Exhibit 10.4
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SYSTEMS & SERVICES TECHNOLOGIES, INC.
SUB-SERVICING AGREEMENT
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This Sub-Servicing Agreement (the "Agreement") is entered into as
of the _________ day of _________________________, 2002 between Systems &
Services Technologies, Inc., a corporation organized under the laws of the
State of Delaware, its permitted successors and assigns (hereinafter referred
to as "Sub-Servicer" or "SST"), and Mitsubishi Motors Credit of America, Inc.
a corporation organized under the laws of the State of Delaware, its permitted
successors and assigns (hereinafter referred to as "Company").
R E C I T A L S:
WHEREAS, Sub-Servicer provides portfolio management services,
including loan administration, payment collection and processing, insurance
claim processing, custodial services and financial reporting to financial
institutions in connection with Sales Contracts (as hereinafter defined); and
WHEREAS, Company purchases Sales Contracts from Mitsubishi Motors
retailers, which it pledges to a lender under a warehouse financing
arrangement and periodically sells the Sales Contracts to special purpose
vehicles in connection with term securitization transactions; and
WHEREAS, Company continues to service the Sales Contracts subject
to securitization transactions and interim warehouse financing arrangements;
and
WHEREAS, Company desires to avail itself of the services provided
by Sub-Servicer and to engage SST as Sub-Servicer with respect to certain of
the Sales Contracts 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
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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. Any Receivable other than: (i) Inactive Receivables, (ii)
prepaid, fully satisfied accounts, (iii) accounts where the Vehicle has been
liquidated and Sub-Servicer has posted the liquidation proceeds or any other
anticipated proceeds including but not limited to credit enhancement insurance
and financed product rebates; and (iv) accounts where Sub-Servicer has
completed all work in connection with processing and receiving insurance
payoffs.
Collected Funds. All funds received by Sub-Servicer related to any Receivable
to be posted to an Obligor's account, including, but not limited to: account
payments, insurance policy proceeds, insurance policy rebates, warranty
proceeds, warranty rebates and any other funds received from any source for
the account of an Obligor.
Depository Account. A remittance banking account established and maintained by
Company, which Company has designated as the account into which identified and
cleared Collected Funds shall be deposited.
Distribution Amount. Those amounts to be distributed to Company, Sub-Servicer
and other parties as provided on the Monthly Servicing Reports.
Inactive Receivable. A Receivable in which Sub-Servicer has been duly
instructed by Company to cease all servicing activities with the exception of
posting payments received from Obligors in connection with deficiency account
balances.
Lock-Box Account. A remittance banking account owned and maintained by Company
to which Obligors shall be directed to deposit funds with respect to the
Receivables. Sub-Servicer shall be vested with certain access rights and other
powers with respect to this account as established in the Limited Power of
Attorney attached hereto as Exhibit A.
Monthly Servicing Reports. A report to be delivered to Company or its
designee(s) on each Reporting Date. Said report shall detail the Distribution
Amounts posted to the designated account of Company, and the amounts to be
distributed to Sub-Servicer as fees and expenses for any Reporting Period.
Such report shall contain the information set forth in Exhibit B hereto.
Obligor. An account debtor or any other person obligated under a Sales
Contract to make payments on the Receivable.
Person. Any natural person or any entity, including, without limitation, any
trust, corporation, partnership, firm, government or government agency.
Receivable. Any account subject to a Sales Contract designated by Company to
Sub-Servicer for servicing.
Reporting Date. The 10th business day of the month immediately following the
related Reporting Period.
Reporting Period. The first day through and including the last day of the
calendar month immediately preceding the Reporting Date.
Sales Contract. A retail installment or conditional sales contract, comparable
loan or other document pursuant to which an Obligor has acquired or financed a
Vehicle or used a Vehicle as security for a financing.
Servicng Transfer Date. The date on which Sub-Servicer boards the initial
Receivables transferred to Sub-Servicer by Company pursuant to this Agreement.
Vehicle. A new or used automobile that was purchased pursuant to a Sales
Contract and serves as collateral for a Receivable.
ARTICLE II
NATURE AND SCOPE OF RELATIONSHIP
--------------------------------
Sub-Servicer agrees to assume the duties of the Sub-Servicer as
described in this Agreement and the attached Exhibit C for the Receivables
designated by Company to be serviced by Sub-Servicer. In performing its duties
under this Agreement, Sub-Servicer shall report to such officers or other
employees of Company as Company may designate from time to time.
Sub-Servicer, for Company, shall: (i) act prudently in accordance
with customary and usual servicing procedures for other institutional
Sub-Servicers; (ii) comply with all applicable federal and state laws and
regulations governing Sub-Servicer and the Receivables; and (iii) use and
exercise that degree of skill and attention that is customary with other
sub-servicers in the industry that provide servicing relating to contracts
substantially similar to the Sales Contracts.
Sub-Servicer acknowledges receipt of the Sale and Servicing
Agreement dated as of Xxxxx 0, 0000 ("XXX"). Company represents that the SSA
is substantially similar to the other Sale and Servicing Agreements referenced
on the attached Schedule 1.
Sub-Servicer agrees to undertake the duties of the servicer set
forth generally in Section 3.1(a) of the SSA, except to the extent that any of
such duties is in conflict with any provision of this Agreement including
Exhibit C. Specifically, and without limitation, Sub-Servicer shall be under
no obligation to: (i) furnish monthly or annual statements to the Owner
Trustee or the Indenture Trustee; (ii) refinance or sell Financed Vehicles;
(iii) make Advances, (iv) administer or enforce Dealer Contracts; (v)
indemnify the Trust; (vi) cover expenses on behalf of the Owner Trustee; (vii)
obtain licenses on behalf of the Trust or the Owner Trustee, or (viii) make
filings or pay fees related to ownership of the Receivables.
Sub-Servicer agrees to otherwise cooperate with the Company and
render assistance to it as reasonably requested in order to conform to the
terms of the SSA.
