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EXHIBIT 10.8
LOAN SERVICING AGREEMENT
THIS AGREEMENT is made as of February 1, 1998, by and between DataTech
Management, Inc. ("Servicer"), a corporation duly organized and existing under
the laws of the State of California, and First Coastal Bank, N.A., a national
banking association ("Customer"), duly organized and existing under the
laws of the United States of America.
The parties hereto, in consideration of the obligations herein made and
undertaken, and intending to be legally bound, hereby agree as follows:
1. Term. Subject to the provisions of Section 8 hereof, the initial term
shall be one (1) years. This Agreement shall automatically renew for a
successive one (1) year term unless either party notifies the other of its
intent not to renew within six (6) months before the end of any term.
2. Duties of Servicer. Servicer shall provide Customer with services
similar to those provided by a bank note department, including but not limited
to boarding loans on to Customer's data processing system, generating billing
statements and mailing such statements to borrowers, processing payments
received from borrowers, processing and preparing statistical information
pertaining to serviced loans, performing daily call backs of transactions and
balancing to Customer's general ledger, performing research and responding to
inquiries directed to Customer, posting and balancing deferred fees and costs,
and processing transactions relating to paid off loans including the release of
collateral and the termination of financing statements. In addition, Servicer
shall prepare various reports to assist Customer in monitoring collateral,
financial statements, tax returns, and insurance coverage on collateral.
Servicer shall provide such other information as Customer reasonably requests
provided such information is available to Servicer from Customer's data base.
3. Duties of Customer. It shall be Customer's responsibility to provide
Servicer, from time to time, with an updated list of officers authorized to
approve loan disbursements and advances, make modifications to existing loans as
well as to interface with Servicer to approve system changes and rate changes.
In addition, Customer will provide authorization to Servicer in order to permit
Servicer to access the data processing system used by Customer so that Servicer
can perform its duties hereunder.
4. Processing. Servicer's scheduled business hours will be 8:30 a.m. to
5:30 p.m., Pacific Time, Monday through Friday, except for bank holidays
observed in California. Servicer will process loan transactions promptly, with
postings to be complete within 24 hours of receipt by Servicer. Servicer shall
not be responsible for delays attributable to causes beyond its reasonable
control.
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5. Fees and Charges. During the first year of the term, Servicer will
charge and Customer will pay the fees and charges as set forth in Schedule "A"
attached hereto. Thereafter, Servicer may adjust the fees annually; provided
however, that any adjustment of the fee schedule must be available for review by
the Customer at least one hundred twenty (120) days prior to its effective date.
6. Backup. Customer acknowledges that entries will be processed by
Servicer to Customer's data processing system. Consequently, historical
information and transactional histories will be under the control of Customer
and Customer shall be responsible for such backup of files, and maintenance of
records off-site, as Customer deems appropriate
7. Confidentiality. Customer views the data, information and records
relating to its business and the data, information, records and accounts of its
customers as "confidential information". Servicer views all data, information
and records relating to its customers and its provision of services under this
Agreement as confidential information.
The parties agree, both during the term of this Agreement and forever
thereafter, to hold each other's confidential information in confidence. The
parties agree not to make each other's confidential information available in any
form to any third party or to use each other's confidential information for any
purpose other than the servicing of Customer's transaction and the
implementation of this Agreement. Should either party receive a subpoena or
similar judicial or governmental order or request seeking confidential
information belonging or pertaining to the other party, notice of such subpoena
or order shall be given immediately to the other party so as to afford
reasonable opportunity to seek a protective order or such other relief as may be
deemed appropriate by the party in interest. Each party agrees to take all
reasonable steps to ensure that confidential information is not disclosed or
distributed by its employees or agents in violation of the provision of this
Agreement.
8. Termination.
A. Termination for Non-Payment. In the event that Customer fails
to pay any fees properly invoiced to Customer by Servicer within sixty (60) days
from the date of Servicer's invoice, Servicer in its discretion may terminate
this Agreement immediately with notification to Customer.
B. Termination on Notice. Customer may terminate this Agreement
upon ninety (90) days prior written notice to Servicer and Servicer may
terminate this Agreement upon one hundred and twenty (120) days prior written
notice to Customer.
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9. Limitation of Liability. Servicer shall be liable to Customer only
for Servicer's intentional misconduct or materially negligent performance of the
services to be provided hereunder. Servicer shall not be responsible for any
loss arising, directly or indirectly, in whole or in part, from: (a) any act or
failure to act on the part of any person not within Servicer's reasonable
control, (b) the negligence of Customer or the breach of this Agreement by
Customer, (c) any ambiguity or inaccuracy in any instruction given to the
Servicer by Customer or Customer's agent, or (d) from any error, failure or
delay in transmission or delivery of any data, records, or items, including
without limitation, any inoperability of computer or communications facilities,
or other circumstances beyond Servicer's reasonable control.
