SERVICING
AGREEMENT
by
and
between
FNBN-CMLCON
I
LLC
and
PRIMARY
RESIDENTIAL
MORTGAGE,
INC.
Dated
as
of
February
20, 2009
FNB
COMMCONSTR SERV A
G.
DOC
EXECUTION VERSION
12349237.5
TABLE OF
CONTENTS
ARTICLE I DEFINITIONS AND CONSTRUCTION .................................................................. 1
Section
1.01
Definitions................................................................................................... 1
ARTICLE
II
SERVICING OBLIGATIONS
OF
THE SERVICER .............................................
10
Section
2.01
Appointment and Acceptance as Servicer ................................................
10
.......................................................................
10
............................................................................................
10
....................................................................................
11
...................................................................................
11
.............................................................................................
12
......................................................................................
13
.........................................................................................
13
Section 2.02 Limited Power
of
Attorney
Section 2.03 Servicing Fee
Section 2.04 Servicing Standard
Section 2.05 Collection Account
Section 2.06 LIP Account.
Section 2.07 Escrow Accounts
Section 2.08 Other Accounts
Section 2.09
Section 2.10 Expenses ...................................................................................................
14
....................................................................
14
Section
2.11
Insured or Guaranteed Loans
Maintenance oflnsurance Policies; Errors and Omissions and Fidelity
Coverage ...................................................................................................
13
ARTICLE III LOAN DEFAULTS; ACQUISITION
OF
COLLATERAL ..................................
l4
Section
3.01
Delinquency Control .................................................................................
14
Section 3.02 Discretion
of
the Company in Responding
to
Defaults ofBorrower. .......
14
Section 3.03
Acquisition
of
Acquired Collateral.. .........................................................
15
ARTICLE IV SUBSERVICING ..................................................................................................
15
Section 4.01 Retention
of
Subservicer...........................................................................
15
....................................................
15
...............................................................
17
...................................................................
17
...................................................................
17
Section 4.02 Subservicing Agreement Requirements
Section 4.03 Servicer Liable for Subservicers
Section 4.04 Company Approval Required
Section 4.05 Regulation
AB
Requirements
ARTICLE V REPRESENTATIONS, WARRANTIES AND COVENANTS
OF
THE
SERVICER ...................................................................................................................................
18
Section
5.01
Representations and Warranties ................................................................
18
....................
19
........................................................................................................ 20
....................................................................................................
21
..........................
21
.......................................................................................
21
Section 5.02 Reporting, Books and Records and Compliance Covenants
Section 5.03 Audits
Section 5.04 No Liens
Section 5.05 Servicer's Duty
to
Advise; Delivery
of
Certain Notices
Section 5.06 Notice
of
Breach
ARTICLE VI PARTICIPANT CONSENT ..................................................................................
21
Section
6.01
Actions Requiring Participant Consent. ....................................................
21
Section 6.02
Amendments, Modification and Waivers .................................................
22
FNB
COMMCONSlR
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G.
DOC
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12349237.5
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ARTICLE VII DEFAULTS; TERMINATION; TERMINATION WITHOUT CAUSE ............ 22
Section
7.01
Defaults ..................................................................................................... 22
Section 7.02
Termination with Cause ............................................................................ 24
Section 7.03
Termination without Cause ....................................................................... 24
Section 7.04 Effective Date ...........................................................................................
25
Section 7.05
Accounting ................................................................................................
25
ARTICLE VIII INDEPENDENCE
OF
PARTIES; INDEMNIFICATION .................................
25
Section
8.01
Independence
of
Parties ............................................................................
25
Section 8.02
Indemnification .........................................................................................
26
Seetion 8.03
Procedure for Indemnification .................................................................. 26
ARTICLE IX NOTICES ...............................................................................................................
27
ARTICLE X GOVERNING LAW; JURISDICTION ..................................................................
28
Section
10.01
Governing Law .........................................................................................
28
Section 10.02 Jurisdiction; Venue and Service ................................................................
28
Section 10.03 Waiver
of
Jury Trial.. ................................................................................ 29
ARTICLE XI MISCELLANEOUS .............................................................................................. 29
Section
11.01
No Assigmnent by Servicer; No Transfer
of
Ownership Interests in
Servicing Rights ........................................................................................ 29
Section 11.02 Legal Fees ................................................................................................. 29
Section 11.03 Entire Agreement.. .................................................................................... 29
Section 11.04 Counterparts; Facsimile Signatures ..........................................................
29
Section 11.05 Headings ................................................................................................... 30
Section 11.06 Construction .............................................................................................. 30
Section 11.07 Compliance with Law ...............................................................................
31
Section 11.08 Severability ...............................................................................................
31
Section 11.09 Third Party Beneficiary .............................................................................
31
Section 11.10 Protection
of
Confidential Information .....................................................
31
Section
11.11
Time
of
Essence........................................................................................
31
Section 11.12 No Presumption ........................................................................................
32
Section 11.13 No Right
of
Setoff..................................................................................... 32
Section 11.14 Release
of
Participant and Prior Servicers ................................................ 32
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FNB
COMMCONSTR
SERV
A
G.
DOC
EXECUTION
VERSION
12349237.5
Exhibits
Exhibit A
Schedules
Schedule I
Schedule 2
Schedule 3
Schedule 4
Schedule 5
SCHEDULES AND EXHIBITS
Loan Schedule
Fee Schedule
Servicing Obligations
Reimbursement
of
Servicer Advances
Form
of
Electronic Report
on
the Loans and Collateral
Termination Without Cause
FNB COMMCONSTR SERV AG.DOC EXECUTION VERSION
12349237.5
SERVICING
AGREEMENT
THIS SERVICING AGREEMENT (as the same shall be amended
or
supplemented, this
"Agreement") is made and entered into
as
of
the
20'h
day
of
February,
2009
(the "Effective
Date"),
by
and between FNBN-CMLCON I LLC, a Delaware limited liability company
(including its successors and assigns, the "Company"), and Primary Residential Mortgage, Inc.,
a Nevada corporation (including those
of
its successors and assigns as are expressly permitted
pursuant to this Agreement, the "Servicer").
RECITALS
WHEREAS, the Company owns the Loans (as defined below) described on the Loan
Schedule attached hereto as Exhibit A (the
"Loan
Schedule"); and
WHEREAS, the Company is obligated
to
service and manage the Loans and related
Collateral (as defined below) pursuant to that certain Participation and Servicing Agreement (the
"Participation
Agreement") dated as
of
the
20'h
day
of
February,
2009,
by
and between the
Company and the Federal Deposit Insurance Corporation ("FDIC"),
as
receiver ("Receiver") for
First National Bank
of
Nevada, including its successors and assigns, (the
"Participant");
and
WHEREAS, the Company and the Servicer desire that the Servicer service and
administer the Loans and Collateral on behalf
of
the Company in a manner that is, at all times,
consistent with the requirements
of
this Agreement;
NOW, THEREFORE, in consideration
of
the foregoing and the mutual promises and
agreements hereinafter contained, and for other good and valuable consideration the receipt and
sufficiency
of
which are hereby acknowledged, the Company and the Servicer hereby agree
as
follows:
ARTICLE
I
DEFINITIONS
AND
CONSTRUCTION
Section
1.01
Definitions. For purposes
of
this Agreement, the following terms shall
have the meanings and definitions hereinafter respectively set forth.
"Acceptable
Rating"
shall mean any
of
the top three rating categories that may
be
assigned to any security, obligation
or
entity
by
the Rating Agencies.
"Acquired
Collateral"
shall mean property to which title is acquired
by
foreclosure,
by
deed in lieu
of
foreclosure,
by
power
of
sale or
by
sale pursuant to the Uniform Commercial
Code, in any such case in accordance with the Loan Documents and this Agreement.
"Affiliate" shall mean, with respect to any specified Person, (i) any other Person directly
or indirectly controlling or controlled
by
or under common control with such specified Person,
(ii) any Person owning
or
controlling ten percent (10%)
or
more
of
the outstanding voting
securities, voting equity interests, or beneficial interests
of
the Person specified, (iii) any officer,
director, partner, member, trustee, employee
or
promoter
of
the Person specified
or
any
Immediate Family Member
of
such officer, director, partner, member, trustee, employee or
FDIC FNBN
CM
LCON Servicing
Agreement-
EXECUTION VERSION
12349237.5
promoter, (iv) any corporation, partnership, limited liability company
or
trust for which
any
Person referred to in clause (ii)
or
(iii) acts
in
that capacity,
or
(v) any Person who is an officer,
director, general partner, managing member, trustee or holder
of
I 0% or
more
of
the outstanding
voting securities, voting equity interests or beneficial interests
of
any Person described in clauses
(i) through (iv); provided, however, that, for purposes
of
this Agreement, the Participant shall not
be
deemed to
be
an
Affiliate
of
the Company or
of
any Affiliate
of
the Company. For the
purposes
of
this definition, the term
"control"
(including the phrases
"controlled
by"
and
"under
common
control
with")
when used with respect to any specified Person means
the
possession, direct or indirect,
of
the power to direct or cause the direction
of
the management and
policies
of
such Person, whether through the ownership
of
voting securities or interests,
by
contract or otherwise.
"Agreement"
shall have the meaning given in the Preamble.
"Authorized
Funding
Draw"
shall mean any principal advance with respect to a Loan
listed, up to the maximum aggregate amount
of
principal advances set forth in the column
of
the
Loan Schedule entitled
"Maximum
Authorized
Funding
Draw",
including any such advances
made
by
Participant prior to the Servicing Transfer Date; provided, however, that (i)
if
required
by
applicable Law or
if
otherwise deemed necessary
by
the Company, an endorsement to the title
policy insuring the Loan, which endorsement shall
be
in form and content acceptable to the
Company, is obtained that (a) brings down the effective date
of
the title policy to the date
on
which the applicable Authorized Funding Draw it covers is made, (b) increases the liability limit
of
the title policy
by
an amount equal to the principal amount
of
such Authorized Funding Draw,
and (c) contains no new exceptions to title; (ii) notwithstanding anything to the contrary
contained in this Agreement, the Servicer shall make
or
permit an Authorized Funding
Draw
if
then outstanding unpaid principal balance
of
the Loan exceeds the value
of
the Collateral
only
if
the Company determines, in its reasonable judgment, that the Borrower is reasonably likely to
be
able to repay the Loan or that the making
of
the Authorized Funding Draw is in the best interests
(in terms
of
maximizing the value
of
the Loan)
of
the Company and the Participant; and (iii)
such advance is made in accordance with the terms
of
the Loan and the Loan Documents,
provided however, that
if
any term with respect to the Loan or the Loan Documents precludes
such advance in the event
of
a Borrower default, such term
may
be
waived
if
the Company
determines, in its reasonable judgment, that such waiver is
in
the best interests
of
the Company
and the Participant in terms
of
maximizing the value
of
the Loan.
"Borrower"
shall mean the borrower
or
other obligor with respect to a Loan.
"Business
Day"
shall mean any day except a Saturday, Sunday or other day on which
commercial banks in Washington, D.C. or United States federal government offices are required
or
authorized
by
Law to close.
"Collateral"
shall mean any and all real or personal property, whether tangible
or
intangible, securing or pledged to secure a Loan, including any account, equipment, guarantee
or
contract right,
or
other interest that is the subject
of
any Collateral Document, and as the context
requires, includes Acquired Collateral.
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FDIC FNBN CMLCON Servicing Agreement-EXECUTION VERSION
12349237.5
"Collateral
Document"
shall mean any pledge agreement, security agreement, personal
or corporate guaranty, deed
of
trust, mortgage, contract for the sale
of
real property, assignment,
collateral agreement or other agreement or document
of
any kind, whether an original or a copy,
whether similar to or different from those enumerated, securing in any manner the performance
or payment
by
any Borrower
of
its obligations or the obligations
of
any other Borrower under
any
of
the Loans
or
Notes evidencing the Loans.
"Collection Account" shall have the meaning given in Section 2.05.
"Company"
shall have the meaning given in the preamble.
"Cut-Off
Date" shall mean December 31, 2008.
"Default" shall have the meaning given in Section 7.01.
"Eligible Account" shall mean a segregated trust
or
custodial account or accounts
established and maintained with an Eligible Institution, each
of
which shall
be
entitled for the
benefit
of
the Company and the Participant as required by Article II.
"Effective Date" shall have the meaning given in the preamble.
"Eligible
Institution"
shall mean a Person that is not an Affiliate
of
the Company and
that is a federally insured depository institution that is well capitalized; provided that an Affiliate
of
the Company may
be
deemed to be an Eligible Institution
if
the Participant provides a written
consent (which may
be
withheld in the Participant's sole and absolute discretion), which consent
may
be
withdrawn
by
the Participant upon written notification to the Company, in which case
such Affiliate
of
the Company shall no longer constitute an Eligible Institution
as
of
the receipt
of
such notice and any accounts maintained pursuant to this Agreement at such institution shall
be moved to an Eligible Institution within three (3) Business Days after the receipt
of
such
notice.
