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No. 05-205 Date of Adorlìon June 30, 2005
AUTHORIZING THE MAYOR TO EXECUTE A LOAN PROCESSING
AGREEMENT WITH NORTH FORK BANK
WHEREAS, the Borough of Carteret ("Borough"), through its UEZ and SID Programs,
has authorized a small business loan program as part of its Washington Avenue Business
District Revitalization Program;
WHEREAS, the Borough wishes to retain North Fork Bank to provide certain loan
processing services with regard to the above referenced loans; and
WHEREAS, North Fork Bank has agreed to provide said services pursuant to certain
terms and conditions; and
WHEREAS, the parties desire to enter into a formal Loan Servicing Agreement setting
forth the parties' respective rights and obligations concerning the servicing of said loans.
NOW, THEREFORE, BE IT RESOLVED by the Mayor and Council of the Borough
ofCarteret, County of Middlesex, State of New Jersey as follows:
I. That the Mayor is hereby authorized and directed to execute a Loan Servicing
Agreement with North Fork Bank, a copy of which is attached hereto and made a
part hereof.
2. That the appropriate Borough officials are hereby authorized to execute any and
all documents, and to perform any and all acts, necessary to effectuate the .
provisions of said Loan Servicing Agreement.
Adopted this 30th day ofJune, 2005 and
certified as a true copy of the original on
.2005. 'ì
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KATHLEEN M. BARNEY, RMC/CMC
Municipal Clerk
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RECORD OF COUNCIL VOTE
COUNCILMAN YES NO NV A.ß. COUNCILMAN YES NO i'\\' A.ß.
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KRUM X SITARZ X
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Adopted at a meeting of [he Municipal Council
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SERVICING AGREEMENT
This SERVICING AGREEMENT is made as of the 27'h day of May, 2005, between
NORTH FORK BANK, a New York banking corporation (the "Servicer") and THE BOROUGH
OF CARTERET ("Carteret"), a corporation organized under the laws of the state of New Jersey,
WHEREAS, Carteret expects to make approximately 20-30 commercial loans to small
businesses within the Borough ofCarteret, New Jersey;
WHEREAS, Carteret desires, and has requested, that the Servicer provide certain
administrative services on behalf of Carteret in respect of said loans; and
WHEREAS, the Servicer is willing to service and administer such loans on the terms and
subject to the conditions set forth herein,
NOW, THEREFORE, in consideration of the mutual premises herein set forth and other
good and valuable consideration, the receipt and sufficiency of which is hereby acknowledged,
the parties hereby agree as follows:
ARTICLE I
DEFINITION OF TERMS
For the purposes of this Servicing Agreement, the following capitalized terms shall have
j following meanings, each such meaning to be equally applicable to the singular and plural
form of the terms so defined.
"Agreement": This Servicing Agreement, as the same may be amended, supplemented or
otherwise modified rrom time to time,
"Loan Documents": The agreements, instruments, certificates, or other documents at any
time evidencing or otherwise relating to, governing, or executed in connection with, or as
security for, a Loan, including without limitation, notes, bonds, loan agreements, drafts,
guarantees, deeds of trust, mortgages, assigrunents, endorsements, security agreements, pledges,
subordination or priority agreements, lien priority agreements, undertakings, security
instruments, financing statements, certificates, documents, and legal opinions with respect to any
of the foregoing and all amendments, modifications, renewals, rearrangements and substitutions
or extensions with respect to any of the foregoing,
"Loans": Loans, advances or other extensions of credit made by Carteret.
"Loan Payments": As defined in Section 2, lea),
"Losses": Shall mean any and alJ claims, losses, liabilities, costs, penalties, fines,
penses (including, without limitation, attorneys' accountants, consultants' and experts'
reasonable fees and expenses), damages, obligations to third parties, expenditures, proceedings,
judgments, awards or demands, including, without limitation, any of the foregoing relating to the
enforcement of any party's rights to indemnification hereunder.
"Month Iv Payment Date": The first day of each calendar month.
