SALE AND ASSIGNMENT AGREEMENT
between
PAYMENTS, INC.,
FLATIRON CREDIT COMPANY, INC.
and
WESTCHESTER PREMIUM ACCEPTANCE CORP.
Dated as of September 14, 1999
TABLE OF CONTENTS
Page
Section 1. Definitions.......................................................1
Section 2. Sale of Conveyed Property.........................................7
Section 3 Termination.......................................................9
Section 4. Purchase Price and Payment Terms for Conveyed
Property/Right of Set-off........................................10
Section 5. Notification of Sale.............................................10
Section 6. Repurchase of Conveyed Property..................................10
Section 7. Delivery to WPAC of Proceeds; Power of Attorney..................11
Section 8. Verification, Notification and Collection of Premium Receivables.11
Section 9. Financial Statements and Books and Records.......................11
Section 10. Seller's General Representations and Warranties..................11
Section 11. Seller's Representations and Warranties With Respect to the
Conveyed Property................................................14
Section 12. Additional Covenants of Seller...................................17
Section 13. Taxes ........................................................19
Section 14. Further Assurances and Substituted Performance...................19
Section 15. Indemnification..................................................20
Section 16. Default..........................................................20
Section 17. Remedies.........................................................21
Section 18. Waiver...........................................................22
Section 19. Counterparts/Facsimiles..........................................22
Section 20. Essence of Time..................................................22
Section 21. Assignment.......................................................22
Section 22. Standard of Care.................................................23
Section 23. Costs and Expenses/Attorneys Fees................................23
Section 24. Notices..........................................................23
Section 25. Successors and Assigns...........................................23
Section 26. Severability.....................................................23
Section 27. Force Majeure....................................................24
Section 28. Governing Law....................................................24
Section 29. Jurisdiction and Waiver of Certain Damages.......................24
Section 30. Entire Agreement.................................................25
Section 31. Waiver of Jury Trial.............................................25
SALE AND ASSIGNMENT AGREEMENT
This Sale and Assignment Agreement is dated as of the 14 day of September,
1999 by Payments, Inc. ("Seller"), whose address is 0000 Xxxxxxxxx Xxxxxxxx,
Xxxx Xxxxxxx, Xxx Xxxx, Xxx Xxxx 00000 and Flatiron Credit Company, Inc.
("Flatiron"), whose address is 000 Xxxxxxxxxxx Xxxxxx Xxxxx 0000X, Xxxxxx,
Xxxxxxxx 00000 and Westchester Premium Acceptance Corp. ("WPAC"), a Texas
corporation whose address is 0000 XX Xxxx 000, #000, Xxx Xxxxxxx, Xxxxx 00000.
RECITALS:
A. Seller originated and/or owns Premium Receivables evidenced by Premium
Finance Agreements to finance payments by Obligors of premiums for the purchase
of insurance policies and, in connection therewith, Seller has a security
interest arising under statutory authority or otherwise in unearned premiums,
dividends and loss payments with respect to such insurance policies and in state
or industry guaranty funds for the reimbursement of unearned premiums from
cancelled insurance policies and failed insurance companies; and
B. Seller wishes to sell from time to time during the Term of this
Agreement and WPAC wishes to purchase Seller's Eligible Premium Receivables and
related interests delivered under the terms and conditions described in this
Agreement.
NOW, THEREFORE, in consideration of the foregoing and the covenants
contained herein and for other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the parties hereto agree as
follows:
Section 1. Definitions. The following terms shall be defined in this
Agreement:
"Additional Provisions" means the Additional Provisions of this Agreement
as set forth in Schedule A attached hereto.
"Amount Financed" means, with respect to each Premium Receivable Sold to
WPAC, an amount equal to 100% of the premium and other financeable amounts
relating to the insurance policy that gives rise to the Premium Receivable less
any down payment made at the inception of the Premium Finance Agreement.
"Affiliate" of any specified Person means any other Person controlling or
controlled by or under common control with such specified Person. For the
purposes of this definition, "control" when used with respect to any specified
Person means the power to direct the management and policies of such Person,
directly or indirectly, whether through the ownership of voting securities, by
contract or otherwise.
"Agent" means any Person licenced and qualified to sell or arrange for the
sale of insurance in the state in which any Premium Receivable is originated.
"Agent Statement Unpaid Balance" means the amounts due from any Agent as
shown on the applicable Agent statement maintained by the Servicer.
"Agent Statement Unpaid Balance Trigger" shall have the meaning set forth
in Schedule A attached hereto.
"Agreement" means this Agreement together with all schedules, and all
amendments, modifications, replacements or substitutions thereto and together
with all documents and instruments contemplated to be executed pursuant to this
Agreement.
"Allowable Endorsement Additions" means any increase to a Premium
Receivable arising out of an increase in the premium payable under an insurance
policy relating to a change in the coverage thereof so long as the following
criteria is met:
(a) The Insured is current as to all payments due on the existing Contract;
(b) The Insured pays an additional down payment in accordance with WPAC
down payment schedule (with a minum of 20% if Accounts Payable is received
within 30 days of origination date and such additional down payment shall
increase 10% for each additional 30 day period); and
(c) There are at least three payments remainnig on the Contract.
"Business Day" means any day that is not a Saturday, Sunday or other day on
which commercial banking institutions in New York, New York or Denver, Colorado
are authorized or obligated by law or executive order to be closed.
