Loans in Litigation. (a) With respect to any Loan subject of any type of pending litigation as of the Closing Date, the Company shall notify the FDIC’s Regional Counsel, 0000 Xxxxx Xxxxxx, Dallas, Texas 75201-4586, within fifteen (15) Business Days before the Servicing Transfer Date of the name of the attorney selected by the Company to represent the Company’s interests in the litigation. The Company shall, before the Servicing Transfer Date, notify the clerk of the court or other appropriate official and all counsel of record that ownership of the Loan was transferred from the Initial Member to the Company. Subject to the provisions of Sections 4.5(c) and 4.5(d), the Company shall have its attorney file appropriate pleadings and other documents and instruments with the court or other appropriate body before the Servicing Transfer Date, substituting the Company’s attorney for the Initial Member’s attorney, removing the Initial Member and the Failed Bank as a party to the litigation and substituting the Company as the real party-in-interest. Nothing contained in this Agreement shall preclude the Company from retaining the same attorney retained by the Initial Member (or the Failed Bank) to handle litigation with respect to the Loans, provided, that, with respect to litigation referred to in Section 4.5(c), the Company shall not retain the same counsel that represents the Initial Member in connection with such litigation unless the FDIC’s Regional Counsel (referred to above) agrees in writing to such dual representation. Subject to the provisions of Section 4.5(b) (and the Company’s compliance with its obligations therein) and Section 4.5(d), in the event the Company fails, prior to the Servicing Transfer Date, to remove the Initial Member and the Failed Bank as parties to the litigation and substitute the Company as the real party-in-interest, (1) the Initial Member may, but shall have no obligation to, continue to pursue or defend such litigation on behalf of the Company and, (2) in the event the Initial Member does continue to pursue or defend such litigation, the Company shall be liable for and hereby agrees to pay all costs and expenses incurred by the Initial Member in connection therewith (which expenses shall constitute Borrower Reimbursable Costs. (b) If the Company is unable, as a matter of applicable Law, to cause the Initial Member and Failed Bank to be replaced by the Company as party-in-interest in any pending litigation as required by Section 4.5(a), the Company shall so notify the FDIC’s Regional Counsel, at the address specified above, no less than five (5) Business Days before the Servicing Transfer Date, and provide such evidence to such effect and stating the reasons for such failure. In any such event, (i) the Company shall cause its attorney to conduct such litigation at the Company’s expense (which expenses shall constitute Borrower Reimbursable Costs); (ii) the Company shall cause the removal of the Initial Member and Failed Bank and substitution of the Company as party-in-interest in such litigation at the earliest time possible under applicable Law;
Appears in 2 contracts
Samples: Loan Contribution and Assignment Agreement, Loan Contribution and Assignment Agreement
Loans in Litigation. (a) With respect to any Loan subject of any type of pending litigation as of the Closing Date, the Company shall notify the FDIC’s Regional Counsel, 0000 Xxxxx Xxxxxx, Dallas, Texas 75201-4586, within fifteen (15) Business Days before the Servicing Transfer Date of the name of the attorney selected by the Company to represent the Company’s interests in the litigation. The Company shall, before the Servicing Transfer Date, notify the clerk of the court or other appropriate official and all counsel of record that ownership of the Loan was transferred from the Initial Member to the Company. Subject to the provisions of Sections 4.5(c) and 4.5(d), the Company shall have its attorney file appropriate pleadings and other documents and instruments with the court or other appropriate body before the Servicing Transfer Date, substituting the Company’s attorney for the Initial Member’s attorney, removing the Initial Member and the Failed Bank as a party to the litigation and substituting the Company as the real party-in-interest. Nothing contained in this Agreement shall preclude the Company from retaining the same attorney retained by the Initial Member (or the Failed Bank) to handle litigation with respect to the Loans, provided, that, with respect to litigation referred to in Section 4.5(c), the Company shall not retain the same counsel that represents the Initial Member in connection with such litigation unless the FDIC’s Regional Counsel (referred to above) agrees in writing to such dual representation. Subject to the provisions of Section 4.5(b) (and the Company’s compliance with its obligations therein) and Section 4.5(d), in the event the Company fails, prior to the Servicing Transfer Date, to remove the Initial Member and the Failed Bank as parties to the litigation and substitute the Company as the real party-in-interest, (1) the Initial Member may, but shall have no obligation to, continue to pursue or defend such litigation on behalf of the Company and, (2) in the event the Initial Member does continue to pursue or defend such litigation, the Company shall be liable for and hereby agrees to pay all costs and expenses incurred by the Initial Member in connection therewith (therewith, which expenses shall constitute Borrower Reimbursable CostsServicing Expenses.
