shall
notify the Issuer and the Indenture Trustee of any modification, waiver or
amendment of any provision of any Home Loan and the date thereof, and shall
deliver to the Custodian for deposit in the related Home Loan File, an original
counterpart of the agreement relating to such modification, waiver or amendment
promptly following the execution thereof. Notwithstanding the preceding
provisions of this subsection (c), the Servicer may modify, vary or waive any
Defaulted Home Loan in a manner that in the reasonable judgment of the Servicer
will be likely to maximize the net proceeds realizable from such Defaulted Home
Loan under the circumstances, including, without limitation, the establishment
of a forbearance plan with the related Obligor and the deferment or forgiveness
of any principal or interest payments due or to become due thereon.
The Servicer shall make reasonable efforts to collect all payments
called for under the terms and provisions of each Home Loan and the related
Debt Instrument and Mortgage. Consistent with the foregoing, the Servicer may
in its discretion waive or permit to be waived any late payment charge or
assumption fee or any other fee or charge which the Servicer would be entitled
to retain hereunder as Servicing Compensation and extend the due date for
payments due on a Debt Instrument for a period in accordance with Accepted
Servicing Practice, but in no event later than the Maturity Date. In connection
with any partial prepayment, the Servicer may recalculate the amortization
schedule of the related Home Loan to provide for reduced monthly payments over
the remaining term to maturity.
The Servicer may, in a manner consistent with its servicing
practices, permit an Obligor who is selling his principal residence and
purchasing a new residence to substitute the new mortgaged property as
collateral for the related Home Loan. In such circumstances, the Servicer
acknowledges that it intends to, consistent with its Accepted Servicing
Practices, generally require such Obligor to make a partial prepayment in
reduction of the principal balance of the Home Loan to the extent that such
Obligor has received proceeds from the sale of the prior residence that will
not be applied to the purchase of the new residence.
(d) Instruments of Satisfaction or Release. Without limiting the
generality of the foregoing, the Servicer is hereby authorized and empowered to
execute and deliver on behalf of the Issuer, the Indenture Trustee, each
Securityholder, all instruments of satisfaction or cancellation, or of partial
or full release, discharge and all other comparable instruments, with respect
to the Home Loans and with respect to the related Mortgaged Properties. If
reasonably required by the Servicer, the Issuer and the Indenture Trustee shall
furnish the Servicer or any Subservicer with any powers of attorney and other
documents necessary or appropriate to enable the Servicer or any Subservicer to
carry out the servicing and administrative duties under this Agreement.
Section 4.02 Liquidation of Home Loans. (a) In the event that any
payment due under any Home Loan and not postponed pursuant to Section 4.01(c)
is not paid when the same becomes due and payable, or in the event the Obligor
fails to perform any other covenant or obligation under the Home Loan and such
failure continues beyond any applicable grace period, the Servicer shall, in
accordance with the standard of care specified in Section 4.01(a), take such
action as it shall deem to be in the best interest of the Securityholders to
collect or liquidate such Home Loan in default in a manner that in the
reasonable judgment of the Servicer will be likely to maximize the net proceeds
realizable therefrom under the circumstances (including, but without
limitation, the purchase or substitution of such Home Loan pursuant to Section
3.05, or, if no Superior Liens exist on the related Mortgaged Property,
foreclose or otherwise comparably effect ownership in such Mortgaged Property
in the name of the Indenture Trustee for the benefit of Securityholders). The
Servicer shall have the power and authority, exercisable in its sole discretion
at any time, to reach a negotiated settlement with a borrower. The Servicer
shall promptly deposit the Net Liquidation Proceeds or Post-Liquidation
Proceeds, as applicable, from the sale of such Liquidated Home Loans into the
Collection Account in accordance with Section 5.01 of this Agreement. The
Servicer shall give the Indenture Trustee notice of the election of remedies
made pursuant to this Section 4.02. The Servicer shall not be required to
satisfy the indebtedness secured by any Superior Liens on the related Mortgaged
Property or to advance funds to keep the indebtedness secured by such Superior
Liens current. In connection with any collection or liquidation activities, the
Servicer shall exercise collection or liquidation procedures in accordance with
Accepted Servicing Practices.
(b) During any Due Period occurring after a Home Loan becomes a
Liquidated Home Loan, the Servicer shall deposit into the Collection Account
any proceeds received by it with respect to such Liquidated Home Loan or the
related Foreclosure Property ("Post-Liquidation Proceeds").
(c) After a Home Loan has become a Liquidated Home Loan, the Servicer
shall promptly prepare and forward to the Indenture Trustee and the Holder of
the Residual Interest Certificate a liquidation report detailing the following:
(i) the Net Liquidation Proceeds, Insurance Proceeds or Released Mortgaged
Property Proceeds received in respect of such Liquidated Home Loan; (ii)
expenses incurred with respect thereto; (iii) any Net Loan Losses incurred in
connection therewith; and (iv) any Post-Liquidation Proceeds.
Section 4.03 Maintenance of Hazard Insurance; Property Protection
Expenses. The Servicer shall cause to be maintained for each Home Loan fire and
hazard insurance naming the Servicer or its designee as loss payee thereunder
providing extended coverage in an amount which is at least equal to the lesser
of (i) the maximum insurable value of the improvements securing such Home Loan
from time to time and (ii) the combined principal balance owing on such Home
Loan and any mortgage loan senior to such Home Loan. The Servicer shall also
maintain on property acquired upon foreclosure, or by deed in lieu of
foreclosure, hazard insurance with extended coverage in an amount which is at
least equal to the lesser of (i) the maximum insurable value from time to time
of the improvements which are a part of such property and (ii) the combined
principal balance owing on such Home Loan and any mortgage loan senior to such
Home Loan. Amounts collected by the Servicer under any such policies shall be
deposited in the Collection Account to the extent called for by Section
5.01(b). In cases in which any Mortgaged Property is located in an area
identified in the Federal Register by the Flood Emergency Management Agency as
FLOOD ZONE "A", the hazard insurance to be maintained for the related Home Loan
shall include flood insurance to the extent such flood insurance is available
and the Servicer has determined such insurance to be necessary in accordance
with Accepted Servicing Practices. All such flood insurance shall be in amounts
not less than the lesser of (A) the amount in clause (ii) above and (B) the
maximum amount of insurance available under the National Flood Insurance Act of
1968, as amended. The Servicer shall be under no obligation to require that any
Mortgagor maintain earthquake or other additional insurance and shall be under
no obligation itself to maintain any such additional insurance on property
acquired in respect of a Home Loan, other than pursuant to such applicable laws
and regulations as shall at any time be in force and as shall require such
additional insurance.
Section 4.04. Maintenance of Mortgage Impairment Insurance Policy. In
the event that the Servicer shall obtain and maintain a blanket policy
consistent with prudent industry standards insuring against fire and hazards of
extended coverage on all of the Home Loans, then, to the extent such policy
names the Servicer or its designee as loss payee and provides coverage in an
amount equal to the aggregate unpaid principal balance on the Home Loans
without coinsurance, and otherwise complies with the requirements of Section
4.05, the Servicer shall be deemed conclusively to have satisfied its
obligations with respect to fire and hazard insurance coverage under Section
4.05, it being understood and agreed that such blanket policy may contain a
deductible clause, in which case the Servicer shall, in the event that there
shall not have been maintained on the related Mortgaged Property a policy
complying with Section 4.05, and there shall have been a loss which would have
been covered by such policy, deposit in the Collection Account the difference,
if any, between the amount that would have been payable under a policy
complying with Section 4.05 and the amount paid under such blanket policy. Upon
the request of the Indenture Trustee, the Servicer shall cause to be delivered
to the Indenture Trustee a certified true copy of such policy which is
maintained as of the Closing Date with Lloyds of London. In connection with its
activities as servicer of the Home Loans, the Servicer agrees to prepare and
present, on behalf of itself, the Indenture Trustee and Securityholders, claims
under any such policy in a timely fashion in accordance with Accepted Servicing
Practices.
Section 4.05. Fidelity Bond; Errors and Omission Insurance. The
Servicer shall maintain with a responsible company, and at its own expense, a
blanket fidelity bond and an errors and omissions insurance policy in such
amounts as required by, and satisfying any other requirements of, the FNMA and
the FHLMC, with broad coverage on all officers, employees or other persons
acting in any capacity requiring such persons to handle funds, money, documents
or papers relating to the Home Loans ("Servicer Employees"). Any such fidelity
bond and errors and omissions insurance shall protect and insure the Servicer
against losses, including losses resulting from forgery, theft, embezzlement,
fraud, errors and omissions and negligent acts of such Servicer Employees. Such
fidelity bond shall also protect and insure the Servicer against losses in
connection with the release or satisfaction of a Home Loan without having
obtained payment in full of the indebtedness secured thereby. In the event of
any loss of principal or interest on a Home Loan for which reimbursement is
received from the Servicer's fidelity bond or errors and omissions insurance,
the proceeds from any such insurance will be deposited in the Collection
Account. No provision of this Section 4.05 requiring such fidelity bond and
errors and omissions insurance shall diminish or relieve the Servicer from its
duties and obligations as set forth in this Agreement. Upon the request of the
Issuer or the Indenture Trustee, the Servicer shall cause to be delivered to
requesting party a certified true copy of such fidelity bond and insurance
policy.
Section 4.06. Title, Management and Disposition of Foreclosure
Property. The deed or certificate of sale in respect of each Foreclosure
Property shall be taken in the name of the Indenture Trustee for the benefit of
the Securityholders.
The Servicer shall manage, conserve, protect and operate each
Foreclosure Property for the Indenture Trustee and the Securityholders solely
for the purpose of its prudent and prompt disposition and sale. The Servicer
shall, either itself or through an agent selected by the Servicer, manage,
conserve, protect and operate the Foreclosure Property in accordance with
Accepted Servicing Practices. The Servicer shall attempt to sell the same (and
may temporarily lease the same) on such terms and conditions as the Servicer
deems to be in the best interest of the Securityholders. The disposition of
Foreclosure Property shall be carried out by the Servicer at such price, and
upon such terms and conditions, as the Servicer deems to be in the best
interest of the Indenture Trustee and the Securityholders and, as soon as
practicable thereafter, the expenses of such sale shall be paid. The Net
Liquidation Proceeds or Post-Liquidation Proceeds, as applicable, from the
conservation, disposition and sale of the Foreclosure Property shall be
promptly deposited by the Servicer in the Collection Account in accordance with
Section 5.01 of this Agreement and the Indenture, which Net Liquidation
Proceeds or Post-Liquidation Proceeds, as applicable, shall equal all cash
amounts received with respect thereto less the amounts retained and withdrawn
by the Servicer for any related unreimbursed Servicing Advances, unpaid
Servicing Fees and any other fees and expenses incurred in connection with such
Foreclosure Property.
Section 4.07 Access to Certain Documentation and Information
Regarding the Home Loans. The Servicer shall provide to Residual Interest
Certificateholder, the Issuer, the Indenture Trustee on behalf of the
Securityholders and the supervisory agents and examiners of each of the
foregoing access to the documentation regarding the Home Loans required by
applicable state and federal regulations, such access being afforded without
charge but only upon reasonable request and during normal business hours at the
offices of the Servicer designated by it.
Section 4.08. Superior Liens. (a) The Administrator may file (or
cause to be filed) of record a request for notice of any action by a lienholder
under a Superior Lien for the protection of the Indenture Trustee's interest,
where permitted by local law and whenever applicable state law does not require
that a junior lienholder be named as a party defendant in foreclosure
proceedings in order to foreclose such junior lienholder's equity of
redemption. (b) Subject to (a) above, if the Servicer is notified that any
lienholder under a Superior Lien has accelerated or intends to accelerate the
obligations secured by such Superior Lien, or has declared or intends to
declare a default under the related mortgage or promissory note secured
thereby, or has filed or intends to file an election to have any Mortgaged
Property sold or foreclosed, the Servicer shall take, on behalf of the Issuer
and the Indenture Trustee, all reasonable actions that are necessary to protect
the interests of the Securityholders, and/or to preserve the security of the
related Home Loan, including making any Servicing Advances that are necessary
to cure the default or reinstate the Superior Lien. Any Servicing Advances by
the Servicer pursuant to its obligations in this Section 4.08 shall comply with
requirements set forth in Section 4.01(b) hereof.
Section 4.09 Subservicing. (a) The Servicer may, with the prior
written consent of the Indenture Trustee and each Rating Agency, enter into
Subservicing Agreements for any servicing and administration of Home Loans with
any institution which is in compliance with the laws of each state necessary to
enable it to perform its obligations under such Subservicing Agreement and is
an Eligible Servicer; provided, however, such consent shall not be required
with respect to a Subservicer who is an affiliate of the Servicer. The Servicer
shall give prior written notice to the Issuer, the Indenture Trustee of the
appointment of any Subservicer, except an affiliate of the Servicer. The
Servicer shall be entitled to terminate any Subservicing Agreement in
accordance with the terms and conditions of such Subservicing Agreement and to
either directly service the related Home Loans or enter into a Subservicing
Agreement with a successor subservicer which qualifies hereunder.