"Cancelled Premium Receivable" means each Premium Receivable for which a
request for cancellation has been sent to the Issuing Insurance Company, and for
which a reinstatement notice has not been received by the Servicer from such
insurance company.
"Collections" shall mean all amounts received daily by WPAC, or the
Servicer on behalf of WPAC, on all Premium Receivables Sold under this Agreement
including, but not limited to: (a) payments from Obligors, (b) return of
unearned commission from agents, (c) return of unearned premium from Issuing
Insurance Companies, and (d) amounts received from a guaranty fund or other
amounts paid by or on behalf of the Obligor, agent or Issuing Insurance Company.
The amounts referred to as "Collections" shall exclude Obligor's down payment
amounts, correction amounts or amounts not lawfully eligible under applicable
law to be applied to the payment of amounts due under the Premium Receivables.
"Concentration Limits" means the Premium Receivable concentration limits
set forth in Schedule B attached hereto.
"Conveyed Property" means all of the Seller's right, title and interest in,
to and under the Premium Receivables Sold pursuant to this Agreement, all
related Premium Finance Agreements
and all related documents including, without limitation, all loan documents and
servicer documents, and all of the Seller's rights to any payment from the
Obligors and any and all rights against any Obligor with respect to such Premium
Receivables, all collateral and guaranties with respect to such Premium
Receivables, all other related rights and assets, and all proceeds of the
foregoing.
"Default" shall have the meaning specified in Section 16 of this Agreement.
"Default Rate" shall mean the annual rate of interest as set forth in
Schedule A attached hereto.
"Defaulted Premium Receivable" means (without duplication) any Premium
Receivable which (a) has an amount due and unpaid for 180 days, or (b) is a
Cancelled Premium Receivable and has an unpaid principal balance after
application of all expected unearned premium received by or on behalf of the
Issuing Insurance Company, or (c) has been written off by the Servicer.
"Down Payment Requirement" shall have the meaning set forth in Schedule A
attached hereto.
"Effective Date" shall have the meaning set forth in Schedule A attached
hereto.
"Eligible Insurance Company" means (a) an insurance company which is
licensed and in good standing to do business in the State in which the policy to
which a Premium Receivable relates is issued by such insurance company, (b) a
joint underwriting organization, intercompany insurance pool or intercompany
reinsurance pool which is licensed or otherwise permitted to do business in the
state in which the policy to which a Premium Receivable relates is issued by
such joint underwriting organization or intercompany insurance pool, (c) a
foreign or alien insurance company which is authorized or approved to issue
insurance on a nonadmitted basis, through a licensed surplus or excess lines
broker, in the state in which the policy to which a Premium Receivable relates
is issued by such foreign or alien insurance company. No such insurer may be an
Eligible Insurance Company (i) if such insurer is the subject of a
rehabilitation or liquidation proceeding commenced by a state or foreign
insurance regulatory authority, or (ii) if such insurer is not, in the judgment
of WPAC, a creditworthy Person which WPAC has full expectations will return, on
a timely basis, unearned premiums on Cancelled Premium Receivables.
"Eligible Premium Receivable" has the meaning defified in Section 11.
"Endorsement Refunds" means all funds returned by an insurance company to
the Seller or any other Person arising out of a reduction in the premium payable
under an insurance policy relating to a change in the coverage thereof.
"WPAC Principal Balance" means for any day of determination, the sum of the
Up-front Purchase Price paid by WPAC for the Premium Receivables under this
Agreement, less the sum of (a) all Collections received by WPAC representing
principal payments, and (b) the principal amount of repurchases of Premium
Receivables by the Seller under Section 6 of this Agreement.
"GAAP" means generally accepted accounting principles applied in the United
States of America in effect from time to time which are recognized by the
American Institute of Certified Public Accountants.
"Guarantor" means each guarantor of Seller's repurchase obligations as
described in Section 6(b) of this Agreement listed in Schedule A attached
hereto, if any.
"Independent Public Accountants" means any firm of public accountants
acceptable to WPAC; provided, that such firm is independent with respect to the
Seller and WPAC within the meaning of the Securities Act of 1933, as amended.
"Issuing Insurance Company" means, with respect to any Premium Receivable,
the insurance company which issued the insurance policy related to such Premium
Receivable.
"Interest Rate" means the rate of interest set forth in Schedule A attached
hereto.
"Lien" means any statutory, judicial, contractual or other lien, security
interest, encumbrance or claim of any kind.
"Loss" shall mean (i) with respect to Defaulted Premium Receivables, an
amount equal to the outstanding principal balance on such Defaulted Premium
Receivable, (ii) with respect to any Repurchase Property not reacquired by
Seller, an amount equal to the Repurchase Price, and (iii) with respect to
amounts due from Agents, any Agent Statement Unpaid Balance amount over sixty
(60) days past due.
"Loss Ratio" shall mean for any consecutive three month period the
percentage resulting from dividing (a) Loss incurred in such three month period
by (0)the average WPAC Principal balance for such three month period.
"Loss Ratio Trigger" shall have the meaning set forth in Schedule A
attached hereto.
"Material Adverse Change" shall mean any material and adverse change either
individually or in the aggregate, in the business, prospects, management,
financial position, results of operations or general condition of Seller or any
of its Affiliates as determined by WPAC in its reasonable discretion.
"Maximum Purchase Commitment" means the maximum outstanding principal
balance of the Eligible Premium Receivables Sold under this Agreement, at the
time of calculation, not to exceed the amount set forth in Schedule A attached
hereto.
