BACKUP SERVICING AGREEMENT
Exhibit
10.8
This
Backup Servicing Agreement
(this
“Agreement”)
is
made and entered into as of February 28, 2007 (the “Effective
Date”),
by
and between DEUTSCHE BANK NATIONAL
TRUST
COMPANY, a New York banking corporation, operating out of its offices in Santa
Ana, California (the "Trustee"),
solely in its capacity as trustee of the NovaStar Mortgage Funding Trust, Series
2007-1 (the “Trust”)
pursuant to the Pooling Agreement (as hereinafter defined) and Countrywide
Home
Loans Servicing LP, having a principal office at 0000 Xxxx Xxxxxxx XX-00,
Xxxxxxxxx, Xxxxxxxxxx 00000 (the "Backup
Servicer"
or
"Countrywide").
1. ACCEPTANCE
AND TERMS AND CONDITIONS:
By
acceptance of this Agreement, Backup Servicer agrees to be bound by, and to
comply with all the terms and conditions of this Agreement, and the Pooling
Agreement.
All
capitalized terms used herein, and not otherwise defined herein, shall have
their respective meanings as set forth in the Pooling Agreement.
2. SCOPE
OF WORK:
The
Pooling Agreement has specified the services to be provided by Backup Servicer
to the Trust, (the “Services”)
as
more specifically set forth on Exhibit A hereto. No later than the time of
execution of this Agreement, the Trustee shall provide Backup Servicer a copy
of
the executed Pooling and Servicing Agreement, dated as of February 1, 2007
(the
“Pooling
Agreement”)
by and
among NovaStar Mortgage Funding Corporation, as Depositor (the “Depositor”),
NovaStar Mortgage, Inc., as Servicer and as Sponsor (the “Servicer”
and
the
“Sponsor”),
U.S.
Bank National Association, as Custodian (the “Custodian”)
and
Deutsche Bank, as Trustee. Services shall be provided to the Trust in accordance
with the procedures described in the Pooling Agreement and on Exhibit A hereto.
3. FEES
AND EXPENSES:
For the
Services performed and provided under this Agreement, Backup Servicer shall
be
paid pursuant to the Pooling Agreement in accordance with the terms
thereof.
4. TERM:
Subject
to the termination provisions of this Agreement, this Agreement shall be in
effect for so long as the Pooling Agreement has not terminated pursuant to
Section 11.01 thereof (the “Term”
of
this
Agreement).
5. PAYMENT:
Prior
to becoming the successor Servicer, and except as otherwise provided on Exhibit
A hereto, any fee payable to Backup Servicer shall be paid on each Distribution
Date, as set forth in Section 4.01 of the Pooling Agreement and if Backup
Servicer becomes the successor Servicer under the Pooling Agreement, then Backup
Servicer as successor Servicer shall be entitled to retain Servicing Fees and
other reimbursable amounts as provided in the Pooling Agreement.
6. APPOINTMENT
AS AGENT:
The
Backup Servicer is hereby appointed as provided in the Pooling Agreement to
act
as successor to the Servicer during the Term solely to the extent necessary
for
Backup Servicer to render Services in accordance with the terms and conditions
of this Agreement and the Pooling Agreement, and Backup Servicer hereby accepts
such appointment. In all other respects, the status of Backup Servicer to the
Trust shall be that of an independent contractor and not any other relationship
including agent, partner, joint venturer or employee, and Backup Servicer shall
act consistently with its independent contractor status in connection with
such
other matters. Backup Servicer shall not make any representation to any person
inconsistent with this paragraph. None of Backup Servicer’s employees or agents
shall be deemed employees of the Trustee or of the Trust.
7. SUBCONTRACTOR
APPROVAL:
Backup
Servicer shall not assign this Agreement or the Services hereunder or delegate
its rights or duties hereunder or any portion thereof, without the prior written
approval of the Trustee and the Sponsor; provided, however, that, without the
Trustee’s or the Sponsor’s consent, Backup Servicer may (a) outsource certain
specific functions to a third party, and (b) in order to fulfill its obligations
as Backup Servicer hereunder, delegate certain specific functions to any entity
that is directly or indirectly owned by Backup Servicer or any entity
controlling, controlled by or under common control with, Backup Servicer. Backup
Servicer shall remain liable for the conduct of any subcontractor, including
any
third party to which it outsources or otherwise delegates its specific
functions, to the same extent as Backup Servicer’s liability under this
Agreement. Backup Servicer shall be solely responsible for the compensation
due
to any such subcontractor for Services rendered in connection with this
Agreement.