"Environmental
Hazard"
shall mean the presence at, in or under any real property
constituting part
of
the Collateral (whether held in fee simple estate or subject to a ground lease,
or otherwise, and including any improvements whether
by
buildings or facilities, and any
personal property, fixtures, leases and other property or rights pertaining thereto)
of
any
"hazardous substance," as defined in Section I 0 I ( 14)
of
the Comprehensive Environmental
Response, Compensation and Liability Act
of
1980,42 U.S.C. §9601(14), or any petroleum
(including crude oil or any fraction thereof that is liquid at standard conditions
of
temperature
and pressure), at a level or in an amount that requires remediation or abatement under applicable
environmental Law.
"Escrow Accounts" shall have the meaning given in Section 2.07.
"Escrow Advance" shall mean any advance made to pay taxes or insurance premiums or
any other cost or expense that, but for a shortfall in the Borrower's Escrow Account, is payable
using funds in the Borrower's Escrow Account.
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FDIC
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CMLCON
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Agreement-EXECUTION
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12349237.5
"Excluded Expenses" shall mean fees, costs, expenses or indemnified amounts that:
(i)
are not incurred in accordance with the Servicing Standard
or
the
Fannie Mae Guidelines;
(ii)
are paid
to
any Affiliate
of
the Company, or any Affiliate
of
the
Servicer or any Subservicer;
(iii)
any incurred by the Servicer or any other Person to become a
MERS member or
to
maintain the Servicer or such Person
as
a MERS member in good
standing;
(iv)
incurred
to
pay compensation
to
or expenses
of
financial advisers,
except to the extent the same are incurred as
to
pay brokerage fees or sales commissions
incurred to market or sell the Loans or any Acquired Collateral in a bulk sale the terms
of
which bulk sale (including the financial adviser's or broker's fees or sales commissions)
are approved in advance by the Company;
(v)
incurred to pay any fine, tax or other penalty, late fee, service
charge, interest or similar charge, costs
to
release Liens or any other costs or expenses
(including legal fees and expenses) incurred by or on behalf
of
the Servicer or any
Subservicer as a result
of
the Servicer's or any Subservicer's failure
to
service any Loan
or Collateral properly in accordance with the applicable Loan Documents, this
Agreement, any Subservicing Agreement or otherwise, or failure to make a payment in a
timely manner, or failure otherwise to act in a timely manner;
(vi)
incurred
to
pay any interest on any Servicing Advances or any
advances made by any Subservicer;
(vii)
constitute or are incurred
to
pay any overhead or administrative
costs incurred by the Servicer or any other Person (including any expenses incurred to
comply with Section 5.02); or
(viii) incurred to pay any servicing, management or similar fees paid to
any Subservicer or any other Person.
"Failed
Bank"
shall mean First National Bank
of
Nevada.
"Fannie
Mae"
shall mean the Federal National Mortgage Association
of
the United
States or any successor thereto.
"Fannie
Mae
Guidelines" shall mean those guidelines governing reimbursement
of
costs
and expenses by Fannie Mae with respect
to
loans owned or securitized by Fannie Mae,
as
in
effect on the date on which an expense or cost is incurred.
"Fee Schedule" shall mean Schedule
1,
as the same may be amended from time
to
time
by the Company and the Servicer without the consent
of
the Participant.
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FDIC
FNBN
CMLCON Servicing Agreement-EXECUTION
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12349237.5
"FDIC"
shall mean the Federal Deposit Insurance Corporation,
in
any capacity, or
any
successor thereto.
"Governmental
Authority"
shall mean any United States or non-United States national,
federal, state, local, municipal
or
provincial or international government
or
any political
subdivision
of
any governmental, regulatory or administrative authority, agency or commission,
or judicial or arbitral body.
"Guarantor"
shall mean any guarantor
of
all
or
any portion
of
any Loan
or
all
or
any
of
any Borrower's obligations set forth and described in the Loan Documents.
"Guidelines" shall have the meaning given in Section 2.04.
"Immediate
Family
Member"
shall mean, with respect to any individual, his
or
her
spouse, parents, parents-in-Jaw, grandparents, descendants, nephews, nieces, brothers, sisters,
brothers-in-law, sisters-in-law, children (whether natural or adopted), children-in-law, step
children, grandchildren and grandchildren-in-law.
"Indemnified
Parties"
shall have the meaning given in Section 8.02.
"Insolvency
Event"
shall mean, with respect to any specified Person, the occurrence
of
any
of
the following events:
(1)
the specified Person makes an assignment for the benefit
of
creditors;
Proceeding;
(2)
the specified Person files a voluntary petition for relief in any Insolvency
(3)
the specified Person is adjudged bankrupt or insolvent or there is entered
against the specified Person an order for relief in any Insolvency Proceeding;
(4)
the specified Person files a petition
or
answer seeking for the specified
Person any reorganization, arrangement, composition, readjustment, liquidation, dissolution,
or
similar relief under any Law;
(5)
the specified Person seeks, consents to, or acquiesces
in
the appointment
of
a trustee, receiver or liquidator
of
the specified Person or
of
all or any substantial part
of
the
specified Person's properties;
(6)
the specified Person files an answer or other pleading admitting
or
failing
to contest the material allegations
of
a petition filed against the specified Person in any
proceeding described in clauses (1) through (5);
(7)
the specified Person becomes unable to pay its obligations as they become
due, or the sum
of
such specified Person's debts is greater than all
of
such Person's property, at a
fair valuation;
or
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FDJC FNBN CMLCON Servicing Agreement-EXECUTION VERSJON
12349237.5
(8)
within ninety (90) days
of
any proceeding against the specified Person
seeking reorganization, arrangement, composition, readjustment, liquidation, dissolution
or
similar relief under any Law
if
the proceeding has not been dismissed, or within ninety (90) days
after the appointment
of
a trustee, receiver
or
liquidator for the specified Person
or
all
or
any
substantial part
of
the specified Person's properties without the specified Person's agreement
or
acquiescence, which appointment is not vacated or stayed,
or
if
the appointment is stayed, for
ninety (90) days after the expiration
of
the stay
if
the appointment is not vacated.
"Insolvency Proceeding"
shall mean any proceeding under Title
11
of
the United States
Code
(11
U.S.C. §§I 01, et seq.) or any proceeding under the Law
of
any jurisdiction involving
any reorganization, arrangement, composition, readjustment, liquidation, dissolution, or similar
relief.
"Interest Rate"
shall mean the rate at which the outstanding principal balance
of
a Loan
bears interest, as more particularly set forth in a Note, including, without limitation, the rate
of
any default interest,
if
applicable.
"Law"
shall mean any applicable statute, law, ordinance, regulation, rule, code,
injunction, judgment, decree or order (including any executive order)
of
any Governmental
Authority.
"Lien"
shall mean any pledge, security interest, charge, restriction on
or
condition to
transfer, voting or exercise or enjoyment
of
any right
or
beneficial interest, option, right
of
first
refusal and any other lien, claim or encumbrance
of
any nature whatsoever.
"LIP Account"
shall mean an Eligible Account established and maintained with an
Eligible Institution for the sole purpose
of
holding and distributing the LIP Funds.
"LIP Funds"
shall have the meaning given in Section 2.06(a).
"Loan"
shall mean any loan or Loan Participation listed on the Loan Schedule and any
loan into which any such listed loan or Loan Participation is refinanced, and includes with
respect to each such loan or Loan Participation: (i) any obligation evidenced
by
a Note; (ii) all
rights, powers
or
Liens
of
the Company in
or
under the Collateral Documents; (iii) any contract
for deed
or
installment land contract and the real property which is subject to any such contract
for deed
or
installment land contract; and (iv) any lease and the related leased property.
"Loan Documents"
shall mean all documents, agreements, certificates, instruments and
other writings (including all Collateral Documents) now
or
hereafter executed
by
or
delivered
or
caused to be delivered
by
any Borrower, any Guarantor
or
any other obligor evidencing,
creating, guaranteeing or securing, or otherwise executed or delivered in respect of, all or any
part
of
a Loan
or
any Acquired Collateral or evidencing any transaction contemplated thereby,
and all Modifications thereto.
"Loan Participation"
shall mean any asset subject to a shared credit, participation or
similar inter-creditor agreement under which the Failed Bank
or
the Receiver was the lead or
agent financial depository institution or otherwise managed or held the credit or sold
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FDIC
FNBN
CMLCON
Servicing
Agreement~EXECUTION
VERSION
12349237.5
participations,
or
under which the Failed Bank
or
the Receiver was a participating financial
depository institution or purchased participations in a credit managed
by
another Person.
"Loan Participation Agreement"
shall mean an agreement under which the Failed Bank
or
the Receiver was the lead
or
agent financial depository institution or otherwise managed
or
held a shared credit or sold participations,
or
under which the Failed Bank
or
the Receiver was a
participating financial depository institution or purchased participations in a credit managed
by
another Person.
"Loan Proceeds"
shall mean (i) any and all proceeds (net
of
such proceeds as are
payable to others under any Loan Participation Agreement) with respect to any
or
all
of
the
Loans and any
or
all
of
the Collateral that is received at any time after the Servicing Transfer
Date, including principal, interest, default interest, prepayment fees, premiums and charges,
extension and exit fees, late fees, assumption fees, other fees and charges, insurance proceeds
and condemnation payments (or any portion thereof) that are not used and disbursed to repair,
replace
or
restore the related Collateral in accordance with the terms
of
the Loan Documents, (ii)
any and all proceeds from sales
or
other dispositions
of
any or all
of
the Loans or the Collateral,
(iii) any proceeds from making a draw under any letter
of
credit or certificate
of
deposit held
with respect to any Loan, provided that such draw is permitted
by
the terms
of
the Loan
Documents, (iv) any recoveries
ofPre-Cut-OffDate
Advances
or
other recoveries from
Borrowers or Guarantors
of
any kind
or
nature with respect to the Loans, and (v) any interest
or
other earnings accrued and paid on any
of
the amounts described in the foregoing clauses
(i)
through (iv) while held in the Collection Account or any Other Account.
"Loan Schedule"
shall have the meaning given in the first Recital
of
this Agreement.
"MERS"
shall mean Mortgage Electronic Registration Systems, Incorporated.
"Modification"
shall mean any extension, renewal, substitution, replacement,
supplement, amendment or modification
of
any agreement, certificate, document, instrument
or
other writing, whether
or
not contemplated in the original agreement, document or instrument.
"Note"
shall mean each note or promissory note, lost instrument affidavit, loan
agreement, shared credit
or
Loan Participation Agreement, intercreditor agreement,
reimbursement agreement, any other evidence
of
indebtedness
of
any kind,
or
any other
agreement, document or instrument evidencing a Loan, and all Modifications to the foregoing.
"Other Accounts"
shall have the meaning given in
Section 2.08.
"Participant"
shall have the meaning given in the second Recital
ofthis
Agreement.
"Participation Agreement"
shall have the meaning given in the second Recital
of
this
Agreement.
"Permitted Investments"
shall mean any one or more
of
the following obligations or
securities having at the time
of
purchase,
or
at such other time as may be specified, the required
ratings,
if
any, provided for in this definition:
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Agreement-EXECUTION
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12349237.5
(1)
direct obligations of, or guaranteed
as
to timely payment
of
principal and
interest by, the United States
of
America
or
any agency
or
instrumentality
of
the United
States
of
America, the obligations
of
which are backed
by
the full faith and credit
of
the
United States
of
America;
(2)
demand and time deposits in or certificates
of
deposit of,
or
bankers'
acceptances issued by, any bank or trust company, savings and loan association or
savings bank, provided that, in the case
of
obligations that are not fully FDIC-insured
deposits, the commercial paper and/or long-term unsecured debt obligations
of
such
depository institution
or
trust company (or in the case
of
the principal depository
institution in a holding company system, the commercial paper or long-term unsecured
debt obligations
of
such holding company) have an Acceptable Rating;
(3)
general obligations
of
or obligations guaranteed
by
any state
of
the United
States
or
the District
of
Columbia receiving ratings
of
not less than the highest rating
of
each Rating Agency rating such obligations;
(4)
mutual funds in which investments are limited to the obligations referred
to in clauses
(I),
(2) or (3)
of
this definition; and
(5)
with the prior written consent
of
the Company, any other demand, money
market or time deposit or other obligation, security
or
investment.
"Person"
shall mean any individual, corporation, partnership (general
or
limited), limited
liability company, limited liability partnership, firm, joint venture, association, joint-stock
company, trust, estate, unincorporated organization, governmental or regulatory body or other
entity.
