Exhibit 10.1
SERVICING AGREEMENT
This Servicing Agreement (this "Agreement"), effective as of
_________________, 1998, is entered into by and between _______________
________________, a ____________ corporation (the "Servicer"), and Tamarack
Lenders Corporation, a Texas corporation ("Buyer").
BACKGROUND STATEMENT
This Agreement shall govern the collection and servicing responsibilities
with respect to any and all of the Receivables purchased by Buyer from Servicer
pursuant to that certain Transfer Agreement (herein so called) by and between
Buyer and Servicer of even date herewith.
STATEMENT OF AGREEMENT
In consideration of the mutual covenants contained herein and for other
good and valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, Buyer and Servicer agree as follows:
1. APPOINTMENT OF AND ACCEPTANCE BY THE SERVICER OF SERVICING
OBLIGATIONS.
(a) The Servicer, on behalf of Buyer, shall during the term of this
Agreement manage, administer and collect each of the Receivables (as defined in
the Transfer Agreement), shall exercise discretionary powers involved in such
management, administration and collection, and shall bear all costs and expenses
incurred in connection therewith that may be necessary or advisable in carrying
out this Agreement. In the management, administration and collection of the
Receivables, the Servicer shall use at least the same care and apply the same
policies that it would exercise if it owned the Receivables, including but
not limited to the servicing criteria as set forth in EXHIBIT A attached
hereto.
(b) The Servicer shall have full power and authority to do those
things in connection with such servicing, administration and collection
activities which it may deem necessary or desirable in order to maximize
receipts collected from Obligors or foreclosure and sale of Financed Vehicles
underlying the Receivables subject to the provisions hereof. The Servicer is
authorized and empowered to execute and deliver, on behalf of Buyer, instruments
of satisfaction or cancellation, or of partial or full release or discharge, or
other comparable instruments, in order to evidence payments received with
respect to the Receivables and, after the delinquency of any Receivables and to
the extent permitted under and in compliance with applicable law and
regulations, to commence enforcement proceedings with respect to such
Receivables, or commence any legal action against an Obligor in the name of
Buyer without the prior written consent of the Buyer. Buyer shall, at its
discretion, furnish the Servicer with powers of attorney and other documents
necessary or appropriate to enable the Servicer to carry out its servicing and
administrative duties hereunder.
2. TERM. This Agreement shall commence as of the date first written
above and shall continue until terminated upon 30 days written notice by either
party to the other.
3. COMPENSATION. The Servicer shall be reimbursed by Buyer with respect
to each Receivable only upon satisfaction in full of the particular obligor's
obligations with respect to such Receivable. Upon such satisfaction in full,
the Servicer shall be entitled to a Servicing Fee equal to 5% of the amount paid
by the Buyer under the Transfer Agreement for such Receivable. In the event
this Agreement terminates, either at the election of the Servicer as provided
herein, or of the Buyer as permitted hereunder upon the occurrence of an
event of default by the Servicer, prior to the time the Receivable has been
paid in full, the Servicer will not be entitled to the Servicing Fee.
4. REPRESENTATIONS AND WARRANTIES OF THE SERVICER. The Servicer
represents and warrants to Buyer as follows:
(a) ORGANIZATION AND GOOD STANDING. Servicer is a corporation duly
organized, validly existing and in good standing under the laws of its state of
incorporation, and has full corporate power, authority and legal right to own
its properties and conduct its business as such properties are presently owned
and such business is presently contemplated, and to execute, deliver and perform
its obligations under this Agreement.
(b) DUE QUALIFICATION. The Servicer is duly qualified and has
registered as a foreign corporation in each state where such qualification is
required in order to perform its obligations pursuant to this Agreement and has
obtained all necessary licenses, approvals or consents as are required under
applicable law to perform its duties hereunder.
(c) DUE AUTHORIZATION. The execution, delivery and performance of
this Agreement has been duly authorized by the Servicer by all necessary
corporate action on the part of the Servicer.