"Obligor" means, with respect to any Premium Finance Agreement, the obligor
or account debtor thereunder.
"Person" means an individual, partnership, limited liability company,
corporation (including a business trust), joint stock company, trust,
unincorporated association, joint venture or other entity, or a government or
any political subdivision or agency thereof.
"Premium Finance Agreement" means the premium finance agreement or
agreements which evidence a Premium Receivable in the form prescribed under
applicable law. The Premium Finance Agreements shall be in form and substance
acceptable to WPAC in its sole discretion.
"Premium Receivable" means the entire interest in a Premium Finance
Agreement, all security interests relating thereto, all moneys due or to become
due thereon subsequent to the Sale of such Premium Receivable to WPAC, all
related Realization Provisions, all related Endorsement Refunds all Allowable
Endorsement Additions relating thereto which have been acquired by WPAC pursuant
to this Agreement and any related documents and the proceeds of any and all of
the foregoing.
"Prohibited Agent" means any Agent that has been identified by written
notice from WPAC to the Originator as being prohibited from producing insurance
policies financed by Premium Receivables that are subject to purchase by WPAC
pursuant to this Agreement.
"Purchase Premium" means the portion of the Purchase Price as set forth in
Schedule A attached hereto.
"Purchase Price" means the price paid by WPAC for each Eligible Premium
Receivable equal to the sum of the (a) Up-front Purchase Price plus (b) the
Purchase Premium.
"Realization Provisions" means, with respect to any Premium Receivable,
collectively: (a) the security interest granted or assigned by an Obligor,
pursuant to the terms of the documents creating and evidencing the respective
Premium Receivable at the time of execution thereof to the originator of such
Premium Receivable, in all unearned premiums, dividends, loss payments which
reduce the unearned premiums under the respective insurance policy or policies,
(b) any interest arising under a state guaranty fund for all unearned premiums
from the cancelled policy or policies in the event the Issuing Insurance Company
becomes insolvent, (c) Endorsement Refunds with respect to such Premium
Receivable, (d) if applicable to such Premium Receivable, all broker or agent
guarantee agreements with respect thereto, and (e) if applicable to such Premium
Receivable, any interest thereof in a cash collateral account established with
respect to such Premium Receivable.
"Required Documents" means the original signed Premium Finance Agreement,
the original of the check or draft relating thereto, the signed power of
attorney of the insured (if a power of attorney signed by the insured is not
included in the Premium Finance Agreement), a copy of the motor vehicle report
run at the time of policy origination, and all other documents necessary for the
legal origination of the Premium Finance Agreement.
"Repurchase Price" shall have the meaning set forth in Schedule A attached
hereto.
"Repurchase Property" shall have the meaning defined in Section 6(a).
"Sale" or "Sell" or "Sold" means to absolutely sell, transfer, assign or
otherwise convey property.
"Servicer" means Input 1 LLC or such other servicer as approved by
Flatiron.
"Servicing Agreement" means the Premium Receivable Servicing Agreement
between Input 1, LLC and WPAC.
"Servicing Fee" means the fee to be paid to the Servicer pursuant to the
Servicing Agreement
"Tangible Net Worth" shall mean the tangible net worth, determined in
accordance with GAAP, to be maintained by Seller in the amount set forth in
Schedule A attached hereto. For purposes of this definition (i) Tangible Net
Worth may be in the form of common or preferred equity or unsecured debt, the
terms and conditions of which shall be satisfactory to WPAC in its sole
discretion ("Subordinated Debt"), and (li) tangible assets used to calculate net
worth shall exclude all intangible assets, goodwill and intercompany or
Affiliate indebtedness of any nature.
"Term" means the term of this Agreement as defined in Schedule A attached
hereto.
"Up-front Purchase Price" means the portion of the Purchase Price paid by
WPAC for a Premium Receivable as set forth in Schedule A attached hereto.
"Walk-In Payment Ratio" Flatiron will calculate monthly ("ginning in the
second month following origination) the percentage of total payments received at
agency "walk-in" (insured making payment at a DCAP agency) to total payments
made including the P.O. Box. For each month, the Walk-In Payment Ratio will be
calculated and a corresponding adjustment if any, made to the "No Risk
Origination Fee".
Section 2. Sale of Conveyed Property.
(a) During the Term of this Agreement, Seller irrevocably agrees to
Sell to WPAC some or all of the Eligible Premium Receivables
originated, acquired or otherwise owned by Seller and WPAC agrees to
purchase up to the amount of the maximum Purchase Commitment the
Seller's Eligible Premium Receivables in accordance with the terms and
conditions of this Agreement. The parties agree that WPAC shall have
the first right of refusal, during the Term of this Agreement, to
purchase Eligible Premium Receivables originated, acquired or
otherwise owned by Seller, which are not retained by Seller or an
affiliate in its internal capacity.