"Pre-Cut-Off
Date Advances" shall mean advances made
by
or
on behalf
of
the Failed
Bank or the Receiver (or any assignor that conveyed the Loans to the Failed Bank or the
Receiver) on
or
prior to the Cut-OffDate to fund Servicing Expenses.
"Qualified Servicer" shall mean any Person that (i) is properly licensed and qualified to
conduct business in each jurisdiction in which such licenses and qualifications to conduct
business are necessary for the servicing
of
the Loans and management
of
the Collateral and the
Acquired Collateral, (ii) has the management capacity and experience to service loans
of
the type
held by the Company, especially performing and non-performing construction loans secured
by
residential or commercial properties, including the number and types
ofloans
serviced, and the
ability to track, process and post payments, to furnish tax reports to borrowers, to monitor
construction and disburse construction draws, (iii) either (x) has an Acceptable Rating as a
mortgage loan servicer
or
special servicer
or
(y) is an FDIC-insured depository institution or an
Affiliate
of
an FDIC-insured depository institution, and (iv) in the case
of
any mortgage loan
servicer
or
special servicer that does not have an Acceptable Rating, is acceptable to and
approved
by
the Participant (such approval not to
be
unreasonably withheld, delayed or
conditioned).
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FDIC FNBN CMLCON Servicing Agreement-EXECUTION VERSION
12349237.5
"Rating
Agencies" shall mean each
of
Moody's Investors Service, Inc., Standard
&
Poor's Rating Services, a division
of
The McGraw-Hill Companies, Inc., Fitch IBCA, Inc. and
such other rating agencies
as
are nationally recognized.
"Receiver" shall have the meaning given in the second Recital
of
this Agreement.
"Regulation AB" shall mean the regulations at
17
C.F.R. §§229.1100, et seq., as the
same may be amended from time to time.
"Servicer"
shall have the meaning given in the Preamble.
"Servicer Advances" shall mean (a) advances made
by
or
on behalf
of
the Servicer to
fund Servicing Expenses and (b) to the extent not covered
by
clause (a), any and all legal fees
and expenses (including judgments, settlements and reasonable attorneys' fees) incurred
by
the
Servicer in its defense
of
claims asserted against the Company that (x) relate to one
or
more
Loans, and (y) arise out
of
acts or omissions
of
the Failed Bank
or
the Receiver in connection
with the origination or servicing
of
such Loans prior to the Servicing Transfer Date.
"Servicer
Remittance
Date"
shall mean the 1
o'h
day
of
each month,
or
such other day
as is agreed to by the Servicer and the Company, provided, however, that, in any case,
if
such
day is not a Business Day, the Servicer Remittance Date shall be the immediately preceding
Business Day.
"Servicing Expenses" shall mean all customary and reasonable out-of-pocket fees, costs,
expenses and indemnified amounts incurred in connection with servicing the Loans and the
Acquired Collateral, including (i) any and all out-of-pocket fees, costs, expenses and indemnified
amounts which a Borrower is obligated to pay to any Person or to reimburse to the lender
pursuant to the applicable Note or any other Loan Documents, including Escrow Advances,
(ii) any and all reasonable out-of-pocket expenses necessary to protect or preserve the value
of
the Collateral or the priority
of
the Liens and security interests created
by
the Loan Documents
relating thereto, including taxes, insurance premiums (including forced place insurance
premiums), payment
of
ground rent, the costs
of
prevention
of
waste, repairs and maintenance,
foreclosure expenses and legal fees and expenses relating to foreclosure or other litigation with
respect to the Loans, (iii) any and all direct expenses related to the preservation, operation,
demolition, management and sale
of
the Acquired Collateral (including real estate brokerage fees
and amounts disbursed to complete partially completed projects), and (iv) to the extent not
covered
by
any
of
clauses (i) through (iii), legal fees and expenses (including judgments,
settlements and reasonable attorneys fees) incurred by the Servicer in its defense
of
claims
asserted against the Company that relate to one
or
more Loans, and (x) arise out
of
the acts
or
omissions
of
the Failed Bank or the Receiver in connection with the origination or servicing
of
such Loans prior to the Servicing Transfer Date,
or
(y) allege, as the basis for such claims, any
act or omission
of
the Company (or its Servicer) and such claims are decided (and there are final
non appealable orders) in favor
of
the Company (or its Servicer); provided, however, that
Servicing Expenses shall not include Authorized Funding Draws or Excluded Expenses.
"Servicing Fee" shall have the meaning given in Section 2.03.
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FDJC FNBN CMLCON Servicing Agreement-EXECUTION VERSION
12349237.5
"Servicing
Obligations" shall have the meaning given in Section 2.04.
"Servicing
Standard"
shall have the meaning given in Section 2.04.
"Servicing
Transfer
Date" shall be on
or
before February 27, 2009, or such other date as
is agreed to
by
the Servicer and the Company.
"Site Assessment" shall have the meaning given in Section 3.03.
"Subservicer"
shall have the meaning given in Section 4.01.
"Subservicing Agreement" shall have the meaning given in Section 4.02.
"Termination
Notice" shall mean any written notice
of
termination required pursuant to
Article VII.
"Uniform
Commercial
Code" shall mean, with respect to each discrete element or
category
of
the personal property Collateral, the Uniform Commercial Code in effect in the
applicable jurisdiction, as the same may be amended from time to time.
"Unpaid
Principal
Balance" shall mean, at any time, an amount equal to the then
aggregate outstanding principal balance
of
the Loans and, for each Loan with respect
to
which
some or all
of
the related Collateral has been converted to Acquired Collateral and, until such
time as the Acquired Collateral (or any portion thereoJ) is liquidated, the unpaid principal
balance
of
the related Loan (adjusted pro rata for partial collateral sales, debt forgiveness or
retained indebtedness) at the time at which such Loan was converted to Acquired Collateral plus
any outstanding balance remaining on such Loan which is evidenced
by
a modification
agreement or a replacement or successor promissory note executed
by
the Borrower.
ARTICLE
II
SERVICING
OBLIGATIONS
OF
THE
SERVICER
Section 2.01
Appointment and Acceptance as Servicer. Effective
as
of
the date hereof,
the Company appoints the Servicer to service, administer, manage and dispose
of
the Loans and
the Collateral on behalf
of
and as an agent
of
the Company.
Section 2.02
Limited Power
of
Attorney. The Company hereby grants to the Servicer a
limited power
of
attorney to execute all documents on its behalf in accordance with the Servicing
Standard set forth below and
as
may
be
necessary to effectuate the Servicer's obligations under
this Agreement until such time
as
the Company revokes said limited power
of
attorney.
Revocation
of
the limited power
of
attorney shall take effect upon: (i) the receipt
by
the Servicer
of
written notice thereof from or on behalf
of
the Company, or (ii) termination
of
this Agreement
pursuant to Article VII.
Section 2.03
Servicing Fee. As consideration for servicing the Loans and the
Collateral, on each Servicer Remittance Date, the Servicer shall
be
paid such monthly servicing
fee as is set forth on the Fee Schedule (the "Servicing Fee").
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FDIC FNBN CMLCON Servicing Agreement-EXECUTION VERSJON
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Section 2.04
Servicing Standard. The Servicer shall take such actions and perform such
duties in connection with the servicing, administration, management and disposition
of
the Loans
and Collateral as are set forth on Schedule 2,
as
the same may be amended from time to time
by
the Company and the Servicer without the Participant's consent (the
"Servicing
Obligations").
The Servicer shall perform its Servicing Obligations (i) in the best interests and for the benefit
of
the Participant and the Company, (ii) in accordance with the terms
of
the Loans (and related
Loan Documents), (iii) in accordance with the tenns
of
this Agreement (including this
Article
II), (iv) in accordance with all applicable Law, (v) with respect to all Loans, in compliance with
the Statement on Loss Mitigation Strategies for Servicers
of
Residential Mortgages (September
2007), issued
by
the federal financial institutions regulatory agencies and the Conference
of
State
Bank Supervisors, and the Statement on Working with Mortgage Borrowers (April 2007), issued
by the federal financial institutions regulatory agencies, as the same may
be
amended,
supplemented or modified from time to time (collectively, the "Guidelines"), to the extent
applicable, and, (vi) to the extent consistent with the foregoing terms, in the same manner in
which a prudent servicer would service and administer similar loans and in which a prudent
servicer would manage and administer similar properties for its own portfolio or for other
Persons, whichever standard is higher, but using no less care and diligence than would
be
customarily employed
by
a prudent servicer following customary and usual standards
of
practice
of
prudent mortgage lenders, loan servicers and asset managers servicing, managing and
administering similar loans and properties on an arms' length basis, provided that in the absence
of
a customary and usual standard
of
practice, the Servicer shall comply with the Fannie Mae
Guidelines applicable to similar loans or properties in similar situations (the requirements in
clauses (i) through (vi) collectively, the "Servicing
Standard").
In
addition, the Servicer shall
perform its Servicing Obligations without regard to (a) any relationship that the Servicer, the
Company or any Subservicer
or
any
of
their respective Affiliates may have to any Borrower,
Guarantor
or
other obligor
or
any
of
their respective Affiliates, including any other banking
or
lending relationship, (b) the Company's, the Servicer's,
or
any Subservicer's, obligation to make
disbursements and advances with respect to the Loans and the Collateral, (c) any relationship
that the Servicer
or
any Subservicer may have to each other
or
to the Company
or
any
of
its
Affiliates, or any relationship that any
of
their respective Affiliates may have to the Company
or
any
of
its Affiliates (other than the contractual relationship evidenced by this Agreement
or
any
Subservicing Agreement), and (d) the Servicer's
or
any Subservicer's right to receive
compensation (including the Servicing Fee) for its services under this Agreement
or
any
Subservicing Agreement.
Section 2.05
Collection Account.
(a)
Except as otherwise directed by the Company, on
or
prior to the Servicing
Transfer Date, the Servicer (i) shall establish and maintain an Eligible Account, which shall be
held in trust for the benefit
of
the Company and the Participant and shall be for the sole purpose
of
holding and distributing the Loan Proceeds (the "Collection Account"); and (ii) shall deposit
into the Collection Account all Loan Proceeds on a daily basis (without deduction or setoff as
provided in Section 11.13 hereof). Exeept as otherwise directed
by
the Company, the Servieer
shall not cause or allow funds from any other source (other than interest or earnings on the Loan
Proceeds) to be commingled in the Collection Account.
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11
FDIC FNBN CMLCON Servicing Agreement-EXECUTION VERSION
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(b)
Except as otherwise directed
by
the Company, each Servicer Remittance
Date, the Servicer shall remit all amounts then on deposit in the Collection Account to the
Company.
(c)
Except as otherwise directed
by
the Company, any and all amounts on
deposit in (or that are required to have been deposited into) the Collection Account (including
interest and earnings thereon) shall be withdrawn and disbursed strictly in accordance with this
Agreement; provided, however, that
if
the Servicer
or
any Subservicer erroneously deposits any
amounts into the Collection Account, it may withdraw such erroneously deposited amount.
(d)
Except as otherwise directed
by
the Company, any and all amounts due
the Company under this Agreement shall be remitted
by
wire transfer, in immediately available
funds to such account or accounts as the Company may, from time to time, direct.
(e)
Except as otherwise directed
by
the Company, amounts
on
deposit in the
Collection Account shaH be invested in Permitted Investments, but with a maturity that allows
for their a11ocation and distribution
on
a monthly basis in accordance with this Agreement.
(f)
The Collection Account (and all funds therein) will
be
subject to an
account control agreement among the Company, the Participant and the Eligible Institution that
holds such Collection Account.
Section 2.06
LIP Account.
(a)
Except as otherwise directed
by
the Company, on
or
prior to the Servicing
Transfer Date, the Servicer shall establish and maintain the LIP Account, which shall be held in
trust for the benefit
of
the Company and the Participant and which shall
be
funded with any
initial principal amount of$37,571,664.00 (the
"LIP
Funds"). No funds from any other source
(other than interest or earnings on the LIP Funds) shall
be
commingled in the LIP Account.
(b)
Except as otherwise directed
by
the Company, any and all amounts on
deposit in (or that are required to have been deposited into) the LIP Account (including interest
and earnings thereon) shall be withdrawn and disbursed strictly in accordance with this
Agreement.
(c)
The Servicer shall
be
authorized, at the Company's direction, to withdraw
funds (or to make draw requests on the escrow agent for the funds) from the LIP Account on! y to
make Authorized Funding Draws, and the LIP Account and the LIP Funds shall not otherwise be
used for any purpose. The Servicer shall not permit withdrawals from the LIP Account for any
other purpose. On the Servicing Transfer Date, the participant shall be reimbursed from the LIP
Account an amount equal to the Authorized Funding Draws made
by
it at any time after the Cut
OffDate
and on or before the Servicing Transfer Date.