Sub-Servicer shall receive the fees as outlined in Schedule 2 as
full compensation for its services hereunder. The fees and any reimbursement
of Sub-Servicer's expenses shall be obligations of the Company. For avoidance
of doubt, in the event that Company shall fail to make any payment to
Sub-Servicer in accordance with the terms of this Agreement, Sub-Servicer
shall have recourse to the Company only and shall have no recourse to any
Collected Funds, Sales Contracts, Receivables, the related Vehicles or any
proceeds of any of the foregoing. Sub-Servicer hereby acknowledges that the
Collected Funds, the Sales Contracts, the Receivables and the Vehicles are not
the property of the Sub-Servicer. Company may reasonably request Sub-Servicer
to modify or supplement Sub-Servicer's duties or methods of performing those
duties provided that Company shall compensate Sub-Servicer at a reasonable fee
for any increase in expense experienced by Sub-Servicer due to Company's
requests. Any such supplemented or modified duties shall be agreed to in
writing and signed by the parties.
ARTICLE III
ERRORS AND OMISSIONS AND BLANKET CRIME INSURANCE
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Sub-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 Sub-Servicer in any capacity
with regard to the Receivables to handle funds, money, documents and papers
relating to the Receivables. Any such insurance shall protect and insure
Sub-Servicer against losses, including forgery, theft, embezzlement, fraud,
errors and omissions and negligent acts of such persons and shall be
maintained in a form and amount that would meet the requirements of prudent
loan servicing companies. At all times while this Agreement is in effect,
Sub-Servicer shall maintain in effect Workers' Compensation insurance coverage
in amounts required by applicable law.
No provision of this Article III requiring such insurance shall
diminish or relieve Sub-Servicer from its duties and obligations as set forth
in this Agreement. Sub-Servicer shall cause each and every one of its
sub-contractors, if any, to maintain a policy of insurance covering errors and
omissions which would meet the above stated requirements. Upon the request of
Company, Sub-Servicer shall cause to be delivered to Company a certificate
evidencing coverage under such errors and omissions and/or blanket crime
policies.
ARTICLE IV
REPRESENTATIONS AND WARRANTIES
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A. REPRESENTATIONS AND WARRANTIES OF SUB-SERVICER
1. Sub-Servicer is a corporation duly organized, validly
existing and in good standing under the laws of the State
of Delaware and is duly qualified to do business, and is
in good standing in every jurisdiction in which the
nature of its business requires it to be so qualified; it
is or will be in compliance with the laws of each state
to the extent necessary to perform its obligations under
this Agreement. Sub-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
Sub-Servicer. This Agreement has been duly and validly
executed and delivered by Sub-Servicer and is a valid and
legally binding agreement of Sub-Servicer enforceable in
accordance with its terms.
3. The execution and delivery of this Agreement by
Sub-Servicer hereunder and the compliance by Sub-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 Sub-Servicer 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 Sub-Servicer.
4. Sub-Servicer will perform all services contemplated
hereby in accordance with all applicable laws and
regulations. Subject to the Sub-Servicer's consent, not
to be unreasonably withheld, Sub-Servicer shall further
comply with all of Company's applicable policies and
procedures provided to Sub-Servicer.
B. REPRESENTATIONS AND WARRANTIES OF COMPANY
1. Company is a corporation, validly existing and in good
standing under the laws of the State of Delaware. Company
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
Company. This Agreement has been duly and validly
executed and delivered by Company and assuming due
authorization, execution and delivery by Company, this
Agreement is a valid and legally binding agreement of
Company enforceable in accordance with its terms.
3. The execution and delivery of this Agreement by Company
hereunder and the compliance by Company 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 Company is subject or by which it or
its property is bound, nor does such execution, delivery
or compliance violate the Articles/Certificate of
Incorporation or By-laws of Sub-Servicer.
4. With respect to each Receivable designated to
Sub-Servicer for servicing pursuant to this Agreement,
Company represents and warrants that, as of the date on
which Company designates a Receivable for servicing by
Sub-Servicer under this Agreement, such Receivable:
a) complies with all applicable federal and state laws
and legal requirements; and
b) was originated in connection with the sale of a
Vehicle to a Person or the financing or refinancing of
such a Vehicle; and
c) represents a bona fide obligation of an Obligor; and
d) was originated and purchased from a Person in the
regular course of business; and
e) represents a debt that has not been satisfied, and the
Obligor has not been released from liability on all or
any portion of the Receivable; and
f) is secured by a valid and perfected first priority
security interest in a Vehicle titled or registered in
the United States, its territories, or the District of
Columbia; and
g) has not been discharged in bankruptcy, and is not
otherwise legally non-collectable; and
h) is one as to which (i) the property which is the
subject thereof has been delivered to an Obligor, (ii)
there are no exceptions, counterclaims or set-offs on the
part of such Obligor against the amounts payable, and
(iii) there have been no representations or warranties
made to such Obligor not contained in the Sales Contract.
The representations and warranties contained in this Article IV
shall survive the execution of this Agreement
ARTICLE V
EVENTS OF DEFAULT
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If any one of the following events ("Events of Default") shall occur and be
continuing:
A. Failure on the part of Company to pay Sub-Servicer any amounts due
hereunder, including amounts set forth in Schedule 2 hereto, which
failure shall not be cured by Company within ten (10) days after the
date on which written notice of such failure shall have been received
by Company; or
B. The occurrence of a Performing Loan Trigger Event as set forth in
Exhibit D.
