THIS NOTE HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED,
AND MAY NOT BE SOLD OR TRANSFERRED UNLESS SOLD OR TRANSFERRED IN A TRANSACTION
EXEMPT FROM THE REGISTRATION REQUIREMENTS OF SAID ACT AND APPLICABLE STATE LAWS
AND SUBJECT TO THE REQUIREMENTS OF THE NOTE PURCHASE AGREEMENT REFERRED TO
HEREIN.
MF RECEIVABLES HOLDING CORP.
Amended and Restated Senior Note
No. 1
$511,446.21 July 28, 1999
REGISTERED HOLDER: ROTHSCHILD NORTH AMERICA, INC.
MF RECEIVABLES HOLDING CORP., a Delaware corporation (hereinafter referred
to as the "Company"), for value received, in accordance with the provisions of
that certain Pledge and Custodial Agreement, dated as of July 28, 1999 (the
"Pledge and Custodial Agreement"), among the Company, Norwest Bank Minnesota,
National Association, as trustee (in such capacity, the "Trustee") under an
Indenture between the Company (as successor to Monaco Finance, Inc., a Colorado
corporation ("Monaco")), and the Trustee, dated as of January 9, 1996 (as
amended, modified or otherwise supplemented), Rothschild North America, Inc., a
Delaware corporation, and The Bank of New York, as collateral agent (in such
capacity, the "Collateral Agent"), promises to make payments, or cause payments
to be made, in respect of this Amended and Restated Senior Note (this "Note"),
up to a maximum principal amount as indicated on the face of this Note together
with interest accrued thereon (computed on the basis of a 360-day year of twelve
30-day months) at the applicable Interest Rate, all as, when and if received by
the Collateral Agent under the Pledge and Custodial Agreement. Payments in
respect of this Note will be made to the Holder of this Note on the terms and in
the manner as provided herein, in the Note Purchase Agreement (as hereinafter
defined) and in the Pledge and Custodial Agreement, in coin or currency of the
United States of America which at the time of payment shall be legal tender for
the payment of public and private debts.
This Note is one of the "Notes" of the Company issued or to be issued
under and pursuant to the terms and provisions of the Amended and Restated Note
Purchase Agreement, dated as of January 9, 1996 (as heretofore, now or hereafter
amended, supplemented, restated or otherwise modified (including, without
limitation, pursuant to the terms of that certain Amendment to Amended and
Restated Note Purchase Agreement, dated as of July 28, 1999), the "Note Purchase
Agreement"), between the Company (as successor to Monaco) and Rothschild North
America, Inc., a Delaware corporation, the original purchaser, and this Note and
the holder hereof are entitled equally and ratably with the holders of all other
Notes outstanding under the Note Purchase Agreement to all the benefits provided
for thereby or referred to therein. Reference is hereby made to the Note
Purchase Agreement for a statement of such rights and benefits. Each capitalized
term used and not otherwise herein shall have the meaning ascribed thereto in
the Note Purchase Agreement.
This Note is registered on the books of the Company and is transferable
only by surrender thereof at the principal office of the Company in Denver,
Colorado, duly endorsed or accompanied by a written instrument of transfer duly
executed by the registered Holder of this Note or its attorney duly authorized
in writing. Payment of or on account of principal, Make-Whole Amount, if any,
and interest on this Note shall be made only to or upon the order in writing of
the registered Holder.
This Note amends and restates in its entirety, and is issued in
substitution for, that certain $5,000,000 Senior Subordinated Note Originally
Due October 1, 1999, made by Monaco to the payee hereof.
Dated:
MF RECEIVABLES HOLDING CORP.
By:
Name:
Title:
1691284
-----------------------------------------------------------------------
121
-----------------------------------------------------------------------
SUPPLEMENTARY SERVICING AGREEMENT
This Supplementary Servicing Agreement (this "Agreement"), dated as of
April 1, 1999, by and among MF Receivables Corp. III, a Delaware corporation
(the "Borrower"), Systems & Services Technologies, Inc., a Delaware corporation,
as Substitute Servicer (the "Substitute Servicer"), and The Chase Manhattan
Bank, in its capacity as verification agent (the "Verification Agent") and as
collateral agent (the "Collateral Agent").
R E C I T A L S:
WHEREAS, the Borrower, the Verification Agent, the Collateral Agent and
Monaco Finance, Inc., a Colorado corporation ("Monaco") are parties to a
Servicing Agreement, dated as of December 4, 1997 (as heretofore modified,
amended or supplemented, the "Existing Servicing Agreement"), pursuant to which
Monaco has acted as the servicer of certain auto loans owned by the Borrower;
and
WHEREAS, unless otherwise defined herein, capitalized terms used herein
shall have the meanings assigned in the Existing Servicing Agreement; and
WHEREAS, due to the occurrence of one or more Servicer Events of Default,
Monaco's responsibilities as the Servicer under the Existing Servicing Agreement
have been terminated; and
WHEREAS, the Substitute Servicer provides portfolio management services,
including loan administration, payment collection and processing, back-up
servicing, insurance claim processing, custodial services, third party
repossession, liquidation and recovery collections and financial reporting to
financial institutions in connection with Designated Auto Loans; and
WHEREAS, the Borrower desires to avail itself of the services provided by
the Substitute Servicer to assume the duties of the Servicer, on the terms
provided herein;
NOW THEREFORE, in consideration of the foregoing, other good and valuable
consideration, and the mutual terms and covenants contained herein, the parties
hereto agree as follows:
ARTICLE I
DEFINITIONS
As used in this Agreement, the following terms shall, unless the context
otherwise requires, have the following meanings (such meanings to be equally
applicable to the singular and plural forms of the terms defined):
"Active Receivable" means any Designated Auto Loan other than: (i) an
Inactive Receivable, (ii) a fully satisfied Designated Auto Loan, (iii) a
Designated Auto Loan where the Vehicle secured thereby has been liquidated and
the Substitute Servicer has posted the liquidation proceeds or any other
anticipated proceeds (e.g., credit enhancement insurance and financed product
rebates); and (iv) any Designated Auto Loan where the Substitute Servicer has
completed all work in connection with processing and receiving insurance
payoffs.
"Change of Control" means that a person or group of persons acting
together has, following the date hereof, directly or indirectly acquired more
than 50% of the outstanding capital stock of the Substitute Servicer.
"Fees, Expenses & Distributions" means the fees, expenses and
distributions described in Schedule 1, attached hereto and by this reference
made a part hereof.
"Inactive Receivable" means a Receivable as to which the Substitute
Servicer has exhausted all remedies in accordance with its Policies and
Procedures Manual and has ceased all servicing activities with the exception of
posting payments received from Obligors in connection with deficiency account
balances but the principal balance of which remains unpaid.
"Lock-Box Account" means a lockbox or other segregated account into which
Obligors shall, by no later than April 30, 1999, be directed by the Substitute
Servicer to deposit funds with respect to the Designated Auto Loans.
"Transfer Period" means the period following the Substitute Servicer's
receipt of a Transfer Notice and prior to the date the Substitute Servicer is to
begin as the active servicer for all of the Designated Auto Loans.
ARTICLE II
NATURE AND SCOPE OF RELATIONSHIP
The Substitute Servicer agrees to assume the duties of the active servicer
as described in this Agreement and Paragraph II of the attached Exhibit A for
all of the Designated Auto Loans. In performing its duties under this Agreement,
the Substitute Servicer shall report to such officers or other employees of the
Initial Lender and the Borrower as the Initial Lender and the Borrower may
designate from time to time.
In performing its duties hereunder, the Substitute Servicer shall: (i) act
prudently in accordance with customary and usual servicing procedures for other
institutional servicers; (ii) comply with all applicable Federal and State laws
and regulations governing the Substitute Servicer and the Designated Auto Loans;
and (iii) use and exercise that degree of skill and attention that is customary
with other servicers in the industry that provide servicing relating to
Designated Auto Loans.
The Substitute Servicer shall perform those duties specified in the
Existing Servicing Agreement and in this Agreement and contained in the attached
Exhibit A and shall receive the fees as outlined in Schedule 1 as full
compensation for its services. The Initial Lender or the Borrower with the
consent of the Initial Lender, such consent not to be unreasonably withheld, may
reasonably request the Substitute Servicer to modify or supplement its duties or
methods of performing those duties; provided that the Borrower shall compensate
the Substitute Servicer at a reasonable fee for any increase in expense
experienced by the Substitute Servicer due to the Initial Lender's requests.
Except to the extent specifically reimbursed under the Existing Servicing
Agreement and this Agreement, all costs and expenses of the Substitute Servicer
in connection with its duties hereunder shall be the sole responsibility of the
Substitute Servicer.
ARTICLE IIA
EFFECT OF THIS AGREEMENT
The parties hereto agree that, except as specifically set forth herein,
the Existing Servicing Agreement shall remain in full force and effect and the
Substitute Servicer shall be the Servicer thereunder. Notwithstanding the above,
from and after the date of this Agreement, the Existing Servicing Agreement
shall be amended as follows:
113. ARTICLE ONE:
(A) Add the following new definition: "Supplementary Servicing Agreement"
means the Supplementary Servicing Agreement, dated as of April 1, 1999, among
the Borrower, the Collateral Agent, the Verification Agent and Systems &
Services Technologies, Inc. (the "Substitute Servicer"), as the same may be
modified, amended or supplemented.