(b) WPAC's obligation to be bound by the terms of this Agreement is
subject to the satisfaction of each of the following conditions by
evidence in form and substance satisfactory to WPAC in its reasonable
discretion:
(i) Seller shall provide evidence that it has the necessary
authority and has secured any required consents to execute and
deliver this Agreement and to enter into
the transactions contemplated by this Agreement, which evidence
shall include, at a minimum, good standing certificate of Seller,
officers' certificates regarding (together with copies of the
articles and bylaws of Seller (or other organizational documents
as may be applicable) and any amendments thereto, UCC searches
regarding the Seller, proof of Seller's license to originate the
Premium Finance Agreements, the form of the Premium Finance
Agreements to be originated by Seller, and such other evidence as
WPAC may require in its reasonable discretion including, without
limitation, any legal opinions that WPAC may require regarding
Seller and Seller's ability to enter into and perform under this
Agreement;
(ii) WPAC shall have completed its due diligence of the Seller
and determined that the findings of such due diligence are
acceptable to WPAC in its sole discretion;
(iii) Seller shall have provided evidence that there are no prior
Liens or existing Uniform Commercial Code financing Statements
granting to any party a security interest in any of Seller's
Premium Receivables or other Conveyed Property; and
(iv) Seller shall have provided to WPAC Uniform Commercial Code
financing statements in form and substance acceptable to WPAC
establishing a first priority ownership interest in favor of WPAC
in the Premium Receivable and related Conveyed Property.
(c) Each Sale of a Premium Receivable hereunder is subject to the
satisfaction to WPAC of each of the following conditions at Seller's
sole cost and expense:
(i) All covenants and conditions of this Agreement have been
complied with by Seller and no default (or event which, with the
passage of time or notice or both would constitute a default)
exists hereunder;
(ii) No Material Adverse Change has occurred;
(iii) Bach of the Loss Ratio Trigger and Maximum Purchase
Commitment shall not be exceeded;
(iv) The availability to WPAC of funding from WPAC's funding
source for the transactions contemplated hereby;
(v) The Concentration Limits established from time to time by
WPAC, with respect to concentrations with Issuing Insurance
Companies, originators or Agents shall not be exceeded;
(vi) The Premium Receivables shall be Eligible Premium
Receivables; and
(vii) Seller shall provide such additional evidence, documents
and instruments as WPAC may reasonably request to consummate the
Sale of the Conveyed Property in accordance with the terms and
provisions of this Agreement.
(d) In connection with the Sale of each Premium Receivable hereunder,
Seller shall timely take the following actions:
(i) Deliver to WPAC the Required Documents relating to each
Premium Finance Agreement, which delivery shall be made by the
tenth (10th) calendar day after the date of origination of the
Premium Finance Agreement; and
(e) The Sale of any Conveyed Property shall be effective (i) with
respect to the Conveyed Property Sold to WPAC on the Effective Date,
upon delivery to WPAC of an assignment in form and substance
acceptable to WPAC or by other method of transfer as may be directed
by WPAC, and (ii) with respect to all Conveyed Property Sold after the
Effective Date, upon the origination by the Originator of each Premium
Finance Agreement giving rise to the Premium Receivable and other
Conveyed Property without the need for execution and delivery of any
further assignments or instruments of transfer unless specifically
requested in writing by WPAC. The Originator shall cooperate with WPAC
and the Servicer in immediately supplying to the Servicer the Premium
Receivable data needed to enter the Premium Receivables on the
Servicer's data processing system. All Sales shall be deemed to take
place at the offices of WPAC described on the first page of this
Agreement or such other location as Seller and WPAC may agree in
writing.
(f) Seller and WPAC intend and agree that each purchase and Sale
hereunder shall be treated as a true and absolute Sale of all of
Seller's right, title and interest in, to and under the Conveyed
Property and not a transfer intended as a security interest. However,
if, notwithstanding such intention, a determination is made by a court
or other body with appropriate jurisdiction over the matter that such
transfer shall not be treated as a true and absolute Sale, this
Agreement shall be deemed to constitute a security agreement and the
transaction effected hereby shall be deemed to constitute a secured
financing, and Seller hereby pledges and grants to WPAC a first
priority Lien on, and security interest in, to and under, all of
Seller's right, title and interest in, to and under the Premium
Receivables and all other related Conveyed Property as collateral for
and as security for all amounts paid and to be paid by WPAC to Seller
in connection with the Conveyed Property and for all amounts due and
owing and all obligations arising under this Agreement.
Section 3. Termination. Seller or WPAC shall have the right to terminate
this Agreement upon ninety (90) days prior written notice to the other party.
Upon a termination, WPAC shall continue to own all Premium Receivables acquired
by WPAC to the date of termination and the Servicer shall service the portfolio
of Conveyed Property in the normal course of its business and, in connection
therewith, all provisions of this Agreement or any Servicing Agreement with
respect to such existing portfolio shall remain in full force and effect and
shall survive the termination of
this Agreement under this Section 3, including, without limitation, the
repurchase obligations of Seller or Guarantor relating to such existing
portfolio.
Section 4. Purchase Price and Payment Terms for Conveyed Property/Right of
Set-Off WPAC shall pay Seller the Purchase Price for the Conveyed Property
pursuant to the terms and conditions set forth in this Agreement. The Up-front
Purchase Price shall be paid to Seller or a third party acceptable to WPAC upon
satisfaction of the conditions set forth in Section 2(c). The Purchase Premium,
if any, shall be paid to Seller monthly in arrears, not later than the sixth
(6th) Business Day of each month. WPAC shall have a right to off-set from such
Purchase Price amounts due to Seller any amounts due WPAC from Seller or
Guarantor under this Agreement including, without limitation, any Repurchase
Price amounts due under Section 6.