"Sale Proceeds": As defined in Section 2, lea),
ARTICLE II
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SERVICING
2, I Agreement with Respect to Servicing. (a) On the terms and subject to the
conditions of this Agreement and effective as of the date first written above, Carteret hereby
appoints the Servicer as its servicer to service the Loans, and the Servicer shall perform during
the term of this Agreement and any extension or renewal hereof in accordance with the terms
hereof, on behalf of Carteret, the collection of all interest, principal, premiums, penalties,
charges, fees and other payments thereon (colJectively, "Loan Payments"), which Loan Payments
will be debited ITom a designated demand deposit account of the borrower maintained at North
Fork Bank, In the event there are insufficient funds in the borrowers designated demand deposit
account, the borrower will remain responsible for making their Loan Payment. Carteret
acknowledges that the Servicer shall have no fiduciary duty to Carteret hereunder. In performing
such services, the Servicer shall:
(A) use the same degree of reasonable care as it applies in the administration
of comparable assets that it owns;
(B) implement accounting and reporting systems and procedures for all Loan
Payments collected by the Servicer and timely record all Loan Payments received and
post such payments to individual loan records of borrowers in accordance with the terms
of the respective Loan Documents;
(C) within five (5) business days following the end of each calendar month
remit to Carteret, or upon instructions which Carteret from time to time in writing may
provide, deposit in the Loan Account for the benefit of Carteret, all Loan Payments and
Sales Proceeds collected by the Servicer in respect of the Loans during such preceding
calendar month; and
(D) provide Carteret, on or before the tenth business day of each month, with a
report containing a statement setting forth all Loan Payments collected during the
preceding month,
(b) Carteret shall not have any right of action whatsoever against the Servicer as a
result of the Servicer acting or refraining from acting hereunder in accordance with the terms and
provisions of this Agreement, except in the event of the Servicer's gross negligence or willful
misconduct, and any action or failure to act pursuant hereto shall be binding upon Carteret.
(c) The Servicer may rely, shalJ be protected and shall incur no liability for or in
respect of any action taken or omitted to be taken or thing suffered by it in reliance upon any
note, notice, 'direction, instruction, consent, judgment, certificate, affidavit, statement, instrument
or other writing which have been presented or signed by an officer of Carteret or, in the case of
telecopies and telexes, to have been sent by such officer. Notwithstanding anything to the
contrary set forth in this Agreement, in no event shall the Servicer be liable to Carteret for any
ion or failure to act in connection with the Servicer's obligations hereunder in the event
L-arteret does not promptly forward any note, notice, direction, instruction, consent, judgment,
certificate, affidavit, statement instrument or other writing to the Servicer in order for the
Servicer to act in accordance with the terms of this Agreement.
(d) With respect to Loans in default, servicer shall employ such reasonable measures
to collect past due amounts provided that any and all Loans that become past due for a period of
90 days or more shall be referred to Carteret for further collection activity and shall no longer be
serviced by the Servicer hereunder.
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2.2 Modification of Existing Loan Agreements: Sale of Loans, The Servicer shall not
"\ modify, extend, forgive or otherwise alter any terms contained in the Loan Documents relating
~ any Loan, (ii) sell, assign or otherwise transfer any Loan or (iii) take any action to cause the
occurrence of any of the foregoing, in each case without the prior approval and instruction of the
Carteret.
2,3 Reimbursement of Expenses. Carteret shall reimburse the Servicer on a quarterly
basis for the following expenses incurred in connection with servicing the Loans: (i) fees and
disbursements of legal counsel whose work is directly related to the administration of the Loans;
(ii) fees and disbursements of accounting and other independent professional consultants whose
work is directly related to the administration of the Loans; (iii) other direct out-of-pocket
expenses incurred to secure, protect, preserve or maintain the Loans; and (iv) other direct out-of-
pocket expenses incurred to enforce any rights under the Loan Documents relating to any Loan,
2.4 Servicer's Compensation
(a) The Servicer shall receive a fee for services to be rendered hereunder on each
Monthly Payment Date, which fee shall be in an amount equal to one-twelfth (1/12) of the
Service Fee set forth on Appendix I attached hereto and made a part hereof. The Servicer is
hereby authorized to net the monthly service fee for the remittance to be made pursuant to
Section 2, I (a) (C) by deducting such fees rrom the Loan Account.