(B) Amend the definition of "Servicer Fee" to read as follows: "Servicer
Fee" means the fees payable to the Substitute Servicer under the Supplementary
Servicing Agreement and includes any indemnification payment required to be made
under Article X of the Supplementary Servicing Agreement.
114. ARTICLE TWO: Deleted in its entirety.
115. ARTICLE THREE:
(A) Section 3.01: Deleted in its entirety.
(B) Section 3.03: Deleted in its entirety.
(C) Section 3.05: Delete all but the first two sentences.
(D) Section 3.07: Deleted in its entirety.
(E) Section 3.08(a): Delete the words "or the Servicer has complied with
Section 3.01(b) hereof," and the last sentence.
(F) Section 3.08(d): Delete "the Servicer" and substitute therefor "the
Initial Lender".
116. ARTICLE FOUR:
1.
(A) Section 4.02: Delete Subsections (a)(ii)-(iv) and (vii).
(B) Section 4.03 (b): Deleted in its entirety.
(C) Section 4.04: Delete the words "under the Program Documents that the
Servicer may possess" and substitute the words "under the Servicing Agreement
and the Supplementary Servicing Agreement"; delete the last two words of the
Section and substitute the words "Servicing Agreement and the Supplementary
Servicing Agreement".
117. ARTICLE FIVE:
Delete in its entirety as to the Substitute Servicer. It is the intention
of the Borrower, the Collateral Agent and the Verification Agent (and of the
Initial Lender and Monaco, although they are not parties hereto) that the
provisions of ARTICLE FIVE of the Existing Servicing Agreement remain in full
force and effect with respect to the rights and responsibilities of Monaco in
relation to its activities prior to April 1, 1999.
118. ARTICLE SIX:
Sections 6.01 and 6.02: Delete in their entirety.
119. ARTICLE EIGHT
Section 8.01: Delete in its entirety.
ARTICLE III
ERRORS AND OMISSIONS AND BLANKET CRIME INSURANCE
The Substitute Servicer shall maintain, at its own expense, (i) an errors
and omissions insurance policy and (ii) a blanket crime policy, in each case
with broad coverage with established insurance companies, covering all officers,
employees or other persons acting on behalf of the Substitute Servicer with
regard to the Designated Auto Loans to handle funds, money, documents,
computerized information and papers relating to the Designated Auto Loans. Any
such insurance shall protect and insure the Substitute Servicer against losses,
including forgery, theft, embezzlement, fraud, errors and omissions and
negligent acts of such the Substitute Servicer and shall be maintained in a form
and amount that would meet the requirements of prudent loan servicing companies.
No provision of this Article III requiring such insurance shall diminish
the duties of the Substitute Servicer as set forth in this Agreement and the
Existing Servicing Agreement or relieve the Substitute Servicer from its duties
and obligations as set forth in this Agreement and the Existing Servicing
Agreement. Upon the request of the Initial Lender, the Substitute Servicer shall
cause to be delivered to the Initial Lender and to the Collateral Agent a
certificate evidencing coverage under such errors and omissions and/or blanket
crime policies. Any such policies shall not be canceled without prior written
consent of the Borrower and Initial Lender.
ARTICLE IV
REPRESENTATIONS AND WARRANTIES
A. REPRESENTATIONS AND WARRANTIES OF THE SUBSTITUTE SERVICER
The Substitute Servicer makes the following representations and warranties
to the Borrower, the Collateral Agent and the Initial Lender:
1. The Substitute Servicer is a corporation duly organized, validly
existing and in good standing under the laws of the State of Delaware
and in each other jurisdiction where the conduct of its business
requires it to be in good standing. The Substitute Servicer has full
corporate power and authority to enter into this Agreement and to
carry out the provisions of this Agreement.
2. This Agreement and all other instruments or documents to be
delivered hereunder or pursuant hereto, and the
transactions contemplated hereby, have been duly authorized
by all necessary corporate proceedings of the Substitute
Servicer. This Agreement has been duly and validly
executed and delivered by the Substitute Servicer and,
assuming due authorization, execution and delivery by each
other party hereto, this Agreement is a valid and legally
binding agreement of the Substitute Servicer enforceable in
accordance with its terms.
3. The execution and delivery of this Agreement by the
Substitute Servicer and the compliance by the Substitute
Servicer with all provisions of this Agreement do not
conflict with or violate any applicable law, regulation or
order and do not conflict with or result in a breach of or
default under any of the terms or provisions of any
contract or agreement to which the Substitute Servicer is
subject or by which it or its property is bound, nor does
such execution, delivery or compliance violate the Articles
of Incorporation or By-laws of the Substitute Servicer.
4. The practices used or to be used by the Substitute Servicer
to monitor collections with respect to the Designated Auto
Loans and repossess and dispose of the Vehicles related to
the Designated Auto Loans will be, in all material
respects, legal, proper and in conformity with the
requirements of all applicable federal and state laws,
rules and regulations, and VSI policy procedures (if
applicable). The Substitute Servicer is in possession of
all state and local licenses (including all debt collection
licenses) required for it to perform its services
hereunder, and none of such licenses has been suspended,
revoked or terminated.
5. The Initial Lender has been given a true and accurate copy of the
Policies and Procedures Manual of the Substitute Servicer. All of the
responsibilities of the Substitute Servicer hereunder will be in
compliance with such Policies and Procedures Manual, as the same may
be amended from time to time upon notice to the Initial Lender.
B. REPRESENTATIONS AND WARRANTIES OF THE BORROWER
The Borrower makes the following representations and warranties to the
Substitute Servicer:
1. The Borrower is a corporation, validly existing and in good standing
under the laws of the State of Delaware. The Borrower has full
corporate power and authority to enter into this Agreement and to
carry out the provisions of this Agreement.
2. This Agreement and all other instruments or documents to be
delivered hereunder or pursuant hereto, and the
transactions contemplated hereby, have been duly authorized
by all necessary corporate proceedings of the Borrower.
This Agreement has been duly and validly executed and
delivered by the Borrower and assuming due authorization,
execution and delivery by each other party hereto, this
Agreement is a valid and legally binding agreement of the
Borrower enforceable in accordance with its terms.
3. The execution and delivery of this Agreement by the
Borrower and the compliance by the Borrower with all
provisions of this Agreement do not conflict with or
violate any applicable law, regulation or order and do not
conflict with or result in a breach of or default under any
of the terms or provisions of any contract or agreement to
which the Borrower is subject or by which it or its
property is bound, nor does such execution, delivery or
compliance violate the Certificate of Incorporation or
By-laws of the Borrower.
The representations and warranties contained in this Article IV shall survive
the execution and delivery of this Agreement.
ARTICLE V
SUBSTITUTE SERVICER EVENTS OF DEFAULT
A. If any one of the following events (each, a "Substitute Servicer Event of
Default") shall occur and be continuing:
1. Any failure by the Substitute Servicer to deposit into the Lock-Box
Account any proceeds or payments received from an Obligor or in
respect of the Designated Auto Loans and required to be so delivered
or deposited under the terms of this Agreement or the Existing
Servicing Agreement that continues unremedied until 10:00 a.m. St.
Louis time on the following Business Day; or
2. Failure on the part of the Substitute Servicer (a) to
observe or to perform in any material respect any other
covenant or agreement set forth in this Agreement or the
Existing Servicing Agreement, which failure shall adversely
affect the rights of the Initial Lender and continue
unremedied for a period of 30 days after the date on which
written notice of such failure shall have been received by
the Substitute Servicer or (b) to deliver the Monthly
Servicer Report as required by the Existing Servicing
Agreement; or
3. The entry of a decree or order by a court or agency or
supervisory authority having jurisdiction in the premises
for the appointment of a conservator, receiver, or
liquidator for the Substitute Servicer in any bankruptcy,
insolvency, readjustment of debt, marshaling of assets and
liabilities, or similar proceedings, or the winding-up or
liquidation of its affairs, and the continuance of any such
decree or order unstayed and in effect for a period of 30
consecutive days; or
4. (a) The admission by the Substitute Servicer of its
inability to pay its debts generally as they become due; or
(b) the filing by the Substitute Servicer of a petition
under any applicable bankruptcy, insolvency or
reorganization of any applicable statute; or (c) if the
Substitute Servicer makes an arrangement for the benefit of
its creditors or voluntarily suspend payment of its
obligations; or (d) the filing by a third party of a
bankruptcy case under Federal or State law against the
Substitute Servicer; or
5. If there is breach of any representation or warranty as set forth in
Article IV and such breach shall not be cured in all material respects
within 30 consecutive days after receipt of written notice from one
party to the breaching party or upon discovery by the breaching party;
then, and in each and every case and so long as a Substitute Servicer Event of
Default described above shall not have been remedied, the Initial Lender may
terminate all of the rights and obligations of the Substitute Servicer under
this Agreement.
ARTICLE VI
REMEDIES
In addition to the indemnification rights contained in Article X and the
right to terminate contained in Article XI, the Substitute Servicer agrees that
upon the occurrence of any Substitute Servicer Event of Default, both the
Initial Lender and the Borrower may avail itself of any other relief to which it
may be legally or equitably entitled. In the event of any default of this
Agreement by the Borrower, the Borrower acknowledges the remedies of the
Substitute Servicer contained in Articles XI and XII may be inadequate and that
the Substitute Servicer may also avail itself of any other relief to which it
may be legally or equitably entitled.