Section 5. Notification of Sale. WPAC shall send or cause to be sent notice
of the Sale of the Premium Receivables to WPAC, (i) to each Obligor to the
effect that the Premium Receivables have been Sold to WPAC and that all payments
with respect thereto are required to be made payable as specified in such
notice, and (ii) to each Issuing Insurance Company to the effect that the
Premium Receivables have been Sold to WPAC and that all payments with respect
thereto are required to be paid to the Servicer as specified in such notice. The
Seller shall promptly respond to reasonable inquiries from WPAC or third parties
confirming the Sale of the Conveyed Property hereunder.
Section 6. Repurchase of Conveyed Property.
(a) Not later than five (5) Business Days after notice from WPAC,
Seller shall repurchase from WPAC any Premium Receivables and other
related Conveyed Property (collectively, the "Repurchase Property")
(i) that does not comply in all respects with Seller's representations
and warranties described in Section 11 of this Agreement or (ii) for
which the Required Documents have not been timely delivered to WPAC.
The amount payable by Seller to WPAC for the Repurchase Property shall
be equal to the Repurchase Price. Upon its receipt of the Repurchase
Price, WPAC shall convey to Seller all of its right, title and
interest in such Repurchase Property on an "AS IS, WHERE IS" basis
without recourse and without any warranties, written or oral, express
or implied of any kind including, but not limited to warranties of
TITLE; MERCHANTABILITY OR ABSENCE FROM LIENS.
(b) Each Guarantor jointly and severally hereby agrees to repurchase
(i) the Repurchase Property referred to in Section 6(a) upon the
failure of Seller to do so, and (ii) any Premium Receivable originated
in a fraudulent manner. Upon its receipt of all of the amounts due
under this Section, WPAC shall convey to Guarantor all of its right,
title and interest in such Repurchase Property on an "AS IS, WHERE IS"
basis without recourse and without any warranties, written or oral,
express or implied, of any kind including, but not limited to,
warranties of TITLE; MERCHANTABILITY OR ABSENCE FROM LIENS.
Section 7. Delivery to WPAC of Proceeds; Power of Attorney. WPAC shall be
the owner of any Conveyed Property including any proceeds thereof. Following the
Sale of any Conveyed
Property, if any proceeds of such Conveyed Property are received by Seller,
Seller shall hold such proceeds in trust for WPAC separate and apart from its
own property and, at its own cost, inunediately endorse (if necessary) and
deliver such proceeds, as WPAC directs. Seller hereby constitutes and appoints
WPAC as its true and lawful attorney with the power to endorse the name of
Seller upon any instrument or other document pertaining to the Conveyed Property
and and related proceeds. This power is coupled with an interest and is
irrevocable.
Section 8. Verification, Notification and Collection of Premium
Receivables. WPAC shall be entitled, in its own or any other name and in form
determined by WPAC, to contact any Obligor or any other Person and verify the
payment of or inquire about any other issue pertaining to any Conveyed Property
that has been or is to be Sold to WPAC. Upon the Sale of any of Conveyed
Property, WPAC shall be entitled to notify and, upon the request of WPAC, Seller
shall notify the Obligors, insurance companies and any other Persons that WPAC
is the owner of such Conveyed Property and direct such Persons to pay WPAC any
amounts owing with respect to such Conveyed Property.
WPAC, as the owner of the Conveyed Property, shall be entitled to amend,
compromise, modify, release or settle the indebtedness and obligations of the
Obligors with respect to the Conveyed Property that is Sold to WPAC hereunder,
and to take any legal action to collect any amounts owing with respect to such
Conveyed Property and to take or refrain from taking any additional action with
respect to such Conveyed Property in good faith, without notice to or the
consent of Seller and without affecting any obligation of Seller to repurchase
such Conveyed Property as may be required by WPAC under this Agreement. Seller,
at its own cost, shall execute and deliver to WPAC any documents and take any
actions deemed necessary or desirable by WPAC to assist WPAC in exercising any
right or remedy pertaining to the Conveyed Property.
Section 9. Financial Statements and Books and Records. Seller shall keep
accurate and complete books and Financial records pertaining to the Conveyed
Property in accordance with GAAP and shall disclose the Sale of any Conveyed
Property to WPAC and the respective date of such Sale in Seller's books and
records. Flatiron or its designated representative shall have the right, upon
written notice to Seller and during regular business hours, to inspect, audit
and copy Seller's books and records relating to the Conveyed Property.