(d)
At the direction
of
the Company, the LIP Account shall be liquidated (and
no further Authorized Funding Draws
may
be
made
on
or after the date
of
such direction), and
all remaining LIP Funds then on deposit in the LIP Account, including all interest and earnings
thereon, shall be distributed to the Company.
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FDIC FNBN CMLCON Servicing Agreement-EXECUTION VERSION
12349237.5
(e)
The LIP Account (and all funds therein) shall
be
subject to an account
control agreement among the Company, the Participant and the Eligible Institution that holds
such LIP Account.
(f)
The LIP Funds shall
be
invested in Permitted Investments,
but
with a
maturity that allows for (i) distribution
of
the LIP Funds as and when needed to
make
Authorized
Funding Draws and (ii) liquidation
of
the LIP Account and distribution
of
the remaining LIP
Funds (which liquidation and distribution shall
be
at such time and in such manner as is directed
by
the Company to the Servicer).
Section 2.07
Escrow Accounts. Except as otherwise direeted
by
the Company, the
Servicer shall establish and maintain
one
or more Eligible Accounts, each
of
which shall
be
held
in trust for the benefit
of
the Company and Participant
("Escrow
Accounts"). Except as
otherwise directed
by
the Company, the Servicer shall deposit into the Escrow Account on a
daily basis all collections from the Borrowers for the payment
of
taxes, assessments, hazard
insurance premiums, and comparable items for the account
of
the Borrowers, and the Servieer
shall pay to the Borrowers interest on funds in Escrow Accounts to the extent required
by
law.
Section 2.08
Other Accounts. At the direction
of
the Company, the Servicer shall
establish and maintain such other Eligible Accounts as
may
be
directed
by
the Company, each
of
which shall
be
held in trust for the benefit
of
the Company and the Participant, and shall
be
funded and disbursed only in accordance with such instructions as are provided
by
the Company
("Other
Accounts").
Section 2.09
Maintenance
oflnsurance
Policies; Errors and Omissions and Fidelity
Coverage.
(a)
The Servicer and each Subservicer shall cause to
be
maintained for the
Collateral (including any Acquired Collateral) from an insurer reasonably acceptable to the
Company for each Loan with respect to which the Borrower has failed to maintain required
insurance, fire, hurricane, flood and hazard insurance with extended coverage as is customary in
the area in which the Collateral is located and in such amounts and with such deductibles as,
from time to time, is directed
by
the Company.
(b)
The Servicer and each Subservicer shall at all times maintain in effect a
blanket fidelity bond and an errors and omissions insurance policy affording, in each case,
coverage with respect to all officers, directors, employees and other Persons acting
on
behalf
of
the Servicer or the Subservicer, as applicable, and covering errors and omissions in the
performance
of
the Servicer's, or the Subservicer's, as applicable, obligations under this
Agreement
or
any Subservicing Agreement.
The
errors and omissions insurance policy and the
fidelity bond shall
be
in such form and amount that would meet the requirements
ofF
annie Mae
if
Fannie Mae were the purchaser
of
the Loans. The Servicer and each Subservicer shall provide
the Company with certificates evidencing such coverage.
(c)
Copies
of
fidelity bonds and insurance policies required to
be
maintained
pursuant to this Section shall
be
made available to the Company and its representatives upon
request.
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FDIC
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CMLCON Servicing Agreement-EXECUTION VERSION
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Section 2.10
Expenses. Except as otherwise directed
by
the Company, the Servicer
shall use its reasonable best efforts to recover from Borrowers and Guarantors all Servicing
'Expenses that are Servicer Advances. All such Servicing Expenses not recovered from
Borrowers or Guarantors and all other Servicer Advances shall
be
reimbursed
only
in accordance
with the terms set forth on Schedule 3, as the same
may
be
amended from time to time
by
the
Company and the Servicer without the Participant's consent. In the event the Servicer
is
reimbursed for any expense that is not,
or
cannot
be
documented as, a Servicer Advance,
in
the
reasonable determination
of
the Company, the Servicer shall be obligated to refund such amounts
to the Company on the Servicer Remittance Date immediately following
the
Servicer's receipt
of
notice from the Company requesting the same.
No
Servicer Advances shall
bear
interest
chargeable in any way to the Company or deductible from any Loan Proceeds.
Section 2.11
Insured or Guaranteed Loans.
If
any Loans being serviced pursuant to this
Agreement are insured or guaranteed
by
any Governmental Authority, the Servicer
acknowledges and agrees that,
if
the Company so directs pursuant to the Servicing Obligations
with respect to such Loans, it shall take any and all actions as
may
be
necessary to insure such
insurance
or
guarantees remain in full force and effect. The Servicer acknowledges and agrees
that, upon assumption
of
the Servicing Obligations with respect to the Loans pursuant to this
Agreement, it agrees to fulfill all
of
the
Company's
obligations under the contracts
of
insurance
or
guaranty.
ARTICLE III
LOAN DEFAULTS; ACQUISITION OF COLLATERAL
Section 3.01
Delinquency Control. Except as otherwise directed
by
the Company, the
Servicer shall maintain a collection department that substantially complies with the Servicing
Standard and protect the Company's investment in the Loans in accordance with the Servicing
Standard with Borrowers who are delinquent or in default.
Section 3.02
Discretion
of
the Company in Responding to Defaults
of
Borrower. Upon
the occurrence
of
an event
of
default under any
of
the Loan Documents,
but
subject to the other
terms and conditions
of
this Agreement, including the Servicing Obligations
of
the Servicer and
such direction as the Company
may
otherwise provide that is consistent with the Servicer's
compliance with the Servicing Standard, the Servicer shall cause to
be
determined the response
to such default and course
of
action with respect to such default, including (a) the selection
of
attorneys to
be
used in connection with any action, whether judicial or otherwise, to protect the
respective interests
of
the Company and the Participant in the Loan and the Collateral, (b) the
declaration and recording
of
a notice
of
such default and the acceleration
of
the maturity
of
the
Loan, (c) the institution
of
proceedings to foreclose the Loan Documents securing the Loan
pursuant to the power
of
sale contained therein
or
through a judicial action, (d) the institution
of
proceedings against any Guarantor, (e) the acceptance
of
a deed in lieu
of
foreclosure, (f) the
purchase
of
the real property Collateral at a foreclosure sale or trustee's sale or the purchase
of
the personal property Collateral at a Uniform Commercial Code sale, and (g) the institution or
continuation
of
proceedings to obtain a deficiency judgment against such Borrower
or
any
Guarantor and the collection
of
such judgment.
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FDIC FNBN CMLCON Servicing Agreement-EXECUTION VERSION
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Section 3.03
Acquisition
of
Acquired Collateral. Any acquisition
of
Collateral shall
conform with the terms and conditions
of
this Agreement (including the Servicing Obligations
of
the Servicer). With respect to any Loan as to which the Servicer has received actual notice of,
or
has actual knowledge of, any Environmental Hazard with respect to the related Collateral, the
Servicer shall immediately provide written notice
of
same to the Company.
In
addition,
if
the
Company so directs, prior to the acquisition
of
title to any Collateral, the Servicer shall cause to
be commissioned with respect to such Collateral (i) a Transaction Screen Process consistent with
ASTM Standard E 1528-06,
by
an environmental professional or (ii) such other site inspections
and assessments
by
a Person who regularly conducts environmental audits using customary
industry standards
as
would customarily
be
undertaken or obtained
by
a prudent lender in order
to ascertain whether there are any actual
or
threatened Environmental Hazards (a
"Site
Assessment").
Except as is otherwise directed
by
the Company, the Servicer
or
any Subservicer
shall not acquire or otherwise cause the Company or any other ownership entity to acquire all
or
any portion
of
any Collateral having any actual or threatened Environmental Hazards
by
foreclosure, deed in lieu
of
foreclosure, power
of
sale
or
sale pursuant to the Uniform
Commercial Code
or
otherwise.
ARTICLE IV
SUBSERVICING
Section 4.01
Retention
of
Subservicer. The Servicer may engage
or
retain one
or
more
subservicers, including Affiliates
of
the Company or
of
the Servicer (individually and
collectively,
"Subservicer"),
as it may deem necessary and appropriate, provided that any
Subservicer meets the requirements set forth in clause (i) and, to the extent applicable to the
services to be performed by such Subservicer, clause (ii)
of
the definition
of
Qualified Servicer.
Section 4.02
Subservicing Agreement Requirements. Any subservicing agreement with
any Subservicer
("Subservicing Agreement")
shall, among other things:
(a)
provide for the servicing
of
the Loans and management
of
the Collateral
by
the
Subservicer in accordance with the Servicing Standard and the other terms
of
this Agreement;
(b)
be terminable with
or
without cause, upon no more than thirty (30) days prior
notice in the event
of
any Default under this Agreement or a default under the Subservicing
Agreement
as
set forth in Section 4.02(n) below;
(c)
provide that the Servicer as well as the Company and the Participant shall be
entitled to exercise termination rights thereunder;
(d)
provide that the Subservicer and the Servicer acknowledge that the Sub servicing
Agreement constitutes a personal services agreement between the Servicer and the Subservicer;
(e)
provide that each
of
the Participant and the Company is a third party beneficiary
thereunder and entitled to enforce the Subservicing Agreement;
(f)
provide that (i) upon a Default under this Agreement, the Company and
Participant may exercise all
of
the rights
of
(A ) the Company under this Agreement and cause
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FDIC
FNBN
CMLCON
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Agreement-EXECUTION
VERSION
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the termination or assignment
of
this Agreement to any other Person, without penalty or payment
of
any fee, and (B) the Servicer under any or or all
of
the Subservicing Agreements entered into
by the Servicer and cause the termination or assignment
of
the same to any other Person, without
penalty
or
payment
of
any fee, and (ii) upon a default under any Subservicing Agreement,
provide that the Company and Participant may exercise all
of
the rights
of
the Servicer under
such Subservicing Agreement and cause the termination or assignment
of
any such Subservicing
Agreement to any other Person, without penalty
or
payment
of
any fee;
(g)
provide that the Company and the Participant (and each
oftheir
respective
representatives) shall have access to and the right to review, copy and audit the books and
records
of
the Subservicer and that the Subservicer shall make available its officers, directors,
employees, accountants and attorneys to the Company and the Participant (and each
of
their
respective representatives) to answer questions or to discuss any matter relating to the
Subservicer's affairs, finances and accounts, as they relate to the Loans, the Collateral, the
Servicing Obligations, the Collection Account, the LIP Account, the Escrow Accounts or any
Other Accounts established
or
maintained pursuant to this Agreement
or
the Subservicing
Agreement
or
any matters relating to this Agreement
or
the Subservicing Agreement or the rights
or obligations thereunder;
(h)
provide that all Loan Proceeds are to
be
deposited into the Collection Account on
a daily basis (without reduction or setoff as provided in
Section 11.13
hereof) and that under no
circumstances are any funds, other than Loan Proceeds and interest and earnings thereon, to
be
deposited into the Collection Account;
(i)
provide that under no circumstances are any funds, other than the LIP Funds and
interest and earnings thereon, to be deposited into the LIP Account;
G)
provide that the Subservicer shall not transfer or assign its rights under the
Subservicing Agreement with the Servicer and that any prohibited transaction shall be void
ab
initio;
(k)
provide that the Subservicer consents to the immediate termination
of
the
Subservicer pursuant to
Section 7.02
of
this Agreement;
(I)
provide that there shall be no right
of
setoff on the part
of
the Subservicer,
(m)
provide for such other matters as are necessary
or
appropriate to ensure that the
Subservicer is obligated to comply with the Servicing Obligations
of
the Servicer hereunder in
the conduct
of
such matters
as
are delegated to the Subservicer,
(n)
(i) contain default provisions that relate to the actions
of
the Subservicer that
parallel the provisions
of
Sections 7.01(a), (b), (c), (d), (e), (t)
and
(h)
of
this Agreement, and
(ii) provide that the Participant has the right (x) to terminate the Subservicing Agreement
by
providing written notice upon the occurrence
of
any such default (except that, with respect to
default under the provision that parallels
Section 7.01(c),
only with respect to the provisions that
parallel
Sections 5.02(1)
and
(g)
that shall
be
referred to therein), without any cure period other
than as may be provided for in the default provisions that parallel provisions in
Section 7 .01,
and
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upon the occurrence
of
any Default under any
of
Sections 7.01(a), (b), (c) (but, with respect to a
Default under clause (c), only with respect to Sections 5.02(f) and (g) referred to therein), (d),
(e), (f) or (h)
of
this Agreement, and (y) otherwise to enforce the rights
of
the Servicer under the
Subservicing Agreement;
(o)
provide that (i) the Subservicer consents to its immediate termination under the
Subservicing Agreement upon a Default under Section 7.01(b)
of
this Agreement and upon the
occurrence
of
any Insolvency Event with respect to the Subservicer
or
any
of
its Affiliates, and
(ii) the occurrence
of
any Insolvency Event with respect to the Subservicer
or
any Affiliate
thereof constitutes a default under the Subservicing Agreement; and
(p)
provide a full release and discharge
of
the Participant and any predecessor
servicer, and all
of
their respective officers, directors, employees, agents, attorneys, contractors
and representatives, and all
of
their respective successors and assigns (other than the Company)
and Affiliates, from any and all claims (including any counterclaim or defensive claim),
demands, causes
of
action, judgments or legal proceedings and remedies
of
whatever kind
or
nature that the Subservicer had, has
or
might have in the future, whether known or unknown,
which are related in any manner whatsoever to that servicing
of
the Loans by the Participant
or
such other predecessor servicer prior to the Servicing Transfer Date (other than due to gross
negligence or willful misconduct
of
the Participant
or
other predeccessor servicer).