(b) If the Company is unable, as a matter of applicable Law, to cause the Initial Member and the Failed Bank to be replaced by the Company as party-in-interest in any pending litigation as required by Section 4.5(a), the Company shall so notify the FDIC’s Regional Counsel, at the address specified above, no less than five (5) Business Days before the Servicing Transfer Date, and provide such evidence to such effect and stating the reasons for such failure. In any such event, (i) the Company shall cause its attorney to conduct such litigation at the Company’s expense, which expense (which expenses shall constitute Borrower Reimbursable Costs)Servicing Expenses; (ii) the Company shall cause the removal of the Initial Member and the Failed Bank and substitution of the Company as party-in-interest in such litigation at the earliest time possible under applicable Law;; (iii) the Company shall use commercially reasonable efforts to cause such litigation to be resolved by judgment or settlement in as reasonably efficient a manner as practical; (iv) the Initial Member shall cooperate with the Company and the Company’s attorney as reasonably required in the Initial Member’s sole judgment to bring such litigation or any settlement relating thereto to a reasonable and prompt conclusion; and (v) no settlement shall be agreed upon by the Company or its agents or counsel without the express prior written consent of the Initial Member, unless such settlement includes an irrevocable and complete waiver and release of any and all potential claims against the Initial Member and the Failed Bank in relation to such litigation or the subject Loans or Obligations by any Person asserting any claim in the litigation and any Borrower, and any and all losses, liabilities, claims, causes of action, damages, demands, taxes, fees, costs and expenses relating thereto shall be paid by the Company without recourse of any kind to the Initial Member or the Failed Bank (other than to the extent the same constitute Servicing Expenses). The Company shall pay all of the costs and expenses incurred by it in connection with the actions required to be taken by it pursuant to Section 4.5(a) and this Section 4.5(b) (which expenses shall constitute Servicing Expenses), including all legal fees and expenses and court costs (which expenses shall constitute Servicing Expenses), and shall reimburse the Initial Member, upon demand, for all legal expenses the Initial Member incurs on or after the Effective Date with respect to any such litigation, including costs incurred in connection with the dismissal thereof or withdrawal therefrom (which costs incurred by the Initial Member shall constitute Post-Cut-Off Date Advances hereunder).
(c) In the event there is asserted against the Initial Member (or the Failed Bank) or the Company any claim or action with respect to one or more Loans that is based upon or arises out of any act or omission of the Initial Member or the Failed Bank on or prior to the Cut-Off Date (and not any act or omission of or on behalf of the Company) and that alleges liability that, in the opinion of both the Initial Member and the Company, is reasonably likely to exceed the liability of the Company as the assignee and owner of the Loan after the Cut-Off Date, (i) the Company shall be responsible for and shall control and assume the defense of the Company and the Company’s interest in the Loans, at the Company’s own expense and by the Company’s own counsel, which counsel must be reasonably satisfactory to the Initial Member; and (ii) the Initial Member shall be responsible for and shall control and assume the defense of the Initial Member and the Failed Bank at the Initial Member’s own expense. To the extent their interests are not in conflict, the Company and the Initial Member shall cooperate in the defense of any such claims or action and shall use commercially reasonable efforts to work together to resolve or settle such claims or action in a manner that is mutually agreeable and in their respective best interests. The Company shall obtain the prior written approval of the Initial Member before ceasing to defend against any such claims or action. The costs and expenses incurred by the Company in connection with its defense of any claim or action described in this Section 4.5(c), including (x) reasonable attorneys’ fees and expenses incurred to defend against (or investigate) the same or pursue counterclaims or cross-claims against other parties, (y) awards or judgments assessed against the Company with respect to any such claim or action, or (z) the costs of any settlement of such claim or action, shall constitute Pre-Approved Charges for purposes of the Participation Agreement. If, as a result of any claim or action subject to the provisions of this Section, (i) there is entered against the Company either (1) a final, non-appealable monetary judgment holding the Company liable for damages in excess of an amount equal to the Loan Value of the Loan relating to or that is the subject of such claim (such Loan, the “Affected Loan”) divided by
Appears in 1 contract