(d) BINDING OBLIGATION. This Agreement constitutes a legal, valid and
binding obligation of the Servicer, enforceable in accordance with its terms,
except as enforceability may be limited by applicable bankruptcy, insolvency,
reorganization, moratorium or other similar laws now or hereinafter in effect
which affect the enforcement of creditors' rights in general, and except as such
enforceability may be limited by general principles of equity (whether
considered in a proceeding at law or in equity).
(e) NO VIOLATION. The execution and delivery of this Agreement by
the Servicer, and the performance of the transactions contemplated by this
Agreement and the fulfillment of the terms hereof applicable to the Servicer,
will not conflict with, violate, result in any breach of any of the material
terms and provisions of, or constitute (with or without notice or lapse of time
or both) a default under, any requirement of law applicable to the Servicer or
any indenture, contract, agreement, mortgage, deed of trust or other installment
to which the Servicer is a party or by which it is bound.
5. REPRESENTATIONS AND WARRANTIES OF THE BUYER. The Buyer represents and
warrants to Servicer as follows:
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(a) ORGANIZATION AND GOOD STANDING. Buyer is a corporation duly
organized, validly existing and in good standing under the laws of Texas, and
has full corporate power, authority and legal right to own its properties and
conduct its business as such properties are presently owned and such business is
presently contemplated, and to execute, deliver and perform its obligations
under this Agreement.
(b) DUE QUALIFICATION. The Buyer is duly qualified and has
registered as a foreign corporation in each state where such qualification is
required in order to perform its obligations pursuant to this Agreement and has
obtained all necessary licenses, approvals or consents as are required under
applicable law to perform its duties hereunder.
(c) DUE AUTHORIZATION. The execution, delivery and performance of
this Agreement has been duly authorized by the Buyer by all necessary corporate
action on the part of the Buyer.
(d) BINDING OBLIGATION. This Agreement constitutes a legal, valid and
binding obligation of the Buyer, enforceable in accordance with its terms,
except as enforceability may be limited by applicable bankruptcy, insolvency,
reorganization, moratorium or other similar laws now or hereinafter in effect
which affect the enforcement of creditors' rights in general, and except as such
enforceability may be limited by general principles of equity (whether
considered in a proceeding at law or in equity).
(e) NO VIOLATION. The execution and delivery of this Agreement by
the Buyer, and the performance of the transactions contemplated by this
Agreement and the fulfillment of the terms hereof applicable to the Buyer, will
not conflict with, violate, result in any breach of any of the material terms
and provisions of, or constitute (with or without notice or lapse of time or
both) a default under, any requirement of law applicable to the Buyer or any
indenture, contract, agreement, mortgage, deed of trust or other installment to
which the Buyer is a party or by which it is bound.
6. COVENANTS. The Servicer further warrants to and covenants with Buyer
as follows:
(a) LOCK-BOX ACCOUNT. From and after the date hereof until such
time as this Agreement terminates, Servicer shall instruct all obligors
under the Receivables to remit all payments directly to a Lock-Box Account
(herein so called) in the name of the Buyer. Servicer shall direct all
Obligors to utilize payment books or statements with remittance instructions
directing all payments to be remitted to the lock-box account. Servicer
agrees that all cash, checks, notes, drafts or other items which it receives
attributable to the Receivables, including proceeds from resale of
repossessed Financed Vehicles and recoveries on insurance claims, shall be
deposited in the Lock-Box Account within two business days of receipt. All
collections and payments attributable to the Receivables shall be transferred
from the lock-box account to the Buyer's operating account on at least a
weekly basis.
(b) OPERATIONS. The Servicer shall collect payments from the
Receivables in an orderly and efficient manner consistent with good business
practices and in accordance with all applicable federal, state and local laws
and regulations.