(b) Notwithstanding any Subservicing Agreement, any of the provisions
of this Agreement relating to agreements or arrangements between the Servicer
and a Subservicer or reference to actions taken through a Subservicer or
otherwise, the Servicer shall remain obligated and primarily liable to the
Issuer, the Indenture Trustee and Securityholders for the servicing and
administering of the Home Loans in accordance with the provisions of this
Agreement without diminution of such obligation or liability by virtue of such
Subservicing Agreements or arrangements or by virtue of indemnification from
the Subservicer and to the same extent and under the same terms and conditions
as if the Servicer alone were servicing and administering the Home Loans. For
purposes of this Agreement, the Servicer shall be deemed to have received
payments on Home Loans when the Subservicer has actually received such payments
and, unless the context otherwise requires, references in this Agreement to
actions taken or to be taken by the Servicer in servicing the Home Loans
include actions taken or to be taken by a Subservicer on behalf of the
Servicer. The Servicer shall be entitled to enter into any agreement with a
Subservicer for indemnification of the Servicer by such Subservicer, and
nothing contained in this Agreement shall be deemed to limit or modify such
indemnification.
(c) In the event the Servicer shall for any reason no longer be the
Servicer (including by reason of a Servicer Event of Default), the successor
Servicer, on behalf of the Issuer, the Indenture Trustee, and the
Securityholders pursuant to Section 4.10, shall thereupon assume all of the
rights and obligations of the Servicer under each Subservicing Agreement that
the Servicer may have entered into, unless the successor Servicer elects to
terminate any Subservicing Agreement in accordance with its terms. The
successor Servicer shall be deemed to have assumed all of the Servicer's
interest therein and to have replaced the Servicer as a party to each
Subservicing Agreement to the same extent as if the Subservicing Agreements had
been assigned to the assuming party, except that the Servicer shall not thereby
be relieved of any liability or obligations under the Subservicing Agreements.
The Servicer at its expense and without right of reimbursement therefor, shall,
upon request of the successor Servicer, deliver to the assuming party all
documents and records relating to each Subservicing Agreement and the Home
Loans then being serviced. In addition, the Servicer shall prepare and deliver
to the successor Servicer an accounting of amounts collected and held by it at
the time of such transfer. The Servicer shall use reasonable efforts to effect
the orderly and efficient transfer of the Subservicing Agreements to the
assuming party.
(d) As part of its servicing activities hereunder, the Servicer, for
the benefit of the Issuer, the Indenture Trustee and the Securityholders, shall
enforce the obligations of each Subservicer under the related Subservicing
Agreement. Such enforcement, including, without limitation, the legal
prosecution of claims 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
Servicer, in its good faith business judgment, would require were it the owner
of the related Home Loans. The Servicer shall pay the costs of such enforcement
at its own expense, and shall be reimbursed therefor only (i) from a general
recovery resulting from such enforcement to the extent, if any, that such
recovery exceeds all amounts due in respect of the related Home Loan or (ii)
from a specific recovery of costs, expenses or attorneys fees against the party
against whom such enforcement is directed.
(e) Any Subservicing Agreement that may be entered into and any other
transactions or services relating to the Home Loans involving a Subservicer in
its capacity as such and not as an originator shall be deemed to be between the
Subservicer and the Servicer alone and none of the Issuer, the Indenture
Trustee or the Securityholders shall be deemed parties thereto or shall have
any claims, rights, obligations, duties or liabilities with respect to the
Subservicer in its capacity as such except as set forth in Section 4.09(c)
above.
Section 4.10. Successor Servicers. In the event that the Servicer is
terminated pursuant to Section 10.01 hereof, or resigns pursuant to Section 9.04
hereof or otherwise becomes unable to perform its obligations under this
Agreement, the Indenture Trustee will become the successor Servicer or will
appoint a successor Servicer in accordance with the provisions of Section 10.02
hereof; provided that any successor Servicer, including the Indenture Trustee,
shall satisfy the requirements of an Eligible Servicer and shall be approved by
each Rating Agency.
ARTICLE V
ESTABLISHMENT OF ACCOUNTS
Section 5.01 Collection Account, Note Payment Account and Certificate
Distribution Account.
(a) (1) Establishment of Collection Account. The Indenture Trustee
shall establish and maintain in the name of the Securities Intermediary the
Collection Account for the benefit of Securityholders, which shall be a
separate Eligible Account and which may be interest-bearing, entitled
"Collection Account, U.S. Bank National Association, as Indenture Trustee, in
trust for the United National Home Loan Owner Trust 1999-1 Asset Backed
Securities, Series 1999-1". The Collection Account may be maintained with the
Indenture Trustee or subject to the following paragraph, any other depository
institution which satisfies the requirements set forth in the definition of
Eligible Account. The creation of any Collection Account other than one
maintained with the Indenture Trustee shall be evidenced by a letter agreement
between the Indenture Trustee and the depository institution. A copy of such
letter agreement shall be furnished to the Indenture Trustee. Funds in the
Collection Account shall be invested in accordance with Section 5.06.
As of the Closing Date, the Collection Account shall be established
with the Indenture Trustee, and thereafter upon written notice to the Issuer,
the Collection Account may be transferred by the Indenture Trustee to a
different depository institution so long as such transfer is to an Eligible
Account. The creation of any such Collection Account shall be evidenced by a
letter agreement between the Indenture Trustee and the depository institution.
(a)(2) Establishment of Note Payment Account. As of the Closing Date,
the Indenture Trustee shall cause to be established and maintained in the name
of the Securities Intermediary a Note Payment Account which shall be pledged to
the Indenture Trustee for the benefit of Securityholders, which shall be a
separate Eligible Account and which may be interest-bearing, which shall be
entitled "Note Payment Account, U.S. Bank National Association, as Indenture
Trustee, in trust for the "United National Home Loan Owner Trust 1999-1 Asset
Backed Notes, Series 1999-1." Funds in the Note Payment Account shall be
invested in accordance with Section 5.06.
(a)(3) Establishment of Certificate Distribution Account. As of the
Closing Date, the Co-Owner Trustee, for the benefit of the Certificateholders,
will establish and maintain in the name of the Securities Intermediary with
U.S. Bank National Association for the benefit of the Owner Trustee or Co-Owner
Trustee on behalf of the Certificateholders a separate Eligible Account, which
while the Co-Owner Trustee holds such account shall be entitled "Certificate
Distribution Account, U.S. Bank National Association, as Co-Owner Trustee, in
trust for the United National Home Loan Owner Trust 1999-1 Asset Backed
Securities, Series 1999-1". Funds in the Certificate Distribution Account shall
be invested in accordance with Section 5.06.
(b) (1) Deposits to Collection Account. The Servicer shall deposit or
cause to be deposited (without duplication) within two (2) Business Days of
receipt thereof in the Collection Account and retain therein in trust for the
benefit of the Securityholders:
(i) all payments on account of principal on each Home Loan
received after the Cut-Off Date;
(ii) all payments on account of interest on each Home Loan
received after the Cut-Off Date;
(iii) all Net Liquidation Proceeds and Post-Liquidation Proceeds
pursuant to Sections 4.02 or 4.06;
(iv) all Insurance Proceeds;
(v) all Released Mortgaged Property Proceeds;
(vi) any amounts payable in connection with the repurchase of
any Home Loan and the amount of any Substitution Adjustment pursuant
to Section 3.05; and
(vii) any amount required to be deposited in the Collection
Account pursuant to the receipt of proceeds from any blanket policy
under Section 4.04, any fidelity bond or errors and omission
insurance under Section 4.05 or the deposit of the Termination Price
in connection with the redemption of the Notes and the purchase of
the Certificates pursuant to Section 11.02.
The Servicer shall be entitled to retain and not deposit into the
Collection Account any amounts received with respect to a Home Loan that
constitute its Servicing Fee, Servicing Advances, Nonrecoverable Servicing
Advances and additional Servicing Compensation.
(b)(2) Withdrawals from Collection Account. (i) Subject to Section
5.01(e), no later than 11:00 a.m. (New York City time) on the Withdrawal Date
with respect to each Payment Date, the Indenture Trustee (based on the
information contained in the Servicing Report and the Monthly Statement for
such Payment Date) shall withdraw the Available Collection Amount with respect
to such Payment Date from the Collection Account and make the deposits set
forth below in Section 5.01(c).
(ii) The Servicer shall have the right to (x) cause the
Indenture Trustee to withdraw the following amounts, or (y) net the
amounts set forth below from collections to be deposited into the
Collection Account:
(A) to reimburse the Servicer for any accrued unpaid
Servicing Fees and for unreimbursed Servicing Advances. The
Servicer's right to reimbursement for unreimbursed Servicing
Advances shall be limited to late collections on the related
Home Loans, including Liquidation Proceeds, Released Mortgaged
Property Proceeds, Insurance Proceeds and such other amounts as
may be collected by the Servicer from the related Obligor or
otherwise relating to the Home Loan in respect of which such
unreimbursed amounts are owed, to the extent not retained;
(B) to reimburse the Servicer for any Nonrecoverable
Servicing Advances to the extent not reimbursed;
(C) to pay the Servicer additional Servicing Compensation
to the extent not retained; and
(D) to pay the Servicer any interest earned on or
investment income earned with respect to funds in the Collection
Account (net of any losses on such investments pursuant to
Section 5.06(b)(2)).
(c) Deposits to the Note Payment Account and Certificate Distribution
Account. The Indenture Trustee shall make the following deposits from the
Available Collection Amount for payment on the related Payment Date, in each
case as specified below and in the following order of priority; provided, that
the Class A Noteholders' Interest Payment Amount and the Class A-IO
Certificateholders' Interest Distribution Amount shall be made on a pro rata
basis:
(1) to the Note Payment Account the amounts required for
payments on such Payment Date pursuant to Section 8.02 of the
Indenture; and
(2) to the Certificate Distribution Account the remaining
portion of the Available Collection Amount for such Payment Date, for
distribution pursuant to Section 5.02 of the Trust Agreement.
Notwithstanding that the Notes have been paid in full, the Indenture
Trustee shall continue to maintain the Collection Account, the Note Payment
Account and the Certificate Distribution Account hereunder until the Class
Principal Balance of each Class of Securities has been reduced to zero, unless
this Agreement has been terminated pursuant to Article XI.
(d) Additional Withdrawals from Collection Account. The Servicer
shall have the right to cause the Indenture Trustee to make the following
withdrawals from the Collection Account, in no particular order of priority:
(1) to withdraw and pay as directed by the Servicer any amount
not required to be deposited in the Collection Account (including,
without limitation, any payments on or proceeds from a Home Loan
received on or prior to the Cut-Off Date which shall be paid to the
Seller), or deposited therein in error;
(2) to withdraw and pay to the Issuer for distribution to the
Residual Interest Certificateholder on each Payment Date with respect
to each Home Loan, any prepayment penalties or prepayment fees
collected on such Home Loan during the related Due Period;
(3) to withdraw and pay to the Seller with respect to each Home
Loan, any interest due and unpaid on such Home Loan on or prior to
the Cut-Off Date; and
(4) to clear and terminate the Collection Account in connection
with the termination of this Agreement.
(e) Additional Withdrawals from Collection Account Following Early
Redemption or Termination. No later than 11:00 a.m. (New York City time) on the
Withdrawal Date on which an early redemption or purchase pursuant to Section
11.02(b) is to occur, to the extent of the Available Collection Amount, the
Indenture Trustee (based on the information contained in the Servicing Report
and the Monthly Statement for such Payment Date) and shall make the following
deposits as indicated, in each case as specified below and in the following
order of priority: (1) to the Note Payment Account for payment pursuant to
Section 8.02 of the Indenture (i) to the holders of the Notes, all accrued and
unpaid interest on each Class of Notes and an amount equal to the aggregate of
the then outstanding Class Principal Balances of each Class of Notes and (ii)
to the various parties, the amounts set forth in Section 8.02(i) and (ii) in
the Indenture; (2) to the Certificate Distribution Account for distribution
pursuant to the Trust Agreement to the Certificateholders, all accrued and
unpaid interest on the Certificates and an amount equal to the aggregate of the
then outstanding Class Principal Balance of the Certificates; (3) to the Note
Payment Account for payment of the Deferred Amounts owed to any Note, if any,
until each such Deferred Amount has been paid in full; and (4) to the
Certificate Distribution Account, any remaining amount for distribution
pursuant to the Trust Agreement.
Section 5.02. [RESERVED].
Section 5.03. [RESERVED].
Section 5.04. [RESERVED].
Section 5.05. Certificate Distribution Account. The Indenture Trustee
shall withdraw from the Collection Account all amounts required pursuant to
Section 5.01(c) to be deposited in the Certificate Distribution Account with
respect to the preceding Due Period and remit such amount to the Owner Trustee
or the Co-Owner Trustee for deposit into the Certificate Distribution Account.