Loans in Litigation. (a) With respect to any Loan Loans that, at the Closing Date, are subject of to any type of pending litigation as that is listed on Schedule 2.01(c) or of which the Closing DateCompany has received written notice of from the Initial Member, the Company shall notify the FDIC’s Regional Counsel, 0000 Xxxxx Xxxxxx, Dallas, Texas 75201-4586, within fifteen thirty (1530) Business Days before after the Servicing Transfer Date Closing Date, or within thirty (30) Business Days after receiving such written notice, as the case may be, of the name of the attorney selected by the Company to represent the Company’s interests in the litigation. The Company shall, before within thirty (30) Business Days after the Servicing Transfer Closing Date, or within thirty (30) Business Days after receiving the written notice described above, as the case may be, notify the clerk of the court or other appropriate official and all counsel of record that ownership of the Loan was transferred from the Initial Member to the Company. Subject to the provisions of Sections 4.5(cSection 4.04(c) and 4.5(d4.04(d), the Company shall have its attorney file appropriate pleadings and other documents and instruments with the court or other appropriate body before within thirty five (35) Business Days after the Servicing Transfer Closing Date, or within thirty (30) Business Days after receiving the written notice described above, as the case may be, substituting the Company’s attorney for the Initial Member’s attorney, removing the Initial Member and the Failed Bank IndyMac Federal (or any predecessor-in-interest) as a party to the litigation and substituting the Company as the real party-in-interest. Nothing contained in this Agreement shall preclude the Company from retaining the same attorney retained by the Initial Member (or the Failed BankThrift) to handle litigation with respect to the Loans, provided, that, with respect to litigation referred to in Section 4.5(c4.04(c), the Company shall not retain the same counsel that represents the Initial Member in connection with such litigation unless the FDIC’s Regional Counsel (referred to above) agrees in writing to such dual representation. Subject to the provisions of Except as otherwise provided in Section 4.5(b4.04(b) (and the Company’s compliance with its obligations therein) and Section 4.5(d), in the event the Company fails, prior fails to comply with this Section 4.04(a) within thirty five (35) Business Days after the Servicing Transfer Closing Date, to remove or within thirty (30) Business Days after receiving the Initial Member and the Failed Bank as parties to the litigation and substitute the Company written notice described above, as the real party-in-interestcase may be, (1) the Initial Member may, but shall have no obligation to, continue to pursue or defend such litigation on behalf of the Company and, and (2) in the event the Initial Member does continue to pursue or defend such litigation, the Company shall be liable for and hereby agrees to pay all costs and expenses incurred by the Initial Member in connection therewith (therewith, which expenses shall constitute Borrower Reimbursable CostsServicing Expenses.
(b) If the Company is unable, as a matter of applicable LawLaw or due to the actions or inactions of third parties unrelated to the Company and over whom the Company has no control, to cause the Initial Member and Failed Bank IndyMac Federal (or any predecessor-in-interest) to be replaced by the Company as party-in-interest in any pending litigation as required by Section 4.5(a4.04(a), the Company shall so notify provide to the FDIC’s Regional Counsel, at the address specified above, no less than within thirty-five (535) Business Days before after the Servicing Transfer Closing Date, and provide such or within thirty-five (35) Business Days after receiving the written notice described in Section 4.04(a), as the case may be, evidence to such effect effect, including reference to any applicable Law, and stating the reasons for such failureinability. In any such event, (i) the Company shall cause its attorney to conduct such litigation at the Company’s expense, which expense (which expenses shall will constitute Borrower Reimbursable Costs)Servicing Expenses; (ii) the Company shall cause the removal of the Initial Member and Failed Bank IndyMac Federal (or its predecessor-in-interest) and substitution of the Company as party-in-interest in such litigation as soon as reasonably practicable; (iii) the Company shall use commercially reasonable efforts to cause such litigation to be resolved by judgment or settlement in as reasonably efficient a manner as practical; (iv) the Initial Member shall cooperate with the Company and the Company’s attorney as reasonably required to bring such litigation or any settlement relating thereto to a reasonable and prompt conclusion; and (v) no settlement shall be agreed upon by the Company or its agents or counsel without the express prior written consent of the Initial Member, unless such settlement includes an irrevocable and complete waiver and release of any and all potential claims against the Initial Member and IndyMac Federal (or its predecessor-in-interest) in relation to such litigation or the subject Loans or obligations by any Person asserting any claim in the litigation and any Borrower, and any and all losses, liabilities, claims, causes of action, damages, demands, taxes, fees, costs and expenses relating thereto shall be paid by the Company without recourse of any kind to the Initial Member or IndyMac Federal (or its predecessor-in-interest) (other than to the extent the same constitute Servicing Expenses). The Company shall provide to the Participant twenty (20) Business Days following the Closing Date a status report for each pending litigation regarding replacement of the Company as the party-in-interest. The Company shall pay all of the costs and expenses incurred by it in connection with the actions required to be taken by it pursuant to Section 4.04(a) and this Section 4.04(b), which expenses shall constitute Servicing Expenses, including all legal fees and expenses and court costs, which expenses shall constitute Servicing Expenses, and shall reimburse the Initial Member for all reasonable out-of pocket costs, including all legal expenses, incurred by the Initial Member on or after the Closing Date with respect to any such litigation, including costs incurred in connection with the dismissal thereof or withdrawal therefrom.