C. Any failure by Sub-Servicer to deliver to Company any proceeds or
payment required to be so delivered under the terms of this Agreement
that shall continue unremedied for a period of five (5) days after
receipt of written notice to Sub-Servicer by Company; or
D. Failure on the part of Sub-Servicer to observe or to perform in any
material respect any other covenants or agreements set forth in this
Agreement, which failure shall adversely affect the rights of Company
and continue unremedied for a period of thirty (30) days after the date
on which written notice of such failure shall have been received by
Sub-Servicer; or
E. 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 Sub-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 thirty (30) consecutive days; or
F. The admission, in writing, by Sub-Servicer: (a) of its inability to pay
its debts generally as they become due; (b) that it has filed a
petition of any applicable bankruptcy, insolvency or reorganization of
any applicable statute; (c) that it has made an arrangement for the
benefit of its creditors or voluntarily suspended payment of its
obligations; or (d) that a third party has forced Sub-Servicer into
bankruptcy under Federal or State law; or
G. 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 thirty (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 an Event of Default described
above shall not have been remedied, the non-breaching party may terminate all
of the rights and obligations under this Agreement. As an alternative to
termination, upon the occurrence of an Event of Default by Sub-Servicer,
Company may elect to continue the Agreement with a reduced fee arrangement as
set forth in Schedule 2.
ARTICLE VI
REMEDIES
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In addition to the indemnification rights contained in Article X
and the right to terminate contained in Article XI, Sub-Servicer agrees that
upon the happening of any Event of Default, as defined in this Agreement,
Company may avail itself of any other relief to which Company may be legally
or equitably entitled. In the event of any default of this Agreement by
Company, Company likewise acknowledges Sub-Servicer's remedies contained in
Articles X and XI and that Sub-Servicer may also avail itself of any other
relief to which Sub-Servicer may be legally or equitably entitled.
ARTICLE VII
RESPONSIBILITY AND AUTHORITY OF SUB-SERVICER
--------------------------------------------
A. Sub-Servicer shall have the full power and authority acting alone and
without the consent of Company, to do any and all things in connection
with the servicing of any Receivable that it may deem reasonably
necessary or desirable, consistent with the duties and obligations
imposed upon Sub-Servicer by this Agreement including, but not limited
to, the right to subcontract any of its duties hereunder.
Notwithstanding, Sub-Servicer shall cooperate fully with Company and
promptly inform Company of any and all changes or developments of which
Sub-Servicer becomes aware that may affect the Receivables.
B. Company authorizes Sub-Servicer to communicate with third parties and
the Obligors in the name of Company as necessary and proper to perform
the services anticipated by this Agreement.
C. Sub-Servicer shall have the right to commence a legal proceeding on
behalf of Company to enforce a Receivable. As reasonably requested by
Sub-Servicer, Company shall furnish Sub-Servicer with any necessary and
appropriate powers of attorney and other documents needed in order to
enable Sub-Servicer to carry out such proceeding and with respect to
its servicing and administrative duties hereunder.
ARTICLE VIII
BANK ACCOUNTS
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Company shall own, maintain and control the Lock-Box Account.
Sub-Servicer shall direct Obligors to make payments directly to the Lock-Box
Account. Further, all Collected Funds that come into the possession of
Sub-Servicer shall be deposited promptly by Sub-Servicer into the Lock-Box
Account. Sub-Servicer shall be vested with certain access rights and other
powers with respect to this account as established in the Limited Power of
Attorney attached hereto as Exhibit A.
ARTICLE IX
ACCESS AND INSPECTION
---------------------
Sub-Servicer shall provide Company, or their designee(s) access to
Sub-Servicer's facility, but only upon reasonable request and during normal
business hours of Sub-Servicer and to the extent that such access would not
significantly disrupt the orderly conduct of business at such facility.
ARTICLE X
INDEMNIFICATION
---------------
A. Sub-Servicer agrees to indemnify and hold Company, its respective
officers, employees and agents harmless against any and all claims,
losses, penalties, fines, forfeitures, legal fees and related costs,
judgments and any other costs, fees and expenses that Company may
sustain in any way related to the negligence or misconduct of
Sub-Servicer in its performance under the terms of this Agreement, or
arising from any breach of the representations and warranties of
Sub-Servicer set forth in Article IV herein. Sub-Servicer shall
immediately notify Company if a claim is made by a third party with
respect to this Agreement or the Receivables. This right to
indemnification shall survive the termination of this Agreement.
B. Company agrees to indemnify and hold Sub-Servicer, its respective
officers, employees and agents harmless against any and all claims,
losses, penalties, fines, forfeitures, legal fees and related costs,
judgments, and any other costs, fees and expenses that Sub-Servicer may
sustain in any way related to the negligence or misconduct of Company
in its performance under the terms of this Agreement, or arising from
any breach of the representations and warranties of Company set forth
in Article IV herein. Company shall immediately notify Sub-Servicer if
a claim is made by a third party with respect to this Agreement or the
Receivables. This right to indemnification shall survive the
termination of this Agreement.
C. Sub-Servicer may accept and reasonably rely on all accounting and
servicing records and other documentation provided to Sub-Servicer by
or at the direction of Company, including documents prepared or
maintained by any originator, or previous Sub-Servicer, or any party
providing services related to the Receivables (collectively "third
party"). Company agrees to indemnify and hold Sub-Servicer, its
respective officers, employees and agents harmless against any and all
claims, losses, penalties, fines, forfeitures, legal fees and related
costs, judgments, and any other costs, fees and expenses that
Sub-Servicer may sustain in any way related to allegations of
negligence or misconduct of Company or any third party with respect to
the Receivables. Sub-Servicer shall have no duty, responsibility,
obligation or liability (collectively "liability") for the acts or
omissions of Company or any third party. If any error, inaccuracy or
omission (collectively "error") exists in any information provided to
Sub-Servicer and such errors cause or materially contribute to
Sub-Servicer making or continuing any error (collectively "continuing
errors"), Sub-Servicer shall have no liability for such continued
errors; provided, however, that this provision shall not protect
Sub-Servicer against any liability which would otherwise be imposed by
reason of willful misconduct, bad faith or gross negligence in
discovering or correcting any error or in the performance of its duties
contemplated herein.