ARTICLE VII
RESPONSIBILITY AND AUTHORITY OF THE SUBSTITUTE SERVICER
A. The Substitute Servicer shall have the full power and authority
acting alone and without the consent of any other party hereto,
to do any and all things in connection with the servicing of any
Designated Auto Loan that it may deem reasonably necessary or
desirable, consistent with the duties and obligations imposed
upon the Substitute Servicer by this Agreement including, but
not limited to, the right to subcontract any of its duties
hereunder. Notwithstanding the foregoing, the Substitute
Servicer shall cooperate fully with the Initial Lender and the
Borrower and promptly inform the Initial Lender and the Borrower
of any and all changes or developments of which the Substitute
Servicer becomes aware that may affect the Designated Auto Loans.
B. The Substitute Servicer is hereby authorized to communicate with third
parties and the Obligors in the name of the Borrower as necessary and
proper to perform the services anticipated by this Agreement.
C. The Substitute Servicer shall have the right to commence a legal
proceeding on behalf of the Borrower to enforce any Designated
Auto Loan. As reasonably requested by the Substitute Servicer,
the Borrower shall furnish the Substitute Servicer with any
necessary and appropriate powers of attorney and other documents
needed in order to enable the Substitute Servicer to carry out
such proceeding and with respect to its servicing and
administrative duties hereunder.
ARTICLE VIII
BANK ACCOUNTS
Following the expiration of the Transfer Period:
A. The Substitute Servicer shall maintain the Lock-Box Account, and
shall collect and hold in trust (for the benefit of the
Collateral Agent) in such accounts all funds received from
Obligors or in respect of Designated Auto Loans. The Substitute
Servicer shall use its best efforts to ensure that all
Collections are directed to and/or deposited into the Lock-Box
Account. The financial institution in which the Lock-Box
Account is opened shall be under irrevocable instructions (which
can be modified only with the consent of the Initial Lender)
that upon receipt of cleared funds in the Lock-Box Account, such
funds shall be transferred to the Collateral Account.
B. The Substitute Servicer shall immediately notify the Initial Lender and
the Collateral Agent of the identity of the financial institution
maintaining the Lock-Box Account and obtain the agreement of such
financial institution to the irrevocable instructions described above.
ARTICLE IX
DOCUMENTS AND RECORDS
The Substitute Servicer shall provide the Initial Lender and its designees
access to the its facility, but only (except following the occurrence of a
Substitute Servicer Event of Default) upon reasonable request and during normal
business hours of the Substitute Servicer and to the extent that such access
would not significantly disrupt the orderly conduct of business at such
facility. The Substitute Servicer will accept all deliveries of loan files and
similar data as specified by the Initial Lender from time to time.
ARTICLE X
INDEMNIFICATION
A. The Substitute Servicer shall indemnify and hold harmless the
Initial Lender, the Borrower, the Servicer, the Collateral Agent
and the Verification Agent and each of their respective
officers, employees and agents against any and all claims,
losses, penalties, fines, forfeitures, legal fees and related
costs, judgments and any other costs, fees and expenses that any
of such Persons may sustain in any way related to the negligence
or misconduct of the Substitute Servicer in its performance
under the terms of this Agreement or the Existing Servicing
Agreement, or arising from any breach of the representations and
warranties of the Substitute Servicer set forth in Article IV
hereof. The Substitute Servicer shall notify the Initial Lender
as soon as possible if a claim is made by a third party with
respect to this Agreement, any Program Document or any
Designated Auto Loan. The right to indemnification set forth in
this paragraph shall survive the termination of this Agreement.
B. The Borrower shall indemnify and hold harmless the Substitute
Servicer and its officers, employees and agents against any and
all claims, losses, penalties, fines, forfeitures, legal fees
and related costs, judgments and any other costs, fees and
expenses that the Substitute Servicer may sustain in any way
related to the negligence or misconduct of the Borrower in its
performance under the terms of this Agreement or the Existing
Servicing Agreement, or arising from any breach of the
representations and warranties of the Borrower set forth in
Article IV hereof. The Borrower shall notify the Substitute
Servicer as soon as possible if a claim is made by a third party
with respect to this Agreement, any Program Document or any
Designated Auto Loan. The right to indemnification set forth in
this paragraph shall survive the termination of this Agreement.
C. The Substitute Servicer may accept and reasonably rely on all
accounting and servicing records and other documentation
provided to the Substitute Servicer by or at the direction of
the Borrower, including documents prepared or maintained by any
originator or the Servicer, or any party providing services
related to the Designated Auto Loans (each, a "third party").
------------
The Borrower shall indemnify and hold harmless the Substitute
Servicer and its officers, employees and agents against any and
all claims, losses, penalties, fines, forfeitures, legal fees
and related costs, judgments, and any other costs, fees and
expenses that the Substitute Servicer may sustain in any way
solely related to the negligence or misconduct of any third
party with respect to the Designated Auto Loans. The Substitute
Servicer shall have no duty, responsibility, obligation or
liability (collectively "liability") for the acts or omissions
---------
of any third party. If any error, inaccuracy or omission
(collectively "error") exists in any information provided to the
-----
Substitute Servicer and such error causes or materially
contributes to the Substitute Servicer making or continuing any
error (a "continuing error"), the Substitute Servicer shall have
-----------------
no liability for such continued error; provided, however, that
-------- -------
this provision shall not protect the Substitute Servicer against
any liability arising from its willful misconduct, bad faith or
gross negligence in discovering or correcting or failing to
discover or correct any error or in the performance of its
duties contemplated herein.
If the Substitute Servicer becomes aware of any error or continuing error
which in the opinion of the Substitute Servicer impairs its ability to
perform its services hereunder, the Substitute Servicer shall promptly
notify the Initial Lender thereof; the Substitute Servicer may undertake
such data or records reconstruction as it deems appropriate to correct any
such error or continued error and to prevent future continued error. To
the extent it is not otherwise reimbursed under the Existing Servicing
Agreement, the Substitute Servicer shall be entitled to recover its costs
thereby expended.
ARTICLE XI
TERM AND TERMINATION
A. The term of this Agreement shall be for one year from the date first
written above and will automatically renew for additional successive
one-year terms unless the Initial Lender or the Substitute Servicer shall
upon 90 days written notice elect not to renew this Agreement.
Notwithstanding the above, this Agreement shall automatically terminate
when the Notes are repaid in full.
B. The Initial Lender shall have the right to terminate this
Agreement (i) at any time prior to the delivery of a Transfer
Notice, and, (ii) following such delivery, during any term upon
not less than 60 days written notice delivered by overnight mail
to the Substitute Servicer. In the event of any such
termination under clause (ii) above, the Substitute Servicer
shall be entitled to a termination fee equal to the greater of
$20,000.00 or the servicing fee for each Designated Auto Loan so
transferred for the month preceding the month in which the
notice of termination is delivered, such fee to be paid by the
Borrower unless the Initial Lender affects such termination
without the prior written consent of the Borrower (which consent
shall not be unreasonably withheld), in which case the Initial
Lender shall be responsible therefor; provided, that no such
--------
termination fee shall be payable if (x) a Substitute Servicer
Event of Default shall have occurred or (y) the effective date
of such termination is within 90 days following the date upon
which the Substitute Servicer has been merged with or into
another entity or a Change of Control has occurred. The
Substitute Servicer shall not, however, be entitled to receive
any such termination fee if the Substitute Servicer is
terminated due to the occurrence of a Substitute Servicer Event
of Default.
C. The Substitute Servicer shall have the right to resign under
this Agreement by giving 90 days prior written notice to the
Initial Lender; provided, however, that in no event shall any
-------- -------
such resignation be effective unless the Substitute Servicer
shall have provided the Initial Lender with a successor which is
acceptable to the Initial Lender in its sole discretion and such
successor shall agree, by written instrument delivered to each
party hereto, to be bound by all of the terms and conditions of
this Agreement.
ARTICLE XII
WAIVERS
No failure or delay on the part of the Initial Lender or any party hereto
in exercising any power, right or remedy under this Agreement shall operate as a
waiver thereof nor shall any single or partial exercise of any such power, right
or remedy preclude any other or further exercise thereof or the exercise of any
other power, right or remedy except by a written instrument signed by the party
to be charged or as otherwise expressly provided herein.
ARTICLE XIII
NOTICES
Except as otherwise provided herein, all notices, requests, consents,
demands and other formal communications given hereunder shall be in writing. All
notices of whatever kind shall be either personally delivered or sent by
telecopy or other form of rapid transmission and confirmed by United States
mail, properly addressed and with full postage prepaid to the following:
To Servicer: Systems & Services Technologies, Inc.
0000 Xxxxxxx Xxxx
Xx. Xxxxxx, Xxxxxxxx 00000
Attn: Xxxx X. Xxxxxxxx, President
Telecopy No.: (000) 000-0000
To any other party hereto: At its address referred to in the Existing
Servicing Agreement. Any party hereto delivering any notice to any other party
hereto shall also deliver a copy thereof to the Initial Lender at its address
set forth in the Credit Agreement.
Daiwa Finance Corp.
00 Xxx Xxxx
Xxx Xxxx, XX 00000
Attn: Xxxxxx Xxxxxxx
Telecopy No.: (000) 000-0000
or to such other address as such party shall have specified in writing in the
manner set forth above.