On each Payment Date, the Owner Trustee or the Co-Owner Trustee shall
distribute all amounts on deposit in the Certificate Distribution Account
pursuant to Section 5.02 of the Trust Agreement.
Section 5.06. Trust Accounts; Trust Account Property. (a) Control of
Trust Accounts. Each of the Trust Accounts established hereunder has been
pledged by the Issuer to the Indenture Trustee under the Indenture and shall be
subject to the lien of the Indenture. In addition to the provisions hereunder,
each of the Trust Accounts shall also be established and maintained pursuant to
the Indenture. Amounts paid or distributed from each Trust Account in
accordance with the Indenture and this Agreement shall be released from the
lien of the Indenture upon such payment or distribution thereunder or
hereunder. The Indenture Trustee shall possess all right, title and interest in
all funds on deposit from time to time in the Trust Accounts and in all
proceeds thereof (including all income thereon) and all such funds,
investments, proceeds and income shall be part of the Trust Estate. If, at any
time, any Trust Account ceases to be an Eligible Account, the Indenture Trustee
(or the Servicer on its behalf) shall within 10 Business Days (or such longer
period, not to exceed 30 calendar days, as to which each Rating Agency may
consent) (i) establish a new Trust Account as an Eligible Account, (ii)
terminate the ineligible Trust Account, and (iii) transfer any cash and
investments from such ineligible Trust Account to such new Trust Account. With
respect to the Trust Accounts, the Indenture Trustee agrees, by its acceptance
hereof, that each such Trust Account shall be subject to the sole and exclusive
custody and control of the Indenture Trustee for the benefit of the
Securityholders and the Issuer, as the case may be, and the Indenture Trustee
shall have sole signature and withdrawal authority with respect thereto.
In addition to this Agreement, the Certificate Distribution Account
established hereunder also shall be subject to and maintained in accordance
with this Agreement and the Trust Agreement. The Owner Trustee or Co-Owner
Trustee shall possess all right, title and interest for the benefit of the
Certificateholders in all funds on deposit from time to time in the Certificate
Distribution Account and in all proceeds thereof (including all income thereon)
and all such funds, investments, proceeds and income shall be part of the Trust
Account Property. If, at any time, the Certificate Distribution Account ceases
to be an Eligible Account, the Issuer (or the Servicer on its behalf) shall
within 10 Business Days (or such longer period, not to exceed 30 calendar days,
as to which each Rating Agency may consent) (i) establish a new Certificate
Distribution Account as an Eligible Account, (ii) terminate the ineligible
Certificate Distribution Account, and (iii) transfer any cash and investments
from such ineligible Certificate Distribution Account to such new Certificate
Distribution Account. The Owner Trustee and Co-Owner Trustee agree, by their
acceptance hereof, that such Certificate Distribution Account shall be subject
to the sole and exclusive custody and control of the Owner Trustee and Co-Owner
Trustee for the benefit of the Issuer and the parties entitled to distributions
therefrom, including without limitation, the Certificateholders, and the Owner
Trustee and the Co-Owner Trustee shall have sole signature and withdrawal
authority with respect to the Certificate Distribution Account.
(b) (1) Investment of Funds. So long as no Servicer Event of Default
shall have occurred and be continuing, the funds held in any Trust Account or
in the Certificate Distribution Account may be invested (to the extent
practicable and consistent with any requirements of the Code) in Permitted
Investments, as directed by the Servicer in the case of the Collection Account
and as directed by the Issuer in the case of the Note Payment Account and the
Certificate Distribution Account, in each case in writing or by telephone or
facsimile transmission confirmed in writing. In any case, funds in any Trust
Account or in the Certificate Distribution Account must be available for
withdrawal without penalty, and any Permitted Investments must mature or
otherwise be available for withdrawal, not later than two (2) Business Days
(except with respect to the Note Payment Account and Certificate Distribution
Account, which shall be invested on a one (1) Business Day basis) immediately
preceding the Payment Date next following the date of such investment and shall
not be sold or disposed of prior to its maturity subject to Section 5.06(b)(2)
below. All interest and any other investment earnings on amounts or investments
held in any Trust Account or in the Certificate Distribution Account shall be
deposited into such account immediately upon receipt. All Permitted Investments
in which funds in the Note Payment Account are invested must be held by or
registered in the name of "U.S. Bank National Association, as Indenture
Trustee, in trust for the United National Home Loan Owner Trust 1999-1 Asset
Backed Securities, Series 1999-1". While the Co-Owner Trustee holds the
Certificate Distribution Account, all Permitted Investments in which funds in
the Certificate Distribution Account are invested shall be held by or
registered in the name of "U.S. Bank National Association, as Co-Owner Trustee,
in trust for the United National Home Loan Owner Trust 1999-1 Asset Backed
Securities, Series 1999-1".
(b)(2) Insufficiency and Losses in Trust Accounts. If any amounts are
needed for disbursement from the Note Payment Account or the Certificate
Distribution Account and sufficient uninvested funds are not available to make
such disbursement, the Indenture Trustee, or the Owner Trustee or Co-Owner
Trustee in the case of the Certificate Distribution Account, shall cause to be
sold or otherwise converted to cash a sufficient amount of the investments in
such account to make up such insufficiency. The Indenture Trustee, or Owner
Trustee or Co-Owner Trustee in the case of the Certificate Distribution
Account, shall not be liable for any investment loss or other charge resulting
therefrom, unless such loss or charge is caused by the failure of the Indenture
Trustee or Owner Trustee or Co-Owner Trustee, respectively, to perform in
accordance with this Section 5.06.
If any losses are realized in connection with any investment in any
Trust Account or in the Certificate Distribution Account pursuant to this
Agreement and the Indenture, then the Servicer, with respect to the Collection
Account and the Issuer, with respect to the Note Payment Account and the
Certificate Distribution Account, shall deposit the amount of such losses (to
the extent not offset by income from other investments in such account) in such
account immediately upon the realization of such loss. All interest and any
other investment earnings on amounts held in any Trust Account or in the
Certificate Distribution Account shall be taxed to the Issuer and for federal
and state income tax purposes the Issuer shall be deemed to be the owner of
each Trust Account and of the Certificate Distribution Account.
(c) On each Payment Date the Indenture Trustee shall withdraw from
the Note Payment Account any interest earned on or investment income earned
with respect to funds in the Note Payment Account (net of any losses on such
investments pursuant to Section 5.06(b)(2)) and pay such amounts to the
Co-Owner Trustee for deposit in the Certificate Distribution Account.
(d) Subject to Section 6.01 of the Indenture, the Indenture Trustee
shall not in any way be held liable by reason of any insufficiency in the Note
Payment Account held by the Indenture Trustee resulting from any investment
loss on any Permitted Investment included therein (except to the extent that
the Indenture Trustee, with respect to such Permitted Investment, is the
obligor and has defaulted thereon).
(e) The Issuer and the Indenture Trustee hereby appoint U.S. Bank
National Association as Securities Intermediary with respect to the Trust
Accounts and the Certificate Distribution Account. The Issuer has, pursuant to
the Indenture, granted to the Indenture Trustee, as collateral agent for the
benefit of the Securityholders, a security interest to secure all amounts due
Noteholders hereunder in and to the Trust Accounts and the Security
Entitlements to all Financial Assets credited to the Trust Accounts, and the
Depositor hereby grants to the Issuer, as collateral agent for the benefit of
Certificateholders, a security interest to secure all amounts due
Certificateholders hereunder in and to the Certificate Distribution Account and
the Security Entitlements and all Financial Assets credited to the Certificate
Distribution Account, including in each case without limitation all amounts,
securities, investments, Financial Assets, investment property and other
property from time to time deposited in or credited to such accounts and all
proceeds thereof. Amounts held from time to time in the Trust Accounts will
continue to be held by the Securities Intermediary for the benefit of the
Indenture Trustee, as collateral agent, for the benefit of the Securityholders,
and amounts held from time to time in the Certificate Distribution Account will
continue to be held by the Securities Intermediary for the benefit of the
Issuer, as collateral agent, for the benefit of the Certificateholders. Upon
the termination of the Trust or the discharge of the Indenture, the Indenture
Trustee shall inform the Securities Intermediary of such termination. By
acceptance of their Securities or interests therein, the Securityholders shall
be deemed to have appointed U.S. Bank National Association as Securities
Intermediary. U.S. Bank National Association hereby accepts such appointment as
Securities Intermediary.
(1) With respect to the Trust Account Property credited to the
Trust Accounts and the Certificate Distribution Account, the
Securities Intermediary agrees that:
(i) with respect to any Trust Account Property that is held
in deposit accounts, each such deposit account shall be subject
to the exclusive custody and control of the Securities
Intermediary, and the Securities Intermediary shall have sole
signature authority with respect thereto;
(ii) the sole assets permitted in the Trust Accounts and
the Certificate Distribution Account shall be those as the
Securities Intermediary agrees to treat as Financial Assets; and
(iii) any such Trust Account Property that is, or is
treated as, a Financial Asset shall be physically delivered
(accompanied by any required endorsements) to, or credited to an
account in the name of, the Securities Intermediary or other
eligible institution maintaining any Trust Account or the
Certificate Distribution Account in accordance with the
Securities Intermediary's customary procedures such that the
Securities Intermediary or such other institution establishes a
Security Entitlement in favor of the Indenture Trustee (or the
Issuer, in the case of the Certificate Distribution Account)
with respect thereto over which the Securities Intermediary or
such other institution has Control;
(2) The Securities Intermediary hereby confirms that (A) each
Trust Account and the Certificate Distribution Account is an account
to which Financial Assets are or may be credited, and the Securities
Intermediary shall, subject to the terms of this Agreement, treat the
Indenture Trustee, as collateral agent, as entitled to exercise the
rights that comprise any Financial Asset credited to any Trust
Account, and the Issuer, as collateral agent, as entitled to exercise
the rights that comprise any Financial Asset credited to the
Certificate Distribution Account, (B) all Trust Account Property in
respect of any Trust Account or the Certificate Distribution Account
will be promptly credited by the Securities Intermediary to such
account, and (C) all securities or other property underlying any
Financial Assets credited to any Trust Account or the Certificate
Distribution Account shall be registered in the name of the Securities
Intermediary, endorsed to the Securities Intermediary or in blank or
credited to another securities account maintained in the name of the
Securities Intermediary and in no case (x) will any Financial Asset
credited to any Trust Account be registered in the name of the
Depositor or the Issuer, payable to the order of the Depositor or the
Issuer or specially endorsed to the Depositor or the Issuer, or (y)
will any Financial Asset credited to the Certificate Distribution
Account be registered in the name of the Depositor, payable to the
order of the Depositor or specially endorsed to the Depositor, except
to the extent the foregoing have been specially endorsed to the
Securities Intermediary or in blank;
(3) The Securities Intermediary hereby agrees that each item
of property (whether investment property, Financial Asset, security,
instrument or cash) credited to any Trust Account or the Certificate
Distribution Account shall be treated as a Financial Asset;
(4) If at any time the Securities Intermediary shall receive
any order from the Indenture Trustee directing transfer or redemption
of any Financial Asset relating to any Trust Account, the Securities
Intermediary shall comply with such entitlement order without further
consent by the Depositor, the Issuer or any other Person. If at any
time the Indenture Trustee notifies the Securities Intermediary in
writing that the Trust has been terminated or the Indenture discharged
in accordance herewith and with the Trust Agreement or the Indenture,
as applicable, and the security interest granted pursuant to the
Indenture has been released, then thereafter if the Securities
Intermediary shall receive any order from the Depositor or the Issuer
directing transfer or redemption of any Financial Asset relating to
any Trust Account, the Securities Intermediary shall comply with such
entitlement order without further consent by the Indenture Trustee or
any other Person;
If at any time the Securities Intermediary shall receive any
order from the Issuer directing transfer or redemption of any
Financial Asset relating to the Certificate Distribution Account, the
Securities Intermediary shall comply with such entitlement order
without further consent by the Depositor or any other Person. If at
any time the Issuer notifies the Securities Intermediary in writing
that the Trust has been terminated in accordance herewith and with the
Trust Agreement and the security interest granted above has been
released, then thereafter if the Securities Intermediary shall receive
any order from the Depositor directing transfer or redemption of any
Financial Asset relating to the Certificate Distribution Account, the
Securities Intermediary shall comply with such entitlement order
without further consent by the Issuer or any other Person;
(5) In the event that the Securities Intermediary has or
subsequently obtains by agreement, operation of law or otherwise a
security interest in any Trust Account or the Certificate Distribution
Account or any Financial Asset credited thereto, the Securities
Intermediary hereby agrees that such security interest shall be
subordinate to the security interest of the Indenture Trustee, in the
case of the Trust Accounts, or of the Issuer, in the case of the
Certificate Distribution Account. The Financial Assets credited to the
Trust Accounts or the Certificate Distribution Account will not be
subject to deduction, set-off, banker's lien, or any other right in
favor of any Person other than the Indenture Trustee, in the case of
the Trust Accounts, or the Issuer, in the case of the Certificate
Distribution Account (except that the Securities Intermediary may set
off (i) all amounts due to it in respect of its customary fees and
expenses for the routine maintenance and operation of the Trust
Accounts and the Certificate Distribution Account, and (ii) the face
amount of any checks which have been credited to any Trust Account or
the Certificate Distribution Account but are subsequently returned
unpaid because of uncollected or insufficient funds);
(6) There are no other agreements entered into between the
Securities Intermediary in such capacity and the Depositor or the
Issuer with respect to any Trust Account, or the Depositor with
respect to the Certificate Distribution Account. In the event of any
conflict between this Agreement (or any provision of this Agreement)
and any other agreement now existing or hereafter entered into, the
terms of this Agreement shall prevail;
(7) The rights and powers granted under the Indenture and
herein to (x) the Indenture Trustee have been granted in order to
perfect its security interest in the Trust Accounts and the Security
Entitlements to the Financial Assets credited thereto, and (y) the
Issuer have been granted in order to perfect its security interest in
the Certificate Distribution Account and the Security Entitlements to
the Financial Assets credited thereto, and are powers coupled with an
interest and will neither be affected by the bankruptcy of the
Depositor (or the Issuer, in the case of the Trust Accounts) nor by
the lapse of time. The obligations of the Securities Intermediary
hereunder shall continue in effect until the security interest of the
Indenture Trustee in the Trust Accounts or of the Issuer in the
Certificate Distribution Account, and in such Security Entitlements,
has been terminated pursuant to the terms of this Agreement and the
Indenture Trustee or the Issuer, as applicable, has notified the
Securities Intermediary of such termination in writing; and
(8) Notwithstanding anything else contained herein, the
Depositor and the Issuer agree that the Trust Accounts and the
Certificate Distribution Account will be established only with the
Securities Intermediary or another institution meeting the
requirements of this Section, which by acceptance of its appointment
as Securities Intermediary agrees substantially as follows: (1) it
will comply with Entitlement Orders related to the Trust Accounts
issued by the Indenture Trustee, as collateral agent, without further
consent by the Depositor or the Issuer, and with Entitlement Orders
related to the Certificate Distribution Account issued by the Issuer,
as collateral agent, without further consent by the Depositor; (2)
until termination of the Trust or discharge of the Indenture, it will
not enter into any other agreement related to such accounts pursuant
to which it agrees to comply with Entitlement Orders of any Person
other than the Indenture Trustee, as collateral agent with respect to
the Trust Accounts, or the Issuer, as collateral agent with respect to
the Certificate Distribution Account; and (3) all assets delivered or
credited to it in connection with such accounts and all investments
thereof will be promptly credited to the applicable account.