8. REPRESENTATIONS
AND WARRANTIES OF BACKUP SERVICER:
Backup Servicer
shall
provide all Services with at least the same degree of care as that used by
prudent mortgage servicing institutions which provide similar services. Backup
Servicer warrants and represents that (a) it is duly organized and in good
standing under applicable law; (b) it has the full power and authority to
perform under this Agreement and under the Pooling Agreement, and (c) the
execution and delivery of this Agreement will not conflict with or result in
a
breach of the terms and conditions of any other agreement to which Backup
Servicer is a party. Backup Servicer further warrants and represents that any
Services provided by Backup Servicer: (i) shall comply with all applicable
laws,
regulations, standards and codes, and (ii) shall otherwise fully conform in
all
respects to the Scope of Work document included as part of this Agreement.
Backup Servicer shall promptly correct nonconforming Services at no additional
charge.
9. REPRESENTATIONS
AND WARRANTIES OF THE TRUSTEE:
The
Trustee warrants and represents that (a) it is duly organized and in good
standing under applicable law; and (b) it has the full power and authority
to
perform under this Agreement pursuant to the powers vested in it under the
Pooling Agreement and as provided therein to execute and deliver this
Agreement.
10. INTELLECTUAL
PROPERTY RIGHTS WARRANTY:
In addition to its representations and warranties under Section 8 above,
Backup
Servicer warrants and represents that it owns, or has the right to use or
license (and sublicense where applicable) under valid and enforceable
agreements, all intellectual property or proprietary rights, including
copyrights, patents or pending applications for patent protection, derivative
works, publicity rights, trade secrets, trademarks, trade names, service marks,
logos, and all improvements or modifications of the foregoing (collectively,
“Intellectual Property”), in any and all jurisdictions and in any and all media,
reasonably necessary for or related to the performance of the Services. Backup
Servicer further represents and warrants the performance of the Services and
the
Trustee’s use of any materials furnished by Backup Servicer shall not infringe
or violate the Intellectual Property rights of any third party.
11. INDEMNIFICATION
BY THE BACKUP SERVICER:
(a) Backup
Servicer hereby agrees to indemnify, hold harmless and defend the Trustee and
the Trust, their respective successors and assigns, and each of their officers,
directors and employees (collectively, the “Indemnitees”), at Backup Servicer’s
sole expense, from any judgment, loss, damage, penalty, cost, fine and/or
expense (including reasonable attorneys' fees) that the Indemnitees may suffer
or incur by reason of any claim or the defense of any claim, suit, or proceeding
to the extent caused by:
(i) any
acts
or omissions, negligence or willful or wanton misconduct of Backup Servicer,
its
subcontractors, and or any of their officers, agents, servants, or employees,
whether attributable wholly or in part, resulting in liability or injury to
the
Indemnitees;
(ii) the
breach or alleged breach of any of the undertakings, representations or
warranties made by Backup Servicer;
(b) Backup
Servicer shall defend, at its sole expense, every such claim, suit, or
proceeding, and shall be given authority, information, and assistance for,
at
Backup Servicer's sole expense, the defense of such claim, suit, or proceeding.
Backup Servicer shall pay all judgments, losses, damages, penalties, costs,
fines, and expenses awarded against the Indemnitees in every such claim, suit,
or proceeding and indemnify, defend and hold harmless the Indemnitees at Backup
Servicer’s sole expense, from any judgment, loss, damage, penalty, cost, fine
and/or expense (including reasonable attorneys' fees) which any of them may
incur by reason thereof.
(c) Backup
Servicer shall indemnify, hold harmless, and defend the Indemnitees, at Backup
Servicer's sole expense, against every claim, suit, proceeding, judgment, loss,
damage, penalty, cost, fine and/or expense (including reasonable attorneys'
fees) brought against or imposed upon the Indemnitees for any violation or
alleged violation of any applicable law by Backup Servicer or by any officer,
agent, employee, or subcontractor of Backup Servicer.
2
(d) Backup
Servicer hereby agrees to perform all required obligations with respect to
compliance with the Exchange Act as set forth in the Pooling Agreement and
to
fully indemnify the parties thereto with respect to any noncompliance with
such
obligations.
(e) With
regard to each of (a), (b), (c) and (d) above, the Indemnitees shall have the
right to participate in the defense and settlement of any claims.