(b) On a periodic basis the parties will mutually review the fee structure set forth
aoove, it being the specific intention of the parties that such fees will represent the fair market
value of the services rendered hereunder. Notwithstanding the foregoing, the fee structure set
forth in this Section 2.4 shall continue in effect until the parties agree in writing to any
modification thereof.
ARTICLE III
INDEMNIFICATION
3.1 Indemnification of the Servicer. Carteret shall indemnify and hold the Servicer
and its Affiliates and their respective officers, directors, employees, agents and representatives
(collectively, the "Bank Indemnitees") harmless against and in respect of (A) any and all present
and future stamp or documentary taxes or any other excise or property taxes, charges or
otherwise with respect to this Agreement (to the extent not paid by the relevant borrower under
the respective Loan Document related to a Loan) and any and all liabilities with respect to or
resulting from any delay or omission by Carteret to pay any such taxes, charges or levies; and (B)
any Losses incurred or sustained as a result of or relating to (i) the performance by the Servicer of
its duties hereunder or pursuant to any action taken, or omitted to be taken, pursuant to or in
respect of any instructions, notices, directions or other communications from Carteret to the
"ervicer hereunder or as a result of any action omitted to be taken by the Servicer as a result of
; failure of Carteret to give instructions, notices or directions to the Servicer in respect of the
Servicer's obligations and duties under this Agreement, (ii) any breach by Carteret of any
provision or term of this Agreement and (iii) investigating or defending any legal action arising
from the servicing of any Loan under the terms of this Agreement; provided, however, that in no @
event shall Carteret be obligated under this Section 3, I to indemnify any Bank Indemnitee in
respect of any losses incurred or sustained by any such Bank Indemnitees that result~ ITom
the gross negligence or willful misconduct of a Bank Indemnitee.
3,2 Indemnification of Carteret. The Servicer shall indemnify and hold Carteret and
its Affiliates and their respective officers, directors, employees, agents and representatives
(collectively, the "Carteret Indemnitees") harmless against and in respect of any Losses incurred
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or sustained as a result of or relating to any breach by the Servicer of any provision or term of
'his Agreement; provided, however, that Carteret shall have no indemnification obligation under
_s Section 3.2 unless and to the extent that such breach is attributable to the gross negligence or
willful misconduct of the Servicer.
3.3 Survival of Indemnity, The provisions of this Article III of this Agreement shall
survive the termination of this Agreement.
ARTICLE IV
MISCELLANEOUS
4,1 Additional Documents. At any time, and ITom time to time, upon the reasonable
request of the other party on and after the date hereof, the Servicer or Carteret, as the case may
be, shall execute and deliver such further instruments and documents as shall be reasonably
necessary to enable such other party to discharge any obligation and exercise any right
contemplated by this Agreement.
4,2 Term, This Agreement shall be in effect for an initial term of one year from the
date first written above and, thereafter, shall extend for successive one-year periods unless either
party hereto shall provide written termination notice to the other not less than sixty (60) days
prior to the then-applicable termination date. Upon termination, the Servicer shall cooperate
, 'sonably with Carteret in the transition of servicing to Carteret or any third party and Carteret
c ,all, on the termination date, make payment of all amounts due the Servicer hereunder.
Notwithstanding the foregoing, this Agreement shall automatically terminate if and when all
loans are paid off, or otherwise transferred to Carteret, pursuant to the terms herein.
4,3 Termination. (a) In the event of a material breach by the Servicer of this
Agreement, Carteret, upon written notice, may immediately terminate this Agreement.
(b) In the event of a material breach by Carteret under this Agreement, the
Servicer, upon written notice, may immediately terminate this Agreement.
4.4 Entire Agreement. This Agreement embodies the entire agreement of the parties
and the services required to be provided by the Servicer in relation to the subject matter herein
and supersedes all prior understandings or agreements, oral or written, between the parties hereto.