ARTICLE XIV
FURTHER ASSURANCES
Each party agrees, if reasonably requested by any other party, to execute
and deliver such additional documents or instruments and take such further
actions as may be reasonably necessary to effect the transactions contemplated
by this Agreement.
ARTICLE XV
COUNTERPARTS
This Agreement may be executed in counterparts (including counterparts
evidenced by facsimile transmission), each of which shall be deemed an original
but all of which taken together shall constitute but one and the same document.
ARTICLE XVI
ENTIRE AGREEMENT; AMENDMENTS
This Agreement, together with the Program Documents and including the
Exhibits and Schedules attached hereto and the documents referred to herein,
contains the entire agreement between the parties hereto with respect to the
transactions contemplated hereby and supersedes all prior understandings,
negotiations, commitments and writings with respect hereto. This Agreement may
not be modified, changed or supplemented except upon the express written consent
of each party hereto.
ARTICLE XVII
GOVERNING LAW
This Agreement shall be governed by and construed in accordance with the
internal laws of the State of New York.
ARTICLE XVIII
CONFIDENTIALITY
The parties agree that they will execute and deliver a mutually
satisfactory confidentiality agreement.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed as of the date first written above.
SUBSTITUTE SERVICER:
SYSTEMS & SERVICES TECHNOLOGIES, INC.
By:
Name: Xxxx X. Xxxxxxxx
Title: President
BORROWER
MF RECEIVABLES CORP. III
By:
Name: Xxxxxx Xxxxxxxx
Title: President
COLLATERAL AGENT
THE CHASE MANHATTAN BANK
By:
Name:
Title:
EXHIBIT A
SUMMARY OF SERVICES
SUBSTITUTE SERVICING
The following outlines the services to be provided by the Substitute Servicer
from and after the end of the Transfer Period. The procedures identified herein
are to be implemented at the discretion of the Substitute Servicer depending on
the needs and circumstances of the Designated Auto Loans:
A. CUSTODIAL DUTIES
1. Upon transfer of the Designated Auto Loans to the Substitute Servicer,
the Substitute Servicer shall establish all necessary records in its computer
system, and shall separate the physical loan package for storage. Any perfection
of interest documents to be maintained by the Substitute Servicer shall be filed
in appropriate fireproof facilities. All physical files regarding the Designated
Auto Loans shall be kept in separate filing cabinets being distinctly marked as
the property of the Borrower. All Designated Auto Loans shall be distinctly
marked on the computer files of the Substitute Servicer as belonging to the
Borrower.
B. OBLIGOR ACCOUNTING
1. The Substitute Servicer shall process all monies received by or on behalf of
an Obligor through the Lock-Box Account.
2. The Substitute Servicer may, from time to time, utilize the services of
third-party vendors to assist in the receipt and processing of payments by or on
behalf of Obligors, i.e., Western Union "Quick Collect" or Speedpay.
3. To the extent possible, the Substitute Servicer shall cause all monies
received by or on behalf of an Obligor to post to the Obligor's account within
one Business Day following receipt.
4. The Substitute Servicer shall cause the Obligor's next scheduled due date to
roll when the Obligor payment received is within $25.00 of the expected monthly
payment unless the aggregate unpaid payment shortfalls exceeds $75.00 at the
time of posting.
5. The Substitute Servicer shall advance monies as necessary to cover the
expenses incurred in the process of servicing as provided in Schedules 1 and 2,
to include repossession of an Obligor's Vehicle. These expenses include, but are
not limited to, field calls, repossession costs, storage and transportation
costs, legal fees, mailing costs, skip tracing, mechanics liens and liquidation
costs. Such "out-of-pocket" expenses shall be reimbursed to the Substitute
Servicer as Servicer Fees. Such expenses shall be posted to the Obligor's
account, as applicable and in accordance with law.
C. CUSTOMER SERVICE
1. The Substitute Servicer shall respond to all inquiries from Obligors
regarding their Designated Auto Loans.
2. The Substitute Servicer shall send to Obligors or their approved
representatives (i) payment books or monthly payment statements, as the case may
be; and (ii) account payoff information.
3. The Substitute Servicer shall (i) subcontract physical damage insurance
tracking services, if so requested and (ii) coordinate and assist with
electronic data transfers as needed. All such subcontractor fees and costs shall
be reimbursable to the Substitute Servicer as Servicer Fees.
D. COLLECTIONS
1. The Substitute Servicer shall use its best efforts to collect all outstanding
sums due on every delinquent account. Such efforts shall include diligent
contact with the Obligor by phone or by letter as set forth in the Substitute
Servicer's policy manual delivered to the Initial Lender.
2. Field calls may be utilized at the Substitute Servicer's discretion.
3. The Substitute Servicer may implement any legally permissible collection
methods, including telephone calls, mailed notices and outside field calls.
4. If the Substitute Servicer determines that an Obligor is or may become a
"Skip", the Substitute Servicer shall make all reasonable attempts to locate the
Obligor or related Vehicle using internal skip tracing procedures, and may
sub-contract for outside assistance.
5. The Substitute Servicer shall report all appropriate Obligor account
developments to one or more nationally recognized credit agencies on a monthly
basis.
E. SPECIAL RECOVERIES
1. The Substitute Servicer shall make all reasonable attempts to collect
delinquent Obligor accounts. Promptly after such efforts have been exhausted,
and in the judgment of the Substitute Servicer required payments will not be
forthcoming from the Obligor, the Substitute Servicer shall use its best efforts
to repossess or otherwise recover the Vehicle securing the Designated Auto Loan.
The Substitute Servicer shall pursue repossession or recovery of a Vehicle only
after it has determined that eventual repayment in full is unlikely and such
repossession or recovery is permitted under the terms of the receivable and all
applicable laws.
2. At such time as a Vehicle has been authorized for repossession, the
Substitute Servicer shall assign the account to an authorized, qualified,
licensed and bonded regional repossession agency. Such agent shall be a member
of a nationally recognized association requiring adequate insurance and bonding
(e.g., National Finance Adjusters). Any such assignment shall not relieve the
Substitute Servicer of any of its obligations hereunder.
3. Upon receipt of notification that a repossession has been made, the
Substitute Servicer shall mail to the Obligor and any co-borrower or guarantor,
a Notice of Intent ("NOI") to sell the Vehicle, and shall therein provide the
Obligor with an opportunity to reinstate or redeem the Vehicle.
4. Upon repossession, the repossession agency shall deliver the Vehicle to the
specified destination. At that time, the Substitute Servicer will engage an
inspection agent to assess physical damage to the Vehicle, and will arrange for
any necessary repairs to be made.
5. Assuming no reinstatement or redemption is made by the Obligor, the
Substitute Servicer will determine the appropriate method of resale/liquidation.
Such determination shall weigh federal and state law requirements, market
factors and other variables so as to maximize the liquidation proceeds.
6. The Substitute Servicer shall send notices of deficiencies and manage all
aspects of collateral liquidation including title transfers.
7. Following the liquidation of a Vehicle, the Substitute Servicer shall post
all receipts and apply all credits that may exist to the applicable Obligor
account. If the account is insured under a credit enhancement policy, the
Substitute Servicer shall file a claim as specified in the policy.
8. The Substitute Servicer may perform deficiency balance collections under
separate agreement.
F. ADDITIONAL DUTIES
1. The Substitute Servicer shall establish a physical file for each Designated
Auto Loan, and shall keep complete books and records pertaining to the same.
2. Upon request, the Substitute Servicer shall make available to the Initial
Lender or its designee, the physical files, records and computer systems for
audit or inspection on the premises of the Substitute Servicer, so long as such
audit or inspection does not unreasonably interfere with the operations of the
Substitute Servicer.
3. The Substitute Servicer shall act as custodian of all documents delivered to
it related to the Collateral.
SCHEDULE 1
FEES, EXPENSES & DISTRIBUTIONS
The Fees and Expenses described herein shall be considered Servicer Fees for all
purposes of the Program Documents. All fees and expenses of the Substitute
Servicer will be paid only from the proceeds of the Designated Auto Loans as set
forth in Section 6.04(d) of the Security Agreement.
I. FEES
A. Monthly Fee
(1.) Remaining term of 30 or more months: greater of: $17.00 per
Active Receivable or 320 basis
points
(2.) Remaining term of less than 30 months: $20.00 per Active
Receivable
(3.) Remaining term of less than 24 months: $22.00 per Active
Receivable
(4.) Inactive Receivables: $0.50 per Inactive Receivable
B. Minimum Monthly Fee $1,000.00 per loan pool
II. EXPENSES
The Substitute Servicer shall be reimbursed in accordance with the Existing
Servicing Agreement for all out-of-pocket expenses, including, but not limited
to, those associated with Vehicle recovery, Vehicle liquidation, legal
proceedings related to replevin actions or Obligor bankruptcies, mailing costs,
title processing, bank charges and insurance tracking. All such expenses,
together with a Substitute Servicer administrative fee of 8% of the advanced
funds, shall be billed to the Borrower as provided in Section III. B. below.
Alternatively, the Borrower may at any time during the term of the Agreement
establish an advance account to be used by the Substitute Servicer to cover
out-of-pocket expenses. If such an advance account is implemented, the
Substitute Servicer administration fee shall not apply.