Section 4.03
Servicer Liable for Subservicers. Notwithstanding anything to the
contrary contained herein, the use
of
any Subservicer shall not release the Servicer from any
of
its Servicing Obligations or other obligations under this Agreement, and the Servicer shall
remain responsible and liable for all acts and omissions
of
each Subservicer
as
fully as
if
such
acts and omissions were those
of
the Servicer. All actions
of
any Subservicer performed
pursuant to the Subservicing Agreement with the Servicer shall
be
performed as an agent
of
the
Servicer. No Subservicer shall be paid any fees
or
indemnified out
of
any Loan Proceeds.
Section 4.04
Company Approval Required. Each Subservicing Agreement and all
amendments and modifications thereto and the selection
of
the Subservicer, regardless
of
whether the Subservicer is an Affiliate
of
the Servicer, shall be subject
to
the prior written
approval
of
the Company (which approval shall not be unreasonably withheld, delayed or
conditioned). A copy
of
all Subservicing Agreements, as executed and delivered and all
amendments thereto, shall be provided to the Company.
Section 4.05
Regulation
AB
Requirements. The Servicer shall ensure, where
applicable, that each Subservicer (A) has in place policies and procedures to comply with the
provisions
of
Section 1122(d)(l)(i) through (iv)
of
Regulation AB, and (B) complies with the
provisions
of
Sections 1122(d)(2)(i) through (vii), 1122(d)(3)(i) through (iv), and 1122(d)(4)(i)
through (xv)
of
Regulation AB (regardless
of
whether any such requirements apply,
by
their
terms, only to companies registered
or
required to file reports with the Securities and Exchange
Commission).
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ARTICLE
V
REPRESENTATIONS,
WARRANTIES
AND
COVENANTS
OF
THE
SERVICER
Section 5.01
Representations and Warranties.
The
Servicer hereby makes the following
representations and warranties as
of
the date hereof:
(a)
The Servicer (i) is a corporation, duly organized, validly existing and in
good standing under the laws
of
the State
of
Nevada; (ii) has qualified or will qualify to transact
business as a foreign entity and will remain so qualified, in the state
or
states and other
jurisdictions where the Loans or the nature
of
the Servicer's activities under this Agreement
makes such qualification necessary; (iii) has all licenses and other governmental approvals
necessary to carry on its business as now being conducted and to perform its obligations
hereunder; and (iv) has established and shall maintain its principal place
of
business in the
United States.
(b)
The Servicer has all requisite power, authority and legal right to service
each Loan, and to execute, deliver and perform, and to enter into and consummate the
transactions contemplated by, this Agreement, and this Agreement has
been
duly authorized
by
all requisite corporate action
on
the part
of
the Servicer.
(c)
This Agreement and all agreements contemplated hereby
to
which the
Servicer is
or
will
be
a party constitute the valid, legal, binding and enforceable obligations
of
the Servicer, except as such enforcement
may
be
limited
by
bankruptcy, insolvency,
reorganization or other similar laws affecting the enforcement
of
creditors' rights generally, and
by
general principles
of
equity (regardless
of
whether such enforcement is considered in a
proceeding in equity or at law); and all requisite corporate action has
been
taken
by
the Servicer
to make this Agreement and all agreements contemplated hereby to which the Servicer is
or
will
be
a party valid and binding upon the Servicer in accordance with their terms and conditions.
(d)
The Persons executing this Agreement on
behalf
of
the Servicer are duly
authorized to do so.
(e)
The execution and delivery
of
this Agreement
by
the Servicer, the
servicing
of
the Loans and the Collateral under this Agreement, the consummation
of
any other
of
the transactions contemplated
by
this Agreement, and the fulfillment
of
or compliance with
the terms
hereof
are in the ordinary course
of
business
of
the Servicer and (i) will not result in a
breach
of
any term or provision
of
the articles or charter or bylaws or operating agreement
of
the
Servicer; (ii) conflict with, result in a breach, violation or acceleration of, or result in a default
(or an event which, with notice or lapse
of
time, or both, would constitute a default) under the
terms
of
any agreement or other instrument to which the Servicer is a party or
by
which it
may
be
bound; or (iii) constitute a violation
of
any Law applicable to the Servicer, and the Servicer is
not in breach
or
violation
of
any agreement or instrument, or in violation
of
any Law
of
any
Governmental Authority having jurisdiction over it which breach
or
violation
may
impair the
Servicer's ability to perform or meet any
of
its obligations under this Agreement.
(f)
No litigation is pending
or
threatened against the Servicer that would
prohibit the Servicer from entering into this Agreement or is likely to materially and adversely
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affect either the ability
of
the Servicer to perform its obligations under this Agreement
or
the
financial condition
of
the Servicer.
(g)
Any consent, approval, authorization
or
order
of
any Governmental
Authority required for the execution, delivery and performance
by
the Servicer
of
or compliance
by
the Servicer with this Agreement or the consummation
of
the transactions contemplated
by
this Agreement has been obtained and is effective.
(h)
Neither the Servicer
nor
any Subservicer or their respective Affiliates
shall, at any time, (i)
be
a partner or joint venturer with any Borrower, (ii)
be
an agent
of
any
Borrower,
or
allow any Borrower to be an agent
of
the Servicer or any Subservicer,
or
(iii) have
any interest whatsoever in any Borrower, Guarantor
or
other obligor with respect to any Loan or
any
of
the Collateral.
Section 5.02
Reporting, Books and Records and Compliance Covenants.
The
Servicer
covenants to the Company as follows:
(a)
The Servicer shall
be
responsible for submitting all Internal Revenue
Service information returns related to the Loans for all applicable periods commencing with the
Servicing Transfer Date. Information returns include reports on Forms I 098 and 1099 and any
other reports required
by
Law.
The
Servicer shall
be
responsible for submitting all information
returns required under applicable Law
of
any foreign Governmental Authority, to the extent such
are required to
be
filed
by
the Company under such Law, relating to the Loans, for the calendar
or tax year in which the Effective Date falls and thereafter.
(b)
The Servicer shall cause to
be
kept and maintained (including
by
any
Subservicer and including records transferred
by
the Company to the Servicer), at all times, at
the Servicer's principal place
of
business, a complete and accurate set
of
files, books and records
regarding the Loans and the Collateral, and the
Company's
interests in the Loans and the
Collateral, including records relating to the Collection Account, the LIP Account and any Other
Accounts maintained
in
connection with the Loans and Servicer Advances.
(c)
The Servicer shall cause all such books and records to
be
maintained and
retained until the date that is the later
of
ten
(1
0) years after the Effective Date
of
this Agreement
or three (3) years after the date on which the final Loan Proceeds are distributed to the Company,
which date shall
be
established
by
notice to the Servicer from the Company. All such books and
records shall
be
available during such period for inspection
by
the Company and the Participant
(and their representatives, including any applicable Governmental Authority) at all reasonable
times during business hours on any Business Days (or,
in
the case
of
any such inspection after
the term hereof, at such other location as is provided
by
notice to the Company and the
Participant, as applicable), in each instance upon two (2) Business Days' prior notice to the
Servicer. Upon request
by
the Company, the Servicer, at the sole cost and expense
of
the
Company, shall promptly send copies (the number
of
copies
of
which shall
be
reasonable)
of
such books and records to the Company. The Servicer shall provide the Company with
reasonable advance notice
of
the Servicer's intention to destroy
or
dispose
of
any documents or
files relating to the Loans and, upon the request
of
the Company, shall allow the Company, at its
own expense, to recover the same from the Servicer.
The
Servicer shall also maintain complete
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and accurate records reflecting the status
of
taxes, ground rents and other recurring charges
generally accepted
by
the mortgage servicing industry, which would become a Lien on the
security property.
(d)
The covenants set forth in
Section 5.02(b)
and
(c)
above to maintain a
complete and accurate set
of
records shall encompass all files in the Servicer's custody,
possession
or
control pertaining to the Loans and the Collateral, including all original and other
documentation pertaining to the Loans and the Collateral, all documentation relating to items
of
income and expense pertaining to the Loans and the Collateral, and all
of
the Servicer's (and
Subservicer's) internal memoranda pertaining to the Loans and the Collateral.
(e)
The Servicer shall cause to
be
furnished to the Company, each month on
the Servicer Remittance Date, commencing the first month following the Servicing Transfer
Date, a monthly Electronic Report on the Loans and Collateral containing such information and
substantially in the form set forth on Schedule 4, as the same may be amended from time to time
by
the Company and the Servicer without the Participant's consent.
(f)
The Servicer shall deliver, and shall cause each Subservicer to deliver to
the Company, on or before March I 0
1
h
of
each year,
or
such other day as the Company and the
Servicer may agree, commencing in the year 2010, an officer's certificate stating, as to the signer
thereof, that (i) a review
of
such party's activities during the preceding calendar year (or portion
thereof) and
of
its performance under this Agreement (or, as applicable, any Subservicing
Agreement) has been made under such officer's supervision, and (ii) to the best
of
such officer's
knowledge and belief, based on such review, such party has fulfilled all
of
its obligations under
this Agreement (or, as applicable, any Subservicing Agreement) in all material respects
throughout such year or portion thereof or,
if
there has been a failure to fulfill any such
obligation in any material respect, specifying each such failure and the nature and status thereof.
In the event any Subservicer was terminated, resigned or otherwise performed in such capacity
for only part
of
a year, such party shall provide such annual compliance certificate with respect
to such portion
of
the year.
(g)
On or before March I 0
1
h
of
each year, or such other day as the Company
and the Servicer agree, commencing in the year 2010, the Servicer shall, and shall cause each
Subservicer to, each at its own expense
or
the expense
of
the Company, provide a report
prepared
by
a nationally recognized firm
of
independent certified public accountants to the effect
that, with respect to the most recently ended fiscal year, such firm has examined certain records
and documents relating to compliance with the servicing requirements in this Agreement and
that, on the basis
of
such examination conducted substantially in compliance with the Uniform
Single Attestation Program for Mortgage Bankers , such firm is
of
the opinion that the Servicer
(or Subservicer's) activities have been conducted in compliance with this Agreement (including,
to the extent applicable, Regulation AB), or that such examination has disclosed no material
items
of
noncompliance except for (i) such exceptions as such firm believes to be immaterial,
and (ii) such other exceptions as are set forth in the report.
Section 5.03
Audits. Until the later
of
the date that is ten
(I
0)
years after the Effective
Date and the date that is three (3) years after the date on which the final Loan Proceeds are
distributed to the Company, which date shall be established
by
notice to the Servicer from the
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Company, the Servicer shall, and shall cause each Subservicer to, (a) provide
the
Company and
the Participant and their respective representatives (including any government agency
or
instrumentality), during normal business hours and
on
reasonable notice, with access to and the
right to review all
of
the books
of
account, reports and records relating to
the
Loans or any
Collateral, the Servicing Obligations, the Collection Account, the LIP Account, the Escrow
Accounts, any Other Accounts or any matters relating to this Agreement
or
the rights or
obligations hereunder, (b) permit such representatives to make copies
of
and extracts from the
same, (c) allow the Company and the Participant to cause such books to
be
audited
by
accountants selected
by
the Company
or
the Participant, as applicable, and (d) allow the
Company and the Participant to discuss the Servicer's and Subservicer's affairs, finances and
accounts, as they relate to the Loans, the Collateral, the Servicing Obligations, the Collection
Account, the LIP Account, the Escrow Accounts, and any Other Accounts
or
any other matters
relating to this Agreement or the rights
or
obligations hereunder, with its officers, directors,
employees, accountants (and
by
this provision the Servicer hereby authorizes such accountants to
discuss such affairs, finances and accounts with such representatives), Subservicers, and
attorneys.
Section 5.04 No Liens. The Servicer shall not place or permit (voluntarily or
involuntarily) any Lien to
be
placed on any
of
the Loans, the Collateral, the Loan Documents
or
the Loan Proceeds, and shall not take any action to interfere with the Participant's rights as a
secured party with respect to the Loans, the Collateral and the Loan Proceeds.