4,5 Headings, The headings and subheadings of the Articles and Sections contained
in this Agreement are inserted for convenience only and shall not affect the meaning or
interpretation of this Agreement or any provision hereof. '
4,6 Counterparts, This Agreement may be executed in any number of counterparts
j by the duly authorized representative of the different parties hereto on separate counterparts,
each of which when so executed shall be deemed to be an original and all of which taken
together shall constitute one and the same Servicing Agreement.
4,7 Governing Law, This Agreement and the rights and obligations hereunder shall
be governed by and construed in accordance with the laws of the State of New York, without
regard to the conflicts of laws provisions thereof.
4,8 Successors, This Agreement shall not be assigned and any attempted assigrunent
shall be void, To the extent Carteret sells, assigns, transfers or otherwise transfers any of the
Loans, then this Agreement shall immediately terminate in respect of such Loan and all
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obligations of the Servicer under this Agreement with respect to such Loan shall immediately
"'rnlinate, Except as set forth in Article III, nothing herein is intended nor shall be construed to
Je any Person other than Carteret and the Servicer any legal or equitable right, remedy or claim
under or in respect of this Agreement or any provisions contained herein, it being the specific
intention of the parties hereto that this Agreement, the obligations and statements of
responsibilities hereunder, and all other conditions and provisions hereof are for the sole and
exclusive benefit of Carteret and the Servicer and for the benefit of no other person.
4,9 Modification, No amendment or other modification, rescission, release or
assigrunent or any part of this Agreement shall be effective except pursuant to a written
agreement subscribed by the duly authorized representative of the parties hereto.
4.10 Notice, All notices and other communications hereunder shall be in writing and
shall be deemed given if delivered personally or transmitted by telex, telegram or facsimile or
mailed by registered or certified mail (return receipt requested) to the parties at the following
addresses (or at such other address for a party as shall be specified by like notice):
(A) if to the Servicer, to:
North Fork Bank
9025 Main Road
Mattituck, New York 11952
Attention: Nancy Martel
Telephone: (631) 298-6710
Facsimile: (631) 298-8994
(B) if to Carteret, to:
Borough of Carteret
61 Cooke Avenue
Carteret, New Jersey 07008
Attention: Anthony J. Neibert
Telephone: (732) 541-3810
Facsimile: (732) 969-2429
4,11 Waiver. Carteret and the Servicer may waive their respective rights, powers or
privileges under this Agreement; provided, that such waiver shall be in writing; and further
provided, that no failure or delay on the part of Carteret or the Servicer to exercise any right,
power or privilege under this Agreement will operate as a waiver thereof, nor will any single or
partial exercise of any right, power or privilege under this Agreement preclude any other or
r.'rther exercise thereof or the exercise of any other right, power or privilege by Carteret or the
rvicer under the terms of this Agreement, nor will any such waiver operate or be construed as
a future waiver of such right, power or privilege under this Agreement.
4,12 Severabilitv, If any provision of this Agreement is invalid or unenforceable then,
to the extent possible, all of the remaining provisions of this Agreement shall remain in full force
and effect and shall be binding upon the parties hereto,
4,13 Power of Attornev, Carteret hereby makes, constitutes and appoints the Servicer
the true and lawful attomey-in-fact for Carteret, with full power of substitution, in its name, place
and stead with the same effect as if personally done by Carteret, to take all actions deemed
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necessary by any of them in connection with the servicing of the Loans in accordance with this
,.-' o;reement, including, without limitation, to execute and deliver documents in connection with
!; servicing of the Loans on behalf of Carteret but in the name of the Servicer, subject to the
Servicer's having first obtained Carteret's consent if otherwise required to do so herein, The
power of attorney granted to the Servicer by Carteret is a power coupled with an interest and
shall be irrevocable during the term of this Agreement and any extensions or renewals hereof.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be executed
by their duly authorized representatives on the date first above written,
NORTH FORK BANK
By
Name: Nancy Martel
Title: Divisional Senior Vice President
Consumer Loan Operations
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