In the event Sub-Servicer becomes aware of errors and/or continued
errors, which in the opinion of Sub-Servicer impairs its ability to
perform its services hereunder, Sub-Servicer shall immediately notify
Company of such errors and/or continued errors; and further,
Sub-Servicer may undertake such data or records reconstruction as it
deems appropriate to correct such errors and/or continued errors and to
prevent future continued errors. Sub-Servicer shall be entitled to
recover its costs thereby expended.
ARTICLE XI
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TERM AND TERMINATION
A. Company shall have the right to terminate this Agreement during any
term upon not less than sixty (60) days written notice delivered by
overnight mail to Sub-Servicer. In the event of any such termination,
Company shall pay to Sub-Servicer a termination fee equal to the
servicing fee for each Receivable so transferred for the two (2) months
preceding the notice of termination. Sub-Servicer shall not, however,
be entitled to receive any such termination fee if Sub-Servicer is
terminated due to an Event of Default committed by Sub-Servicer under
this Agreement. Any such Event of Default committed by Sub-Servicer
must result in a material harm to the portfolio serviced by
Sub-Servicer, and Sub-Servicer must have received notice of default
with a reasonable opportunity to cure the same.
B. Sub-Servicer shall have the right to resign under this Agreement by
giving sixty (60) days prior written notice to Company; provided,
however, that in no event shall any such resignation be effective
unless Sub-Servicer shall have provided Company with a successor which
is acceptable to Company in its sole discretion and such successor
shall agree, by written instrument delivered to Company, to be bound by
all of the terms and conditions of this Agreement.
ARTICLE XII
WAIVERS
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No failure or delay on the part of Sub-Servicer or Company 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 Sub-Servicer: Systems & Services Technologies, Inc.
0000 Xxxxxxx Xxxx
Xx. Xxxxxx, XX 00000
Attn: Xxxx X. Xxxxxxxx
Xxxxxx X. Xxxx
Telecopy No.: (000) 000-0000
To Company: Mitsubishi Motors Credit of America, Inc.
0000 Xxxxxxx Xxxxxx
Xxxxxxx, XX 00000
Attn: Xxxxxxx X. Xxxxxxx
Xxxxx X. Xxxxx
Telecopy No.: (000) 000-0000
or to such other person(s) or 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 the 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
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This Agreement may be executed in counterparts, 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, 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 assigned, modified,
changed or supplemented except upon the express written consent of both
parties hereto.
ARTICLE XVII
GOVERNING LAW
-------------
This Agreement shall be governed by and construed in accordance
with the laws of the State of Missouri. The choice of law is not a designation
of jurisdiction or venue. Any legal proceedings relating to this Agreement
shall be tried by the court and not by a jury and the parties hereby waive all
right to trial by jury. The prevailing party in any legal proceeding relating
to this Agreement shall be entitled to an award for all reasonable attorneys
fees and costs incurred in the proceeding.
[THE BALANCE OF THIS PAGE IS BLANK]
IN WITNESS WHEREOF, the parties hereto have caused this Agreement
to be executed as of the date first written above, provided, however, that all
duties, rights and obligations of each party shall become effective on the
Servicing Transfer Date.
SUB-SERVICER:
SYSTEMS & SERVICES TECHNOLOGIES, INC.
By:
-------------------------------
Name: Xxxx X. Xxxxxxxx
Its: President
COMPANY:
MITSUBISHI MOTORS CREDIT OF AMERICA, INC.
By:
-------------------------------
Name: Xxxxxx X. Xxxxxxxxxx
Its: President and Chief Executive Officer
EXHIBIT A
LIMITED POWER OF ATTORNEY
KNOW ALL PERSONS BY THESE PRESENTS, that Mitsubishi Motors Credit
of America, Inc., together with its affiliate, and subsidiary corporations and
entities (collectively "MMCA"), in connection with certain security interests
and liens created in the name of MMCA, has and hereby affirms that it has
made, constituted and appointed, and by these presents does make, constitute
and appoint Systems & Services Technologies, Inc. ("SST" or
"Attorney-in-Fact"), having its principal place of business at 0000 Xxxxxxx
Xxxx, Xx. Xxxxxx, Xxxxxxxx 00000, as MMCA's true and lawful attorney-in-fact
and in MMCA's name, place and stead to act solely for the purpose of
performing any or all of the acts described herein in connection with any
account serviced by SST pursuant to the Sub-Servicing Agreement dated as of
November ___, 2002 ("Sub-Servicing Agreement").
FIRST: To execute and/or endorse certificates of title,
applications for certificates of title or other documents necessary or
appropriate to evidence the assignment, sale, transfer, acquisition or
disposition of vehicles or MMCA's interest in vehicles including, but not
limited to, vehicles to be sold at auction, or to be otherwise liquidated.
SECOND: To endorse, sign, deliver and deposit any and all checks,
drafts or instruments of deposits issued by obligors, insurance companies,
vendors or third parties. Such instruments may only be executed and deposited
by Attorney-in-Fact if the same represent funds paid on any account serviced
by Attorney-in-Fact pursuant to the above-referenced Sub-Servicing Agreement.
THIRD: To instruct any bank or financial institution that provides
lockbox or similar account services in connection with any receivable subject
to the Sub-Servicing Agreement concerning the deposit, distribution or
withdrawal of funds held in the lockbox account (a remittance banking account
owned and maintained by MMCA); provided, however, that absent the written
consent of MMCA, Attorney-in-Fact shall have no right or power to issue such
instructions that exceed the sum of $10,000.00 in any one day.
FOURTH: To execute and/or endorse any loan agreement, promissory
note, security agreement, financing statement, certificate of title or other
document, instrument or agreement, or any amendment, modification or
supplement of any of the foregoing, and perform any act and covenant in any
way which MMCA itself could do which is necessary or appropriate to modify,
amend, renew, extend, terminate and/or extinguish: (i) any and all liens and
security interests granted to or created in favor of MMCA in or affecting
vehicles; or (ii) any indebtedness secured by any such lien or security
interest or any right or obligation of the obligor of such indebtedness
secured by a vehicle, in each case upon such terms and conditions deemed, in
the sole discretion of said Attorney-in-Fact, necessary or appropriate in
connection with such modification, amendment, renewal extension, termination
and/or extinguishment.