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(c) RECORDS. So long as Buyer has not given notice of termination
pursuant to Section 2, the Servicer shall, (i) keep such accounts and other
records as will enable Buyer to determine the status of the Receivables; (ii)
keep such books and records at its offices identified in Section 14 herein; and
(iii) permit Buyer and its representatives at any time to inspect, audit, check
and make abstracts from Servicer's accounts, records, correspondence and other
papers pertaining to the Receivables. Servicer shall maintain, or cause to be
maintained, its respective records with respect to the Receivables in a manner
such that the Servicer can produce a computer file containing a listing (by
Obligor) of all Receivables, together with the account balance of such accounts
and the payment history related thereto. The Servicer shall provide Buyer
with monthly reports updating the information relating to account balances
and activity and the amounts collected on the Receivables during the
proceeding month.
(d) CONTINUATION STATEMENTS. If Buyer so requests, the Servicer
shall execute and file documents which shall create a first priority security
interest in favor of Buyer in Financed Vehicles, including registration of the
Certificates of Title in the name of Buyer, and/or any other documents requested
by Buyer or which may be required by law to preserve and protect the interest of
Buyer in and to the Receivables.
(e) PRINCIPAL EXECUTIVE OFFICE. The Servicer shall not, without
providing 30 days' notice to Buyer, and without filing such amendments to any
previously filed financing statements as Buyer may require, (i) change the
county where its principal executive office, or the office where the records
relating to the Receivables are kept, is located, or (ii) change its name,
identity or corporate structure in any manner which would, could or might make
any financing statement or continuation statement filed by Buyer or the Servicer
or any provision hereof seriously misleading within the meaning of Section
9-402(g) of any applicable enactment of the Texas Uniform Commercial Code.
(f) NO IMPAIRMENT. The Servicer will duly fulfill all obligations
on its part to be fulfilled under or in connection with each Receivable and will
do nothing to materially impair the rights of Buyer in the Receivables.
(g) COMPLIANCE WITH LAW. The Servicer will comply in all material
respects with all acts, rules, regulations, orders, decrees and directions of
any governmental authority applicable to the Receivables or any part thereof.
The Servicer will comply, in all material respects, with any obligation of a
holder of a Receivable to the Obligor thereof arising under such Receivable or
under applicable law.
(h) SECURITY INTEREST. Except for the transfers of Receivables to
the Buyer under the Transfer Agreement, the Servicer will not sell, pledge,
assign or transfer to any other person, or grant, create, incur, assume or
suffer to exist any lien on any Receivables, or the books or records relating to
any Receivables, or any interest therein; the Servicer shall immediately notify
Buyer of the existence of any lien on any Receivables; the Servicer shall defend
the right, title and interest of Buyer in, to and under the Receivables, whether
now existing or hereafter transferred to Buyer, against all claims of third
parties claiming through or
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under the Servicer.
7. MAINTENANCE OF INTERNAL CONTROL AND PROCEDURES. Servicer shall, at
all times during the term of this Agreement, follow internal control procedures
consistent with loan servicing industry standards and, at the request of Buyer,
will supply same in written form for review purposes.
8. COMPUTER. Servicer shall, at all times during the term of this
Agreement, utilize in the operation of its business the industry standard
computer software and contract information maintenance system.
9. SERVICER EVENTS OF DEFAULT. The occurrence and continuation of any
one of the following events shall be a "Servicer Event of Default" under this
Agreement:
(a) Failure on the part of the Servicer to remit collections on the
Receivables to the Lock-Box Account when due in accordance with Section 6(a) and
continuance of such failure for five business days. For purposes of this
Agreement, "business day" shall mean any day other than a Saturday, Sunday or
legal holiday; or
(b) An involuntary case is commenced or filed against the Servicer
under the federal bankruptcy laws, as now or hereafter in effect, or any other
present or future federal or state bankruptcy, insolvency or similar law, or for
the appointment of a receiver, liquidator, assignee, trustee, custodian,
sequestrator or other similar official of the Servicer or of any substantial
part of its property, or for the winding up of the affairs of, liquidation,
dissolution, or reorganization of the Servicer and the continuance of such case
or filing unstayed for a period of 30 consecutive days; or
(c) An order for relief shall be entered in a case under title 11 of
the United States Code in which the Servicer is a debtor, or the commencement by
the Servicer of a voluntary case under the federal bankruptcy laws, as now or
hereafter in effect, or any other present or future federal or state bankruptcy,
insolvency or similar law, or the consent by the Servicer to the appointment of
or taking possession by a receiver, liquidator, assignee, trustee, custodian,
sequestrator or other similar official of the Servicer or of any substantial
part of its property or the making by the Servicer of an assignment for the
benefit of creditors.