12. INDEMNIFICATION
OF BACKUP SERVICER:
The
Trust
hereby agrees to indemnify, hold harmless and defend Backup Servicer, its
successors and assigns, and each of their officers, directors and employees
(collectively, the “Backup Servicer Indemnitees”), at the Trust’s sole expense,
from any judgment, loss, damage, penalty, cost, fine and/or expense (including
reasonable attorneys' fees) that the Backup Servicer’s Indemnitees may suffer or
incur by reason of any claim or the defense of any claim, suit, or proceeding,
to the same extent and on the same terms as the Servicer is indemnified, as
provided in Section 6.03 of the Pooling Agreement; provided that, in addition,
the Backup Servicer's Indemnities shall also be indemnified by the Trust for
any
claims, etc. based upon the acts or omissions of the prior Servicer, any
originator of any Mortgage Loan or of any other third party.
13. POOLING
AGREEMENT INDEMNITEES.
The
Indemnification arrangements provided for in Sections 11 and 12 hereof are
in
addition to any indemnification arrangements which may be provided for in the
Pooling Agreement.
14. LIMITATION
OF LIABILITY OF BACKUP SERVICER AND OTHERS:
Neither
Backup Servicer nor any of the officers, employees or agents of Backup Servicer
shall be under any liability to the Trust or the Trustee for any action taken
or
for refraining from the taking of any action, to the same extent as the Servicer
would not be so liable under such circumstances, as provided in Section 6.03
of
the Pooling Agreement.
15. LIMITATION
ON LIABILITY:
NONE OF THE TRUSTEE, THE TRUST OR THE BACKUP SERVICER SHALL, UNDER ANY
CIRCUMSTANCES, BE LIABLE TO THE OTHER FOR ANY SPECIAL, INDIRECT, INCIDENTAL,
PUNITIVE, OR CONSEQUENTIAL LOSSES, DAMAGES, COSTS, OR EXPENSES
WHATSOEVER.
16. TRUSTEE
CAPACITY:
It is expressly understood and agreed by the parties hereto that,
notwithstanding the execution of this Agreement by Trustee on behalf of the
Trust, Trustee shall perform only as required pursuant to the Pooling Agreement
and each of the representations, undertakings and agreements herein made by
the
Pooling Agreement is made and intended for the purpose of binding only the
Trust, and that the Trustee in its individual capacity shall not be personally
liable under any circumstance for the payment of any indebtedness, expense,
or
obligation or be personally liable for the breach or failure of any obligation,
representation, warranty or covenant made or undertaken except as provided
in
the Pooling Agreement. The Trustee shall be afforded all of the rights,
protections and immunities available to the Trustee under the Pooling Agreement
in connection with its performance hereunder.
17. TERMINATION:
The
Trustee may, at the direction of the Servicing Rights Pledgee (as defined in
the
Pooling Agreement) terminate all or any part of this Agreement upon thirty
(30)
days prior written notice to Backup Servicer, in which case Backup Servicer
shall be entitled to retain the Servicing Fees accruing prior to the date of
termination. In the event of such termination Backup Servicer shall immediately
stop rendering Services hereunder and shall immediately cause any of its
subcontractors to cease work and deliveries. To the extent the termination
occurs pursuant to this Section, the Trust shall, at the expense of the
Servicing Rights Pledgee, reimburse Backup Servicer for all costs and expenses
incurred in connection with the transition of Services.
18. AMENDMENT:
This
Agreement may be amended from time to time by the parties hereto, provided
that
any amendment be accompanied by a letter from the Rating Agencies that the
amendment will not result in the downgrading, qualification or withdrawal of
the
rating then assigned to any Class of Certificates.
19. GOVERNING
LAW:
THIS
AGREEMENT SHALL BE CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW
YORK, WITHOUT REFERENCE TO ITS CONFLICT OF LAW PROVISIONS, AND THE OBLIGATIONS,
RIGHTS AND REMEDIES OF THE PARTIES HEREUNDER SHALL BE DETERMINED IN ACCORDANCE
WITH SUCH LAWS.
3
20. NOTICES:
All
demands, notices and communications hereunder shall be in writing and shall
be
deemed to have been duly given if when delivered to:
|
a)
|
in
the case of the Backup Servicer:
|
Countrywide
Home Loans/Portfolio Services Group
0000
Xxxx
Xxxxxx Xx, XX SV2-103A
Xxxx
Xxxxxx, XX 00000
Attention:
Xxx Xxx
|
b)
|
in
the case of Rating Agencies:
|
Standard
& Poor’s, a division of The XxXxxx-Xxxx Companies, Inc.
00
Xxxxx
Xxxxxx - 00xx Xxxxx
Xxx
Xxxx,
Xxx Xxxx 00000
Attention:
Xxxxxx Xxxxxx
Xxxxx’x
Investors Service, Inc.