FIFTH: To agree and to contract with any person, in any manner and
upon terms and conditions deemed, in the sole discretion of said
Attorney-in-Fact, necessary or appropriate for the accomplishment of any such
modification, amendment, renewal, extension, termination and/or extinguishment
of any such lien, security interest, indebtedness, right or obligation with
respect to vehicles, to perform, rescind, reform or modify any such agreement
or contract or any similar agreement or contract made by or on behalf of MMCA;
to execute acknowledge, seal and deliver any contract, agreement, certificate
of title or other document, agreement or contract or any similar agreement or
document creating, evidencing, securing or secured by any such lien, security
interest, indebtedness, right or obligation; and to take all such other
actions and steps, pay or receive such moneys and to execute, acknowledge,
seal and deliver all such other certificates, documents and agreements as said
Attorney-in-Fact may deem necessary or appropriate to consummate any such
modification, amendment, renewal, extension, termination and/or extinguishment
of any such security interest, lien, indebtedness, right or obligation or in
furtherance of any of the transactions contemplated by the foregoing.
SIXTH: To commence a legal proceeding in the name of MMCA to
enforce a receivable, or file a claim in any obligor bankruptcy/insolvency
action. If Attorney-in-Fact exercises this right, MMCA shall thereupon be
deemed to have automatically assigned such receivable to Attorney-in-Fact,
which assignment shall be solely for the purpose of collection/recovery.
SEVENTH: This Limited Power of Attorney shall not be affected by
the subsequent dissolution or disability of MMCA or its authorized
representatives.
EIGHTH: To induce any third party to act hereunder, MMCA hereby
agrees that any third party receiving a duly executed copy or facsimile of
this instrument may act hereunder, and that any notice of revocation or
termination hereof or other revocation or termination hereof by operation of
law shall be ineffective as to such third party.
[THE BALANCE OF THIS PAGE IS BLANK]
IN WITNESS WHEREOF, the undersigned has executed this Limited Power
of Attorney on behalf of MMCA as of this _______ day of __________________,
2002.
MITSUBISHI MOTORS CREDIT OF AMERICA, INC.
By:
-------------------------------
Name: Xxxxxx X. Xxxxxxxxxx
Its: President and Chief Executive Officer
ACKNOWLEDGMENTS
STATE OF CALIFORNIA )
) ss
COUNTY OF ORANGE )
This instrument was acknowledged, sworn to and subscribed before me as of the
date above written by __________________________________ on behalf of
MITSUBISHI MOTORS CREDIT OF AMERICA, INC., as its duly authorized
representative.
My commission expires:
_________________________________ ________________________
Notary Public
EXHIBIT B
REPORTING
Files To Be Received From SST
--------------------------
GL
1. Daily Transaction Posting - IL603A.GL.FILE (See Issue #1)
2. Daily Transaction Detail - IL603A.DETAIL.GLFILE (See Issue #1 and #7)
3. Cash Journal Entries - VLJ
ABS
1. Daily Transactions - IL80TR
2. Monthly Loan Master - IL80MAST. Same file as FOCUS #3.(See Issue #1 & #2)
FOCUS
1. Daily Transactions - IL80TR. Same as file ABS #1.
a. SST to include maintenance transactions for REPORT BRANCH and
VIN changes.
2. Daily Loan Master - IL80MAST. Same file as ABS #2. (See Issue #1 & #2)
3. Monthly Name and Address - IL80ALT. SST will only send changed accounts.
Files To Be Sent To SST
ABS
1. Monthly Repurchase File
Files To Be Created by MMSA I.T.
SEQ (or GDG) files received:
1. SST IL603A.GL.FILE (Proposed MMSA Name: P.C1I.GDG.SST.GL.FILE)
2. SST IL603A.DETAIL.GLFILE (Proposed MMSA Name: P.C1I.GDG.SST.DETAIL.GLFILE)
3. SST VLJ (Proposed MMSA Name: P.C1I.GDG.SST.VLJ)
4. SST IL80TR (Proposed MMSA Name: P.C1I.GDG.SST.IL80TR)
5. SST Loan Master (Proposed MMSA Name: P.C1I.GDG.SST.LOAN.FILE)
6. SST Name Address (Proposed MMSA Name: P.C1I.GDG.SST.NAME.ADDRESS)
VSAM files to be created/updated from SEQ (or GDG) files:
1. SST Loan Master - IL80MAST (Proposed MMSA Name: P.C1I.VSM.SST.LOAN.FILE)
2. SST Name Address - IL80ALT (Proposed MMSA Name: P.C1I.VSM.SST.NAME.ADDRESS)
3. SST Trans Hist - IL80THT/THS/THR (Proposed MMSA Name: P.C1I.VSM.SST.TRANS.HIST)
EXHIBIT C
SUMMARY OF SERVICES
The following outlines the loan services to be provided by SST as the
Sub-Servicer on any Receivable. The procedures identified herein are to be
implemented at the discretion of SST depending on the circumstances of each
Receivable.
A. CUSTODIAL DUTIES OF SUB-SERVICER
1. Upon transfer of any Receivable to SST, SST shall establish all
necessary records in its computer system, and shall separate the physical loan
package for storage. Perfection of interest documents shall be filed in
appropriate fireproof facilities. SST shall use its "best efforts" to adhere
to the additional requirements related to perfection of interest documents set
forth in Exhibit E.
B. OBLIGOR ACCOUNTING
1. SST shall process all monies received by or on behalf of an
Obligor through a Lockbox Account.
2. SST may, from time to time, utilize the services of third party
vendors to assist in the receipt and processing of payments received by or on
behalf of Obligors (i.e., Western Union "Quick Collect" or Speedpay).
3. To the extent possible, SST shall cause all monies received by
or on behalf of an Obligor to post to the Obligor's account within one (1)
business day of identification.
