EXHIBIT H
---------
SERVICING AGREEMENT
This SERVICING AGREEMENT (this "Agreement"), dated and effective as of
October 1, 2000 (the "Effective Date") and is entered into by and between
Pacific Financial Group, Inc., a Delaware corporation ("PFG"), and AutoCorp
Equities Inc., a Nevada corporation, ("ACE") and is an integral part of a
certain Master Agreement by and between the parties hereto and AutoPrime, Inc.
dated as of October 1, 2000, to which this Servicing Agreement is attached as
Exhibit I.
WHEREAS, ACE is engaged in the business of managing and servicing
Contracts;
WHEREAS, PFG desires to retain the services of ACE for the purposes of
managing and servicing the Contracts ("Contracts") described in Exhibit A;
NOW, THEREFORE, in consideration of the mutual premises and promises of the
parties and for other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, ACE and PFG agree as follows:
Section 1. Contract Management and Servicing. Subject to the terms and
conditions hereinafter set forth, ACE shall provide all management and servicing
of the Contracts and covenants and agrees to manage and service the Contracts
for the account of PFG as described below.
(a) ACE obligates itself to service the Contracts under this Servicing
Agreement in accordance with the industry standards pertaining to such
Contracts utilizing the same degree of care as if the Contracts were
owned by ACE itself, including an obligation to maintain an automated
reporting system at its sole cost which produces information with
respect to each Contract in form and content reasonably acceptable to
PFG.
(b) ACE covenants and agrees to comply with all requirements of State law
and any other applicable federal, state, and local laws and regulations
thereunder, including, without limitation, the Fair Debt Collection
Practices Act, in servicing the Contracts under this Agreement.
(c) During the term of the Contracts serviced under this Agreement, ACE
will proceed diligently to collect all sums due under the Contracts and
will deposit on a daily basis or as otherwise directed in writing by
PFG all funds received with respect to the Contracts, less the
servicing fee provided for in Section 2 hereof, into a bank account or
accounts maintained for the benefit of PFG. Said account or accounts
shall be maintained in a financial institution designated by PFG, the
accounts of which are insured by the Federal Deposit Insurance
Corporation.
SERVICING AGREEMENT 1
(d) ACE shall maintain complete books and records relating to its servicing
activities hereunder and shall provide to PFG, from time to time,
written servicing reports containing a complete and accurate accounting
of the servicing activity during the preceding time period, which
reports shall include a schedule of payments received and payments due.
Each report shall be delivered to PFG by hand delivery, facsimile
transmission, or E-mail transmission and shall be accurate as of all
transactions through the close of business on the date therein stated.
(e) ACE, in the course of servicing and managing the Contracts, shall not
waive, vary, extend, or cancel any term or condition of the Contracts
without PFG's prior written consent, but ACE may, without legally
committing PFG to any of the same, extend in its discretion reasonable
forbearance before declaring a Contract in default for such period(s)
as may be consistent with industry standards.
(f) ACE shall deliver to PFG from time to time, copies of profit and loss
statements and balance sheets and other financial information that ACE
has filed with the Securities and Exchange Commission.
Section 2. Servicing Fees. As compensation for its services rendered
hereunder, ACE shall be entitled to retain an amount, as set forth on Exhibit B
to this Agreement, of all payments due and actually received by ACE under each
Contract serviced hereunder. ACE shall remit in full to PFG the balance of the
payments actually received by ACE under each Contract serviced hereunder, less
the servicing fee provided for in this Section 2, into a bank account or
accounts as set forth in Section l (b) hereof. ACE will pay all costs and
expenses incurred by it in connection with its servicing activities hereunder.
Section 3. Costs of Repossession. The parties agree that any costs incurred
by ACE in connection with the repossession of collateral securing the Contracts
in Exhibit A will be the sole responsibility of PFG. PFG agrees to fully and
directly reimburse ACE for said costs within ten (10) business days after ACE
has requested reimbursement for said costs in writing. PFG hereby authorizes ACE
to deduct such reimbursement from amounts collected under this Servicing
Agreement if PFG has failed to reimburse ACE within ten (10) business days of
the reimbursement request.