Section 5.05
Servicer's Duty to Advise; Delivery
of
Certain Notices. In addition to
such other reports and access to records and reports as are required to
be
provided to the
Company and the Participant hereunder, the Servicer shall cause to
be
delivered to the Company
and the Participant, such information relating to the Loans, the Collateral, the Servicer and any
Subservicer as the Company
or
the Participant
may
reasonably request from time to time and, in
any case, shall ensure that the Company and the Participant are promptly advised, in writing,
of
any matter
of
which the Servicer or Subservicer becomes aware relating to the Loans, any
of
the
Collateral, the Collection Account, Escrow Accounts, any Other Accounts
or
any Borrower or
Guarantor that materially and adversely affects the interests
of
the Company or the Participant.
Without limiting the generality
of
the foregoing, the Servicer shall immediately notify the
Company and the Participant
of
any claim, threatened claim or litigation against the Company
arising out
of
any Loan and shall cause to
be
delivered to the Company and the Participant
information indicating any possible Environmental Hazards with respect to any Collateral.
Section 5.06 Notice
of
Breach. The Servicer shall immediately notify the Company
and the Participant
of
any failure or anticipated failure
on
its part to observe and perform any
warranty, representation, covenant or agreement required to
be
observed and performed
by
it as
the Servicer.
ARTICLE VI
PARTICIPANT CONSENT
Section 6.01
Actions Requiring Participant Consent. Notwithstanding anything to the
contrary contained in this Agreement, neither the Company
nor
the Servicer shall permit to
be
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taken any
of
the following actions without the prior written consent
of
the Participant, which
may be withheld or conditioned in the Participant's sole and absolute discretion:
(a)
the sale or other transfer
of
any Loan or Collateral (or any portion thereof)
to
any Affiliate
of
the Company, the Servicer, any Affiliate
of
the Servicer, any Subservicer, or
any Affiliate
of
any Subservicer;
(b)
the financing
of
the sale or other transfer
of
any Loan or Collateral (or any
portion thereof);
(c)
the sale
of
any Loan or Collateral (or any portion thereof) that provides for
any recourse against the Company (except as otherwise permitted by the Company) or the
Participant or any share
of
the Loan Proceeds allocable
to
the Participant;
(d)
any disbursement
of
any funds in the Collection Account, the
LIP
Account
or any Other Accounts other than in accordance with the provisions
of
this Agreement;
(e)
other than capitalizing accrued and unpaid interest, Pre-Cut -Off Date
Advances, Servicing Advances and Authorized Funding Draws, advancing additional funds that
would increase the Unpaid Principal Balance; or
(f)
reimbursement for any expense or cost incurred (or paid)
to
any Affiliate
of
the Company, any Affiliate
of
the Servicer or any Affiliate
of
any Subservicer.
Section 6.02
Amendments, Modification and Waivers. No provision
of
this Agreement
may be amended, modified or waived except in writing executed by the Company and the
Servicer and, except for those provisions that may be amended without the Participant's consent,
as
and
to
the extent expressly provided in this Agreement, each such amendment and
modification shall be subject
to
the prior written consent
of
the Participant (which consent shall
not be unreasonably withheld, delayed or conditioned).
ARTICLE
VII
DEFAULTS; TERMINATION;
TERMINATION
WITHOUT
CAUSE
Section
7.01
Defaults. A default ("Default") means the occurence of:
(a)
any failure by the Servicer
to
remit to the Company or deposit in the
Collection Account, the LIP Account, the Escrow Accounts or any Other Accounts any amount
required
to
be
so
remitted or deposited under the terms
of
this Agreement in any case which
continues unremedied until12:00 p.m. New York time on the Business Day immediately
following the date upon which written notice
of
such failure, requiring the same to be remedied,
shall have been given by the Company to the Servicer; or
(b)
any Insolvency Event (without any cure period other than as may be
provided for in the definition
of
Insolvency Event) with respect to the Servicer or any Affiliate
therof, or any Subservicer or any Affiliate thereof; or
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(c)
any failure
by
the Servicer to duly perform its obligations in (i) Section
5.02(e), which failure continues unremedied for a period
of
five (5) days,
or
such other period as
the Company and the Servicer agree, after the date on which written notice
of
such failure,
requiring the same to
be
remedied, shall have been given
by
the Company to the Servicer,
or
(ii)
Section 5.02(t) or 5.02(g), which failure continues unremedied for a period
of
twenty-five (25)
days, or such other period as the Company and the Servicer agree, after the date on which written
notice
of
such failure, requiring the same to be remedied, shall have been given
by
the Company
to the Servicer;
or
(d)
any failure
by
the Servicer to cause to be remitted to the Company any
payment required to
be
made to the Company under the terms
of
this Agreement,
as
set forth in
the monthly cash flow and distribution report, in either case which continues unremedied until
12:00 p.m. New York time on the Business Day immediately following the date upon which
written notice
of
such failure, requiring the same to be remedied, shall have been given
by
the
Company to the Servicer;
or
(e)
any failure by the Servicer at any time (i) to comply with its obligation to
be a Qualified Servicer and to renew or maintain any permit
or
license necessary to carry out its
responsibilities under this Agreement in compliance with Law,
or
(ii) to cause each Subservicer
to
be
a Qualified Servieer and to renew or maintain any permit
or
license necessary to carry out
its responsibilities under any Subservicing Agreement, which, in the case
of
either (i) or (ii),
continues unremedied for a period
of
thirty (30) days after the date on which written notice
of
such failure requiring the same to be remedied shall have been given
by
the Company to the
Servicer;
or
(t)
the occurrence
of
any event
of
default or material breach
by
the Servicer
under this Agreement, which continues unremedied for a period
of
thirty (30) days after the date
on which written notice
of
such failure requiring the same to
be
remedied shall have been given
by
the Company to the Servicer; or
(g)
any failure
by
the Servicer to cause any Subservicer to comply with the
terms
of
its Subservicing Agreement with the Servicer, the occurrence
of
a default or material
breach
by
any Subservicer under its Subservicing Agreement
or
the failure
by
the Servicer to
replace any Subservicer upon the occurrence
of
any such event in accordance with the terms
governing material breach or default under the applicable Subservicing Agreement; or
(h)
any other failure (other than those specified in any
of
Sections 7.01(a)
through (g)) by the Servicer duly
to
observe or perform in any material respect any other
covenants or agreements on the part
of
the Servicer contained in this Agreement
or
to perform
any Servicing Obligation in compliance with the Servicing Standard, and such failure continues
unremedied for a period
of
thirty (30) days, or such other period as the Company and the
Servicer agree, after the date on which written notice
of
such failure, requiring the same to
be
remedied, shall have been given
by
the Company to the Servicer; provided, however, that in the
case
of
a failure that cannot be cured within thirty (30) days (or such other period as the
Company and the Servicer agree), the cure period shall be extended for an additional thirty (30)
days
if
the Servicer can demonstarte to the reasonable satisfaction
of
the Company that the
Servicer is diligently pursuing remedial action.
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Section 7.02
Termination with Cause.
(a)
Upon the occurrence
of
any Default pursuant to this Agreement (without
any cure period other than as may be provided for in Section 7.01 above), the Company, in
addition to any other rights the Company may have pursuant to this Agreement, at law (including
the Uniform Commercial Code), or in equity, including injunctive relief, specific performance or
otherwise, may terminate this Agreement
by
providing a Termination Notice to the Servicer.
(b)
Upon the occurrence
of
a Default pursuant to any
of
Sections
7.0l(a),
(b),
(c), (d), (e),
(f)
or
(h) (but with respect to a Default under clause (c), only with respect to
Sections 5.02(t) and (g) referred to therein),
or
of
this Agreement (in each case, without any cure
period other than as may
be
provided for in Section 7.01 above), the Participant, in addition to
any other rights the Participant may have at law
or
equity, including injunctive relief, specific
performance
or
otherwise, may (i) terminate this Agreement
by
providing a Termination Notice
to the Servicer, (ii) terminate the Subservicing Agreements
by
providing a written termination
notice to the Subservicers, and (iii) otherwise enforce this Agreement, in any case, without
penalty
or
payment or any fee.
(c)
The Servicer hereby consents to its immediate termination under this
Agreement
by
the Participant upon a Detimlt under Section 7.01(b)
of
this Agreement.
(d)
Upon a default or failure
of
the Company to perform its obligations under
this Agreement in a material manner, including but not limited to, the failure
of
the Company to
pay to the Servicer the Servicing Fee in full and timely, the Servicer, in addition to any other
rights it may have pursuant to this Agreement, at law
or
in equity, may terminate this Agreement
by
providing a Termination Notice to the Company, with a copy to the Participant. The
Termination Notice shall set forth with specificity the nature
of
the default
or
failure to perform
of
the Company and provide the Company with no less than thirty (30) days to cure any such
default or failure to perform.
In
the event that the default or failure to perform is not cured
within thirty (30) days from the date
of
the Termination Notice, the Servicer shall provide a
second Termination Notice to the Company with a copy to the Participant, which second
Termination Notice shall be prominently labeled as the "Second Termination Notice". Such
Second Termination Notice shall confirm to the Company that the Servicer shall continue to
perform the Servicing Obligations under this Agreement until the earlier to occur
of
(i) ninety
(90) days after the delivery
of
the Second Termination Notice to the Company and the
Participant,
or
(ii) the transfer
of
the Servicing Obligations to a successor Servicer. The duty
of
the Servicer to continue to perform the Servicing Obligations as provided in the Second
Termination Notice is contingent upon the timely and full payment
of
the Servicing Fee to the
Servicer during such period. Servicer shall cooperate fully and completely with the transition
of
the Servicing Obligations to a successor Servicer in order to assure an orderly transfer.
Section 7.03
Termination without Cause.
(a)
The Company may at any time, without cause, terminate this Agreement,
upon providing a Termination Notice to the Servicer, but only as and in accordance with the
-24
FDIC FNBN CMLCON Servicing
Agreement~
EXECUTION VERSION
12349237.5
provisions set forth on Schedule 5,
as
the same may be amended from time to time
by
the
Company and the Servicer without the Participant's consent.
(b)
The Servicer may at any time after the first anniversary
of
the Effective
Date and thereafter, without cause, terminate this Agreement. No termination
of
this Agreement
by
Servicer shall be effective unless the Servicer delivers to the Company, with a copy to the
Participant, a Termination Notice, which for the purpose
of
this Section 7 .03(b) shall
be
a notice
of
Servicer's intent to terminate this Agreement. Such Termination Notice shall be provided at
least sixty (60) days prior to any date specified
by
the Servicer as the date
of
termination
of
Servicer's Obligations under this Agreement. Notwithstanding the foregoing, such Termination
Notice shall not
be
effective unless the Termination Notice contains confirmation
of
the intent
and obligation
of
the Servicer to continue to perform its Servicing Obligations until the earlier
of
(i) ninety (90) days after the Termination Notice is given
or
(ii) such other date on which the
Servicing Obligations are transferred to a successor Servicer in an orderly manner. Servicer
shall cooperate fully and completely with the transition
of
the Servicing Obligations to a
successor Servicer in order to assure an orderly transfer. The Servicer issuing the Termination
Notice shall
be
liable for all costs associated with the transfer
of
Servicing Obligations to the
successor Servicer, including but not limited to the costs
of
transporting the servicing files and
the provision
of
any notices to Borrowers.
Section 7.04
Effective Date. Termination
as
specified in this
Article VII
shall be
effective at such time as is specified in the Termination Notice. In the event
of
such termination,
all authority and power
of
the Servicer under this Agreement, whether with respect to the Loans
or otherwise, shall pass to and be vested in the Company, the Participant
or
the successor
servicer
as
designated
by
the Company in the case
of
termination
by
the Company,
or
as
designated solely
by
the Participant in the case
of
termination
by
the Participant. The Servicer
agrees to cooperate with the Company, the Participant and such successor servicer with respect
to the timely and orderly transition
of
its obligations under this Agreement. The Servicer shall
be
liable for all obligations
of
the Servicer that have accrued under this Agreement or at Law
prior to such termination.
Section 7.05
Accounting. Upon termination
of
this Agreement as set forth herein, the
Servicer shall account for and tum over to the Company or the Participant,
or
the designee
of
either, funds collected under the terms
of
this Agreement. The Servicer shall provide written
notice in conformance with all applicable Law to the Borrowers to indicate that their Loans will
henceforth be serviced
by
the Participant, the Company
or
any successor servicer designated
by
either the Participant or the Company, as the case may be, and transfer its duties
as
the Servicer
to either the Participant, the Company
or
any successor Servicer as applicable.
ARTICLE VIII
INDEPENDENCE OF PARTIES; INDEMNIFICATION
Section 8.01
Independence
of
Parties. The Servicer shall have the status of, and act as,
an independent contractor. Nothing herein contained shall be construed to create a partnership
or
joint venture or any similar relationship between the Company and the Servicer.
