Common use of Loans in Litigation Clause in Contracts

Loans in Litigation. (a) (i) With respect to any Loan that is the subject of any type of pending litigation as of the Closing Date that consists solely of claims or actions based upon, arising out or involving Excluded Liabilities (“Excluded Liabilities Litigation”), the Company shall have no obligation to substitute its counsel to represent the Company’s interests in the Excluded Liabilities Litigation. In such case, the Initial Member shall retain all rights and obligations, and shall remain the real party-in-interest, with respect to and shall retain control over the Excluded Liabilities Litigation. With respect to any Loan that is the subject of any type of pending litigation that consists of both Excluded Liabilities Litigation and other claims or actions, that portion of any litigation that consists of Excluded Liabilities Litigation shall be bifurcated from such other claims or actions, with the Initial Member retaining all rights and obligations, and remaining the real party-in-interest, with respect to and shall retain control over the Excluded Liabilities Litigation and the Company substituting itself as the real party in interest and taking control of the remaining claims in the litigation as is provided otherwise in this Section 4.5. The Initial Member shall pay all of the costs and expenses incurred by it in connection with any such Excluded Liabilities Litigation, including all legal fees and expenses and court costs. The Initial Member’s determination whether or not pending litigation consists of Excluded Liabilities Litigation and the extent to which pending litigation consists of both Excluded Liabilities Litigation and other claims or actions shall be conclusive and binding for all purposes with respect to this Agreement.

Loans in Litigation. On or prior to the Servicing Transfer Date, Purchaser, at its cost, shall deliver to Seller for Seller’s execution any and all documents necessary to substitute Purchaser for Seller in any then-pending litigation, bankruptcy, receivership, foreclosure, or arbitration proceeding (aA) involving any of the Loans or REO Property and in which Seller is a party, and (iB) With concerning which (1) the Loan File contains one or more pleadings or other court filings that identify the forum in which the matter is pending, or other materials that describe the proceeding in reasonable detail, or (2) Seller provided to Purchaser, during the period between the Cut-off Date and the Closing Date, a written notice that identified the forum in which the matter is pending and otherwise described the proceeding in reasonable detail (collectively, the “Pending Actions”). Such documents (the “Substitution Documents”) shall be reasonably satisfactory to Seller. Within five (5) Business Days following its receipt thereof, Seller shall execute the Substitution Documents and return them to Purchaser. Seller agrees to reasonably cooperate with Purchaser, at Purchaser’s expense, in connections with Purchaser’s filing of the Substitution Documents. Seller acknowledges and agrees that Purchaser, in its sole discretion, may retain Seller’s existing legal counsel in connection with any one or more of the Pending Actions, provided, that neither Seller nor Purchaser shall retain or continue to engage any such counsel with respect to any Loan that is the subject Pending Action if it involves a conflict of interest between Seller and Purchaser — and any type of pending litigation as of engagement letter or conflicts waiver entered into with such counsel after the Closing Date that consists solely of claims or actions based upon, arising out or involving Excluded Liabilities (“Excluded Liabilities Litigation”), the Company shall have no obligation to substitute its counsel to represent the Company’s interests in the Excluded Liabilities Litigationso provide. In such case, the Initial Member shall retain all rights and obligations, and shall remain the real party-in-interestaddition, with respect to and shall retain control over the Excluded Liabilities Litigation. With respect to any Loan that is the subject bankruptcy proofs of any type of pending litigation that consists of both Excluded Liabilities Litigation and other claims or actionsclaim, if any, that portion of have been filed by Seller in any litigation that consists of Excluded Liabilities Litigation shall be bifurcated from such other claims or actions, with the Initial Member retaining all rights and obligations, and remaining the real party-in-interest, with respect to and shall retain control over the Excluded Liabilities Litigation and the Company substituting itself as the real party in interest and taking control of the remaining Pending Actions, if Purchaser so requests, Seller shall execute and deliver to Purchaser such assignments of such claims as Purchaser shall prepare and submit to Seller in the litigation as is provided otherwise in this Section 4.5. The Initial Member shall pay all of the costs and expenses incurred by it in connection with any such Excluded Liabilities Litigation, including all legal fees and expenses and court costs. The Initial Member’s determination whether or not pending litigation consists of Excluded Liabilities Litigation and the extent forms that are reasonably acceptable to which pending litigation consists of both Excluded Liabilities Litigation and other claims or actions shall be conclusive and binding for all purposes with respect to this AgreementSeller.