00
Xxxxxx
Xxxxxx
Xxx
Xxxx,
Xxx Xxxx 00000
Attention:
Xxxxxx Xxxx
|
c)
|
in
the case of the Trustee:
|
Deutsche
Bank National Trust Company
0000
Xxxx
Xx. Xxxxxx Xxxxx
Xxxxx
Xxx, XX 00000
Attention:
Trust Administration -- NS0701
21. SEVERABILITY
OF PROVISIONS:
If any
one or more of the covenants, agreements, provisions or terms of this Agreement
shall be for any reason whatsoever held invalid, then such covenants,
agreements, provisions or terms shall be deemed severable from the remaining
covenants, agreements, provisions or terms of this Agreement and shall in no
way
affect the validity or enforceability of the other provisions of this
Agreement.
22. THIRD-PARTY
BENEFICIARIES:
This
Agreement will inure to the benefit of and be binding upon the parties hereto,
the parties to the Pooling Agreement and the Certificateholders and their
respective successors and permitted assigns. Except as otherwise provided in
this Agreement, no other Person will have any right or obligation hereunder.
The
Trustee shall have the right to exercise all rights of the Trust under this
Agreement. The Sponsor and its officers and directors (in their corporate or
individual capacity) shall have the right to bring an action against the Backup
Servicer as it relates to a failure of the Backup Servicer to comply with its
obligations under Section 11(d) of this Agreement.
23. COUNTERPARTS:
This
instrument may be executed in any number of counterparts, each of which so
executed shall be deemed to be an original, but all such counterparts shall
together constitute but one and the same instrument.
24. EFFECT
OF HEADINGS AND TABLE OF CONTENTS:
The
Article and Section headings herein and the Table of Contents are for
convenience only and shall not affect the construction hereof.
25. NO
PETITION:
The
Backup Servicer, by entering into this Agreement, hereby covenants and agrees
that it will not at any time institute against the Trust, or join in any
institution against the Trust, any bankruptcy proceedings under any United
States federal or state bankruptcy or similar law in connection with any
obligations of the Trust. This section shall survive the satisfaction and
discharge of the Pooling Agreement by one year.
4
26. NO
RECOURSE:
The
Backup Servicer acknowledges that no recourse may be had against the Trust,
except as may be expressly set forth in this Agreement.
27. CONSENT
TO JURISDICTION:
The
parties to this Agreement each hereby irrevocably submits to the non exclusive
jurisdiction of any New York State or federal court sitting in the Borough
of
Manhattan in The City of New York in any action or proceeding arising out of
or
relating to this Agreement or the transactions contemplated hereby, and all
such
parties hereby irrevocably agree that all claims in respect of such action
or
proceeding may be hard and determined in such New York State or federal court
and hereby irrevocably waive, to the fullest extent that they may legally do
so,
the defense of an inconvenient forum to the maintenance of such action or
proceeding. EACH OF THE PARTIES HERETO HEREBY IRREVOCABLY WAIVES, TO THE FULLEST
EXTENT PERMITTED BY APPLICABLE LAW, ANY AND ALL RIGHT TO TRIAL BY JURY IN ANY
ACTION OR PROCEEDING ARISING OUT OF OR RELATING TO THIS AGREEMENT OR THE
TRANSACTIONS CONTEMPLATED HEREBY.
28. RELATIONSHIP
TO POOLING AGREEMENT.
In the
event of any inconsistency between this Agreement and the Pooling Agreement,
the
Pooling Agreement shall control.
5
IN
WITNESS WHEREOF, the parties hereto, intending to be legally bound hereby,
have
caused this Agreement to be executed by their duly authorized representatives
as
of the day and year first above written.
|
DEUTSCHE
BANK NATIONAL
TRUST
COMPANY,
not in its individual
capacity
but solely as Trustee
|
COUNTRYWIDE
HOME LOANS SERVICING LP,
as
Backup Servicer
By:
Countrywide GP, INC.
|
|
By:/s/
Xxxxxxx Xxxxx
|
By:/s/
Xxxxxx X. Xxx
|
|
Name:Xxxxxxx
Xxxxx
|
Name:Xxxxxx
X. Xxx
|
|
Title:Vice
President
|
Title:Senior
Vice President
|
EXHIBIT
A
SCOPE
OF WORK
Dated
as of February 28, 2007
(a)
Compensation:
The
Servicer shall pay a nonrefundable initial fee of $15,000 to Countrywide to
act
as cold Backup Servicer. Such fee shall be payable within thirty days of the
execution of this Agreement. Thereafter, until such time as the Backup Servicer
is terminated, or becomes the Successor Servicer, the Backup Servicer shall
receive a monthly fee payable as provided in Section 4.01(a)(i) of the Pooling
Agreement, equal to the greater of (1) 1/12 of 0.01% per annum times the Pool
Balance as of the first day of the related Due Period (as defined in the Pooling
Agreement) and (2) $2,250.