Section 10. Seller's General Representations and Warranties. Seller hereby
represents and warrants to and for the benefit of WPAC on the date of this
Agreement and on any date of Sale of Premium Receivables hereunder that:
(a) Seller is duly organized and is validly existing as a corporation
in good standing under the laws of the state of its organization with
full power and authority to execute and deliver this Agreement and to
Sell the Conveyed Property to WPAC and otherwise to perform the terms
and provisions thereof;
(b) Seller is duly qualified to do business as a domestic or foreign
business entity in good standing, and has obtained all required
licenses and approvals, if any, in all jurisdictions in which the
conduct of its business requires such qualifications, and has
complied with all federal state and local laws and regulations in
connection with the origination of the Premium Receivables and the
Sale of the Conveyed Property under this Agreement;
(c) The execution and delivery by Seller of this Agreement and
Seller's performance of the terms and conditions thereof have been
duly authorized by all necessary action of Seller, do not require any
approval or consent of any governmental agency or authority or any
other Person, and do not and will not conflict with or result in a
breach or (with or without notice or lapse of time) a default under
any agreement, law or governmental regulation binding upon or
applicable to Seller or the Conveyed Property;
(d) No litigation or administrative proceeding of or before any court,
tribunal or governmental body is presently pending or threatened,
against Seller or its properties which have not been previously
disclosed in writing to WPAC;
(e) This Agreement and any related documents to which Seller or any
Guarantor is a party constitute valid, legal and binding obligations
of Seller and any such Guarantor, enforceable against Seller and any
such Guarantor in accordance with the terms thereof, subject to
applicable bankruptcy, insolvency, reorganization, moratorium and
other laws affecting the enforcement of creditor's rights generally
and to general principles of equity, regardless of whether such
enforcement is considered in a proceeding in equity or at law;
(f) Seller does not have material liabilities or obligations other
than those previously disclosed in writing to WPAC;
(g) No information, certificate, statement or report furnished by or
on behalf of Seller or any Guarantor to WPAC contains any untrue
statement of a material fact or omits a material fact necessary to
make such information, certificate, statement or report not
misleading. There is no fact peculiar to Seller or any Affiliate of
Seller or, to its knowledge, any Conveyed Property or Obligor, which
it has not disclosed to WPAC in writing which could adversely affect
Seller's ability to perform the transactions contemplated by this
Agreement and any related documents to which Seller is a party;
(h) All tax returns required to be filed by Seller, any of its
Affiliates, subsidiaries or any Guarantor in any jurisdiction have in
fact been filed, and all taxes, assessments, fees, claims and other
governmental charges upon Seller, such Affiliate or subsidiary, such
Guarantor or any of their respective properties, income or franchises,
shown to be due and payable on such returns have been paid; provided,
that neither Seller nor such Affiliate or subsidiary or Guarantor
shall be required to pay or discharge any such tax, assessment, fee,
claim or other charge which is being contested in good faith and by
proper proceedings and as to which appropriate reserves are being
maintained in accordance with GAAP. To the best of Seller's
knowledge, all such tax returns were true and correct and Seller does
not know of any contemplated or proposed additional tax assessment
against Seller or any of its subsidiaries in any material amount or of
any basis therefor;
(i) The provisions for taxes on Seller's and its subsidiaries' books
are in accordance with GAAP;
(j) At the close of any Sale of Conveyed Property, Seller had a
positive tangible net worth;
(k) The principal executive office of Seller is located at the address
described on the first page of this Agreement, and has been located at
such address for a period of not less than four months preceding the
date of this Agreement or since its formation;
(l) "Payments, Inc." is the only legal name under which Seller is
operating its business upon the execution of this Agreement. Seller
has not changed its name in the last six years (or such shorter period
of time during which Seller was in existence) and does not have any
other trade names, fictitious names, assumed names or "doing business
as" names other than those that have been previously disclosed in
writing to WPAC;
(m) The transactions contemplated by this Agreement are in the
ordinary course of Seller's business and Seller has valid business
reasons for selling the related Conveyed Property rather than
obtaining a secured loan with the Conveyed Property as collateral. At
the time of each Sale: (i) Seller Sold the related Conveyed Property
to WPAC without any intent to hinder, delay or defraud any current or
future creditor of Seller; (ii) Seller was not insolvent or did not
become insolvent as a result of any Sale; (iii) Seller was not engaged
and was not about to engage in any business or transaction for which
any property remaining with Seller would constitute unreasonably small
capital or for which the remaining assets of Seller are unreasonably
small in relation to the business of Seller or the transaction; (iv)
Seller did not intend to incur, and did not believe or reasonably
should not have believed, that it would incur, debts beyond its
ability to pay as they become due; and (v) the consideration paid by
WPAC to Seller for the Conveyed Property was equivalent to the fair
market value of such Conveyed Property;
(n) No Material Adverse Change has occurred since the previous Sale of
Conveyed Property;
(o) Each Sale of Conveyed Property contemplated by this Agreement and
any related documents constitutes a true sale and not a pledge of
collateral in connection with a financing and such Conveyed Property
shall not be part of Seller's property for any purpose under state or
federal law;
(p) Each Sale of Conveyed Property (including all payments due or to
become due thereunder) by Seller pursuant to this Agreement to the
best of Seller's knowledge is not subject to and will not result in
any tax, fee or governmental charge payable by Seller or WPAC to any
federal, state or local government;
(q) The consideration to be received by Seller in exchange for each
Sale of Conveyed Property (including the right to receive all payments
due or to become due thereunder) (i) is fair consideration having
value equivalent to or in excess of the fair market value of the
Conveyed Property and, except with respect to the Purchase Premium
(ii) is or will be paid in full to Seller upon the consummation of
each Sale thereof, and (iii) no provision exists whereby the
consideration will be modified after the date of such Sale; and
(r) Any drafts provided by WPAC to Seller shall be used exclusively
for the purchase of Eligible Premium Receivables in accordance with
the terms and conditions for use of such drafts that may be provided
to Seller by WPAC from time to time.
The foregoing representations and warranties shall be continuing in nature
and shall survive the termination of this Agreement.