(c) In the event there is asserted against the Initial Member or IndyMac Federal (or its predecessor-in-interest) or the Company any claim or action with respect to one or more Loans that is based upon or arises out of any act or omission of the Initial Member or IndyMac Federal (or its predecessor-in-interest) on or prior to the Closing Date (and not any act or omission of or on behalf of the Company) and that alleges liability that, in the opinion of both the Initial Member and the Company, is reasonably likely to exceed the liability of the Company as the assignee and owner of the Loan after the Closing Date, (i) the Company shall be responsible for and shall control and assume the defense of the Company and the Company’s interest in the Loans, at the earliest time possible under applicable Law;Company’s own expense and by the Company’s own counsel, which counsel must be reasonably satisfactory to the Initial Member; and (ii) the Initial Member shall be responsible for and shall control and assume the defense of the Initial Member and the Failed Thrift at the Initial Member’s own expense. To the extent their interests are not in conflict, the Company and the Initial Member shall cooperate in the defense of any such claims or action and shall use commercially reasonable efforts to work together to resolve or settle such claims or action in a manner that is mutually agreeable and in their respective best interests. The Company shall obtain the prior written approval of the Initial Member before ceasing to defend against any such claims or action. The costs and expenses incurred by the Company in connection with its defense of any claim or action described in this Section 4.04(c), including (x) reasonable attorneys’ fees and expenses incurred to defend against (or investigate) the same or pursue counterclaims or cross-claims against other parties, (y) awards or judgments assessed against the Company with respect to any such claim or action, or (z) the costs of any settlement of such claim or action, shall constitute Pre-Approved Charges for purposes of the Participation Agreement. If, as a result of any claim or action subject to the provisions of this Section 4.04(c),
(i) there is entered against the Company either (1) a final, non-appealable monetary judgment holding the Company liable for damages in excess of an amount equal to the Loan Value of the Loan relating to or that is the subject of such claim (such Loan, the “Affected Loan”) divided by
Appears in 1 contract
Loans in Litigation. (a) With respect to any Loan Loans that, at the Closing Date, are subject of to any type of pending litigation as that is listed on Schedule 2.01(c) or of which the Closing DateCompany has received written notice of from the Initial Member, the Company shall notify the FDIC’s Regional Counsel, 0000 Xxxxx Xxxxxx, Dallas, Texas 75201-4586, within fifteen thirty (1530) Business Days before after the Servicing Transfer Date Closing Date, or within thirty (30) Business Days after receiving such written notice, as the case may be, of the name of the attorney selected by the Company to represent the Company’s interests in the litigation. The Company shall, before within thirty (30) Business Days after the Servicing Transfer Closing Date, or within thirty (30) Business Days after receiving the written notice described above, as the case may be, notify the clerk of the court or other appropriate official and all counsel of record that ownership of the Loan was transferred from the Initial Member to the Company. Subject to the provisions of Sections 4.5(cSection 4.04(c) and 4.5(d4.04(d), the Company shall have its attorney file appropriate pleadings and other documents and instruments with the court or other appropriate body before within thirty five (35) Business Days after the Servicing Transfer Closing Date, or within thirty (30) Business Days after receiving the written notice described above, as the case may be, substituting the Company’s attorney for the Initial Member’s attorney, removing the Initial Member and the Failed Bank IndyMac Federal (or any predecessor-in-interest) as a party to the litigation and substituting the Company as the real party-in-interest. Nothing contained in this Agreement shall preclude the Company from retaining the same attorney retained by the Initial Member (or the Failed BankThrift) to handle litigation with respect to the Loans, provided, that, with respect to litigation referred to in Section 4.5(c4.04(c), the Company shall not retain the same counsel that represents the Initial Member in connection with such litigation unless the FDIC’s Regional Counsel (referred to above) agrees in writing to such dual representation. Subject to the provisions of Except as otherwise provided in Section 4.5(b4.04(b) (and the Company’s compliance with its obligations therein) and Section 4.5(d), in the event the Company fails, prior fails to comply with this Section 4.04(a) within thirty five (35) Business Days after the Servicing Transfer Closing Date, to remove or within thirty (30) Business Days after receiving the Initial Member and the Failed Bank as parties to the litigation and substitute the Company written notice described above, as the real party-in-interestcase may be, (1) the Initial Member may, but shall have no obligation to, continue to pursue or defend such litigation on behalf of the Company and, and (2) in the event the Initial Member does continue to pursue or defend such litigation, the Company shall be liable for and hereby agrees to pay all costs and expenses incurred by the Initial Member in connection therewith (therewith, which expenses shall constitute Borrower Reimbursable CostsServicing Expenses.