Section 5.07. Allocation of Losses. (a) In the event that Net
Liquidation Proceeds, Insurance Proceeds or Released Mortgaged Property
Proceeds on a Liquidated Home Loan are less than the related Principal Balance
plus accrued interest thereon, or any Obligor makes a partial payment of any
Monthly Payment due on a Home Loan, such Net Liquidation Proceeds, Insurance
Proceeds, Released Mortgaged Property Proceeds or partial payment shall be
applied to payment of the related Debt Instrument in respect of principal and
interest shall be applied in the manner set forth in such Debt Instrument.
(b) On any Payment Date, any Allocable Loss Amount shall be applied,
after giving effect to all payments and distributions made on such Payment
Date, to the reduction of the Class Principal Balances of the Subordinate
Securities in accordance with the Allocable Loss Amount Priority. Any Allocable
Loss Amount allocated to a Class of Securities pursuant to this Section 5.07(b)
shall be allocated among the Securities of such Class in proportion to their
respective outstanding principal balances.
ARTICLE VI
STATEMENTS AND REPORTS; SPECIFICATION OF TAX MATTERS
Section 6.01 Statements. (a) No later than each Servicing Report
Date, the Servicer shall deliver to the Indenture Trustee, the Depositor and
the Seller the Servicing Report.
(b) (1) Based on the information provided by the Servicer in the
Servicing Report, no later than two (2) Business Days before each Payment Date,
the Indenture Trustee shall prepare and distribute a monthly statement (the
"Monthly Statement"), with respect to such Payment Date to the Seller, the
Depositor, the Securityholders and each Rating Agency, stating the date of
original issuance of the Securities (day, month and year), the name of the
Issuer (i.e., "United National Home Loan Owner Trust 1999-1"), the series
designation of the Securities (i.e., "Series 1999-1"), the date of this
Agreement and the following information:
(i) the Available Collection Amount and the Regular Payment
Amount for the related Payment Date;
(ii) the Class Principal Balance or Notional Balance of each
Class of Securities and the Pool Principal Balance as of the first
day of the related Due Period and after giving effect to payments and
distributions made to the holders of such Securities on such Payment
Date;
(iii) the Class Pool Factor with respect to each Class of
Securities then outstanding, carried to seven decimal places;
(iv) the amount of principal and interest received on the Home
Loans during the related Due Period;
(v) the Servicing Fee for such Payment Date;
(vi) the amount, if any, paid on such Payment Date to each Class
of Securities in respect of Deferred Amounts;
(vii) with respect to each Class of Securities the amount of any
applicable Deferred Amounts remaining unreimbursed after giving
effect to payments made on such Payment Date;
(viii) the weighted average remaining term to maturity of the
Home Loans and the weighted average Home Loan Interest Rate of the
Home Loans each as of such Payment Date;
(ix) certain performance information, including delinquency and
foreclosure information with respect to the Home Loans, as set forth
in the Monthly Statement;
(x) the amount of Nonrecoverable Advances reimbursed to the
Servicer;
(xi) the number of and aggregate Principal Balance of all Home
Loans in foreclosure proceedings (other than any Home Loans described
in clause (xvi)) and the percent of the aggregate Principal Balances
of such Home Loans to the aggregate Principal Balances of all Home
Loans, all as of the close of business on the last day of the related
Due Period;
(xii) the number of and the aggregate Principal Balance of the
Home Loans in bankruptcy proceedings (other than any Home Loans
described in clause (xvii)) and the percent of the aggregate
Principal Balances of such Home Loans to the aggregate Principal
Balances of all Home Loans, all as of the close of business on the
last day of the related Due Period;
(xiii) the number of Foreclosure Properties, the aggregate
Principal Balance of the related Home Loans, the book value of such
Foreclosure Properties and the percent of the aggregate Principal
Balances of such Home Loans to the aggregate Principal Balances of
all Home Loans, all as of the close of business on the last day of
the related Due Period;
(xiv) during the related Due Period, the aggregate Principal
Balance of Home Loans for each of the following: (A) that became
Liquidated Home Loans and (B) that became Deleted Home Loans pursuant
to Section 3.05 as a result of such Deleted Home Loans being
Liquidated Home Loans or a Home Loan in foreclosure, default or
imminent default, including the foregoing amounts by loan type;
(xv) from the Cut-Off Date through the most current Due Period,
the cumulative aggregate Principal Balance of Home Loans for each of
the following: (A) that became Liquidated Home Loans, and (B) that
became Deleted Home Loans pursuant to Section 3.05 as a result of
such Deleted Home Loans being in foreclosure, default or imminent
default;
(xvi) the scheduled principal payments and the principal
prepayments received with respect to the Home Loans during the
related Due Period;
(xvii) the number of Home Loans remaining in the Home Loan Pool;
(xviii) the Cumulative Losses; and
(xix) such other information as may be reasonably requested by
the Indenture Trustee, the Issuer or the Residual Interest
Certificateholder.
(2) No later than two (2) Business Days before each Payment
Date, the Indenture Trustee shall prepare and distribute to the
Seller, the Depositor and each Rating Agency a monthly statement that
includes the cumulative aggregate Principal Balance of Home Loans
that became Deleted Home Loans pursuant to Section 3.05(c) as a
result of such Deleted Home Loans being Defective Home Loans, from
the Closing Date through the most current Due Period.
(3) No later than seven days following a repurchase or
substitution pursuant to Sections 2.06, 3.05 or 4.02, the Indenture
Trustee shall notify each Rating Agency of the aggregate principal
balances of the Home Loans repurchased or substituted and (if
applicable) the relevant Substitution Adjustment.
All reports prepared by the Indenture Trustee of the withdrawals from
and deposits in the Collection Account will be based in whole or in part upon
the information provided to the Indenture Trustee by the Servicer, and the
Indenture Trustee may fully rely upon and shall have no liability with respect
to such information provided by the Servicer.
(c) Within a reasonable period of time after the end of each calendar
year, the Indenture Trustee shall prepare and distribute to each Person who at
any time during the calendar year was a Securityholder, such information as is
reasonably necessary to provide to such Person a statement containing the
information set forth in subclauses (b)(iii) and (iv) above, aggregated for
such calendar year or applicable portion thereof during which such Person was a
Securityholder.
(d) On each Payment Date, the Indenture Trustee shall forward to DTC
and to the Holder of each Security a copy of the Monthly Statement in respect
of such Payment Date and a statement setting forth the amounts actually
distributed to the holder of such Security on such Payment Date, together with
such other information as the Indenture Trustee deems necessary or appropriate.
(e) Within a reasonable period of time after the end of each calendar
year, the Indenture Trustee shall prepare and distribute to each Person who at
any time during the calendar year was the Holder of a Security, such
information as is reasonably necessary to provide to such Person a statement
containing the information provided pursuant to the previous paragraph
aggregated for such calendar year or applicable portion thereof during which
such Person was the holder of such Security.
(f) Upon reasonable advance notice in writing, the Servicer will
provide to each Securityholder which is a savings and loan association, bank or
insurance company access to information and documentation regarding the Home
Loans sufficient to permit such Securityholder to comply with applicable
regulations of the FDIC or other regulatory authorities with respect to
investment in such Securities.
(g) The Indenture Trustee shall furnish to each Securityholder,
during the term of this Agreement, such periodic, special, or other reports,
including information tax returns or reports required with respect to the
Securities, including Internal Revenue Service Forms 1099 and (if instructed in
writing by the Issuer on the basis of the advice of legal counsel) and other
similar reports that are required to be filed by the Indenture Trustee or its
agent and the Holder of the Certificates, whether or not provided for herein,
as shall be necessary, reasonable, or appropriate with respect to the
Securityholders, or otherwise with respect to the purposes of this Agreement,
all such reports or information to be provided by and in accordance with such
applicable instructions and directions as the Securityholders may reasonably
require.
(h) Reports and computer tapes furnished by the Servicer and the
Indenture Trustee pursuant to this Agreement shall be deemed confidential and
of proprietary nature, and shall not be copied or distributed except in
connection with the purposes and requirements of this Agreement. No Person
entitled to receive copies of such reports or tapes shall use the information
therein for the purpose of soliciting the customers of the Seller or the
Servicer or for any other purpose except as set forth in this Agreement.
Section 6.02 Reports of Foreclosure and Abandonment of Mortgaged
Property. Each year beginning in 1999 the Servicer, at its expense, shall make
the reports of foreclosures and abandonment of any Mortgaged Property required
by Section 6050J of the Code. The reports from the Servicer shall be in form
and substance sufficient to meet the reporting requirements imposed by such
Section 6050J of the Code.
Section 6.03. Specification of Certain Tax Matters. Each
Securityholder shall provide the Indenture Trustee with a completed and
executed Form W-9 prior to purchasing a Security. The Indenture Trustee shall
comply with all requirements of the Code, and applicable state and local law,
with respect to the withholding from any payments or distributions made to any
Securityholder of any applicable withholding taxes imposed thereon and with
respect to any applicable reporting requirements in connection therewith.
ARTICLE VII
GENERAL SERVICING PROCEDURES
Section 7.01 Assumption Agreements. When a Mortgaged Property has
been or is about to be conveyed by the Obligor, the Servicer shall, to the
extent it has knowledge of such conveyance or prospective conveyance, exercise
its rights to accelerate the maturity of the related Home Loan under any
"due-on-sale" clause contained in the related Mortgage or Debt Instrument;
provided, however, that the Servicer shall not exercise any such right if the
"due-on-sale" clause, in the reasonable belief of the Servicer, is not
enforceable under applicable law. In such event or in the event the related
Mortgage and Debt Instrument do not contain a "due-on-sale" clause, the
Servicer shall enter into an assumption and modification agreement with the
person to whom such property has been or is about to be conveyed, pursuant to
which such person becomes liable under the Debt Instrument and, unless
prohibited by applicable law or the Home Loan documents, the Obligor remains
liable thereon. The Servicer is also authorized to enter into a substitution of
liability agreement with such person, pursuant to which the original Obligor is
released from liability and such person is substituted as Obligor and becomes
liable under the Debt Instrument. The Servicer shall notify the Custodian that
any such substitution or assumption agreement has been completed by promptly
forwarding to the Custodian the original of such substitution or assumption
agreement, which original shall be added by the Custodian to the related Home
Loan File and shall, for all purposes, be considered a part of such Home Loan
File to the same extent as all other documents and instruments constituting a
part thereof. In connection with any assumption or substitution agreement
entered into pursuant to this Section 7.01, the Servicer shall not change the
Home Loan Interest Rate or the Monthly Payment, defer or forgive the payment of
principal or interest, reduce the outstanding principal amount or extend the
final maturity date on such Home Loan. Any fee collected by the Servicer for
consenting to any such conveyance or entering into an assumption or
substitution agreement shall be retained by or paid to the Servicer as
additional Servicing Compensation.