Section 11. Seller's Representations and Warranties With Respect to the
Conveyed Property. Upon each Sale of Conveyed Property, each Premium Receivable
Sold to WPAC shall have all of the following characteristics as of the date of
Sale (such Premium Receivables having all of such characteristics shall be
referred to herein as "Eligible Premium Receivables"):
(a) Each Premium Receivable represents the genuine, legal, valid and
binding payment obligation in writing of the Obligor thereon,
enforceable by the holder thereof in accordance with its terms;
(b) Each Premium Receivable arises under a Premium Finance Agreement
which contains customary and enforceable provisions such that the
rights and remedies of the holder thereof are adequate to enforce the
Realization Provisions;
(c) Each Premium Receivable is not subject to any proceedings or
investigations pending or threatened, before any court, regulatory
body, administrative agency or other governmental instrumentality
having jurisdiction over Seller or its properties: (i) asserting the
invalidity of such Premium Receivable; (ii) seeking to prevent the
enforcement of such Premium Receivable; or (iii) seeking any
determination or ruling that may adversely affect the payment on or
enforceability of such Premium Receivable;
(d) Each Premium Receivable was originated in a state where Seller is
licensed (if required to be licensed) to do business as an insurance
premium finance company;
(e) Each Premium Receivable does not (and did not at the time of
origination) contravene any federal, state or local laws, rules or
regulations applicable thereto or contract between Seller and WPAC
applicable thereto, and no party to any such contract is in
contravention of any such law, rule or regulation;
(f) Each Premium Receivable was originated in the United States of
America by Seller or purchased by Seller from another premium finance
company in the ordinary course of Seller's business of financing
insurance premiums written through independent insurance agents and
brokers or insurance companies directly, in either case, through the
application of and consistent with Seller's standard procedures in a
fashion not less stringent taken as a whole than those other Premium
Receivables owned by Seller;
(g) Each Premium Receivable is payable in U.S. Dollars by an Obligor
who at time of policy origination is located within the United States
of America;
(h) Each Premium Receivable is evidenced by only one original
contract, in the form of a Premium Finance Agreement, properly
completed and executed without variations, with notation of the Sale
to WPAC, on or before the Sale of such Premium Receivable;
(i) Each Premium Receivable provides, according to its original or
modified terms, that the amount payable thereunder will be paid in
consecutive equal monthly payments that fully amortize such Premium
Receivable by its stated terms and which amount will be paid in a
maximum of nine (9) payments (if financing an annual policy), and a
maximum of four (4) payments (if financing a six-month policy) with
the first payment due not later than 31 days following the inception
date of the related insurance policy;
(j) Each Premium Receivable relates to an insurance policy issued by
an Eligible Insurance Company;
(k) Each Premium Receivable relates to an insurance policy for which
the insured has paid a down payment amount of not less than the Down
Payment Requirement;
(1) Each Premium Receivable is evidenced by proof of payment to the
Issuing Insurance Company or its designated general Agent equal to an
amount not less than the original principal amount of such Premium
Receivable and the related down payment due under the Premium Finance
Agreement has been paid in full by, or on behalf of, the related
Obligor;
(m) The information and related documents regarding the Premium
Receivables being Sold to WPAC is true and correct in all material
respects as of the opening of business on the date of Sale and no
selection procedures reasonably believed to be
adverse to WPAC have been utilized in selecting the Premium
Receivables for sale to WPAC;
(n) No Premium Receivable or related Premium Finance Agreement has
been satisfied, cancelled or is more than 30 days past due or is
subject to a right of rescission, setoff, counterclaim, subordination,
recoupment or defense which has been asserted or threatened with
respect to such Premium Receivable nor have the Realization Provisions
securing such Premium Receivable been released from the Lien granted
by the Obligor;
(o) Except for assignments or pledges to lenders who have provided
financing to Seller and which assignments and pledges have been
released prior to the Sale of the Premium Receivables to WPAC, no
Premium Receivable has been Sold or pledged by Seller to any Person
other than WPAC; immediately prior to any Sale contemplated by this
Agreement Seller had good title to the Premium Receivable sold to WPAC
free and clear of all Liens and, immediately upon any Sale of the
Premium Receivables contemplated by this Agreement WPAC will have good
title to the Premium Receivables Sold to WPAC free and clear of all
Liens;
(p) No Premium Receivable has terms which have been extended or
modified other than through Allowable Endorsement Additions, the
originals of which have been included in the Premium Finance Agreement
loan documents delivered to WPAC;
(q) No Premium Receivable has any Liens or claims which have been
filed or claims that would be Liens prior to or equal to the
Realization Provisions granted by the Obligor pursuant to such Premium
Receivable;
(r) At the time of Sale of any Premium Receivable which finances a
commercial line insurance policy, to the best of Seller's knowledge,
the Obligor with respect to such Premium Receivable is not subject to
any bankruptcy or insolvency proceeding;
(s) No Premium Receivable relates to an insurance policy which is
deemed fully earned in the case of a claim;
(t) No Premium Receivable has been originated by a Prohibited Agent;
and
(u) No Premium Receivable has been originated in, nor is subject to
the laws of, any jurisdiction under which the Sale of such Premium
Receivable would be unlawful, void or voidable.
(v) If the total Capital Equity of the DCAP Group (calculated in
accordance with generally accepted accounting principals) falls below
$4,000,000, Flatiron will require a Fidelity Bond in the amount of
$500,000 to be obtained by Payments, Inc. for the benefit of Flatiron.
The foregoing and any additional representations, warranties and covenants
contained in this Agreement shall be continuing in nature and shall survive the
termination of this Agreement.
Section 12. Additional Covenants of Seller. During the Term of this
Agreement,
(a) Seller shall cause all Uniform Commercial Code termination
statements, or releases, as the case may be, with respect to Liens on
the Conveyed Property to be filed on the date of Sale of the Conveyed
Property.