(b) If the Company is unable, as a matter of applicable LawLaw or due to the actions or inactions of third parties unrelated to the Company and over whom the Company has no control, to cause the Initial Member and Failed Bank IndyMac Federal (or any predecessor-in-interest) to be replaced by the Company as party-in-interest in any pending litigation as required by Section 4.5(a4.04(a), the Company shall so notify provide to the FDIC’s Regional Counsel, at the address specified above, no less than within thirty-five (535) Business Days before after the Servicing Transfer Closing Date, and provide such or within thirty-five (35) Business Days after receiving the written notice described in Section 4.04(a), as the case may be, evidence to such effect effect, including reference to any applicable Law, and stating the reasons for such failureinability. In any such event, (i) the Company shall cause its attorney to conduct such litigation at the Company’s expense, which expense (which expenses shall will constitute Borrower Reimbursable Costs)Servicing Expenses; (ii) the Company shall cause the removal of the Initial Member and Failed Bank IndyMac Federal (or its predecessor-in-interest) and substitution of the Company as party-in-interest in such litigation as soon as reasonably practicable; (iii) the Company shall use commercially reasonable efforts to cause such litigation to be resolved by judgment or settlement in as reasonably efficient a manner as practical; (iv) the Initial Member shall cooperate with the Company and the Company’s attorney as reasonably required to bring such litigation or any settlement relating thereto to a reasonable and prompt conclusion; and (v) no settlement shall be agreed upon by the Company or its agents or counsel without the express prior written consent of the Initial Member, unless such settlement includes an irrevocable and complete waiver and release of any and all potential claims against the Initial Member and IndyMac Federal (or its predecessor-in-interest) in relation to such litigation or the subject Loans or obligations by any Person asserting any claim in the litigation and any Borrower, and any and all losses, liabilities, claims, causes of action, damages, demands, taxes, fees, costs and expenses relating thereto shall be paid by the Company without recourse of any kind to the Initial Member or IndyMac Federal (or its predecessor-in-interest) (other than to the extent the same constitute Servicing Expenses). The Company shall provide to the Participant twenty (20) Business Days following the Closing Date a status report for each pending litigation regarding replacement of the Company as the party-in-interest. The Company shall pay all of the costs and expenses incurred by it in connection with the actions required to be taken by it pursuant to Section 4.04(a) and this Section 4.04(b), which expenses shall constitute Servicing Expenses, including all legal fees and expenses and court costs, which expenses shall constitute Servicing Expenses, and shall reimburse the Initial Member for all reasonable out-of- pocket costs, including all legal expenses, incurred by the Initial Member on or after the Closing Date with respect to any such litigation, including costs incurred in connection with the dismissal thereof or withdrawal therefrom.