4. SST shall cause the Obligor's next scheduled due date to roll
when the Obligor payment received is within 90% of the expected monthly
payment at the time of posting.
5. SST shall advance monies as necessary to cover appropriate
servicing-related expenses, as provided in Schedule 2. These expenses include,
but are not limited to, field calls, repossession costs, storage and
transportation costs, legal fees, external skip tracing, mechanics liens, and
liquidation costs. All such "out-of-pocket" expenses shall be reimbursed to
SST and shall be posted to the Obligor's account, as applicable.
6. SST shall issue Monthly Servicing Reports, as defined in the
Agreement.
C. CUSTOMER SERVICE
1. SST shall respond to all inquiries from Obligors regarding their
accounts.
2. SST shall send to Obligors or their approved representatives (i)
monthly payment statements; and (ii) payoff information.
3. SST shall subcontract physical damage insurance tracking
services, if so requested. SST shall coordinate and assist with electronic
data transfers as needed. Any related subcontractor fees and costs shall be
reimbursable to SST.
4. As to both Customer Service and Collection activities, SST shall
use its "best efforts" to adhere to the service standards set forth in
Exhibit F.
D. COLLECTIONS
1. SST 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 and by letter.
2. Field calls may be utilized at SST's discretion.
3. SST may implement any legally permissible collection methods,
including telephone calls, mailed notices, and outside field calls.
4. If SST determines that an Obligor is or may become a skip, SST
shall make all reasonable attempts to locate the Obligor or Vehicle using
internal skip tracing procedures, and may sub-contract for outside assistance.
5. SST shall report all appropriate Obligor account developments to
one or more nationally recognized credit agencies.
E. SPECIAL RECOVERIES
1. SST shall make all reasonable attempts to collect delinquent
Obligor accounts. After such reasonable efforts have been exhausted, and in
SST's judgment required payments will not be forthcoming from the Obligor, SST
shall use its best efforts to repossess or otherwise recover the Vehicle
securing the Receivable. SST 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,
SST shall assign the account to a regional repossession agency. Such agent
shall be a member of a nationally recognized association requiring adequate
insurance and bonding (e.g., National Finance Adjusters) and shall meet or
exceed the standards set forth in Exhibit G. Such agency shall execute a hold
harmless agreement covering Company.
3. Upon receipt of notification that a repossession has been made,
SST shall mail to the Obligor a Notice of Intent ("NOI") to Sell Repossessed
or Surrendered Vehicle, and shall therein provide the Obligor with an
opportunity to reinstate or redeem the Vehicle, as required.
4. Upon repossession, the repossession agency shall deliver the
Vehicle to the destination specified by Company. At that time, Company shall
assume all duties relevant to remarketing the Vehicle. Company specifically
acknowledges and agrees that it will not sell, transfer or liquidate any
Vehicle until so instructed by Sub-Servicer. Delays in the sale of Vehicles
may be attributable to matters involving, without limitation, title issues,
Obligor bankruptcy, expiration of the applicable reinstatement or redemption
period. SST shall process insurance claims, insurance product cancellation
refunds and similar matters.
5. Company shall report the results of the liquidation of each
Vehicle to Sub-Servicer, and shall further instruct the auctions to deliver
liquidation proceeds to the Lock-Box Account in order for Sub-Servicer to post
all receipts and apply all credits that may exist to the applicable Obligor
account and send any surplus and required accounting to the Obligor within the
time specified by applicable law.
F. ADDITIONAL DUTIES
1. SST shall establish a physical file for each Receivable, and
shall keep complete books and records pertaining to the same.
2. Upon request, SST shall make available to Company or its
designee(s), the physical files, records and computer systems for audit or
inspection on the premises of SST, so long as such audit or inspection does
not unreasonably interfere with SST's operations.
3. Upon request, SST shall provide Company with a copy of the
annual audit of its financial statements and SAS 70 report, to be completed
within ninety (90) days of its fiscal year end.
4. Company shall be responsible to handle all matters involving
dealer enforcement or administration.
5. Sub-Servicer's staffing levels are targeted at approximately
400-450 loans per full-time employee. Any material deviation from this
standard shall be subject to the mutual agreement of the parties.
G. REPORTS
1. Sub-Servicer shall provide Company with all reports specified in
Exhibit H, within the time periods specified in that Exhibit.
2. Not later than 12 Midnight Pacific Time each day, Sub-Servicer
shall provide Company with an electronic report of all account activity during
that day.
3. On an as needed basis, the parties shall work together to
identify other reports that are needed and to agree upon a time frame for
development of such reports.
H. DAP/DOP REFINANCING
1. With respect to Receivables under Company's Diamond Advantage
Plan ("DAP") or Diamond Option Plan ("DOP"), Obligors in certain states have
the right to refinance the final balloon payment when due, on the terms
specified in the Sales Contract. Company shall provide SST with the
appropriate refinancing forms and instructions for completion to send to each
Obligor who requests refinancing. SST shall forward such documents to the
Obligor for completion and return to MMCA. SST shall forward to MMCA any
completed refinance documents it receives.
EXHIBIT D
PERFORMING LOAN TRIGGER EVENT
The parties anticipate a substantial improvement in the performance of the
Receivables compared against statistics through November, 2002. Specifically,
Sub-Servicer has committed to reduce defaults by a factor of at least 20% from
the projected defaults had the Receivables not transferred to Sub-Servicer
pursuant to this Agreement. The parties further anticipate that this reduction
in defaults will translate to an annual savings against losses for the Company
of at least $28 to $30 million.
The following definition of Performing Loan Trigger Event addresses the
performance of the Sub-Servicer with respect to both delinquencies and
defaults.
"Performing Loan Trigger Event" means, with respect to any Reporting Date,
either of the following conditions shall exist: (i) the Pool Delinquency Rate
for such Reporting Date is greater than 10.0%; or (ii) the Pool Annualized Net
Default Rate for such Reporting Date is greater than 8.8%. Both (i) and (ii)
shall be based on an average, determined as of the last day of each of the
three preceding Reporting Periods; provided, that the first of such three
Reporting Periods shall be February through March, 2003.