All reimbursable expenses of Monaco previously incurred by Monaco, but not yet
paid, have been submitted to the Substitute Servicer for payment. A schedule of
these expenses is attached hereto as Schedule
2 and by this reference made part hereof. All such expenses will be paid by
the Substitute Servicer upon: (i) receipt of invoices from the Servicer; and
(ii) verification by the Substitute Servicer that the expenses reflected of
any such invoice are proper, reimbursable servicing-related expenses. In the
event the Substitute Servicer is unable to so verify any expense item, the
Substitute Servicer will
return the invoice in question ("Disputed Invoice") to Monaco with a
copy to the Initial Lender. The Substitute Servicer will pay
Disputed Invoices only upon the approval of the Initial Lender. The Substitute
Servicer will only advance such expenses upon confirmation
that the same are fully reimburseable to the Substitute Servicer.
III. DISTRIBUTIONS
Servicer Fees for each Payment Date shall be reflected on the Monthly Servicing
Report for such month. All fees and reimbursable expenses and other amounts due
the Substitute Servicer as reflected on a Monthly Servicing Report shall be paid
to the Substitute Servicer on the related Payment Date.
1691284
-----------------------------------------------------------------------
140
-----------------------------------------------------------------------
IV. MISCELLANEOUS
A. Claim Filing Costs
If the Substitute Servicer files VSI claims in connection with any Designated
Auto Loan, the Substitute Servicer shall receive $25.00 per filing.
B. Late Fees and Extension Fees
All extension fees received by the Substitute Servicer in respect of Designated
Auto Loans shall be deposited by the Substitute Servicer into the Collection
Account and the amount thereof collected shall be paid to the Substitute
Servicer as Servicer Fees. All late fees received by the Substitute Servicer in
respect of Designated Auto Loans shall be deposited into the Collection Account
and the amount thereof collected shall be paid in accordance with Section
6.04(d) of the Security Agreement.
C. Deficiency Collections
Under separate agreement, the Substitute Servicer may provide deficiency balance
collections services on a contingency fee basis.
SUPPLEMENTARY SERVICING AGREEMENT
This Supplementary Servicing Agreement (this "Agreement"), dated as of
April 1, 1999, by and among MF Receivables Corp. IV, a Delaware corporation (the
"Borrower"), Systems & Services Technologies, Inc., a Delaware corporation, as
Substitute Servicer (the "Substitute Servicer"), and The Chase Manhattan Bank,
in its capacity as verification agent (the "Verification Agent") and as
collateral agent (the "Collateral Agent").
R E C I T A L S:
WHEREAS, the Borrower, the Verification Agent, the Collateral Agent and
Monaco Finance, Inc., a Colorado corporation ("Monaco") are parties to a
Servicing Agreement, dated as of December 22, 1997 (as heretofore modified,
amended or supplemented, the "Existing Servicing Agreement"), pursuant to which
Monaco has acted as the servicer of certain auto loans owned by the Borrower;
and
WHEREAS, unless otherwise defined herein, capitalized terms used herein
shall have the meanings assigned in the Existing Servicing Agreement; and
WHEREAS, due to the occurrence of one or more Servicer Events of Default,
Monaco's responsibilities as the Servicer under the Existing Servicing Agreement
have been terminated; and
WHEREAS, the Substitute Servicer provides portfolio management services,
including loan administration, payment collection and processing, back-up
servicing, insurance claim processing, custodial services, third party
repossession, liquidation and recovery collections and financial reporting to
financial institutions in connection with Designated Auto Loans; and
WHEREAS, the Borrower desires to avail itself of the services provided by
the Substitute Servicer to assume the duties of the Servicer, on the terms
provided herein;
NOW THEREFORE, in consideration of the foregoing, other good and valuable
consideration, and the mutual terms and covenants contained herein, the parties
hereto agree as follows:
ARTICLE I
DEFINITIONS
As used in this Agreement, the following terms shall, unless the context
otherwise requires, have the following meanings (such meanings to be equally
applicable to the singular and plural forms of the terms defined):
"Active Receivable" means any Designated Auto Loan other than: (i) an
Inactive Receivable, (ii) a fully satisfied Designated Auto Loan, (iii) a
Designated Auto Loan where the Vehicle secured thereby has been liquidated and
the Substitute Servicer has posted the liquidation proceeds or any other
anticipated proceeds (e.g., credit enhancement insurance and financed product
rebates); and (iv) any Designated Auto Loan where the Substitute Servicer has
completed all work in connection with processing and receiving insurance
payoffs.
"Change of Control" means that a person or group of persons acting
together has, following the date hereof, directly or indirectly acquired more
than 50% of the outstanding capital stock of the Substitute Servicer.
"Fees, Expenses & Distributions" means the fees, expenses and
distributions described in Schedule 1, attached hereto and by this reference
made a part hereof.
"Inactive Receivable" means a Receivable as to which the Substitute
Servicer has exhausted all remedies in accordance with its Policies and
Procedures Manual and has ceased all servicing activities with the exception of
posting payments received from Obligors in connection with deficiency account
balances but the principal balance of which remains unpaid.
"Lock-Box Account" means a lockbox or other segregated account into which
Obligors shall, by no later than April 30, 1999, be directed by the Substitute
Servicer to deposit funds with respect to the Designated Auto Loans.
"Transfer Period" means the period following the Substitute Servicer's
receipt of a Transfer Notice and prior to the date the Substitute Servicer is to
begin as the active servicer for all of the Designated Auto Loans.
ARTICLE II
NATURE AND SCOPE OF RELATIONSHIP
The Substitute Servicer agrees to assume the duties of the active servicer
as described in this Agreement and Paragraph II of the attached Exhibit A for
all of the Designated Auto Loans. In performing its duties under this Agreement,
the Substitute Servicer shall report to such officers or other employees of the
Initial Lender and the Borrower as the Initial Lender and the Borrower may
designate from time to time.
In performing its duties hereunder, the Substitute Servicer shall: (i) act
prudently in accordance with customary and usual servicing procedures for other
institutional servicers; (ii) comply with all applicable Federal and State laws
and regulations governing the Substitute Servicer and the Designated Auto Loans;
and (iii) use and exercise that degree of skill and attention that is customary
with other servicers in the industry that provide servicing relating to
Designated Auto Loans.
The Substitute Servicer shall perform those duties specified in the
Existing Servicing Agreement and in this Agreement and contained in the attached
Exhibit A and shall receive the fees as outlined in Schedule 1 as full
compensation for its services. The Initial Lender or the Borrower with the
consent of the Initial Lender, such consent not to be unreasonably withheld, may
reasonably request the Substitute Servicer to modify or supplement its duties or
methods of performing those duties; provided that the Borrower shall compensate
the Substitute Servicer at a reasonable fee for any increase in expense
experienced by the Substitute Servicer due to the Initial Lender's requests.
Except to the extent specifically reimbursed under the Existing Servicing
Agreement and this Agreement, all costs and expenses of the Substitute Servicer
in connection with its duties hereunder shall be the sole responsibility of the
Substitute Servicer.
ARTICLE IIA
EFFECT OF THIS AGREEMENT
The parties hereto agree that, except as specifically set forth herein,
the Existing Servicing Agreement shall remain in full force and effect and the
Substitute Servicer shall be the Servicer thereunder. Notwithstanding the above,
from and after the date of this Agreement, the Existing Servicing Agreement
shall be amended as follows:
120. ARTICLE ONE:
(A) Add the following new definition: "Supplementary Servicing Agreement"
means the Supplementary Servicing Agreement, dated as of April 1, 1999, among
the Borrower, the Collateral Agent, the Verification Agent and Systems &
Services Technologies, Inc. (the "Substitute Servicer"), as the same may be
modified, amended or supplemented.
(B) Amend the definition of "Servicer Fee" to read as follows: "Servicer
Fee" means the fees payable to the Substitute Servicer under the Supplementary
Servicing Agreement and includes any indemnification payment required to be made
under Article X of the Supplementary Servicing Agreement.
121. ARTICLE TWO: Deleted in its entirety.
122. ARTICLE THREE:
(A) Section 3.01: Deleted in its entirety.
(B) Section 3.03: Deleted in its entirety.
(C) Section 3.05: Delete all but the first two sentences.
(D) Section 3.07: Deleted in its entirety.
(E) Section 3.08(a): Delete the words "or the Servicer has complied with
Section 3.01(b) hereof," and the last sentence.
(F) Section 3.08(d): Delete "the Servicer" and substitute therefor "the
Initial Lender".
123. ARTICLE FOUR:
1.
(A) Section 4.02: Delete Subsections (a)(ii)-(iv) and (vii).
(B) Section 4.03 (b): Deleted in its entirety.
(C) Section 4.04: Delete the words "under the Program Documents that the
Servicer may possess" and substitute the words "under the Servicing Agreement
and the Supplementary Servicing Agreement"; delete the last two words of the
Section and substitute the words "Servicing Agreement and the Supplementary
Servicing Agreement".
124. ARTICLE FIVE:
Delete in its entirety as to the Substitute Servicer. It is the intention
of the Borrower, the Collateral Agent and the Verification Agent (and of the
Initial Lender and Monaco, although they are not parties hereto) that the
provisions of ARTICLE FIVE of the Existing Servicing Agreement remain in full
force and effect with respect to the rights and responsibilities of Monaco in
relation to its activities prior to April 1, 1999.
125. ARTICLE SIX:
Sections 6.01 and 6.02: Delete in their entirety.