Notwithstanding the foregoing paragraph or any other provision of
this Agreement, the Servicer shall not be deemed to be in default, breach or
any other violation of its obligations hereunder by reason of any assumption of
a Home Loan by operation of law or any assumption which the Servicer may be
restricted by law from preventing, for any reason whatsoever.
Section 7.02 Satisfaction of Mortgages and Release of Home Loan
Files. Subject to the provisions of Sections 4.01 and 4.02, the Servicer shall
not grant a satisfaction or release of a Mortgage without having obtained
payment in full of the indebtedness secured by the Mortgage or otherwise
prejudice any right the Securityholders may have under the mortgage
instruments. The Servicer shall maintain the fidelity bond and errors and
omissions insurance as provided for in Section 4.05 insuring the Servicer
against any loss it may sustain with respect to any Home Loan not satisfied in
accordance with the procedures set forth herein.
Upon the payment in full of any Home Loan, or the receipt by the
Servicer of a notification that payment in full will be escrowed in a manner
customary for such purposes, the Servicer will immediately notify the Custodian
by a Request for Release attached hereto as Exhibit C (which Request for
Release 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 Collection Account pursuant to Section 5.01(b) have been or will be so
deposited) of a Servicing Officer and shall request delivery to it of the Home
Loan File. Upon receipt of such certification and request and in accordance
with Section 2.09 of the Indenture, the Custodian shall promptly release the
related Home Loan File to the Servicer. Expenses incurred in connection with
any instrument of satisfaction or deed of reconveyance shall be payable only
from and to the extent of Servicing Compensation and shall not be chargeable to
the Collection Account, the Note Payment Account, or the Certificate
Distribution Account. Upon receipt by the Custodian of the certification of a
Servicing Officer with respect to the release of the Home Loan File for any
Home Loan or any documents included therein, the Custodian shall release to the
Servicer such Home Loan File and shall deliver such instruments of transfer
presented to it by the Servicer as shall be necessary or appropriate for the
release of such Home Loan File in accordance with such certification of the
Servicing Officer. The release to the Servicer of an Home Loan File pursuant to
such certification shall not require or be subject to the prior approval of the
Indenture Trustee in the case of a release in connection with the following:
(1) the satisfaction or release of a Mortgage upon the payment in full of the
Home Loan or upon such Home Loan becoming a Liquidated Home Loan; (2) a Home
Loan in default for which the Servicer is or will be pursuing foreclosure or
another method of liquidation pursuant to Section 4.02; or (3) the correction
of documentation in the Home Loan File for errors and ambiguities, provided
that such corrections shall be performed and returned to the Custodian in a
prompt manner. In the case of a release of the related Home Loan File to the
Servicer in connection with a substitution or repurchase of any Home Loan
pursuant to Section 3.05 or the release of a Home Loan from the lien of the
Indenture pursuant to Section 11.02 or a release for other servicing reasons,
such release of the Home Loan File by the Custodian shall be subject to the
prior approval of the Indenture Trustee.
The Indenture Trustee shall execute and deliver to the Servicer any
court pleadings, requests for trustee's sale or other documents necessary to
the foreclosure or trustee's sale in respect of a Mortgaged Property or to any
legal action brought to obtain judgment against any Obligor on the Debt
Instrument or Mortgage or to obtain a deficiency judgment, or to enforce any
other remedies or rights provided by the Debt Instrument or Mortgage or
otherwise available at law or in equity. Together with such documents or
pleadings, the Servicer shall deliver to the Indenture Trustee a certificate of
a Servicing Officer requesting that such pleadings or documents be executed by
the Indenture Trustee and certifying as to the reason such documents or
pleadings are required and that the execution and delivery thereof by the
Indenture Trustee will not invalidate or otherwise affect the lien of the
Mortgage, except for the termination of such a lien upon completion of the
foreclosure or trustee's sale. The Indenture Trustee shall, upon receipt of a
written request from a Servicing Officer, execute any document provided to the
Indenture Trustee by the Servicer or take any other action requested in such
request that is, in the opinion of the Servicer as evidenced by such request,
required by any state or other jurisdiction to discharge the lien of a Mortgage
upon the satisfaction thereof and the Indenture Trustee will sign and post, but
will not guarantee receipt of, any such documents to the Servicer, or such
other party as the Servicer may direct, within five Business Days, or more
promptly if needed, of the Indenture Trustee's receipt of such certificate or
documents. Such certificate or documents shall establish to the Indenture
Trustee's satisfaction that the related Home Loan has been paid in full by or
on behalf of the Obligor and that such payment has been deposited in the
Collection Account.
Subject to any other applicable terms and conditions of this
Agreement, the Indenture Trustee and Servicer shall be entitled to approve an
assignment in lieu of satisfaction with respect to any Home Loan in accordance
with Accepted Servicing Practices. Upon approval of an assignment in lieu of
satisfaction with respect to any Home Loan, the Servicer shall receive cash in
an amount equal to the unpaid principal balance of and accrued interest on such
Home Loan and the Servicer shall treat such amount as a Principal Prepayment
with respect to such Home Loan for all purposes hereof.
Section 7.03 Servicing Compensation. As compensation for its services
hereunder, the Servicer shall be entitled to receive from the Collection
Account, the Servicing Fee out of which the Servicer shall pay any servicing
fees owed or payable to any Subservicer. Additional servicing compensation in
the form of assumption and other administrative fees, amounts remitted pursuant
to Section 7.01 and late payment charges and other similar servicing charges or
fees (but excluding prepayment fees or prepayment penalties) shall be part of
the Servicing Compensation payable to the Servicer hereunder. The Servicer
shall be required to pay all expenses incurred by it in connection with its
servicing activities hereunder and shall not be entitled to reimbursement
therefor except as specifically provided for herein.
Section 7.04. Annual Statements as to Compliance. Not later than the
last day of the fourth month following the end of the Servicer's fiscal year,
beginning in April 2000, the Servicer will deliver to the Residual Interest
Certificateholder, the Depositor, each Rating Agency, the Indenture Trustee and
the Issuer, an Officer's Certificate stating that (i) the Servicer has fully
complied with the provisions of Articles V and VII, (ii) a review of the
activities of the Servicer during the preceding year or portion thereof and of
performance under this Agreement has been made under such officer's
supervision, and (iii) to the best of such officers' knowledge, based on such
review, the Servicer has fulfilled all its obligations under this Agreement
throughout 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 and the action being taken by the Servicer to cure
such default.
Section 7.05. Annual Independent Public Accountants' Servicing
Report. On or before 120 days after the end of each of the Servicer's fiscal
years elapsing during the term of its appointment under this Agreement,
beginning with the first fiscal year ending after the Closing Date, the
Servicer, at its expense, shall furnish to the Residual Interest
Certificateholder, the Depositor, the Indenture Trustee, the Issuer and each
Rating Agency (i) an opinion by a firm of independent certified public
accountants on the financial position of the Servicer at the end of the
relevant fiscal year and the results of operations and changes in financial
position of the Servicer for such year then ended on the basis of an
examination conducted in accordance with generally accepted auditing standards,
and (ii) if the Servicer is then servicing any Home Loans, a statement from
such independent certified public accountants to the effect that based on an
examination of certain specified documents and records relating to the
servicing of the Servicer's loan portfolio conducted substantially in
compliance with the audit program for mortgages serviced for the United States
Department of Housing and Urban Development Mortgage Audit Standards, or the
Uniform Single Attestation Program for Mortgage Bankers or SAS 70 (the
"Applicable Accounting Standards"), such firm is of the opinion that such
servicing has been conducted in compliance with the Applicable Accounting
Standards except for (a) such exceptions as such firm shall believe to be
immaterial and (b) such other exceptions as shall be set forth in such
statement.
Section 7.06. Right to Examine Servicer Records. The Indenture
Trustee, the Residual Interest Certificateholder, the Issuer and each of their
respective agents shall have the right upon reasonable prior notice, during
normal business hours and as often as reasonably required, to examine, audit
and copy, at the expense of the Person making such examination, any and all of
the books, records or other information of the Servicer (including without
limitation any Subservicer to the extent provided in the related Subservicing
Agreement) whether held by the Servicer or by another on behalf of the
Servicer, which may be relevant to the performance or observance by the
Servicer of the terms, covenants or conditions of this Agreement. The Indenture
Trustee and the Issuer agree that any information obtained pursuant to the
terms of this Agreement shall be held confidential.
Section 7.07. Reports to the Indenture Trustee; Collection Account
Statements. If the Collection Account is not maintained with the Indenture
Trustee, then not later than 30 days after each Record Date, the Servicer shall
forward to the Indenture Trustee a statement, certified by a Servicing Officer,
setting forth the status of the Collection Account as of the close of business
on the preceding Record Date and showing, for the period covered by such
statement, the aggregate of deposits into the Collection Account for each
category of deposit specified in Section 5.01(b), the aggregate of withdrawals
from the Collection Account for each category of withdrawal specified in
Section 5.01(b) and (d) and the aggregate amount of permitted withdrawals not
made in the related Due Period in each case, for the related Due Period.
ARTICLE VIII
REPORTS TO BE PROVIDED
Section 8[RESERVED]
Section 8.02. Reports to the Commission.
(a) The Indenture Trustee shall, on behalf of the Trust, cause to be
filed with the Securities and Exchange Commission (the "Commission") any
periodic reports required to be filed under the provisions of the Exchange Act
and the rules and regulations of the Commission thereunder. Upon the request of
the Indenture Trustee, each of the Seller, the Servicer and the Depositor shall
cooperate with the Indenture Trustee in the preparation of any such report and
shall provide to the Indenture Trustee in a timely manner all such information
or documentation as is in the possession of such Person and that the Indenture
Trustee may reasonably request in connection with the performance of its duties
and obligations under this Section.
(b) The Indenture Trustee shall file with the Commission a Form 15
with respect to the Trust as soon as practicable following the first date on
which the conditions to filing thereof have been satisfied. Following the
filing of such Form 15, the Indenture Trustee will submit a certificate
addressed to an officer of the Depositor certifying that all filings pursuant
to this Section 8.02 have been made and shall attach a copy of acceptance slips
for such filings.
ARTICLE IX
THE SERVICER
Section 9.01 Indemnification; Third Party Claims. (a) The Servicer
agrees to indemnify and hold the Indenture Trustee, the Co-Owner Trustee, the
Owner Trustee, the Issuer, the Depositor and each Securityholder harmless from
and against any and all claims, losses, penalties, fines, forfeitures, legal
fees and related costs, judgments, and any other costs, fees and expenses that
the Indenture Trustee, the Co-Owner Trustee, the Owner Trustee, the Issuer, the
Depositor or any Securityholder may sustain directly resulting from the
negligence, willful misfeasance, or bad faith of the Servicer in the
performance of its duties hereunder. The Servicer shall not be liable or
responsible for any of the representations, covenants, warranties,
responsibilities, duties or liabilities of any prior Servicer. To the extent
the Servicer has actual knowledge, the Servicer shall promptly notify the
Indenture Trustee, the Issuer, and the Depositor if a claim is made by a third
party with respect to this Agreement. The Servicer shall assume the defense of
any such claim and advance all expenses in connection therewith, including
reasonable counsel fees, and promptly advance funds to pay, discharge and
satisfy any judgment or decree which may be entered against the Servicer, the
Indenture Trustee, the Issuer, the Depositor and/or any Securityholder in
respect of such claim related to the Servicer's negligence, willful misfeasance
or bad faith in the performance of its duties hereunder.
Notwithstanding anything in this Agreement, to the contrary, the
Servicer shall not be liable for the settlement of any claim by the Indenture
Trustee, the Issuer, the Depositor, any Securityholder or the Owner Trustee, as
the case may be entered into without the prior consent of the Servicer.
The Trust shall indemnify and hold harmless the Servicer against any
loss, liability or expense incurred in connection with any legal action
relating to this Agreement, other than any loss, liability or expense related
to any specific Home Loan or Home Loans and any loss, liability or expense
incurred by reason of the Servicer's willful misfeasance, bad faith or
negligence in the performance of its duties under this Agreement; provided,
however, amounts payable pursuant to this Section 9.01(a) shall be payable
solely from amounts available to be distributed pursuant to Section
5.02(a)(xiv) of the Trust Agreement.