10. Insurance. Servicer will carry such insurance as is ordinary and
customary for similar types of business including employee fidelity coverage of
not less than $2,000,000 and physical loss coverage insuring Customer's records
while in Servicer's possession. A summary of Servicer's insurance coverage shall
be available to Customer upon request.
11. Indemnity.
A. Except to the extent prohibited or limited by law, Customer
shall defend, indemnify and hold harmless the Servicer against any and all
losses, claims, damages, liabilities, actions, costs or expenses, including
reasonable attorneys' fees incurred by it in connection with any claim against
it and in defending any action (collectively "Losses"), for which the Servicer
may become liable and which arise out of or are based upon any act or omission
to act by any officer or employee of Customer.
B. Except to the extent prohibited or limited by law, the
Servicer shall defend, indemnify and hold harmless Customer from and against any
and all losses, claims, damages, liabilities, actions, costs or expenses,
including reasonable attorneys' fees incurred by it in connection with any claim
against it and in defending any action (collectively "Losses") for which
Customer may become liable and which arise out of or are based upon any act or
omission to act by any officer or employee of Servicer.
C. If any claim is made or lawsuit, proceeding or enforcement
action is filed (herein, "Claim" or "Claims") against any party entitled to the
benefit of indemnity hereunder, written notice thereof shall be given to the
indemnifying party as promptly as practicable (and in any event within ten (10)
business days after receipt of the Claim or the service of the citation or
summons); provided, that the failure of any indemnified party to give timely
notice shall not affect rights to indemnification hereunder except to the extent
that the indemnifying party demonstrates actual damage caused by such
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failure. The indemnifying party shall be entitled, if it so elects, to take
control of the defense and investigation of such Claim, and to employ and engage
attorneys of its own choice who are reasonably acceptable to the indemnified
party to handle and defend the same, at the indemnifying party's cost, risk and
expense. The indemnifying party shall notify the indemnified party in writing of
its election to defend in good faith any such Claim as soon as it is
practicable, and in any event within fifteen (15) days after receipt of written
notice thereof by the indemnifying party from the indemnified party. The
indemnifying party shall have the right to settle or compromise any such claim
without the consent of the indemnified party at any time utilizing its own funds
to do so, if in connection with such settlement or compromise the indemnified
party is fully released from liability and is paid any indemnification amounts
due hereunder. If the indemnifying party fails, or does not elect, to assume the
defense of such Claim within fifteen (15) days after receipt of notice pursuant
to this Section, the indemnified party will (upon delivering notice to such
effect to the indemnifying party) have the right to undertake, at the
indemnifying party's cost and expense, the defense, compromise or settlement of
such Claim on behalf of and for the account and risk of the indemnifying party;
provided, however, that such Claim shall not be compromised or settled without
the written consent of the indemnifying party, which consent shall not be
unreasonably withheld. In the event the indemnified party assumes defense of the
Claim, the indemnified party will keep the indemnifying party reasonably
informed of the progress of any such defense, compromise or settlement. The
indemnifying party shall be liable for any settlement of any Claim effected
pursuant to and in accordance with this Section and/or any final judgment or
assessment (subject to any right of appeal), and the indemnifying party agrees
to indemnify and hold harmless the indemnified party from and against any
damages by reason of such settlement or judgment.
D. The indemnified party shall cooperate in all reasonable
respects with the indemnifying party and its attorneys in any investigation,
trial and defense relating to a Claim and any appeal arising therefrom;
provided, however, that the indemnified party may, at its own costs, participate
in the investigation, trial and defense of such claim and any appeal arising
therefrom.
E. The rights of the parties to indemnification provided for in
this Section 11 shall survive the termination of this Agreement.
12. Auditing. Servicer will cause an independent audit of its operation
to be conducted at least annually and shall make a copy of that audit available
to Customer upon request.
Customer, its independent auditors, and any bank regulatory
personnel shall have access to, and may examine, all documents
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and records pertaining to Customer held by Servicer, during Servicer's scheduled
business hours.
13. Binding Nature and Assignment. This Agreement shall be binding on
parties hereto and their successors and assigns, but neither party may assign
this Agreement without the prior written consent of the other, which consent
shall not be unreasonably withheld.
14. Entire Agreement. This Agreement, together with each Schedule
annexed hereto, constitutes the entire agreement between the parties. There are
no understandings or agreements relative hereto which are not fully expressed
herein and no change, waiver or discharge hereof shall be valid unless in
writing and executed by the party against whom such change, waiver or discharge
is sought to be enforced. This Agreement supersedes any and all previous
agreements relating to loan documentation services entered into between the
parties.
15. Governing Law. This Agreement shall be governed by and construed in
accordance with the laws of the State of California.
16. Binding Arbitration. Any controversy arising out of or relating to
this Agreement or the transactions contemplated hereby shall be referred to
arbitration pursuant to the provisions of California Code of Civil Procedure
Section 1281 et.
seq.
DataTech Management, Inc.
By: \s\ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇
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Its: President
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First Coastal Bank, N.A.
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("Customer")
By: \s\ ▇▇▇▇▇ ▇. Garduino
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Its: Executive Vice President
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