(c) In the event there is asserted against the Initial Member or IndyMac Federal (or its predecessor-in-interest) or the Company any claim or action with respect to one or more Loans that is based upon or arises out of any act or omission of the Initial Member or IndyMac Federal (or its predecessor-in-interest) on or prior to the Closing Date (and not any act or omission of or on behalf of the Company) and that alleges liability that, in the opinion of both the Initial Member and the Company, is reasonably likely to exceed the liability of the Company as the assignee and owner of the Loan after the Closing Date, (i) the Company shall be responsible for and shall control and assume the defense of the Company and the Company’s interest in the Loans, at the earliest time possible under applicable Law;Company’s own expense and by the Company’s own counsel, which counsel must be reasonably satisfactory to the Initial Member; and (ii) the Initial Member shall be responsible for and shall control and assume the defense of the Initial Member and the Failed Thrift at the Initial Member’s own expense. To the extent their interests are not in conflict, the Company and the Initial Member shall cooperate in the defense of any such claims or action and shall use commercially reasonable efforts to work together to resolve or settle such claims or action in a manner that is mutually agreeable and in their respective best interests. The Company shall obtain the prior written approval of the Initial Member before ceasing to defend against any such claims or action. The costs and expenses incurred by the Company in connection with its defense of any claim or action described in this Section 4.04(c), including (x) reasonable attorneys’ fees and expenses incurred to defend against (or investigate) the same or pursue counterclaims or cross-claims against other parties, (y) awards or judgments assessed against the Company with respect to any such claim or action, or (z) the costs of any settlement of such claim or action, shall constitute Pre-Approved Charges for purposes of the Participation Agreement. If, as a result of any claim or action subject to the provisions of this Section 4.04(c),
(i) there is entered against the Company either (1) a final, non-appealable monetary judgment holding the Company liable for damages in excess of an amount equal to the Loan Value of the Loan relating to or that is the subject of such claim (such Loan, the “Affected Loan”) divided by
Appears in 1 contract
Loans in Litigation. (a) With respect to any Loan subject of any type of pending litigation as of the Closing Date, the Company shall notify the FDIC’s Regional Counsel, 0000 Xxxxx Xxxxxx, Dallas, Texas 75201-4586, within fifteen (15) Business Days before the Servicing Transfer Date of the name of the attorney selected by the Company to represent the Company’s interests in the litigation. The Company shall, before the Servicing Transfer Date, notify the clerk of the court or other appropriate official and all counsel of record that ownership of the Loan was transferred from the Initial Member to the Company. Subject to the provisions of Sections 4.5(c) and 4.5(d), the Company shall have its attorney file appropriate pleadings and other documents and instruments with the court or other appropriate body before the Servicing Transfer Date, substituting the Company’s attorney for the Initial Member’s attorney, removing the Initial Member and the Failed Bank as a party to the litigation and substituting the Company as the real party-in-interest. Nothing contained in this Agreement shall preclude the Company from retaining the same attorney retained by the Initial Member (or the Failed Bank) to handle litigation with respect to the Loans, provided, that, with respect to litigation referred to in Section 4.5(c), the Company shall not retain the same counsel that represents the Initial Member in connection with such litigation unless the FDIC’s Regional Counsel (referred to above) agrees in writing to such dual representation. Subject to the provisions of Section 4.5(b) (and the Company’s compliance with its obligations therein) and Section 4.5(d), in the event the Company fails, prior to the Servicing Transfer Date, to remove the Initial Member and the Failed Bank as parties to the litigation and substitute the Company as the real party-in-interest, (1) the Initial Member may, but shall have no obligation to, continue to pursue or defend such litigation on behalf of the Company and, (2) in the event the Initial Member does continue to pursue or defend such litigation, the Company shall be liable for and hereby agrees to pay all costs and expenses incurred by the Initial Member in connection therewith (therewith, which expenses shall constitute Borrower Reimbursable CostsServicing Expenses.