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CMLCON
Servicing
Agreement-EXECUTION
VERSION
12349237.5
Section 8.02
Indemnification. The Servicer agrees to indemnifY, defend and
hold
harmless the Company, the Participant and each
of
their respective Affiliates, directors, officers,
employees and agents and each
of
their respective successors and assigns (the
"Indemnified
Parties")
from and against any and all claims, demands, suits, actions, proceedings, assessments,
losses, costs, expenses (including attorneys' fees), damages and liabilities
of
any kind
or
nature
whatsoever directly
or
indirectly resulting from
or
arising out
of
or related to (i) any inaccuracy
in any
of
the Servicer's warranties
or
representations contained in this Agreement, (ii) any failure
by the Servicer to observe or perform any
or
all
of
the Servicer's covenants, agreements
or
warranties contained in this Agreement, (iii) any act taken by the Servicer purportedly pursuant
to a power
of
attorney granted
by
the Company which act results in a claim related to the
unlawful use
of
such power
of
attorney, or (iv) failure
by
the Servicer or any Subservicer to
discharge obligations on any Collateral relating to taxes, ground rents or other such recurring
charges generally accepted by the mortgage servicing industry, which would become a Lien on
the Collateral. The Servicer shall immediately notify the Indemnified Party
if
a claim is made
with respect to this Agreement or any Loans or Collateral, assume (with prior consent
of
the
Indemnified Party) the defense
of
any such claim and pay all expenses in cormection therewith,
including attorneys' fees, and promptly pay, discharge and satisfy any judgment or decree which
may
be
entered against it or any Indemnified Party in respect
of
such claim. No expenses
incurred
by
the Servicer or any Subservicer in connection with its obligations under this Section
8.02 shall constitute a Servicer Advance. The Servicer shall follow any reasonable written
instructions received from the Indemnified Party in connection with such claims, it being
understood that the Indemnified Party shall have no duty to monitor or give instructions with
respect to such claims.
Section 8.03
Procedure for Indemnification. Promptly upon receipt
of
written notice
of
any claim, in respect
of
which indemnity may
be
sought pursuant to the terms
of
this Agreement,
the Indemnified Party will use its best efforts to notify the Servicer in writing thereof in
sufficient time for the Servicer to respond to such claim. Except to the extent that the Servicer is
prejudiced thereby, the failure
of
the Indemnified Party to promptly notify the Servicer
of
any
such claim shall not relieve the Servicer from any liability which it may have to the Indemnified
Party in cormection therewith.
If
any claim shall
be
asserted
or
commenced against the
Indemnified Party, the Servicer will be entitled to participate therein, and to the extent it may
wish to assume the defense, conduct or settlement thereof, it shall be entitled to do so with
counsel reasonably satisfactory to the Indemnified Party; provided, however, that in the event the
Servicer fails, in the reasonable judgment
of
the Indemnified Party, vigorously to defend or
pursue or attempt to settle such claim, the Company shall have the right to assume the conduct,
defense
or
settlement thereof, provided that the Company shall obtain the prior written approval
of
the Indemnified Party before ceasing to defend against any claim
or
entering into any
settlement, adjustment or compromise
of
such claim involving injunctive
or
similar equitable
relief being imposed upon any Indemnified Party or any
of
its Affiliates. After notice from the
Servicer to the Company
of
its election to assume the defense, conduct or settlement thereof, the
Servicer will not be liable to the Company for any legal
or
other expenses consequently incurred
by
the Company in connection with the defense, conduct
or
settlement thereof.
-26
FDIC FNBN CMLCON Servicing Agreement-EXECUTION VERSION
12349237.5
ARTICLE
IX
NOTICES
All notices, requests, demands, and other communications required
or
permitted to
be
given
or
delivered under or by reason
of
the provisions
of
this Agreement shall
be
in writing and
shall
be
given
by
certified or registered mail, postage prepaid, or, delivered
by
hand
or
by
nationally recognized air courier service, directed to the address
of
such Person set forth below:
If
to the Company:
with a copy to:
If
to the Participant:
with a copy to:
If
to the Servicer:
with a copy to:
FNBN-CMLCON I LLC
c/o Sorenson Group Management, LLC
4393 Riverboat Road, Suite 450
Salt Lake City, UT 84123
Attention: Donald
E.
Wallace
B.
Ray Zoll,P.C.
8941 South 700 East, Suite 103
Sandy, Utah 84070
Attention: B. Ray Zoll
Manager, Capital Markets
&
Resolutions
c/o Federal Deposit Insurance Corporation
550
17
1
h
Street, NW (F-7014)
Washington, D.C. 20429-0002
Attention: Ralph Malarni
Senior Counsel
FDIC Legal Division
Litigation and Resolutions Branch, Receivership Section
Special Issues Unit
3501 Fairfax Drive (Room E-7056)
Arlington, Virginia 22226
Attention: David Gearin
Primary Residential Mortgage, Inc.
4750 W. Wiley Post Way, Suite 200
Salt Lake City, UT 84116
Attention: Kenneth Knudson
Darryl
J.
Lee
60 East South Temple, Suite 500
Salt Lake City, UT 84111
-27
FDIC FNBN CMLCON Servicing
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EXECUTION VERSION
12349237.5
Any such notice shall become effective when received (or receipt is refused)
by
the addressee,
provided that any notice or communication that is received (or refused) other than during regular
business hours
of
the recipient shall be deemed to have been given at the opening
of
business on
the next Business Day
of
the recipient. From time to time, any Person
may
designate a
new
address for purposes
of
notice hereunder
by
notice to such effect to the other Persons identified
above.
ARTICLE
X
GOVERNING
LAW;
JURISDICTION
Section 10.01 Governing Law. THIS AGREEMENT SHALL BE GOVERNED
BY
AND CONSTRUED IN ACCORDANCE WITH THE LAW OF THE STATE OF NEW
YORK
EXCLUDING ANY CONFLICT OF LAWS RULE OR PRINCIPLE THAT MIGHT REFER
THE GOVERNANCE
OR
THE CONSTRUCTION OF THIS AGREEMENT TO THE
LAW
OF ANOTHER JURISDICTION. Nothing in this Agreement shall require any unlawful action
or inaction
by
any party hereto.
Section I 0.02 Jurisdiction; Venue and Service. Each
of
the parties hereto, for itself and
each
of
its Affiliates, hereby irrevocably and unconditionally:
(a)
agrees that any suit, action or proceeding instituted against it by any other
party with respect to this Agreement may
be
instituted, and that any suit, action
or
proceeding
instituted
by
it against any other party with respect to this Agreement shall be instituted, only in
the Supreme Court
of
the State
of
New York, County
of
New York,
or
the U.S. District Court for
the Southern District
of
New York
or
the United States District Court for the District
of
Columbia (and appellate courts from any
of
the foregoing), (ii) consents and submits, for itself
and its property, to the jurisdiction
of
such courts for the purpose
of
any such suit, action or
proceeding instituted against it
by
any other party and (iii) agrees that a final judgment in any
such suit, action
or
proceeding shall be conclusive and may be enforced in other jurisdictions
by
suit on the judgment
or
in any other manner provided
by
Law;
(b)
agrees that service
of
all writs, process and summonses in any suit, action
or
proceeding pursuant to Section 10.02(a) may be effected
by
the mailing
of
copies thereof
by
registered or certified mail, postage prepaid, to it at its address for notices pursuant to Article
IX
(with copies to such other Persons as specified therein); provided, however, that nothing
. contained in this Section 10.02(a) shall affect the ability
of
any party to be served process in any
other manner permitted
by
Law;
(c)
(i) waives any objection that it may now
or
hereafter have to the laying
of
venue
of
any suit, action or proceeding arising out
of
or relating to this Agreement brought in
any court specified in Section 10.02(a), (ii) waives any claim that any such suit, action or
proceeding brought in any such court has been brought in an inconvenient forum and (iii) agrees
not to plead or claim either
of
the foregoing; and
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FDIC FNBN CMLCON Servicing Agreement-EXECUTION VERSION
12349237.5
(d)
agrees that nothing contained in this Section 10.02 shall
be
construed to
constitute consent to jurisdiction by the Failed Bank or the FDIC, in any capacity,
or
a limitation
on any removal rights the FDIC, in any capacity, may have.
Section 10.03 Waiver
of
Jury Trial. EACH OF THE PARTIES HERETO, FOR ITSELF
AND EACH OF ITS AFFILIATES, HEREBY IRREVOCABLY AND UNCONDITIONALLY
W AlVES ANY RIGHT IT MAY HAVE TO A TRIAL BY JURY OF
ANY
DISPUTE
ARISING OUT OF OR RELATING TO THIS AGREEMENT AND AGREES THAT ANY
SUCH DISPUTE SHALL BE TRIED BEFORE A JUDGE SITTING WITHOUT A JURY.
ARTICLE
XI
MISCELLANEOUS
Section 11.01 No Assignment by Servicer; No Transfer
of
Ownership Interests
in
Servicing Rights.
(a)
The Servicer hereby acknowledges that this Agreement constitutes a
personal services agreement between the Company and the Servicer. The Servicer shall not
assign any rights or obligations hereunder to any other Person other than as is expressly provided
in this Agreement. Any purported sale, sub-participation or assignment or delegation in
violation
of
this Section
ll.Ol(a)
shall be void
ab initio
and
of
no force
or
effect whatsoever.
(b)
Under no circumstances shall the Servicer transfer to any Subservicer
or
any other Person any ownership interest in the servicing
of
the Loans
or
any right to transfer or
sell the servicing to the Loans (other than in connection with the sale
of
any Loan). The Servicer
shall not assign, pledge
or
otherwise transfer or purport to assign, pledge or otherwise transfer
any interest to any Person in the servicing
of
the Loans (other than in connection with the sale
of
any Loan). Any purported assignment, pledge, delegation
or
other transfer in violation
of
this
Section
ll.Ol(b)
shall be void
ab initio
and
of
no force
or
effect whatsoever.
Section 11.02 Legal Fees. No party to this Agreement shall be responsible for the
payment
of
the legal fees or expenses incurred
by
the other party hereto in connection with the
negotiation and execution
of
this Agreement or any subsequent modifications or supplements
hereto.
Section 11.03 Entire Agreement. This Agreement contains the entire agreement between
the Company and the Servicer and supersedes any and all other prior agreements, whether oral or
written, with respect to the subject matter hereof.
Section 11.04 Counterparts; Facsimile Signatures. This Agreement may be executed in
two (2)
or
more counterparts, each
of
which shall be deemed an original but all
of
which together
shall constitute but one and the same agreement. This Agreement and any amendments hereto,
to the extent signed and delivered by facsimile or other electronic means, shall
be
treated in all
manner and respects
as
an original agreement and shall
be
considered to have the same binding
legal effect
as
if
it were the original signed version thereof delivered in person. No signatory to
this Agreement shall raise the use
of
a facsimile machine or other electronic means to deliver a
signature or the fact that any signature or agreement was transmitted
or
communicated through
-29
FDIC FNBN CMLCON Servicing Agreement-EXECUTION VERSION
12349237.5
the use
of
a facsimile machine or other electronic means as a defense to the formation or
enforceability
of
a contract and each such Person forever waives any such defense.
Section 11.05 Headings. Paragraph titles or captions contained in this Agreement are
inserted only as a matter
of
convenience and for reference and in no way define, limit, extend or
describe the scope
of
this Agreement or the intent
of
any provisions hereof. All Section and
paragraph references contained herein shall refer to Sections and paragraphs in this Agreement
unless otherwise specified.
Section 11.06 Construction. This Agreement shall be construed and interpreted in
accordance with the following:
(a)
References to "Affiliates" include, with respect to any specified Person,
only such other Persons which from time
to
time constitute "Affiliates"
of
such specified Person,
and do not include, at any particular time, other Persons that may have been, but at such time
have ceased
to
be, "Affiliates"
of
such specified Person, except to the extent that any such
reference specifically provides otherwise.
(b)
The term "or" is not exclusive.
(c)
A reference
to
a Law includes any amendment, modification or
replacement
to
such Law.
(d)
References
to
any document, instrument or agreement (including this
Agreement) (a) shall be deemed
to
include all appendices, exhibits, schedules and other
attachments thereto and all documents, instruments or agreements issued or executed in
replacement thereof, and (b) shall mean such document, instrument or agreement, or replacement
thereto,
as
amended, modified and supplemented from time
to
time in accordance with its terms
and as the same is in effect
at
any given time.
(e)
Unless otherwise specified, the words "hereof," "herein" and "hereunder"
and words
of
similar import shall refer
to
this Agreement as a whole and not to any particular
provision
of
this Agreement.
(f)
The words "include" and "including" and words
of
similar import are not
limiting, and shall be construed
to
be followed by the words "without limitation," whether or not
they are in fact followed by such words.