"Pool Annualized Net Default Rate" means, a fraction, expressed as a
percentage, the numerator of which is equal to the number of Receivables that
become Defaulted Receivables during the Reporting Period, and the denominator
of which is equal to number of performing Receivables as of the first day of
the Reporting Period.
"Pool Delinquency Rate" means, a fraction, expressed as a percentage, the
numerator of which is (x) the number, as of the last day of the Reporting
Period, of performing Receivables for which the related Obligor is more than
30 days contractually delinquent with respect to a scheduled payment
thereunder, and the denominator of which is (y) the number of performing
Receivables as of the last day of the Reporting Period.
"Defaulted Receivable" means a Receivable as to which (i) the related Vehicle
has been repossessed and liquidated, (ii) more than 10% of a payment is 120
days or more past due and Company has not repossessed the Vehicle or (iii)
Company has determined that eventual payment in full on the Receivable is
unlikely and Company has either (A) repossessed and liquidated the Vehicle or
(B) repossessed and held the Vehicle in its repossession inventory for more
than 90 days, which 90 days shall not be more than 180 days after the date on
which the payment was due but not paid.
The Company agrees to give equitable consideration to any seasonal or economic
factors that might contribute to a Performing Loan Trigger Event.
EXHIBIT E
SERVICE STANDARDS RELATED TO CERTIFICATES OF TITLE
Sub-Servicer shall use its "best efforts" to adhere to the following
requirements related to handling of Certificates of Titles covering vehicles
securing Receivables:
o Required Security Standards For Titles
o Titles must be kept in a secured, fire-proof facility
o Titles must be maintained, transferred and released in accordance
with State requirements, including notarization, applications, and
forms
o All maintenance and applications shall be executed by authorized
personnel as required by State & auction regulations. A list of
authorized personnel shall be maintained and provided, as required,
by SST.
o SST shall be solely responsible for the maintenance and safekeeping
of the original title, once provided by MMCA, until such time as
title is lawfully released, transferred or requested to be returned
by Mitsubishi.
o Title Release Service Standards (to apply no sooner than 90 days
following the Servicing Transfer Date)
o EOT/REPO Vehicles - When Title is held as 'available' or 'sale
ready' - the service standard shall be an average of 10 days elapsed
from the time that the vehicle is received at the auction
o EOT/REPO Vehicles - When Title is needing to be 'flipped' - the
service standard shall be an average of 14 days (average because
different cases will vary, according to a number of different
factors and differing procedures)
o Vehicles being sold to Retailers or the Customer - SST will adhere to our
current policies and standards:
o If the total payoff is $5,000.00 or less, the title is released
within 7 days regardless of the method of payment.
o Regardless of the dollar amount of the payoff or the payment method,
the title is released immediately upon receipt of payoff from a
Mitsubishi retailer; Company will provide Sub-Servicer with a list
of retailers whose titles are to be delivered by overnight courier
o Title will be released immediately upon receipt of payoff from the
Mitsubishi Mediation group or Legal Department; such titles are to
be delivered to the designated recipient by overnight courier
o If the total payoff exceeds $5,000.00, any non-Mitsubishi dealer
check, money order, business check, insurance check, unrestricted
draft, and restricted Mitsubishi dealer check will be held for 14
days before the title is released. (EXCEPTION: The state of Texas
requires that titles be released within 10 days, rather than 14
days. Agreements in Texas are the only exception to the 14-day
rule.)
o Other methods of payment on payoff amounts exceeding $5,000.00 (such
as cashier's checks, certified checks, official checks, and Money
Gram Express Payment) will yield title release within 7 days.
Reporting Requirements:
o In order to monitor timely transport of the vehicles, we require a report
showing when individual VINs are grounded and when the vehicles odometer
was received at Retailer facilities
o In order to monitor timely transport of vehicles to auction, we require a
report showing the arrival of previously reported VINs (see above) at
auction facilities, specifying (at least, but not limited to) days
elapsed since grounding at Retailer facility
o In order to monitor timely delivery of titles to auction, we require a
report showing the arrival of Title for previously reported VINs (see
above) at auction facilities, specifying (at least, but not limited to)
days elapsed since grounding at auction facility
o In order to monitor release of Title for Repo vehicles, we require a
report that mimics reporting of information on our current 'Mgmt 07B'
report
o In order to facilitate reporting, MMCA to work with SST to develop
appropriate reports and provide criteria. If necessary, SST to provide
data files, as needed, to compile reports here from data elements
specific to subject accounts
EXHIBIT F
CALL CENTER SERVICE STANDARDS
With respect to both Customer Service and Collection activities under this
Agreement, Sub-Servicer shall use its "best efforts" to adhere to the
following servicing standards:
o Service Level - 80% of calls will be answered within 20 seconds.
o Abandon Rate - not to exceed 10%.
o Average Speed of Answer - 20 seconds
Call Quality
Within 90 days of the Servicing Transfer Date, SST and Mitsubishi will conduct
joint call monitoring sessions to monitor call quality. A mutually agreeable
call monitoring form will be developed andused to measure call quality.
Call Center Reporting Requirements (Delivered Weekly and Monthly):
o Call Received
o Calls Handled
o Calls Abandoned
o % Abandoned
o Service Level
o Average Speed of Answer
Each of the above-referenced reports shall include only blended statistics.
EXHIBIT G
REPOSSESSION AGENCY STANDARDS
Any repossession agency engaged by Sub-Servicer pursuant to the Agreement
shall meet or exceed the following standards:
1. The agency must be a member in good standing of Time Finance Adjusters,
Inc.
2. The agency must possess all required licensure.
3. The agency must be properly insured and bonded, in each case with policy
limits no less than $1 million.