(d) Failure by Servicer to service and collect amounts due from
Obligors under Receivables in accordance with normal business practices and the
continuance of such failure for 30 days after written notice by Buyer of such
failure.
10. REMEDIES. If a Servicer Event of Default shall have occurred and be
continuing, Buyer may, by notice given in writing to the Servicer, immediately
terminate all of the rights and obligations of the Servicer under this
Agreement. Notwithstanding any termination of the rights and obligations of the
Servicer, the Servicer shall remain responsible for any acts or
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omissions to act by it as Servicer prior to such termination. In the event
of such termination:
(a) Buyer is hereby authorized and empowered (upon the failure
of the Servicer to cooperate) to execute and deliver, on behalf of the Servicer
as attorney-in-fact or otherwise, all documents and other instruments upon the
failure of the Servicer to execute or deliver such documents or instruments, and
to do and accomplish all other acts or things necessary or appropriate to effect
the purposes of a transfer of servicing rights to a successor servicer;
(b) The Servicer agrees to cooperate with Buyer and any successor
servicer in effecting the termination of the responsibilities and rights of the
Servicer to conduct servicing hereunder, including, without limitation, the
transfer to such successor servicer of all authority of the Servicer to service
the Receivables provided for under this Agreement, including, without
limitation, all authority over all collections which shall on the date of
transfer be held by the Servicer for deposit or which shall thereafter be
received with respect to the Receivables; and
(c) The Servicer shall promptly transfer its records relating to the
Receivables to a successor servicer in such form as such successor servicer may
reasonably request and shall promptly transfer to such successor servicer all
other records, correspondence and documents necessary for the continued
servicing of the Receivables in the manner and at such times as the successor
servicer shall reasonably request. To the extent that compliance with this
Section shall require the Servicer to disclose to such successor servicer
information of any kind which the Servicer reasonably deems to be confidential,
such successor servicer shall be required to enter into such customary licensing
and confidentiality agreements as the Servicer shall deem necessary to protect
its interest.
11. SUCCESSORS AND ASSIGNS. This Agreement shall be binding upon and
inure to the benefit of the parties hereto and their respective successor and
assigns. The Servicer may contract with others for the performance of any or
all of its obligations arising hereunder but no such contract shall relieve
Servicer from liability for its performance hereunder.
12. BUYER EVENT OF DEFAULT; SERVICER'S REMEDIES. In the event that Buyer
should fail to pay any fees or compensation due under this Agreement, within ten
business days of the date they are due or are submitted for payment, whichever
is less, or shall fail to perform any of its duties or to observe or perform any
other term, covenant, condition or agreement provided within this Agreement,
said failure shall constitute an event of default by the Buyer. In the event of
such default, Servicer shall have the option of immediately terminating this
Agreement by written notice to Buyer in addition to all remedies available in
equity or law.
13. MODIFICATIONS AND WAIVERS. No delay on the part of any party in
exercising any right, power or privilege hereunder shall operate as a waiver
thereof, nor shall any waiver of any right, power or privilege hereunder operate
as a waiver of any other right, power or privilege
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hereunder, nor shall any single or partial exercise of any right, power or
privilege hereunder preclude any other or further exercise thereof, or the
exercise of any other right, power or privilege hereunder. All rights and
remedies herein provided are cumulative and are not exclusive of any rights
or remedies which the parties hereto may otherwise have at law or in equity.
No waiver shall be valid in the absence of the written and signed consent of
the party against which enforcement of such is sought.