(b) Except as otherwise set forth in Section 3.05 (d), the Seller
agrees to indemnify and hold the Indenture Trustee, the Owner Trustee, the
Issuer, the Servicer and each Securityholder harmless from and against any and
all claims, losses, penalties, fines, forfeitures, legal fees and related
costs, judgments, and any other costs, fees and expenses that the Indenture
Trustee, the Issuer, the Servicer or any Securityholder may sustain directly
resulting from the negligence, willful misfeasance, or bad faith of the Seller
in the performance of its duties hereunder or in compliance with the terms of
this Agreement. The Seller shall immediately notify the Indenture Trustee, the
Issuer, the Servicer and each Securityholder if a claim is made by a third
party with respect to this Agreement, and the Seller shall assume (with the
consent of the Indenture Trustee and the Issuer) the defense of any such claim
and advance all expenses in connection therewith, including reasonable counsel
fees, and promptly advance funds to pay, discharge and satisfy any judgment or
decree which may be entered against the Seller, the Servicer, the Indenture
Trustee, the Issuer and/or any Securityholder in respect of such claim.
(c) The obligations of the Servicer and the Seller under this Section
9.01 shall survive the termination of this Agreement.
Section 9.02. Merger or Consolidation of the Servicer. The Servicer
shall keep in full effect its existence, rights and franchises as a corporation,
and will obtain and preserve its qualification to do business as a foreign
corporation and maintain such other licenses and permits, in each jurisdiction
necessary to protect the validity and enforceability of this Agreement or any of
the Home Loans and to perform its duties under this Agreement.
Any Person into which the Servicer may be merged or consolidated, or
any corporation resulting from any merger, conversion or consolidation to which
the Servicer shall be a party, or any Person succeeding to the business of the
Servicer, shall be required to be an Eligible Servicer and shall be the
successor of the Servicer, as applicable 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 Servicer shall
send notice of any such merger, conversion, consolidation or succession to the
Indenture Trustee and the Issuer.
Section 9.03 Limitation on Liability of the Servicer and Others.
Neither the Servicer nor any of the directors or officers or employees or
agents of the Servicer shall be under any liability to the Trust or the
Securityholders for any action taken or for refraining from the taking of any
action by the Servicer in good faith pursuant to this Agreement, or for errors
in judgment; provided, however, that this provision shall not protect the
Servicer or any such Person against any liability which would otherwise be
imposed by reason of willful misfeasance, bad faith or negligence in the
performance of duties of the Servicer or by reason of reckless disregard of
obligations and duties of the Servicer hereunder. The Servicer and any
director, officer, employee or agent of the Servicer may rely on any document
of any kind which it in good faith reasonably believes to be genuine and to
have been adopted or signed by the proper authorities respecting any matters
arising hereunder. Subject to the terms of Section 9.01 herein, the Servicer
shall have no obligation to appear with respect to, prosecute or defend any
legal action which is not incidental to the Servicer's duty to service the Home
Loans in accordance with this Agreement.
Section 9.04. Servicer Not to Resign; Assignment. (a) The Servicer
shall not resign from the obligations and duties hereby imposed on it except by
mutual consent of the Servicer, the Depositor, the Indenture Trustee and the
Issuer, or upon the determination that the Servicer's duties hereunder are no
longer permissible under applicable law and such incapacity cannot be cured by
the Servicer. Any such determination permitting the resignation of the Servicer
shall be evidenced by a written opinion of counsel (who may be an employee of
the Servicer) to such effect delivered to the Indenture Trustee, the Issuer and
the Depositor, which opinion of counsel shall be in form and substance
acceptable to the Indenture Trustee and the Issuer. No such resignation shall
become effective until the Indenture Trustee or a successor Servicer has
assumed the Servicer's responsibilities and obligations hereunder in accordance
with Section 10.02.
(b) The Servicer shall not assign this Agreement or any of its
obligations, rights and duties hereunder without the prior written consent of
the Depositor, the Indenture Trustee and the Issuer; provided, however, the
Servicer may assign this Agreement without the prior written consent of the
Depositor, the Indenture Trustee and the Issuer, to any Person that (A)
services not less than $25,000,000 in aggregate outstanding principal amount of
loans similar in type to the Home Loans, (B) has a net worth of not less than
$2,500,000, (C) has a blanket fidelity bond and errors and omissions insurance
coverage satisfying the requirements set forth in Section 4.05 and (D) will not
cause any rating of any Class of the Securities in effect immediately prior to
such assignment to be qualified, downgraded or withdrawn, as evidenced by a
letter from each Rating Agency to such effect. Any such assignment to a
successor Servicer (other than the Indenture Trustee) shall be effective only
upon delivery to the Indenture Trustee and the Issuer of an agreement, duly
executed by the Servicer and such successor Servicer in a form reasonably
satisfactory to the Indenture Trustee and the Issuer, in which such successor
Servicer shall assume the due and punctual performance of each covenant and
condition to be performed or observed by the Servicer hereunder.
Section 9.05 Relationship of Servicer to the Issuer and the Indenture
Trustee. The relationship of the Servicer (and of any successor to the Servicer
as servicer under this Agreement) to the Issuer and the Indenture Trustee under
this Agreement is intended by the parties hereto to be that of an independent
contractor and not of a joint venturer, agent or partner of the Issuer or the
Indenture Trustee.
ARTICLE X
DEFAULT
Section 10.01 Servicer Events of Default. (a) In case one or more of
the following Events of Default by the Servicer shall occur and be continuing:
(i) any failure by the Servicer to deposit in the Collection
Account in accordance with Section 5.01(b) any payments in respect of
the Home Loans received by the Servicer no later than the second
Business Day following the day on which such payments were received.
(ii) any failure by the Servicer duly to observe or perform, in
any material respect, any other covenants, obligations or agreements
of the Servicer as set forth in this Agreement (other than a
covenant, obligation or agreement, or default in the observance of
which, that is elsewhere in this Section 10.01 specifically dealt
with), which failure 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 (a) to the Servicer by the
Indenture Trustee or the Issuer, or (b) to the Servicer, the
Indenture Trustee or the Issuer by any Securityholder; or
(iii) (A) the entry by a court or supervisory authority having
jurisdiction of a decree or order for relief in respect of the
Servicer in an involuntary case or proceeding under any applicable
federal or state bankruptcy, insolvency, reorganization, or other
similar law or (B) the appointment a custodian, receiver, liquidator,
assignee, trustee, sequestrator, or other similar official of such
member or of any substantial part of its property, or ordering the
winding up or liquidation of the Servicer's affairs, and the
continuance of any such decree or order for relief or any such other
decree or order unstayed and in effect for a period of 60 consecutive
days; or
(iv) the commencement by the Servicer of a voluntary case or
proceeding under any applicable federal or state bankruptcy,
insolvency, reorganization, or other similar law or of any other case
or proceeding to be adjudicated bankrupt or insolvent or the consent
by the Servicer to the entry of a decree or order for relief in
respect of itself in an involuntary case or proceeding under any
applicable federal or state bankruptcy, insolvency, reorganization,
or other similar law or to the commencement of any bankruptcy or
insolvency case or proceeding against the Servicer, or the filing by
the Servicer of a petition or answer or consent seeking
reorganization or relief under any applicable federal or state law,
or the consent by the Servicer to the filing of such petition or to
the appointment of or taking possession by a custodian, receiver,
liquidator, assignee, trustee, sequestrator, or similar official of
the Servicer or of any substantial part of its property, or the
making by the Servicer of an assignment for the benefit of creditors,
or the Servicer's failure to pay its debts generally as they become
due, or the taking of corporate action by the Servicer in furtherance
of any such action; or
(v) the Servicer shall admit in writing its inability to pay its
debts 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; or
(vi) if Advanta Mortgage Corp. USA is the Servicer, the
Cumulative Losses exceed: (i) with respect to the Due Period ending
March 30, 2000, 2.34% of the Pool Balance as of the Cut-Off Date;
(ii) with respect to the Due Period ending March 30, 2001, 6.66% of
the Pool Balance as of the Cut-Off Date; (iii) with respect to the
Due Period ending March 30, 2002, 9.90% of the Pool Balances of the
Cut-Off Date; (iv) with respect to the Due Period ending March 30,
2003, 12.37% of the Pool Balance as of the Cut-Off Date; (v) with
respect to the Due Period ending March 30, 2004, 14.26% of the Pool
Balance as of the Cut-Off Date or (vi) with respect to the Due Period
ending March 30, 2005, 15.70% of the Pool Balance as of the Cut-Off
Date; or
(vii) the consolidated net worth of the Servicer on a
consolidated basis is less than $10,000,000.
(b) then, and in each such case, so long as a Servicer Event of
Default shall not have been remedied, the Indenture Trustee may and, at the
direction of (i) the Majority Noteholders or (ii) the Issuer with the consent
of the Majority Noteholders, shall, by notice in writing to the Servicer and
each Rating Agency, in addition to whatever rights the Indenture Trustee may
have at law or equity to damages, including injunctive relief and specific
performance, terminate all of the rights and obligations of the Servicer under
this Agreement and in and to the Home Loans and the proceeds thereof, as
Servicer under this Agreement whether with respect to the Home Loans or
otherwise, and such rights and obligations shall, subject to Section 10.02,
pass to and be vested in a successor Servicer acceptable to the Rating
Agencies, or the Indenture Trustee if a successor Servicer cannot be retained
in a timely manner, and the successor Servicer, or Indenture Trustee, as
applicable, is hereby authorized and empowered to execute and deliver, on
behalf of the Servicer, as attorney-in-fact or otherwise, any and all documents
and other instruments and do or cause to be done all other acts or things
necessary or appropriate to effect the purposes of such notice of termination,
including, but not limited to, the transfer and endorsement or assignment of
the Home Loans and related documents. The Servicer agrees to cooperate with the
successor Servicer in effecting the termination of the Servicer's
responsibilities and rights hereunder, including, without limitation, the
transfer to the successor Servicer for administration by it of all amounts
which shall at the time be credited by the Servicer to the Collection Account
or thereafter received with respect to the Home Loans.
Section 10.02 Indenture Trustee to Act; Appointment of Successor. On
and after the date the Servicer receives a notice of termination pursuant to
Section 10.01, or the Indenture Trustee receives the resignation of the
Servicer evidenced by an opinion of counsel or accompanied by the consents
required by Section 9.04, or the Servicer is removed as Servicer pursuant to
this Article X, then the Indenture Trustee shall appoint a successor Servicer,
which is an Eligible Servicer, and acceptable to the Rating Agencies to be the
successor in all respects to the Servicer in its capacity as Servicer under
this Agreement and the transactions set forth or provided for herein and shall
be subject to all the responsibilities, duties and liabilities relating thereto
placed on the Servicer by the terms and provisions hereof; provided, however,
that the successor Servicer shall not be liable for any actions of any Servicer
prior to it; provided further, however, that if a successor Servicer cannot be
retained in a timely manner, the Indenture Trustee shall act as successor
Servicer and shall assume the responsibilities of the Servicer hereunder. In
the event that the Indenture Trustee assumed the responsibilities of Servicer
pursuant to this Section 10.02, the Indenture Trustee will become licensed,
qualified and in good standing in each Mortgaged Property State the laws of
which require licensing or qualification, in order to perform its obligations
as Servicer hereunder or, alternatively, shall retain an agent who is so
licensed, qualified and in good standing in any such Mortgaged Property State.
The successor Servicer shall be obligated to make Servicing Advances hereunder.
As compensation therefor, the successor Servicer appointed pursuant to this
Section 10.02, shall be entitled to all Servicing Compensation as provided in
this Agreement. The Servicer shall not be entitled to any termination fee if it
is terminated pursuant to Section 10.01, but shall be entitled to any accrued
and unpaid Servicing Fee to the date of termination. Any collections received
by the prior Servicer after its removal or resignation shall be endorsed by it
to the Indenture Trustee and remitted directly to the Indenture Trustee or, at
the direction of the Indenture Trustee, to the successor Servicer.
Notwithstanding anything to the contrary herein, the Servicer shall
remain liable for all liabilities incurred by its as Servicer hereunder prior
to the time that any resignation pursuant to Section 9.04 or termination under
Section 10.01 becomes effective, including its indemnification obligations
pursuant to Section 9.01 hereof.
The compensation of any successor Servicer (including, without
limitation, the Indenture Trustee) so appointed shall be no greater than the
Servicing Fee, together with other Servicing Compensation provided for herein.
In the event the Indenture Trustee is required to solicit bids to appoint a
successor Servicer, the Indenture Trustee shall solicit, by public
announcement, bids from housing and home finance institutions, banks and
mortgage servicing institutions meeting the qualifications set forth in Section
9.04(b) above. Such public announcement shall specify that the successor
Servicer shall be entitled up to the full amount of the Servicing Fee and
Servicing Compensation provided for herein. Within thirty days after any such
public announcement, the Indenture Trustee shall negotiate and effect the sale,
transfer and assignment of the servicing rights and responsibilities hereunder
to the qualified party submitting the highest qualifying bid. The Indenture
Trustee shall deduct from any sum received by the Indenture Trustee from the
successor Servicer in respect of such sale, transfer and assignment all costs
and expenses of any public announcement and of any sale, transfer and
assignment of the servicing rights and responsibilities hereunder and the
amount of any unreimbursed Servicing Advances made by the Indenture Trustee.