Schedule 1
List of Sale and Servicing Agreements
-------------------------------------
1. Sale and Servicing Agreement, dated as of October 1, 1999 by and
among MMCA Auto Owner Trust 1999-2, as the Trust, MMCA Auto
Receivables Trust, as Seller, and Mitsubishi Motors Credit of
America, Inc., as Servicer.
2. Sale and Servicing Agreement, dated as of August 1, 2000 by and
among MMCA Auto Owner Trust 2000-1, as the Trust, MMCA Auto
Receivables Trust, as Seller, and Mitsubishi Motors Credit of
America, Inc., as Servicer.
3. Sale and Servicing Agreement, dated as of November 1, 2000 by and
among MMCA Auto Owner Trust 2000-2, as the Trust, MMCA Auto
Receivables Trust, as Seller, and Mitsubishi Motors Credit of
America, Inc., as Servicer.
4. Sale and Servicing Agreement, dated as of April 1, 2001 by and
among MMCA Auto Owner Trust 2001-1, as the Trust, MMCA Auto
Receivables Trust, as Seller, and Mitsubishi Motors Credit of
America, Inc., as Servicer.
5. Sale and Servicing Agreement, dated as of June 1, 2001 by and among
MMCA Auto Owner Trust 2001-2, as the Trust, MMCA Auto Receivables
Trust, as Seller, and Mitsubishi Motors Credit of America, Inc., as
Servicer.
6. Sale and Servicing Agreement, dated as of October 1, 2001 by and
among MMCA Auto Owner Trust 2001-3, as the Trust, MMCA Auto
Receivables Trust, as Seller, and Mitsubishi Motors Credit of
America, Inc., as Servicer.
7. Sale and Servicing Agreement, dated as of December 1, 2001 by and
among MMCA Auto Owner Trust 2001-4, as the Trust, MMCA Auto
Receivables Trust, as Seller, and Mitsubishi Motors Credit of
America, Inc., as Servicer.
8. Sale and Servicing Agreement, dated as of March 1, 2002 by and
among MMCA Auto Owner Trust 2002-1, as the Trust, MMCA Auto
Receivables Trust, as Seller, and Mitsubishi Motors Credit of
America, Inc., as Servicer.
9. Sale and Servicing Agreement, dated as of June 1, 2002 by and among
MMCA Auto Owner Trust 2002-2, as the Trust, MMCA Auto Receivables
Trust, as Seller, and Mitsubishi Motors Credit of America, Inc., as
Servicer.
10. Sale and Servicing Agreement, dated as of August 1, 2002 by and
among MMCA Auto Owner Trust 2002-3, as the Trust, MMCA Auto
Receivables Trust II, as Seller, and Mitsubishi Motors Credit of
America, Inc., as Servicer.
11. Sale and Servicing Agreement, dated as of October 1, 2002 by and
among MMCA Auto Owner Trust 2002-4, as the Trust, MMCA Auto
Receivables Trust II, as Seller, and Mitsubishi Motors Credit of
America, Inc., as Servicer.
SCHEDULE 2
FEES, EXPENSES & DISTRIBUTIONS
I. FEES
A. Monthly Fee (1) (2)(3)
$13.50 per loan
II. EXPENSES
A. Transfer Expenses
SST shall be reimbursed for all costs and expenses incurred in
connection with the transfer of Receivables to SST for servicing,
as such expenses are incurred. Such costs and expenses include, but
are not limited to, those related to travel, Obligor mailings,
freight and file shipping.
B. Servicing Expenses
SST shall be reimbursed on a weekly basis 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, statement and mailing
costs, title processing, bank charges and insurance tracking, if
any.
III. DISTRIBUTIONS
All fees, expenses and other amounts due SST for each Reporting
Period shall be reflected on each Monthly Servicing Report. All
such amounts shall be paid to SST by the 20th business day of each
month.
IV. MISCELLANEOUS
A. Administrative Fees
SST and Company shall share equally all administrative fees,
including extension processing fees, NSF fees and late charges
received by SST during any Reporting Period.
B. Deficiency Collections
Under separate agreement, SST may provide deficiency balance
collections services on a contingency fee basis.
_________________________________________
(1) Basis points are annualized (i.e., applicable basis points/12), and shall
be based on the beginning of month principal balance for each individual
Active Receivable serviced by SST.
(2) SST shall receive this fee on a pro-rata basis as of the date of boarding
for all Active Receivables for any month where it functions as the
Sub-Servicer, provided, however, that accounts with a deferred first payment
shall not be subject to this fee until the month before the month in which the
first payment is due. The Servicing Fee is based on certain assumptions
concerning the type and anticipated credit quality of the Receivables assigned
to SST for servicing.
(3) This fee is based on an initial volume of approximately 85,000 Receivables
to be forwarded to Sub-Servicer by Company, consisting of accounts currently
in Company's portfolio having a FICO score less than 620. Company and
Sub-Servicer contemplate that Company may begin sending newly purchased
Receivables having a FICO less than 620. Any such new Receivables shall have a
remaining life of not less than 24 months. In the event Company commits to a
minimum one year flow of at least 1,500 Receivables per month, the Monthly Fee
shall be reduced to $13.00. In the event SST is no longer willing or able to
perform servicing duties for new Receivables delivered by Company, then SST
shall provide Company with 90 days prior written notice of that fact. Upon
expiration of the 90 day period following delivery of the said written notice
from SST to Company, SST shall have no obligation to receive or board
additional Receivables from Company. Absent such notice, Company may rely on
SST to perform servicing duties in deciding to deliver new Receivables to SST.
(4) In the event SST commits a Performing Loan Trigger Event (see Exhibit D),
SST shall reduce its base Monthly Fee by 10% until such time as the Performing
Loan Trigger Event is cured. Conversely, if SST exceeds the performance
standards (as set forth in Exhibit D) by a factor in excess of 15%, SST shall
receive a 10% increase in the base Monthly Fee until such time as SST's
performance fails to exceed 15% of the applicable performance standards.