14. NOTICE. Except as otherwise specifically provided herein, any notice
hereunder shall be in writing (including telecopy communication) and, if mailed,
shall be deemed to be given when sent by registered or certified mail, postage
prepaid or if telecopied when transmitted, or otherwise when delivered in person
to the addressee and a receipt given therefor, in all such instances addressed
to the respective parties as follows:
To Servicer: As provided on signature page
To Buyer: Tamarack Lenders Corporation
000 Xxxx Xxxxxxxx Xxxx, Xxxxx 000
Xxxxxxxxxx, Xxxxx 00000
Attn: Xxxxx Xxxxxx, President
or at such other address as the addressee may, by written notice received by the
other party hereto, designate as the appropriate address for purposes of notice
hereunder.
15. AMENDMENT. This Agreement may be amended, supplemented or modified
only with the written consent of each of the parties hereto.
16. CHOICE OF LAW. THIS AGREEMENT AND THE VALIDITY AND ENFORCEMENT
HEREOF, SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE SUBSTANTIVE
LAWS OF THE STATE OF TEXAS.
17. SEVERABILITY. If any provision of this Agreement is held to be
illegal, invalid or unenforceable under present or future laws effective during
the term of this Agreement, the legality, validity and enforceability of the
remaining provisions of this Agreement shall not be affected thereby, and in
lieu of each such illegal, invalid or unenforceable provision there shall be
added automatically as a part of this Agreement a provision as similar in terms
to such illegal, invalid or unenforceable provision as may be possible and be
legal, valid and enforceable.
18. ENTIRE AGREEMENT. This instrument embodies the entire agreement
between the parties relating to the subject matter hereof and supersedes all
prior agreement and understandings, if any, relating to the subject matter
hereof.
19. COUNTERPARTS. This Agreement may be executed in one or more
counterparts, each of which for all purposes is to be deemed an original.
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20. SURVIVAL. All covenants, agreements, undertakings, indemnities,
representations and warranties made herein shall survive both the execution and
the termination hereof and shall not be affected by any investigation made by
any party.
IN WITNESS WHEREOF, the parties have executed this Agreement as of the day
and year first hereinabove written.
BUYER:
TAMARACK LENDERS CORPORATION
By:
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Xxxxx X. Xxxxxx
President
SERVICER:
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By:
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Name:
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Title:
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Address
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---------------------------
Attention:
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SERVICING AGREEMENT
EXHIBIT A
SERVICING CRITERIA
At all times during the term of the Servicing Agreement as set forth in
Section 2 therein, Servicer shall, in addition to its other duties under the
Servicing Agreement, observe the following covenants and criteria (referred
to as the "servicing criteria"):
I. COLLECTION POLICY
1. All Obligors under related Receivables will be issued a preprinted
payment book or other remittance advice or instructions which will specifically
request that all payments be made to the Buyer's lock-box account.
2. Servicer shall contact any Obligor on a past due Receivable within ten
days after the payment due date for the purpose of pursuing collection and shall
adequately update all credit and collection file records with respect to such
activities.
3. Any material extensions or modifications of Receivables, or
acceptances of partial payments of Obligors, and any related necessary
Receivable amendments and/or default waivers by Servicer, shall be approved by
the chief credit officer or president of Servicer, and all necessary third party
charges and explanations relating thereto shall be documented in the collection
file records.
II. FORECLOSURE/REPOSSESSION POLICY
1. Servicer shall define as delinquent and pursue repossession action,
subject to compliance with all state and federal laws relating thereto, against
the Financed Vehicle underlying any Receivable whose Obligor (i) is three
payments past due in the case of Receivables requiring biweekly or semi-monthly
payments, and has failed for 30 days to remit any sums against payment
obligations under the respective Receivable, or (ii) is two payments past due in
the case of Receivables requiring monthly payments, and has failed for 60 days
to remit any sums against payment obligations under the respective Receivable.
Nothing contained in this Section shall be construed to limit Servicer from
pursuing repossession or any other collection technique, subject to related
state and federal laws, sooner than the time contemplated above if Servicer in
its discretion deems such activity to be prudent and in the best interests of
Servicer or Buyer.
2. For each charge off of any material unpaid amount from an Obligor
under any Receivable, Servicer shall document the reasons for such charge off
and shall maintain all third-party related documentation for such charge off.
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