126. ARTICLE EIGHT
Section 8.01: Delete in its entirety.
ARTICLE III
ERRORS AND OMISSIONS AND BLANKET CRIME INSURANCE
The Substitute Servicer shall maintain, at its own expense, (i) an errors
and omissions insurance policy and (ii) a blanket crime policy, in each case
with broad coverage with established insurance companies, covering all officers,
employees or other persons acting on behalf of the Substitute Servicer with
regard to the Designated Auto Loans to handle funds, money, documents,
computerized information and papers relating to the Designated Auto Loans. Any
such insurance shall protect and insure the Substitute Servicer against losses,
including forgery, theft, embezzlement, fraud, errors and omissions and
negligent acts of such the Substitute Servicer and shall be maintained in a form
and amount that would meet the requirements of prudent loan servicing companies.
No provision of this Article III requiring such insurance shall diminish
the duties of the Substitute Servicer as set forth in this Agreement and the
Existing Servicing Agreement or relieve the Substitute Servicer from its duties
and obligations as set forth in this Agreement and the Existing Servicing
Agreement. Upon the request of the Initial Lender, the Substitute Servicer shall
cause to be delivered to the Initial Lender and to the Collateral Agent a
certificate evidencing coverage under such errors and omissions and/or blanket
crime policies. Any such policies shall not be canceled without prior written
consent of the Borrower and Initial Lender.
ARTICLE IV
REPRESENTATIONS AND WARRANTIES
A. REPRESENTATIONS AND WARRANTIES OF THE SUBSTITUTE SERVICER
The Substitute Servicer makes the following representations and warranties
to the Borrower, the Collateral Agent and the Initial Lender:
1. The Substitute Servicer is a corporation duly organized, validly
existing and in good standing under the laws of the State of Delaware
and in each other jurisdiction where the conduct of its business
requires it to be in good standing. The Substitute Servicer has full
corporate power and authority to enter into this Agreement and to
carry out the provisions of this Agreement.
2. This Agreement and all other instruments or documents to be
delivered hereunder or pursuant hereto, and the
transactions contemplated hereby, have been duly authorized
by all necessary corporate proceedings of the Substitute
Servicer. This Agreement has been duly and validly
executed and delivered by the Substitute Servicer and,
assuming due authorization, execution and delivery by each
other party hereto, this Agreement is a valid and legally
binding agreement of the Substitute Servicer enforceable in
accordance with its terms.
3. The execution and delivery of this Agreement by the
Substitute Servicer and the compliance by the Substitute
Servicer with all provisions of this Agreement do not
conflict with or violate any applicable law, regulation or
order and do not conflict with or result in a breach of or
default under any of the terms or provisions of any
contract or agreement to which the Substitute Servicer is
subject or by which it or its property is bound, nor does
such execution, delivery or compliance violate the Articles
of Incorporation or By-laws of the Substitute Servicer.
4. The practices used or to be used by the Substitute Servicer
to monitor collections with respect to the Designated Auto
Loans and repossess and dispose of the Vehicles related to
the Designated Auto Loans will be, in all material
respects, legal, proper and in conformity with the
requirements of all applicable federal and state laws,
rules and regulations, and VSI policy procedures (if
applicable). The Substitute Servicer is in possession of
all state and local licenses (including all debt collection
licenses) required for it to perform its services
hereunder, and none of such licenses has been suspended,
revoked or terminated.
5. The Initial Lender has been given a true and accurate copy of the
Policies and Procedures Manual of the Substitute Servicer. All of the
responsibilities of the Substitute Servicer hereunder will be in
compliance with such Policies and Procedures Manual, as the same may
be amended from time to time upon notice to the Initial Lender.
B. REPRESENTATIONS AND WARRANTIES OF THE BORROWER
The Borrower makes the following representations and warranties to the
Substitute Servicer:
1. The Borrower is a corporation, validly existing and in good standing
under the laws of the State of Delaware. The Borrower has full
corporate power and authority to enter into this Agreement and to
carry out the provisions of this Agreement.
2. This Agreement and all other instruments or documents to be
delivered hereunder or pursuant hereto, and the
transactions contemplated hereby, have been duly authorized
by all necessary corporate proceedings of the Borrower.
This Agreement has been duly and validly executed and
delivered by the Borrower and assuming due authorization,
execution and delivery by each other party hereto, this
Agreement is a valid and legally binding agreement of the
Borrower enforceable in accordance with its terms.
3. The execution and delivery of this Agreement by the
Borrower and the compliance by the Borrower with all
provisions of this Agreement do not conflict with or
violate any applicable law, regulation or order and do not
conflict with or result in a breach of or default under any
of the terms or provisions of any contract or agreement to
which the Borrower is subject or by which it or its
property is bound, nor does such execution, delivery or
compliance violate the Certificate of Incorporation or
By-laws of the Borrower.
The representations and warranties contained in this Article IV shall survive
the execution and delivery of this Agreement.
ARTICLE V
SUBSTITUTE SERVICER EVENTS OF DEFAULT
A. If any one of the following events (each, a "Substitute Servicer Event of
Default") shall occur and be continuing:
1. Any failure by the Substitute Servicer to deposit into the Lock-Box
Account any proceeds or payments received from an Obligor or in
respect of the Designated Auto Loans and required to be so delivered
or deposited under the terms of this Agreement or the Existing
Servicing Agreement that continues unremedied until 10:00 a.m. St.
Louis time on the following Business Day; or
2. Failure on the part of the Substitute Servicer (a) to
observe or to perform in any material respect any other
covenant or agreement set forth in this Agreement or the
Existing Servicing Agreement, which failure shall adversely
affect the rights of the Initial Lender and continue
unremedied for a period of 30 days after the date on which
written notice of such failure shall have been received by
the Substitute Servicer or (b) to deliver the Monthly
Servicer Report as required by the Existing Servicing
Agreement; or
3. The entry of a decree or order by a court or agency or
supervisory authority having jurisdiction in the premises
for the appointment of a conservator, receiver, or
liquidator for the Substitute Servicer in any bankruptcy,
insolvency, readjustment of debt, marshaling of assets and
liabilities, or similar proceedings, or the winding-up or
liquidation of its affairs, and the continuance of any such
decree or order unstayed and in effect for a period of 30
consecutive days; or
4. (a) The admission by the Substitute Servicer of its
inability to pay its debts generally as they become due; or
(b) the filing by the Substitute Servicer of a petition
under any applicable bankruptcy, insolvency or
reorganization of any applicable statute; or (c) if the
Substitute Servicer makes an arrangement for the benefit of
its creditors or voluntarily suspend payment of its
obligations; or (d) the filing by a third party of a
bankruptcy case under Federal or State law against the
Substitute Servicer; or
5. If there is breach of any representation or warranty as set forth in
Article IV and such breach shall not be cured in all material respects
within 30 consecutive days after receipt of written notice from one
party to the breaching party or upon discovery by the breaching party;
then, and in each and every case and so long as a Substitute Servicer Event of
Default described above shall not have been remedied, the Initial Lender may
terminate all of the rights and obligations of the Substitute Servicer under
this Agreement.
ARTICLE VI
REMEDIES
In addition to the indemnification rights contained in Article X and the
right to terminate contained in Article XI, the Substitute Servicer agrees that
upon the occurrence of any Substitute Servicer Event of Default, both the
Initial Lender and the Borrower may avail itself of any other relief to which it
may be legally or equitably entitled. In the event of any default of this
Agreement by the Borrower, the Borrower acknowledges the remedies of the
Substitute Servicer contained in Articles XI and XII may be inadequate and that
the Substitute Servicer may also avail itself of any other relief to which it
may be legally or equitably entitled.
ARTICLE VII
RESPONSIBILITY AND AUTHORITY OF THE SUBSTITUTE SERVICER
A. The Substitute Servicer shall have the full power and authority
acting alone and without the consent of any other party hereto,
to do any and all things in connection with the servicing of any
Designated Auto Loan that it may deem reasonably necessary or
desirable, consistent with the duties and obligations imposed
upon the Substitute Servicer by this Agreement including, but
not limited to, the right to subcontract any of its duties
hereunder. Notwithstanding the foregoing, the Substitute
Servicer shall cooperate fully with the Initial Lender and the
Borrower and promptly inform the Initial Lender and the Borrower
of any and all changes or developments of which the Substitute
Servicer becomes aware that may affect the Designated Auto Loans.
B. The Substitute Servicer is hereby authorized to communicate with third
parties and the Obligors in the name of the Borrower as necessary and
proper to perform the services anticipated by this Agreement.
C. The Substitute Servicer shall have the right to commence a legal
proceeding on behalf of the Borrower to enforce any Designated
Auto Loan. As reasonably requested by the Substitute Servicer,
the Borrower shall furnish the Substitute Servicer with any
necessary and appropriate powers of attorney and other documents
needed in order to enable the Substitute Servicer to carry out
such proceeding and with respect to its servicing and
administrative duties hereunder.
ARTICLE VIII
BANK ACCOUNTS
Following the expiration of the Transfer Period:
A. The Substitute Servicer shall maintain the Lock-Box Account, and
shall collect and hold in trust (for the benefit of the
Collateral Agent) in such accounts all funds received from
Obligors or in respect of Designated Auto Loans. The Substitute
Servicer shall use its best efforts to ensure that all
Collections are directed to and/or deposited into the Lock-Box
Account. The financial institution in which the Lock-Box
Account is opened shall be under irrevocable instructions (which
can be modified only with the consent of the Initial Lender)
that upon receipt of cleared funds in the Lock-Box Account, such
funds shall be transferred to the Collateral Account.