(g)
The word "during" when used with respect to a period
of
time shall be
construed to mean commencing
at
the beginning
of
such period and continuing until the end
of
such period.
(h)
Unless the context otherwise requires, singular nouns and pronouns when
used herein shall be deemed
to
include the plural and vice versa and impersonal pronouns shall
be deemed to include the personal pronoun
of
the appropriate gender.
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FDIC FNBN CMLCON Servicing Agreement-EXECUTION VERSION
12349237.5
Section 11.07 Compliance with Law. Except as otherwise specifically provided herein,
each party to this Agreement shall, at its own cost and expense, obey and comply with all
applicable Laws, as they may pertain to such party's perfonnance
of
its obligations hereunder.
Section 11.08 Severability. Any provision
of
this Agreement which is prohibited
or
unenforceable in any jurisdiction shall be ineffective, but such ineffectiveness shall be limited
as
follows: (i)
if
such provision is prohibited or unenforceable in such jurisdiction only as to a
particular Person or Persons and/or under any particular circumstance or circumstances, such
provision shall
be
ineffective, but only in such jurisdiction and only with respect to such
particular Person or Persons and/or under such particular circumstance
or
circumstances, as the
case
may
be; (ii) without limitation
of
clause (i), such provision shall in any event
be
ineffective
only as to such jurisdiction and only to the extent
of
such prohibition or unenforceability, and
such prohibition or unenforceability in such jurisdiction shall not invalidate
or
render
unenforceable such provision in any other jurisdiction; and (iii) without limitation
of
clauses (i)
or (ii), such ineffectiveness shall not invalidate any
of
the remaining provisions
of
this
Agreement. Without limitation
of
the preceding sentence, it is the intent
of
the parties to this
Agreement that in the event that in any court proceeding, such court determines that any
provision
of
this Agreement is prohibited
or
unenforceable in any jurisdiction (because
of
the
duration or scope (geographic or otherwise)
of
such provision, or for any other reason) such
court shall have the power to, and shall, (x) modifY such provision (including without limitation,
to the extent applicable, by limiting the duration
or
scope
of
such provision and/or the Persons
against whom, and/or the circumstances under which, such provision shall
be
effective in such
jurisdiction) for purposes
of
such proceeding to the minimum extent necessary so that such
provision, as so modified, may then
be
enforced in such proceeding and (y) enforce such
provision, as so modified pursuant to clause (x), in such proceeding. Nothing in this Section is
intended to, or shall, limit
(I)
the ability
of
any party to this Agreement to appeal any court
ruling or the effect
of
any favorable ruling on appeal or (2) the intended effect
of
Section 10.01.
Section 11.09 Third Party Beneficiary. The Participant shall
be
and is hereby designated
as
a third party beneficiary under this Agreement and, as such, the Participant is entitled to
enforce this Agreement as
if
the Participant were a party hereto. Notwithstanding the foregoing
the Participant shall have no obligation to undertake any
of
the duties
of
the Company hereunder
and shall have
no
liability whatsoever to the Servicer, any Subservicer or any other party related
to this Agreement. There shall be no other third party beneficiaries.
Section 11.10 Protection
of
Confidential Information. The Servicer shall keep
confidential and shall not divulge to any party, without the Company's prior written consent, any
information pertaining to the Participation Agreement, the Loans
or
any Borrower
or
the
Collateral thereunder, except
as
required pursuant to this Agreement and except to the extent that
it is necessary and appropriate for the Servicer to do so in working with legal counsel, auditors,
taxing authorities, regulatory authorities or other Governmental Authority or in accordance with
the Servicing Standard.
Section 11.11 Time
of
Essence. Time is hereby declared to
be
of
the essence
of
this
Agreement and
of
every part hereof
-
31
FDIC
FNBN
CMLCON Servicing Agreement-EXECUTION VERSION
12349237.5
Section 11.12 No Presumption. This Agreement shall
be
construed fairly as to each
party hereto and
if
at any time any such term or condition is desired
or
required to
be
interpreted
'or construed, no consideration shall
be
given to the issue
of
who actually prepared, drafted
or
requested any term or condition
of
this Agreement or any agreement
or
instrument subject
hereto.
Section 11.13 No Right
of
Setoff. The Servicer hereby waives any and all rights it
may
otherwise have (whether
by
contract or operation
of
Law
or
otherwise) to any setoff, offset,
counterclaim
or
deduction (or to assert any claim for any setoff, offset counterclaim or
deduction) against the Loan Proceeds.
Section 11.14 Release
of
Participant and Prior Servicers. The Servicer hereby releases
and discharges the Participant and any predecessor servicer, and all
of
their respective officers,
directors, employees, agents, attorneys, contractors and representatives, and all
of
their
respective successors and assigns (other than the Company) and Affiliates, from any and all
claims (including any counterclaim or defensive claim), demands, causes
of
action, judgments
or
legal proceedings and remedies
of
whatever kind or nature that the Servicer had, has or might
have in the future, whether known or unknown, which are related in any manner whatsoever to
that servicing
of
the Loans or Collateral by the Participant or such other predecessor servicer
prior to the Servicing Transfer Date (other than due to gross negligence
or
willful misconduct
of
the Participant
or
other predeccessor servicer).
[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]
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FDIC
FNBN
CMLCON
Servicing
Agreement-EXECUTION
VERSION
12349237.5
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to
be
executed
as
of
the day and year first above written.
COMPANY:
FNBN-CMLCON I LLC
By:
SGH FNB Ventures, LLC, a Delaware
limited liability company, Sole Member and
Manager
By: Sorenson Group Management, LLC, a
Delaware limited liability company, its
B
Nam
Title: Manager
SERVICER:
PRIMARY RESIDENTIAL MORTGAGE, INC.
By:
_______________
_
Name: Kenneth
C.
Knudson
Title: Vice President - Finance
-33
FDIC
FNBN
CMLCON
Servicing
Agreement-EXECUTION
VERSION
12349237.5
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be executed
as
of
the day and year first above written.
COMPANY:
--------------------~,LLC
By:
_____________
_
Name:
Title:
SERVICER:
-
31
EXHIBIT
A
LOAN
SCHEDULE
[Attached]
See
Tab22
FDIC
FNBN
CMLCON
Servicing
Agreement-
EXECUTION
VERSION
12349237.5
SCHEDULE!
FEE SCHEDULE
PROGRAM
S:ET-UP
FEE:
A loan underwriting conditional analysis review
of
$450 per loan and $95
per
loan initial
setup fee
will
be charged
by
Servicer to review the loan file servicing and other
underwriting conditions
of
the loans and to setup the loan on the Servicer loan servicing
system. In addition, for all loans that
do
not have a valid tax service contract
or
which
require updated UCC filing research, Company
will
reimburse Servicer
for
the purchase
of
a tax service contract and/or any UCC filing research necessary to setup the initial loan
and provide for the ongoing servicing
of
the same. Reimbursement
of
all legal costs
associated with negotiating and closing the servicing agreement
is
not included in this fee
and
will
be an additional expense.
LOAN SERVICING FEES:
$95
per~erforming
loan per month
$250
per
month for all delinquent and defaulted loans past due greater than sixty (60)
days delinquent.
'
I
LOT RELEASE FEE:
'
$!50
per
release request processed, plus Servicer's actual out-of-pocket expenses.
ADDmONAL
FUNDINGS PROCESSING FEE:
$1,750
per
funding request processed, plus Servicer's actual out-of-pocket expenses
including third-party property inspection services, title date-down services, title lien resolution
and recording
f~es,
etc.
ASSIGNMENT OF LOAN DOCUMENTS:
$100
pet
assignment, plus Servicer's actual out-of-pocket expenses
PROPERTY I1'<SPECTIONS:
Servicer will bill
all
inspection costs back to the borrower
or
Company under a separate
billing statement on a "cost plus 30%" basis.
SCHEDULE2
SERVICING
OBLIGATIONS
Company Duties:
Administration
REO Management and Disposition
Mai)age LIP Draws and Inspections
Direct pursuance
of
governmental guaranties
Mru)age Defaults/Foreclosures
Mru)age Litigation
Servicer
Dutie8:
Loab administration
Loan accounting and reporting
A.RM
administration
Tax; insurance and UCC administration- consisting
of
an annual review and
confirmation
of
the status
of
taxes paid and insurance coverage requirements
Escr.ow
and
reserve administration (to the extent necessary)
Routine customer service
Annual fmaucial statement collection, review and analysis (as required by individual
loans)
Property site inspections (to the extent requested)
Loan document assignments (to the extent requested)
Remittances to Company and participants once
per
month
Lot
1-eleases
Funding draw requests -
Servicer will review all funding draw requests, provide a
recommendation to Company for all required construction disbursements
Manage custodial accounts (LIP Account, Liquidity Reserve Account, Litigation
Reserve Account)
'
SCHEDULE3
REIMBURSEMENT OF SERVICER ADVANCES
To the extent that Servicer shall make Servicing Advances, Company shall reimburse
such Servicing Advances to Servicer no later than the
lO'h
day
of
the month following
such advance, together with interest from the date
of
the Servicing Advances to the
date
of
reimbursement
of
same, such interest to accrue at the rate
of
U.S. Bank, NA
Prime Rate
of
Interest plus Three Percent, provided that in no event shall the interest
rate be less than ten percent (I 0%) per annum.
Version
02/20/2009
POSTED/1-13-09
SCHEDULE4
FORM OF ELECTRONIC REPORT
ON
THE
LOANS AND COLLATERAL
[To be provided
by
Servicer and Company)
FNa
COMMCONSTR!>ERV
AO.DOC
12345427.1
Reporting Requirements
Data File from servicing system
to
be provided in Excel
(or such other data fields that Participant may request related to Company assets
utilizing
sys~ems
maintained
by
Servicer
or
any
Subservicer)
Data
Fields
Required
by
property
Loan
Number
2nd Loan Number
Combined Loan Amount
I
st
Loan Arrit
2nd
Loan Amt
Combined UPB or Disb
Amt
1st Loan UPB
or
Disb
2nd
Ln
UPB or Disb Amt
Original
Rat~
Current
Rate
Terrn
Note
CPMod
1st Due
Next Due
Maturity
Margin
Index
Street
City
ST
ZIP
Original ApJiraisal
Lien
'
Credit Score'
CoBwr Score
Units
Prop Class
Purp Type
Occ
Documentation
lnt
Only
,
Int Only
En~
1
PMI Cert
Basis
PI
Pyrnt
TIPymt
2ndT&IBaJ'
TI Balance
D-7
FNB
CommConstr;Pt~.r!
&
Scrv
Ag.DOC
Last CP lnsp
CP%Comp
coo
BPO
Date
BPO
Value As
Is
BPO
Valtte l).epair or Complete
BPO
Prop Condition
Last
Dlq
Insp
Inspection
Type
lnsp Order
Inspection Comments
Updated
Score
Type
Prod
Product
Description
1st
Mtg
Loan
Builder
SqFt
Int
Type
Inv
Grp
PC
Consun1er
In~licator
Bankruptcy
J:Jate
D-8
FNB
CommConstr
~nrt
&
Serv
Ag.DOC
SCHEDULES
TERMINATION WITHOUT CAUSE
This Agreement
may
be
terminated
by
Company, without cause, upon thiny (30) days
written notice
to
the Servicer. Termination
of
this Agreement shall be without prejudice to any
rights
of
the Company or the Servicer, which may have accrued through the date
of
termination hereunder. Upon such termination, the Servicer shall (i) remit all funds in the
Collection Account, the LIP Account, Escrow Accounts and Other Accounts
to
the Company
or such other Person designated by the Company, net
of
accrued Servicing Fees, Servicer
Advances
or
Servicing Expenses through the termination date
to
which the Servicer would
be
entitled to payment
or
reimbursement hereunder; (ii) deliver
all
related Loan Documents
to
the
Company or
to
Persons designated by the Company; and (iii) fully cooperate with the
Company and any new servicer to effectuate an orderly transition
of
Loan Servicing
of
the
related Loans. Upon such termination, any Servicing Fees, Servicer Advances or Servicing
Expenses (with interest thereon at the Advance Rate) which remain unpaid
or
unreimbursed
after the Servicer has netted out such amounts pursuant to the preceding sentence shall be
remitted by the Company
to
the Servicer within ten (10) Business Days after the Company's
receipt
of
an itemized invoice therefor.
With respect
to
a termination
of
this Agreement by the Company without cause as
to
any or all
of
the Loans, the Company shall pay
to
Servicer within ten (10) Business Days after
the effective date
of
such termination a termination fee per loan equal
to
the greater
of
i)
the
amount equal
to
the sum Servicer received
as
a Servicer Fee
in
the sixty days prior
to
the date
of
Termination, or ii) $475 per loan.
Version
02/20/2009