If
appointed as Successor Servicer under the Pooling Agreement, Countrywide shall
be entitled to compensation based on the greater of (a) the Servicing Fee
provided for in the Pooling Agreement or (b) the aggregate servicing fee per
mortgage loan as set forth on Exhibit B attached hereto plus reimbursement
of
any compensating interest and prepayment interest shortfall obligations. In
addition Countrywide shall be entitled to receive all other compensation
otherwise payable to the Servicer under the related Pooling Agreement, including
but not limited to the late fees, interest on deposits into the collection
and
escrow accounts as well as any other ancillary income payable to the Servicer.
Such servicing compensation shall begin to accrue on the effective date of
any
servicing transfer.
(b)
Responsibilities of Backup Servicer:
For
so
long as Countrywide acts as Backup Servicer, the Servicer shall provide to
Countrywide a monthly pool activity tape no later than the 18th day of each
month (in a format acceptable to Countrywide). Countrywide shall retain such
reports as Backup Servicer for the Trust and shall have no further obligations
to render Services as Backup Servicer. Upon request, in anticipation of
transferring the servicing to Countrywide, and no earlier than sixty (60) days
prior notice of the anticipated transfer, the Servicer shall provide Countrywide
with a preliminary electronic data file as of the last cut off date from the
Servicer.
The
Backup Servicer has no reporting, monitoring or reconciliation obligations
during the back-up servicing period (i.e., prior to becoming the successor
Servicer).
If
the
Backup Servicer becomes the successor Servicer under the Pooling Agreement,
the
Backup Servicer shall thereafter perform all of the duties of the Servicer
under
the Pooling Agreement.
(c)
Costs and Expenses:
Countrywide
and the Trust shall each be responsible for its own expenses in connection
with
the performance of its obligations under this Agreement, which include, but
are
not limited to, its legal and accounting fees and data conversion costs. Without
limiting the generality of the foregoing, in connection with the transfer of
servicing from the terminated Servicer to Countrywide, Countrywide shall be
reimbursed from the terminated Servicer (or, if not from the terminated
Servicer, then as provided in Section 3.07 of the Pooling Agreement) for (i)
all
servicing transfer costs and expenses incurred by Countrywide not to exceed
$10
per loan, (ii) its out-of-pocket costs incurred to transfer any third party
contracts including but not limited to the transfer of flood insurance
monitoring and real estate tax service contracts with respect to the Mortgage
Loans, (iii) any other documented third party costs or expenses in connection
with the physical transfer of servicing to Countrywide, and (iv) any costs
to
correct any material errors or insufficiencies in the servicing data.
Countrywide shall not be responsible for any fees or expenses related to the
preparation and recording of assignments, transfer of servicing in MERS and
any
other third party costs. If Countrywide is terminated as successor Servicer
without cause by the Trustee at the direction of the Servicing Rights Pledgee
(as defined in the Pooling Agreement), Countrywide shall be entitled to a
service release fee to be paid by the Servicing Rights Pledgee equal to $10.00
per loan (subject to a minimum of $10,000 per transfer) and shall be entitled
to
100% reimbursement of any advances made pursuant to the Pooling Agreement
including but not limited to unpaid delinquency advances, servicing advances,
and prepayment interest shortfall advances.
EXHIBIT
B
MINIMUM
SERVICING FEES
|
Minimum
Servicing Fee
|
0xx
xxxx
|
0xx
xxxx
|
|
|
Xxxxxxx
|
$
10.00
|
$
10.00
|
per
loan/mo
|
|
30
days delinquent
|
$
35.00
|
$
35.00
|
per
loan/mo
|
|
60
days delinquent
|
$
75.00
|
$
75.00
|
per
loan/mo
|
|
90
days delinquent
|
$
90.00
|
$
65.00
|
per
loan/mo
|
|
120+
days delinquent
|
$
90.00
|
$
35.00
|
per
loan/mo
|
|
Foreclosure
|
$
150.00
|
$
225.00
|
per
loan/mo
|
|
Bankruptcy
|
$
35.00
|
$
35.00
|
per
loan/mo
|
|
REO
|
$
300.00
|
$
300.00
|
per
loan/month
|
i