B. The Substitute Servicer shall immediately notify the Initial Lender and
the Collateral Agent of the identity of the financial institution
maintaining the Lock-Box Account and obtain the agreement of such
financial institution to the irrevocable instructions described above.
ARTICLE IX
DOCUMENTS AND RECORDS
The Substitute Servicer shall provide the Initial Lender and its designees
access to the its facility, but only (except following the occurrence of a
Substitute Servicer Event of Default) upon reasonable request and during normal
business hours of the Substitute Servicer and to the extent that such access
would not significantly disrupt the orderly conduct of business at such
facility. The Substitute Servicer will accept all deliveries of loan files and
similar data as specified by the Initial Lender from time to time.
ARTICLE X
INDEMNIFICATION
A. The Substitute Servicer shall indemnify and hold harmless the
Initial Lender, the Borrower, the Servicer, the Collateral Agent
and the Verification Agent and each of their respective
officers, employees and agents against any and all claims,
losses, penalties, fines, forfeitures, legal fees and related
costs, judgments and any other costs, fees and expenses that any
of such Persons may sustain in any way related to the negligence
or misconduct of the Substitute Servicer in its performance
under the terms of this Agreement or the Existing Servicing
Agreement, or arising from any breach of the representations and
warranties of the Substitute Servicer set forth in Article IV
hereof. The Substitute Servicer shall notify the Initial Lender
as soon as possible if a claim is made by a third party with
respect to this Agreement, any Program Document or any
Designated Auto Loan. The right to indemnification set forth in
this paragraph shall survive the termination of this Agreement.
B. The Borrower shall indemnify and hold harmless the Substitute
Servicer and its officers, employees and agents against any and
all claims, losses, penalties, fines, forfeitures, legal fees
and related costs, judgments and any other costs, fees and
expenses that the Substitute Servicer may sustain in any way
related to the negligence or misconduct of the Borrower in its
performance under the terms of this Agreement or the Existing
Servicing Agreement, or arising from any breach of the
representations and warranties of the Borrower set forth in
Article IV hereof. The Borrower shall notify the Substitute
Servicer as soon as possible if a claim is made by a third party
with respect to this Agreement, any Program Document or any
Designated Auto Loan. The right to indemnification set forth in
this paragraph shall survive the termination of this Agreement.
C. The Substitute Servicer may accept and reasonably rely on all
accounting and servicing records and other documentation
provided to the Substitute Servicer by or at the direction of
the Borrower, including documents prepared or maintained by any
originator or the Servicer, or any party providing services
related to the Designated Auto Loans (each, a "third party").
------------
The Borrower shall indemnify and hold harmless the Substitute
Servicer and its officers, employees and agents against any and
all claims, losses, penalties, fines, forfeitures, legal fees
and related costs, judgments, and any other costs, fees and
expenses that the Substitute Servicer may sustain in any way
solely related to the negligence or misconduct of any third
party with respect to the Designated Auto Loans. The Substitute
Servicer shall have no duty, responsibility, obligation or
liability (collectively "liability") for the acts or omissions
---------
of any third party. If any error, inaccuracy or omission
(collectively "error") exists in any information provided to the
-----
Substitute Servicer and such error causes or materially
contributes to the Substitute Servicer making or continuing any
error (a "continuing error"), the Substitute Servicer shall have
-----------------
no liability for such continued error; provided, however, that
-------- -------
this provision shall not protect the Substitute Servicer against
any liability arising from its willful misconduct, bad faith or
gross negligence in discovering or correcting or failing to
discover or correct any error or in the performance of its
duties contemplated herein.
If the Substitute Servicer becomes aware of any error or continuing error
which in the opinion of the Substitute Servicer impairs its ability to
perform its services hereunder, the Substitute Servicer shall promptly
notify the Initial Lender thereof; the Substitute Servicer may undertake
such data or records reconstruction as it deems appropriate to correct any
such error or continued error and to prevent future continued error. To
the extent it is not otherwise reimbursed under the Existing Servicing
Agreement, the Substitute Servicer shall be entitled to recover its costs
thereby expended.
ARTICLE XI
TERM AND TERMINATION
A. The term of this Agreement shall be for one year from the date first
written above and will automatically renew for additional successive
one-year terms unless the Initial Lender or the Substitute Servicer shall
upon 90 days written notice elect not to renew this Agreement.
Notwithstanding the above, this Agreement shall automatically terminate
when the Notes are repaid in full.
B. The Initial Lender shall have the right to terminate this
Agreement (i) at any time prior to the delivery of a Transfer
Notice, and, (ii) following such delivery, during any term upon
not less than 60 days written notice delivered by overnight mail
to the Substitute Servicer. In the event of any such
termination under clause (ii) above, the Substitute Servicer
shall be entitled to a termination fee equal to the greater of
$20,000.00 or the servicing fee for each Designated Auto Loan so
transferred for the month preceding the month in which the
notice of termination is delivered, such fee to be paid by the
Borrower unless the Initial Lender affects such termination
without the prior written consent of the Borrower (which consent
shall not be unreasonably withheld), in which case the Initial
Lender shall be responsible therefor; provided, that no such
--------
termination fee shall be payable if (x) a Substitute Servicer
Event of Default shall have occurred or (y) the effective date
of such termination is within 90 days following the date upon
which the Substitute Servicer has been merged with or into
another entity or a Change of Control has occurred. The
Substitute Servicer shall not, however, be entitled to receive
any such termination fee if the Substitute Servicer is
terminated due to the occurrence of a Substitute Servicer Event
of Default.
C. The Substitute Servicer shall have the right to resign under
this Agreement by giving 90 days prior written notice to the
Initial Lender; provided, however, that in no event shall any
-------- -------
such resignation be effective unless the Substitute Servicer
shall have provided the Initial Lender with a successor which is
acceptable to the Initial Lender in its sole discretion and such
successor shall agree, by written instrument delivered to each
party hereto, to be bound by all of the terms and conditions of
this Agreement.
ARTICLE XII
WAIVERS
No failure or delay on the part of the Initial Lender or any party hereto
in exercising any power, right or remedy under this Agreement shall operate as a
waiver thereof nor shall any single or partial exercise of any such power, right
or remedy preclude any other or further exercise thereof or the exercise of any
other power, right or remedy except by a written instrument signed by the party
to be charged or as otherwise expressly provided herein.
ARTICLE XIII
NOTICES
Except as otherwise provided herein, all notices, requests, consents,
demands and other formal communications given hereunder shall be in writing. All
notices of whatever kind shall be either personally delivered or sent by
telecopy or other form of rapid transmission and confirmed by United States
mail, properly addressed and with full postage prepaid to the following:
To Servicer: Systems & Services Technologies, Inc.
0000 Xxxxxxx Xxxx
Xx. Xxxxxx, Xxxxxxxx 00000
Attn: Xxxx X. Xxxxxxxx, President
Telecopy No.: (000) 000-0000
To any other party hereto: At its address referred to in the Existing
Servicing Agreement. Any party hereto delivering any notice to any other party
hereto shall also deliver a copy thereof to the Initial Lender at its address
set forth in the Credit Agreement.
Daiwa Finance Corp.
00 Xxx Xxxx
Xxx Xxxx, XX 00000
Attn: Xxxxxx Xxxxxxx
Telecopy No.: (000) 000-0000
or to such other address as such party shall have specified in writing in the
manner set forth above.
ARTICLE XIV
FURTHER ASSURANCES
Each party agrees, if reasonably requested by any other party, to execute
and deliver such additional documents or instruments and take such further
actions as may be reasonably necessary to effect the transactions contemplated
by this Agreement.
ARTICLE XV
COUNTERPARTS
This Agreement may be executed in counterparts (including counterparts
evidenced by facsimile transmission), each of which shall be deemed an original
but all of which taken together shall constitute but one and the same document.
ARTICLE XVI
ENTIRE AGREEMENT; AMENDMENTS
This Agreement, together with the Program Documents and including the
Exhibits and Schedules attached hereto and the documents referred to herein,
contains the entire agreement between the parties hereto with respect to the
transactions contemplated hereby and supersedes all prior understandings,
negotiations, commitments and writings with respect hereto. This Agreement may
not be modified, changed or supplemented except upon the express written consent
of each party hereto.
ARTICLE XVII
GOVERNING LAW
This Agreement shall be governed by and construed in accordance with the
internal laws of the State of New York.
ARTICLE XVIII
CONFIDENTIALITY
The parties agree that they will execute and deliver a mutually
satisfactory confidentiality agreement.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed as of the date first written above.
SUBSTITUTE SERVICER:
SYSTEMS & SERVICES TECHNOLOGIES, INC.