After such deductions, the remainder of such sum shall be paid by the Indenture
Trustee to the Servicer at the time of such sale, transfer and assignment to
the successor Servicer.
The Indenture Trustee, the Issuer, any Custodian, the Servicer and
any such successor Servicer shall take such action, consistent with this
Agreement, as shall be necessary to effectuate any such succession of a
successor Servicer. The Servicer agrees to cooperate with the Indenture Trustee
and any successor Servicer in effecting the termination of the Servicer's
servicing responsibilities and rights hereunder and shall promptly provide the
Indenture Trustee or such successor Servicer, as applicable, all documents and
records reasonably requested by the applicable party to enable it to assume the
Servicer's functions hereunder and shall promptly also transfer to the
Indenture Trustee or such successor Servicer, as applicable, all amounts which
then have been or should have been deposited in the Collection Account by the
Servicer or which are thereafter received with respect to the Home Loans.
Neither the Indenture Trustee nor any other successor Servicer shall be held
liable by reason of any failure to make, or any delay in making, any payment
hereunder or any portion thereof caused by (i) the failure of the prior
Servicer to deliver, or any delay in delivering, cash, documents or records to
it, or (ii) restrictions relating to the prior Servicer imposed by any
regulatory authority having jurisdiction over the prior Servicer. Upon an
appointment of a successor Servicer hereunder, written notice of such
appointment shall be provided by the Indenture Trustee to each Securityholder,
the Issuer and the Depositor.
Pending appointment of a successor Servicer hereunder, the Indenture
Trustee shall act as Servicer hereunder as hereinabove provided. In connection
with such appointment and assumption, the Indenture Trustee may make such
arrangements for the compensation of such successor Servicer as it and such
successor Servicer shall agree; provided, however, that no such compensation
shall be in excess of the Servicing Compensation in the form of assumption
fees, late payment charges or otherwise as provided in this Agreement.
Section 10.03 Waiver of Defaults. The Majority Securityholders may,
on behalf of all Securityholders, waive any events permitting removal of the
Servicer as servicer pursuant to this Article X, provided, however, that the
Majority Securityholders may not waive a default in making a required payment
or distribution on a Security without the consent of the related
Securityholder. Upon any waiver of a past default, such default shall cease to
exist, and any Event of Default arising therefrom shall be deemed to have been
remedied for every purpose of this Agreement. No such waiver shall extend to
any subsequent or other default or impair any right consequent thereto except
to the extent expressly so waived.
Section 10.04. Accounting Upon Termination of Servicer. Upon
termination of the Servicer under this Article X, the Servicer shall, at its
own expense:
(a) deliver to its successor or, if none shall yet have been
appointed, to the Indenture Trustee, the funds in any Collection Account;
(b) deliver to its successor or, if none shall yet have been
appointed, to the Indenture Trustee, all of the Servicer's files, documents and
statements relating to the Home Loans held by it hereunder and a Home Loan
portfolio computer tape;
(c) deliver to its successor or, if none shall yet have been
appointed, to the Indenture Trustee and the Issuer a full accounting of all
funds, including a statement showing the Monthly Payments collected by it and a
statement of monies held in trust by it for payments or charges with respect to
the Home Loans; and
(d) execute and deliver such instruments and perform all acts
reasonably requested in order to effect the orderly and efficient transfer of
servicing of the Home Loans to its successor and to more fully and definitively
vest in such successor all rights, powers, duties, responsibilities,
obligations and liabilities of the Servicer under this Agreement.
ARTICLE XI
TERMINATION
Section 11.01 Termination. (a) This Agreement shall terminate upon
any of the following events: (i) the later of (a) the satisfaction and
discharge of the Indenture pursuant to Section 4.01 of the Indenture and Notice
to the Indenture Trustee of such discharge and (b) the disposition of all funds
with respect to the last Home Loan and the remittance of all funds due
hereunder; (ii) payment of all amounts due and payable to the Securityholders,
the Servicer, the Indenture Trustee, the Owner Trustee, the Co-Owner Trustee
and the Issuer pursuant to this Agreement and the Indenture and written notice
to the Indenture Trustee from the Issuer of the Issuer's intent to terminate
this Agreement; or (iii) mutual written consent of the Servicer, the Issuer,
the Depositor and all Securityholders in writing.
(b) Notice of termination of this Agreement pursuant to Section
11.01(a)(i) shall be sent by the Indenture Trustee to the Securityholders in
accordance with Section 2.6(b) of the Indenture. Notice of termination of this
Agreement pursuant to Section 11.01(a)(ii) or (iii) shall be mailed or
transmitted by facsimile by the Indenture Trustee to the Securityholders on the
Business Day immediately following the day on which the Indenture Trustee
receives notice of such termination, and such notice to the Securityholders
shall state that the Securityholders are to surrender their respective
Securities for cancellation and shall specify the place where such Securities
are to be surrendered.
Section 11.02 Optional Termination by the Residual Interest
Certificateholder or the Servicer.
(a) [RESERVED].
(b) The Residual Interest Certificateholder or the Servicer, if the
Residual Interest Certificateholder does not exercise its option within 30
days, may, at its option, effect an early redemption of the Notes and purchase
of the Certificates on any Payment Date on or after which the Pool Principal
Balance declines to 5% or less of the Original Pool Principal Balance by
releasing from the Indenture the Home Loans for the Termination Price. The
Residual Interest Certificateholder or the Servicer shall effect such early
redemption or purchase by providing notice thereof to the Indenture Trustee and
Owner Trustee and by paying into the Collection Account in the manner described
below an amount equal to the Termination Price.
(c) Any early redemption and purchase by the Residual Interest
Certificateholder or the Servicer pursuant to Section 11.02(b) shall be
accomplished by remitting the Termination Price to the Indenture Trustee on the
Determination Date immediately preceding the Payment Date on which the early
redemption or purchase is to occur. The amount so remitted and any other
amounts then on deposit in the Collection Account (other than any amounts not
required to have been deposited therein pursuant to Section 5.01(b)(1) and any
amounts withdrawable therefrom by the Indenture Trustee pursuant to Section
5.01(d)) shall be available to the Indenture Trustee pursuant to Section
5.01(b)(2) for payment or distribution to Securityholders on the final Payment
Date; provided, that the Certificateholders may accept a distribution of the
Home Loans in lieu of cash. Any amounts received with respect to the Home Loans
and Foreclosure Properties subsequent to the Due Period immediately preceding
such final Payment Date shall belong to the Residual Interest Certificateholder
or the Servicer free of the lien of the Indenture. For purposes of calculating
the payments and distributions to be made on the final Payment Date, amounts
transferred to the Note Payment Account and the Certificate Distribution
Account immediately preceding such final Payment Date shall in all cases be
deemed to have been received during the related Due Period, and amounts so
transferred shall be applied pursuant to Section 5.01(d). Section 1Notice of
Termination. Notice of termination of this Agreement or of early redemption and
purchase of the Securities shall be sent (i) by the Indenture Trustee to the
Noteholders in accordance with Section 10.02 of the Indenture and (ii) by the
Owner Trustee to the Certificateholder in accordance with Section 9.01(d) of
the Trust Agreement.
ARTICLE XII
MISCELLANEOUS PROVISIONS
Section 12.01 Acts of Securityholders. Except as otherwise
specifically provided herein, whenever Securityholder action, consent or
approval is required under this Agreement, such action, consent or approval
shall be deemed to have been taken or given on behalf of, and shall be binding
upon, all Securityholders if the Majority Securityholders agree to take such
action or give such consent or approval.
Section 12.02. Amendment. (a) This Agreement may be amended from time
to time by the Issuer, the Seller, the Depositor, the Servicer, and the
Indenture Trustee by written agreement with notice thereof to the
Securityholders, without the consent of any of the Securityholders, to cure any
error or ambiguity, to correct or supplement any provisions hereof which may be
defective or inconsistent with any other provisions hereof, to add any other
provisions with respect to matters or questions arising under this Agreement;
provided, however, that such action will not adversely affect in any material
respect the interests of the Securityholders. An amendment described above
shall be deemed not to adversely affect in any material respect the interests
of the Securityholders if either (i) an opinion of counsel is obtained to such
effect, or (ii) the party requesting the amendment obtains a letter from each
of the Rating Agencies confirming that the amendment, if made, would not result
in the downgrading or withdrawal of the rating then assigned by the respective
Rating Agency to any Class of Securities then outstanding.
(b) This Agreement may also be amended from time to time by the
Issuer, the Seller, the Depositor, the Servicer, and the Indenture Trustee by
written agreement, with the prior written consent of the Majority
Securityholders, for the purpose of adding any provisions to or changing in any
manner or eliminating any of the provisions of this Agreement, or of modifying
in any manner the rights of the Securityholders; provided, however, that no
such amendment shall (i) reduce or increase in any manner the amount of, or
delay or accelerate the timing of, collections of payments on Home Loans or
payments or distributions which are required to be made on any Security,
without the consent of the holders of 100% of each Class of Securities affected
thereby, (ii) adversely affect in any material respect the interests of the
holders of any Class of Securities in any manner other than as described in (i)
, without the consent of the holders of 100% of such Class of Securities, or
(iii) reduce the percentage of any Class of Securities, the holders of which
are required to consent to any such amendment, without the consent of the
holders of 100% of such Class of Securities.
(c) It shall not be necessary for the consent of Securityholders
under this Section to approve the particular form of any proposed amendment,
but it shall be sufficient if such consent shall approve the substance thereof.
(d) Prior to the execution of any amendment to this Agreement, the
Issuer shall be entitled to receive and rely upon an opinion of counsel stating
that the execution of such amendment is authorized or permitted by this
Agreement. The Issuer and the Indenture Trustee may, but shall not be obligated
to, enter into any such amendment which affects such Person's own rights, duties
or immunities under this Agreement.
Section 12.03 Recordation of Agreement. To the extent permitted by
applicable law, this Agreement, or a memorandum thereof if permitted under
applicable law, is subject to recordation in all appropriate public offices for
real property records in all of the counties or other comparable jurisdictions
in which any or all of the Mortgaged Properties are situated, and in any other
appropriate public recording office or elsewhere, such recordation to be
effected by the Servicer at the Securityholders' expense on direction of the
Majority Securityholders, but only when accompanied by an opinion of counsel to
the effect that such recordation materially and beneficially affects the
interests of the Securityholders or is necessary for the administration or
servicing of the Home Loans.
Section 12.04. Duration of Agreement. This Agreement shall continue
in existence and effect until terminated as herein provided.
Section 12.05. Governing Law. THIS 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, AND, TO THE EXTENT PERMITTED BY LAW, WITHOUT GIVING EFFECT TO
PRINCIPLES OF CONFLICTS OF LAW.
Section 12.06. Notices. All demands, notices and communications
hereunder shall be in writing and shall be deemed to have been duly given if
personally delivered at or mailed by overnight mail, certified mail or
registered mail, postage prepaid, to: (i) in the case of the Seller, 000 Xxxxxx
Xxxxxx, Xxxxxxxxxxx, Xxxx Xxxxxxxx 00000, Attention: Chief Financial Officer,
or such other addresses as may hereafter be furnished to the Securityholders
and the other parties hereto in writing by the Seller, (ii) in the case of the
Issuer, United National Home Loan Owner Trust 1999-1, c/o Wilmington Trust
Company, Xxxxxx Square North, 0000 Xxxxx Xxxxxx Xxxxxx, Xxxxxxxxxx, Xxxxxxxx
00000, Attention: Corporate Trust Administration, or such other address as may
hereafter be furnished to the Securityholders and the other parties hereto,
(iii) in the case of the Depositor, Bear Xxxxxxx Asset Backed Securities, Inc.,
000 Xxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000, Attention: Asset Backed Securities
Group, or such other address as may hereafter be furnished to the
Securityholders and the other parties hereto in writing by the Depositor, (iv)
in case of the Servicer, 00000 Xxxxxx Xxxxxxxx Xxxx, Xxx Xxxxx, XX 00000,
Attention: Senior Vice President, Loan Servicing, or such other address as may
hereafter be furnished to the Securityholders and the other parties hereto in
writing by the Servicer, (v) in the case of the Indenture Trustee or Co-Owner
Trustee, U.S. Bank National Association, 000 Xxxx Xxxxx Xxxxxx, Xx. Xxxx,
Xxxxxxxxx 00000, Attention: Structured Finance, United National Bank Series
1999-1, and (vi) in the case of the Securityholders, as set forth in the
applicable Note Register and Certificate Register. Any such notices shall be
deemed to be effective with respect to any party hereto upon the receipt of
such notice by such party, provided, however, that a facsimile or other form of
electronic transmission shall be deemed to be received by the parties referred
to in (i) to (vi) above when transmitted so long as the transmitting machine
has provided an electronic confirmation of such transmission and such facsimile
or other form of electronic transmission is confirmed with a printed paper copy
thereof by mail or overnight courier service; and provided, further, that any
delivery of computer readable format hereunder shall be accompanied or
confirmed by the delivery of a printed paper copy thereof. Notices to the
Securityholders shall be effective upon mailing or personal delivery. Each
party may, by notice, designate any further or different address to which
subsequent notices, certificates or other communications to such party shall be
sent.