(b) If the Company is unable, as a matter of applicable Law, to cause the Initial Member and the Failed Bank to be replaced by the Company as party-in-interest in any pending litigation as required by Section 4.5(a), the Company shall so notify the FDIC’s Regional Counsel, at the address specified above, no less than five (5) Business Days before the Servicing Transfer Date, and provide such evidence to such effect and stating the reasons for such failure. In any such event, (i) the Company shall cause its attorney to conduct such litigation at the Company’s expense, which expense (which expenses shall constitute Borrower Reimbursable Costs)Servicing Expenses; (ii) the Company shall cause the removal of the Initial Member and the Failed Bank and substitution of the Company as party-in-interest in such litigation at the earliest time possible under applicable Law;; (iii) the Company shall use commercially reasonable efforts to cause such litigation to be resolved by judgment or settlement in as reasonably efficient a manner as practical; (iv) the Initial Member shall cooperate with the Company and the Company’s attorney as reasonably required in the Initial Member’s sole judgment to bring such litigation or any settlement relating thereto to a reasonable and prompt conclusion; and (v) no settlement shall be agreed upon by the Company or its agents or counsel without the express prior written consent of the Initial Member, unless such settlement includes an irrevocable and complete waiver and release of any and all potential claims against the Initial Member and the Failed Bank in relation to such litigation or the subject Loans or Obligations by any Person asserting any claim in the litigation and any Borrower, and any and all losses, liabilities, claims, causes of action, damages, demands, taxes, fees, costs and expenses relating thereto shall be paid by the Company without recourse of any kind to the Initial Member or the Failed Bank (other than to the extent the same constitute Servicing Expenses). The Company shall pay all of the costs and expenses incurred by it in connection with the actions required to be taken by it pursuant to Section 4.5(a) and this Section 4.5(b) (which expenses shall constitute Servicing Expenses), including all legal fees and expenses and court costs (which expenses shall constitute Servicing Expenses), and shall reimburse the Initial Member, upon demand, for all legal expenses the Initial Member incurs on or after the Effective Date with respect to any such litigation, including costs incurred in connection with the dismissal thereof or withdrawal therefrom (which costs incurred by the Initial Member shall constitute Post-Cut-Off Date Advances hereunder).
(c) In the event there is asserted against the Initial Member (or the Failed Bank) or the Company any claim or action with respect to one or more Loans that is based upon or arises out of any act or omission of the Initial Member or the Failed Bank on or prior to the Cut-Off Date (and not any act or omission of or on behalf of the Company) and that alleges liability that, in the opinion of both the Initial Member and the Company, is reasonably likely to exceed the liability of the Company as the assignee and owner of the Loan after the Cut-Off Date, (i) the Company shall be responsible for and shall control and assume the defense of the Company and the Company’s interest in the Loans, at the Company’s own expense and by the Company’s own counsel, which counsel must be reasonably satisfactory to the Initial Member; and (ii) the Initial Member shall be responsible for and shall control and assume the defense of the Initial Member and the Failed Bank at the Initial Member’s own expense. To the extent their interests are not in conflict, the Company and the Initial Member shall cooperate in the defense of any such claims or action and shall use commercially reasonable efforts to work together to resolve or settle such claims or action in a manner that is mutually agreeable and in their respective best interests. The Company shall obtain the prior written approval of the Initial Member before ceasing to defend against any such claims or action. The costs and expenses incurred by the Company in connection with its defense of any claim or action described in this Section 4.5(c), including (x) reasonable attorneys’ fees and expenses incurred to defend against (or investigate) the same or pursue counterclaims or cross-claims against other parties, (y) awards or judgments assessed against the Company with respect to any such claim or action, or (z) the costs of any settlement of such claim or action, shall constitute Pre-Approved Charges for purposes of the Participation Agreement. If, as a result of any claim or action subject to the provisions of this Section, (i) there is entered against the Company either (1) a final, non-appealable monetary judgment holding the Company liable for damages in excess of an amount equal to the Loan Value of the Loan relating to or that is the subject of such claim (such Loan, the “Affected Loan”) divided by 0.20 (such excess amount, the “Excess Damage Liability”), or (2) a final monetary judgment that is appealable, which the Initial Member agrees in writing need not be appealed further by the Company, and that imposes an Excess Damage Liability on the Company, or (ii) the Company enters into a final settlement agreement with the consent of the Initial Member (such consent not to be unreasonably withheld), pursuant to which the Company is obligated to pay an Excess Damage Liability, then, in any such case, the Initial Member shall reimburse the Company for the Excess Damage Liability and the Initial Member shall be entitled, at its option, to repurchase the Affected Loan at its Repurchase Price in accordance with the repurchase provisions of Article VI; provided, however, that the Initial Member shall not be liable pursuant to this sentence for any liability imposed upon the Company that arises as a result of any act or omission of the Company.
(d) The provisions of Sections 4.5(a), 4.5(b) and 4.5(c) are subject to the right of the Initial Member to retain claims pursuant to Section 2.6 of this Agreement, including any such claims as may have been asserted in litigation pending as of the date of the Closing. At the Initial Member’s discretion, litigation involving any such claims shall be bifurcated, with the Initial Member remaining the real party in interest and retaining control over (and being responsible for pursuing and bearing the related costs to pursue) claims retained by it pursuant to Section 2.6 and the Company substituting itself as the real party in interest and taking control of (and being responsible for pursuing and bearing the cost of pursuing) the remainder of the litigation.
Appears in 1 contract