By:
Name: Xxxx X. Xxxxxxxx
Title: President
BORROWER
MF RECEIVABLES CORP. IV
By:
Name: Xxxxxx Xxxxxxxx
Title: President
COLLATERAL AGENT
THE CHASE MANHATTAN BANK
By:
Name:
Title:
EXHIBIT A
SUMMARY OF SERVICES
SUBSTITUTE SERVICING
The following outlines the services to be provided by the Substitute Servicer
from and after the end of the Transfer Period. The procedures identified herein
are to be implemented at the discretion of the Substitute Servicer depending on
the needs and circumstances of the Designated Auto Loans:
A. CUSTODIAL DUTIES
1. Upon transfer of the Designated Auto Loans to the Substitute Servicer,
the Substitute Servicer shall establish all necessary records in its computer
system, and shall separate the physical loan package for storage. Any perfection
of interest documents to be maintained by the Substitute Servicer shall be filed
in appropriate fireproof facilities. All physical files regarding the Designated
Auto Loans shall be kept in separate filing cabinets being distinctly marked as
the property of the Borrower. All Designated Auto Loans shall be distinctly
marked on the computer files of the Substitute Servicer as belonging to the
Borrower.
B. OBLIGOR ACCOUNTING
1. The Substitute Servicer shall process all monies received by or on behalf of
an Obligor through the Lock-Box Account.
2. The Substitute Servicer may, from time to time, utilize the services of
third-party vendors to assist in the receipt and processing of payments by or on
behalf of Obligors, i.e., Western Union "Quick Collect" or Speedpay.
3. To the extent possible, the Substitute Servicer shall cause all monies
received by or on behalf of an Obligor to post to the Obligor's account within
one Business Day following receipt.
4. The Substitute Servicer shall cause the Obligor's next scheduled due date to
roll when the Obligor payment received is within $25.00 of the expected monthly
payment unless the aggregate unpaid payment shortfalls exceeds $75.00 at the
time of posting.
5. The Substitute Servicer shall advance monies as necessary to cover the
expenses incurred in the process of servicing as provided in Schedules 1 and 2,
to include repossession of an Obligor's Vehicle. These expenses include, but are
not limited to, field calls, repossession costs, storage and transportation
costs, legal fees, mailing costs, skip tracing, mechanics liens and liquidation
costs. Such "out-of-pocket" expenses shall be reimbursed to the Substitute
Servicer as Servicer Fees. Such expenses shall be posted to the Obligor's
account, as applicable and in accordance with law.
C. CUSTOMER SERVICE
1. The Substitute Servicer shall respond to all inquiries from Obligors
regarding their Designated Auto Loans.
2. The Substitute Servicer shall send to Obligors or their approved
representatives (i) payment books or monthly payment statements, as the case may
be; and (ii) account payoff information.
3. The Substitute Servicer shall (i) subcontract physical damage insurance
tracking services, if so requested and (ii) coordinate and assist with
electronic data transfers as needed. All such subcontractor fees and costs shall
be reimbursable to the Substitute Servicer as Servicer Fees.
D. COLLECTIONS
1. The Substitute Servicer shall use its best efforts to collect all outstanding
sums due on every delinquent account. Such efforts shall include diligent
contact with the Obligor by phone or by letter as set forth in the Substitute
Servicer's policy manual delivered to the Initial Lender.
2. Field calls may be utilized at the Substitute Servicer's discretion.
3. The Substitute Servicer may implement any legally permissible collection
methods, including telephone calls, mailed notices and outside field calls.
4. If the Substitute Servicer determines that an Obligor is or may become a
"Skip", the Substitute Servicer shall make all reasonable attempts to locate the
Obligor or related Vehicle using internal skip tracing procedures, and may
sub-contract for outside assistance.
5. The Substitute Servicer shall report all appropriate Obligor account
developments to one or more nationally recognized credit agencies on a monthly
basis.
E. SPECIAL RECOVERIES
1. The Substitute Servicer shall make all reasonable attempts to collect
delinquent Obligor accounts. Promptly after such efforts have been exhausted,
and in the judgment of the Substitute Servicer required payments will not be
forthcoming from the Obligor, the Substitute Servicer shall use its best efforts
to repossess or otherwise recover the Vehicle securing the Designated Auto Loan.
The Substitute Servicer shall pursue repossession or recovery of a Vehicle only
after it has determined that eventual repayment in full is unlikely and such
repossession or recovery is permitted under the terms of the receivable and all
applicable laws.
2. At such time as a Vehicle has been authorized for repossession, the
Substitute Servicer shall assign the account to an authorized, qualified,
licensed and bonded regional repossession agency. Such agent shall be a member
of a nationally recognized association requiring adequate insurance and bonding
(e.g., National Finance Adjusters). Any such assignment shall not relieve the
Substitute Servicer of any of its obligations hereunder.
3. Upon receipt of notification that a repossession has been made, the
Substitute Servicer shall mail to the Obligor and any co-borrower or guarantor,
a Notice of Intent ("NOI") to sell the Vehicle, and shall therein provide the
Obligor with an opportunity to reinstate or redeem the Vehicle.
4. Upon repossession, the repossession agency shall deliver the Vehicle to the
specified destination. At that time, the Substitute Servicer will engage an
inspection agent to assess physical damage to the Vehicle, and will arrange for
any necessary repairs to be made.
5. Assuming no reinstatement or redemption is made by the Obligor, the
Substitute Servicer will determine the appropriate method of resale/liquidation.
Such determination shall weigh federal and state law requirements, market
factors and other variables so as to maximize the liquidation proceeds.
6. The Substitute Servicer shall send notices of deficiencies and manage all
aspects of collateral liquidation including title transfers.
7. Following the liquidation of a Vehicle, the Substitute Servicer shall post
all receipts and apply all credits that may exist to the applicable Obligor
account. If the account is insured under a credit enhancement policy, the
Substitute Servicer shall file a claim as specified in the policy.
8. The Substitute Servicer may perform deficiency balance collections under
separate agreement.
F. ADDITIONAL DUTIES
1. The Substitute Servicer shall establish a physical file for each Designated
Auto Loan, and shall keep complete books and records pertaining to the same.
2. Upon request, the Substitute Servicer shall make available to the Initial
Lender or its designee, the physical files, records and computer systems for
audit or inspection on the premises of the Substitute Servicer, so long as such
audit or inspection does not unreasonably interfere with the operations of the
Substitute Servicer.
3. The Substitute Servicer shall act as custodian of all documents delivered to
it related to the Collateral.
SCHEDULE 1
FEES, EXPENSES & DISTRIBUTIONS
The Fees and Expenses described herein shall be considered Servicer Fees for all
purposes of the Program Documents. All fees and expenses of the Substitute
Servicer will be paid only from the proceeds of the Designated Auto Loans as set
forth in Section 6.04(d) of the Security Agreement.
I. FEES
A. Monthly Fee
(1.) Remaining term of 30 or more months: greater of: $17.00 per
Active Receivable or 320 basis
points
(2.) Remaining term of less than 30 months: $20.00 per Active
Receivable
(3.) Remaining term of less than 24 months: $22.00 per Active
Receivable
(4.) Inactive Receivables: $0.50 per Inactive Receivable
B. Minimum Monthly Fee $1,000.00 per loan pool
II. EXPENSES
The Substitute Servicer shall be reimbursed in accordance with the Existing
Servicing Agreement for all out-of-pocket expenses, including, but not limited
to, those associated with Vehicle recovery, Vehicle liquidation, legal
proceedings related to replevin actions or Obligor bankruptcies, mailing costs,
title processing, bank charges and insurance tracking. All such expenses,
together with a Substitute Servicer administrative fee of 8% of the advanced
funds, shall be billed to the Borrower as provided in Section III. B. below.
Alternatively, the Borrower may at any time during the term of the Agreement
establish an advance account to be used by the Substitute Servicer to cover
out-of-pocket expenses. If such an advance account is implemented, the
Substitute Servicer administration fee shall not apply.
All reimbursable expenses of Monaco previously incurred by Monaco, but not yet
paid, have been submitted to the Substitute Servicer for payment. A schedule of
these expenses is attached hereto as Schedule
2 and by this reference made part hereof. All such expenses will be paid by
the Substitute Servicer upon: (i) receipt of invoices from the Servicer; and
(ii) verification by the Substitute Servicer that the expenses reflected of
any such invoice are proper, reimbursable servicing-related expenses. In the
event the Substitute Servicer is unable to so verify any expense item, the
Substitute Servicer will
return the invoice in question ("Disputed Invoice") to Monaco with a
copy to the Initial Lender. The Substitute Servicer will pay
Disputed Invoices only upon the approval of the Initial Lender. The Substitute
Servicer will only advance such expenses upon confirmation
that the same are fully reimburseable to the Substitute Servicer.
III. DISTRIBUTIONS
Servicer Fees for each Payment Date shall be reflected on the Monthly Servicing
Report for such month. All fees and reimbursable expenses and other amounts due
the Substitute Servicer as reflected on a Monthly Servicing Report shall be paid
to the Substitute Servicer on the related Payment Date.
IV. MISCELLANEOUS
A. Claim Filing Costs
If the Substitute Servicer files VSI claims in connection with any Designated
Auto Loan, the Substitute Servicer shall receive $25.00 per filing.
B. Late Fees and Extension Fees
All extension fees received by the Substitute Servicer in respect of Designated
Auto Loans shall be deposited by the Substitute Servicer into the Collection
Account and the amount thereof collected shall be paid to the Substitute
Servicer as Servicer Fees. All late fees received by the Substitute Servicer in
respect of Designated Auto Loans shall be deposited into the Collection Account
and the amount thereof collected shall be paid in accordance with Section
6.04(d) of the Security Agreement.
C. Deficiency Collections
Under separate agreement, the Substitute Servicer may provide deficiency balance
collections services on a contingency fee basis.