Section 12.07. Severability of Provisions. If any one or more of the
covenants, agreements, provisions or terms of this Agreement shall be held
invalid for any reason whatsoever, then such covenants, agreements, provisions
or terms shall be deemed severable from the remaining covenants, agreements,
provisions or terms of this Agreement and shall in no way affect the validity
or enforceability of the other covenants, agreements, provisions or terms of
this Agreement.
Section 12.08. No Partnership. Nothing herein contained shall be
deemed or construed to create any partnership or joint venture between the
parties hereto and the services of the Servicer shall be rendered as an
independent contractor.
Section 12.09. Counterparts. This Agreement may be executed in one or
more counterparts and by the different parties hereto on separate counterparts,
each of which, when so executed, shall be deemed to be an original; such
counterparts, together, shall constitute one and the same Agreement.
Section 12.10. Successors and Assigns. This Agreement shall inure to
the benefit of and be binding upon the Servicer, the Depositor, the Seller, the
Issuer and the Securityholders and their respective successors and permitted
assigns.
Section 12.11. Headings. The headings of the various sections of this
Agreement have been inserted for convenience of reference only and shall not be
deemed to be part of this Agreement.
Section 12.12. Actions of Securityholders. (a) Any request, demand,
authorization, direction, notice, consent, waiver or other action provided by
this Agreement to be given or taken by Securityholders may be embodied in and
evidenced by one or more instruments of substantially similar tenor signed by
such Securityholders in person or by agent duly appointed in writing; and
except as herein otherwise expressly provided, such action shall become
effective when such instrument or instruments are delivered to the Indenture
Trustee, the Seller, the Servicer or the Issuer, as applicable. Proof of
execution of any such instrument or of a writing appointing any such agent
shall be sufficient for any purpose of this Agreement and conclusive in favor
of the Indenture Trustee, the Seller, the Servicer and the Issuer if made in
the manner provided in this Section.
(b) The fact and date of the execution by any Securityholder of any
such instrument or writing may be proved in any reasonable manner which the
Seller, the Servicer or the Issuer deems sufficient.
(c) Any request, demand, authorization, direction, notice, consent,
waiver or other act by a Securityholder shall bind every holder of every
Security issued upon the registration of transfer thereof or in exchange
therefor or in lieu thereof, in respect of anything done, or omitted to be
done, by the Indenture Trustee, the Seller, the Servicer or the Issuer in
reliance thereon, whether or not notation of such action is made upon such
Security.
(d) The Seller, the Servicer or the Issuer may require additional
proof of any matter referred to in this Section 12.12 as it shall deem
necessary.
Section 12.13. Reports to Rating Agencies. (a) The Indenture Trustee
shall provide to each Rating Agency copies of statements, reports and notices,
to the extent received by it from the Servicer, the Seller or the Issuer
hereunder, as follows:
(i) copies of amendments to this Agreement;
(ii) notice of any substitution or repurchase of any Home Loans;
(iii) notice of any termination, replacement, succession, merger
or consolidation of either the Servicer, any Custodian or the Issuer;
(iv) notice of final payment on the Notes and the final
distribution with respect to the Certificates;
(v) notice of the occurrence of any Servicer Event of Default;
(vi) copies of the annual independent auditor's report delivered
pursuant to Section 7.05, and copies of any compliance reports
delivered by the Servicer hereunder including Section 7.04; and
(vii) copies of any Monthly Statement pursuant to Section 6.01,
and
(b) With respect to the requirement of the Indenture Trustee to
provide statements, reports and notices to the Rating Agencies such statements,
reports and notices shall be delivered to the Rating Agencies at the following
addresses: (i) if to Xxxxx'x, 00 Xxxxxx Xxxxxx, 0xx Xxxxx, Xxx Xxxx, Xxx Xxxx
00000, (ii) if to Fitch, Xxx Xxxxx Xxxxxx Xxxxx, Xxx Xxxx, Xxx Xxxx 00000,
(iii) if to S&P, 00 Xxxxxxxx, 00XX Xxxxx, Xxx Xxxx, Xxx Xxxx 00000-0000,
Attention: Asset-Backed Monitoring Department.
Section 12.14. Inconsistencies Among Basic Documents.
In the event certain provisions of a Basic Document conflict with the
provisions of this Sale and Servicing Agreement, the parties hereto agree that
the provisions of this Sale and Servicing Agreement shall be controlling.
Section 12.15 No Petition. Each of the Indenture Trustee, the Seller
and the Servicer by entering into this Agreement, hereby covenants and agrees
that it will not at any time institute against the Issuer, or join in any
institution against the Issuer of, any bankruptcy, reorganization, arrangement,
insolvency or liquidation proceedings, or other proceedings under any United
States federal or state bankruptcy or similar law in connection with any
obligations relating to the Securities or any of the Basic Documents.
Section 12.16 Beneficiaries. The Owner Trustee is an intended third
party beneficiary of this Agreement.
Section 12.17. Limitation of Liability. It is expressly understood
and agreed by the parties hereto that (a) this Agreement is executed and
delivered by Wilmington Trust Company, not individually or personally but
solely as Owner Trustee of the Trust, in the exercise of the powers and
authority conferred and vested in it, (b) each of the representations,
undertakings and agreements herein made on the part of the Trust is made and
intended not as personal representations, undertakings and agreements by
Wilmington Trust Company but is made and intended for the purpose for binding
only the Trust, (c) nothing herein contained shall be construed as creating any
liability on Wilmington Trust Company, individually or personally, to perform
any covenant either expressed or implied contained herein, all such liability,
if any, being expressly waived by the parties hereto and by any Person claiming
by, through or under the parties hereto and (d) under no circumstances shall
Wilmington Trust Company be personally liable for the payment of any
indebtedness or expenses of the Trust or be liable for the breach or failure of
any obligation, representation, warranty or covenant made or undertaken by the
Trust under this Agreement or any other related documents.
Section 12.18. Seller Obligations. The Seller shall indemnify and pay
the fees and expenses of the Owner Trustee pursuant to Sections 8.01 and 8.02
of the Trust Agreement in the event the Seller is no longer the Residual
Interest Certificateholder.
IN WITNESS WHEREOF, the Servicer, the Depositor, the Issuer and the
Seller have caused their names to be signed by their respective officers
thereunto duly authorized, as of the day and year first above written, to this
Sale and Servicing Agreement.
UNITED NATIONAL HOME LOAN OWNER TRUST 1999-1,
By: Wilmington Trust Company, not in its
individual capacity but solely as Owner Trustee
By: /s/ Xxxxx X. Xxxxx
-----------------------------------------------------
Name: Xxxxx X. Xxxxx
Title: Vice President
UNITED NATIONAL BANK, as Seller
By: /s/ Xxx X. Xxxxxx
-----------------------------------------------------
Name: Xxx X. Xxxxxx
Title: Executive Vice President
BEAR XXXXXXX ASSET BACKED SECURITIES, INC.,
as Depositor
By: /s/ Xxxxxxx Xxxxxxx
----------------------------------------------------
Name: Xxxxxxx Xxxxxxx
Title: Managing Director
ADVANTA MORTGAGE CORP. USA, as Servicer
By: /s/ Xxxxxxx X. Xxxxxxx
----------------------------------------------------
Name: Xxxxxxx X. Xxxxxxx
Title: Senior Vice President
U.S. BANK NATIONAL ASSOCIATION, as Indenture Trustee,
Co-Owner Trustee and Custodian
By: /s/ Xxxxx X. Xxxxxxxxx
----------------------------------------------------
Name: Xxxxx X. Xxxxxxxxx
Title: Assistant vice President
THE STATE OF CALIFORNIA)
)
COUNTY OF SAN DIEGO )
BEFORE ME, the undersigned authority, a Notary Public, on this day
personally appeared Xxxxxxx Xxxxxxx, known to me to be the person and officer
whose name subscribed to the foregoing instrument and acknowledged to me that
the same was the act of the said United National Bank, a national banking
association, and that he executed the same as the act of such corporation for
the purposes and consideration therein expressed, and in the capacity therein
stated.
GIVEN UNDER MY HAND AND SEAL OF OFFICE, this the 24th day of March,
1999.
/s/ Xxxxx Xxxxx
------------------------------------
Notary Public, State of California
My commission expires: September 27, 0000
XXX XXXXX XX XXXX XXXXXXXX )
)
COUNTY OF OHIO )
BEFORE ME, the undersigned authority, a Notary Public, on this day
personally appeared Xxx X. Xxxxxx, known to me to be the person and officer
whose name subscribed to the foregoing instrument and acknowledged to me that
the same was the act of the said Advanta Mortgage Corp., USA, a Delaware
corporation and that he executed the same as the act of such corporation for
the purposes and consideration therein expressed, and in the capacity therein
stated.
GIVEN UNDER MY HAND AND SEAL OF OFFICE, this the 24th day of March,
1999.
/s/ Xxxxx X. Xxxxx
-------------------------------------
Notary Public, State of West Virginia
My commission expires: February 2, 0000
XXX XXXXX XX XXXXXXXX )
)
COUNTY OF NEW CASTLE )
BEFORE ME, the undersigned authority, a Notary Public, on this day
personally appeared Xxxxx X. Xxxxx, known to me to be the person and officer
whose name subscribed to the foregoing instrument and acknowledged to me that
the same was the act of the said United National Home Loan Owner Trust 1999-1,
as Issuer, and that he executed the same as the act of such association for
the purposes and consideration therein expressed, and in the capacity therein
stated.
GIVEN UNDER MY HAND AND SEAL OF OFFICE, this the 24th day of March,
1999.
/s/ Xxxxx X. Xxxxxxxx
-------------------------------------
Notary Public, State of Delaware
My commission expires: February 2, 2001
Xxxxx X. Xxxxxxxx
------------------------------------
(printed name)
THE STATE OF MINNESOTA )
)
COUNTY OF XXXXXX )
BEFORE ME, the undersigned authority, a Notary Public, on this day
personally appeared Xxx X. Xxxxxx, known to me to be the person and officer
whose name subscribed to the foregoing instrument and acknowledged to me that
the same was the act of the said U.S. Bank National Association, as Indenture
Trustee, and that she executed the same as the act of such association for the
purposes and consideration therein expressed, and in the capacity therein
stated.
GIVEN UNDER MY HAND AND SEAL OF OFFICE, this the 24th day of March,
1999.
___________________________________
Notary Public, State of Minnesota
My commission expires:
________________________. (printed name)
EXHIBIT A
Home Loan Schedule
EXHIBIT B
Form of Monthly Statement
EXHIBIT C
FORM OF REQUEST FOR RELEASE
[DATE]
U.S. Bank National Association
As Custodian
000 Xxxx Xxxxx Xxxxxx
Xx. Xxxx, Xxxxxxxxx 00000
Re: United National Home Loan Owner Trust 1999-1
Asset-Backed Notes, Series 1999-1
Ladies and Gentlemen:
In connection with the administration of the Home Loans held by you
as Custodian under the Sale and Servicing Agreement dated as of March 1, 1999,
among the Issuer, as issuer, United National Bank, as seller, Bear Xxxxxxx
Asset Backed Securities, Inc., as depositor, Advanta Mortgage Corp. USA, as
servicer and U.S. Bank National Association, as indenture trustee, co-owner
trustee and custodian (the "Agreement"), we hereby request a release of the
Home Loan File held by you as Custodian with respect to the following described
Home Loan for the reason indicated below.
Loan No.: __________________
Reason for requesting file:
___________ a. Home Loan paid in full. (The [Servicer]
[Subservicer] hereby certifies that all amounts
received in connection with the payment in full of
the Home Loan which are required to be deposited in
the Collection Account pursuant to Section 5.01 of
the Agreement have been so deposited).
___________ b. Repurchase of Home Loan. (The [Servicer] [
Subservicer] hereby certifies that the required
amount has been deposited in the Collection Account
pursuant to the Agreement.)
___________ c. The Home Loan is being foreclosed.
___________ d. The Home Loan is being re-financed by another
depository institution. ([Master Servicer]
[Subservicer] hereby certifies that all amounts
received in connection with the payment in full of
the Home Loan which are required to be deposited in
the Collection Account pursuant to Section 5.01 of
the Agreement have been so deposited).
___________ e. Other (Describe).
The undersigned acknowledges that the above Home Loan File will be
held by the undersigned in accordance with the provisions of the Agreement and
will promptly be returned to the Custodian when the need therefor by the
[Servicer] [Subservicer] no longer exists unless the Home Loan has been
liquidated.
Capitalized terms used herein shall have the meanings ascribed to
them in the Agreement.
[ADVANTA MORTGAGE CORP.]
By:___________________________________
Name:
Title: Servicing Officer
EXHIBIT D
[RESERVED]
EXHIBIT E
Form of Lost Note Affidavit