Section 4. Term and Termination. This Agreement shall be effective and
commence on October 1, 2000 and, unless earlier terminated pursuant to this
Section 4, shall terminate after the repayment of the last Contract in PFG's
portfolio and after all taxes, fees, and funds have been accounted for and
disbursed with respect thereto in accordance with the terms hereof and
applicable law. This Agreement may be terminated as follows:
SERVICING AGREEMENT 2
(a) This Agreement shall terminate automatically as to any and all
Contracts upon the dissolution, termination of existence, insolvency
(failure to pay debts as they mature or the failure to maintain the
fair salable value of assets in excess of liabilities), business
failure, appointment of a receiver, trustee, custodian, or similar
fiduciary, assignment for the benefit of creditors, or the commencement
of any proceedings under the bankruptcy laws, of, by, or against ACE,
or the making by ACE of any offer or settlement, extension, or
composition to its creditors generally.
(b) If ACE materially breaches or fails to perform, keep, or observe any
representation, warranty, covenant, or agreement contained in this
Agreement or (including, but not limited to, ACE's failure to deposit
funds received for any Contract into an account as set forth in Section
l (b) hereof; ACE's failure to deliver on a timely basis any of the
reports to PFG pursuant to this Agreement; or ACE's failure to use due
diligence in collecting funds due under any Contract. PFG may, upon
ACE's receipt of five(5) business days prior written notice from PFG,
terminate this Agreement with respect to any and all Contracts upon the
occurrence of any of the events described in this sub-paragraph (b)
(c) This Agreement may be terminated as to any and all Contracts at any
time by the mutual agreement of PFG and ACE.
Section 5. Procedure upon Termination.
(a) Immediately upon the termination of this Agreement pursuant to Section
4(a) and Section 4(c) hereof and immediately upon ACE's receipt of
notice of termination pursuant to Section 4(b) hereof, ACE's right to
retain future, but unearned servicing fees prescribed in Section 2
hereof with respect to any and all of such terminated Contracts shall
terminate immediately and, from and after the date of such termination,
ACE shall deposit all amounts received with respect to such Contracts,
if any, into the account or accounts maintained pursuant to Section
l(b) hereof, deducting only earned servicing fees and unreimbursed
repossession costs. In addition, PFG may, with or without the consent
of ACE and upon the occurrence of any event described in the foregoing
Section 4, mail to each Obligor of any Contract a notice letter
notifying such Obligor of the existence of the transactions between ACE
and PFG, the sale and assignment of the applicable Contract, the
termination of this Agreement, and directing the Obligor to remit all
future payments under the Contract to an account designated by PFG.
(b) Upon termination of this Agreement as to any and all Contracts, ACE
shall immediately deliver to PFG the Servicing File and any other
documents in ACE's possession with respect to each Contract so
terminated and an accounting of all monies collected by ACE and held by
it for PFG with respect to such Contracts and shall immediately pay
over to PFG all monies so held.
SERVICING AGREEMENT 3
Section 6. Indemnification. ACE hereby agrees to protect, defend,
indemnify, and hold PFG and its assigns and their respective attorneys,
accountants, employees, agents, officers, and directors harmless from and
against all losses, liabilities, damages, judgments, claims, counterclaims,
demands, actions, proceedings, costs and expenses (including reasonable
attorneys' fees) of every kind and character resulting from, relating to, or
arising out of this Agreement or the performance of ACE's obligations hereunder.
ACE's obligations under this Section 6 shall survive the termination of this
Agreement.
Section 7. Independent Contractor. Any possible construction of any other
provisions of this Agreement to the contrary notwithstanding, it is intended by
this Agreement that PFG, for and during the term hereof, has delegated to ACE
the right for it and on its behalf to service each Contract as an independent
contractor in accordance with the terms hereof.
Section 8. Effect of Master Agreement. In addition to the provisions of
this Agreement, the provisions of the Master Agreement shall be valid and
binding upon the parties.
IN WITNESS WHEREOF, each of the parties has caused its duly authorized
officer or representative to execute this Agreement as of October 1, 2000.
AutoCorp Equities, Inc. Pacific Financial Group, Inc
By:___________________ By:______________________
Xxxxxxx Xxxxxx, Xxxx Xxxxxxx
President President
SERVICING AGREEMENT 4