(b) Seller shall cause all Uniform Commercial Code financing
statements, continuation statements and any other documents,
reasonably requested by WPAC, establishing the right, title and
interest of WPAC, to and under the Conveyed Property, to be promptly
executed and filed by Seller.
(c) At least thirty (30) days prior to Seller making any change in its
name, identity or organizational structure which would make any
termination statement, financing statement or continuation statement
filed by WPAC or Seller seriously misleading within the applicable
provisions of the Uniform Commercial Code or any title statute, Seller
shall give WPAC notice of any such change and shall execute and file
such financing statements or amendments as may be necessary or
reasonably required by WPAC to continue the perfection of the
respective interests of WPAC in the Conveyed Property.
(d) Except for the Sale to WPAC of the Conveyed Property and Liens
granted or caused by WPAC in such Conveyed Property, Seller shall not
Sell to any other Person, or grant, incur, assume or suffer to exist
any Lien on such Conveyed Property or on any interest therein, and
Seller shall defend the right, title and interest of WPAC in, to and
under such Conveyed Property against all claims of third parties
claiming through or under Seller.
(e) Seller shall not impair WPAC's right, title and interest in, to
and under any of the Conveyed Property.
(f) Seller shall maintain Tangible Net Worth of not less than the
amount set forth in Schedule A attached hereto.
(g) Seller shall furnish to Flatiron and WPAC:
(i) upon written request after the end of each of the first three
fiscal quarters of Seller (commencing with the first fiscal
quarter ending after the date hereof) an unaudited balance sheet
and income statement (prepared in accordance with GAAP without
accompanying notes) for Seller and its subsidiaries covering the
preceding quarter, in each case certified by the president or
principal financial officer of Seller to be true, accurate and
complete copies of such financial statements;
(ii) on the earlier of (A) ninety (90) days after the end of each
fiscal year of Seller beginning at the end of the first fiscal
year after the date hereof or (B) if financial statements are
prepared by an Independent Public Accountant, fifteen (15) days
after delivery by an Independent Public Accountant, a balance
sheet and income statement (prepared in accordance with GAAP) for
Seller and its subsidiaries covering the preceding fiscal year,
in each case certified by the president or principal financial
officer of Seller to be true, accurate and complete copies of
such financial statements;
(iii) such other information respecting the condition or
operations, financial or otherwise, of Seller, any of its
subsidiaries and any Guarantor as WPAC may from time to time
reasonably request; and
(iv) prompt notice to WPAC but in no event more than three (3)
Business Days following) of any Material Adverse Change.
(h) Seller shall provide prompt written notice to Flatiron and WPAC
if:
(i) Seller ceases to be managed and controlled by the Person or
Persons who manage and control Seller as of the date of this
Agreement;
(ii) any such Person which is a corporation, partnership, trust
or other entity is dissolved or liquidated or merged with or into
any other Person or for any period of more than ten (10) days
ceases to exist in its present form and (where applicable) in
good standing and duly qualified under the laws of the
jurisdiction of its incorporation or formation and any
jurisdiction in which such standing or qualification is necessary
or advisable in connection with the conduct of business; or
(iii) Seller commences a sale of all or substantially all of its
assets, except for the Sale of Conveyed Property by Seller to
WPAC under this Agreement and any related documents.
(i) Seller shall not dissolve or liquidate in whole or in part.
(j) Seller shall not voluntarily institute any proceedings to
adjudicate WPAC or any of its Affiliates bankrupt or insolvent,
consent to the institution of bankruptcy or insolvency proceedings
against WPAC or any of its Affiliates, file a petition seeking or
consenting to reorganization or relief under any applicable federal or
state law relating to bankruptcy, consent to the appointment of a
receiver, liquidator, assignee, trustee, sequestrator (or other
similar official) of WPAC or any of its Affiliates or a substantial
part of its or their property or admit its or their inability to pay
its or their debts generally as they become due or authorize any of
the foregoing to be done or taken on behalf of WPAC or any of its
Affiliates,
(k) Seller shall maintain at its own expense, a blanket fidelity bond
or an errors and omissions insurance policy, in form and content and
in amounts acceptable to WPAC and naming WPAC as an additional loss
payee or beneficiary thereunder.
Section 13. Taxes. Seller shall pay when due all present and future taxes
and property taxes levied by or required to be paid to any governmental or
quasi-governmental authority and pertaining to Seller, its business operations,
its assets or the Conveyed Property (except for WPAC's income taxes) and provide
WPAC with written proof of such payment upon written request of Flatiron.
Section 14. Further Assurances and Substituted Performance. Seller shall
take or cause any third party to take any actions and execute or cause any third
party to execute any additional documents (including, but not limited to,
Uniform Commercial Code filings) reasonably deemed necessary or desirable by
WPAC to carry out the intent or purposes of this Agreement and any related
documents. WPAC shall be entitled, but not required, to take any action and
execute any document that was required to be, but not, taken or executed by
Seller under this Agreement and any related documents. This power is coupled
with an interest and is irrevocable. Upon demand, Seller shall reimburse WPAC
for any amounts, attorneys' fees, expenses and costs paid by WPAC in connection
with such actions. No action taken by WPAC shall be deemed to relieve Seller's
obligation to take such action or cure Seller's default under this Agreement.
Section 15. Indemnification. Seller shall indemnify and hold WPAC and its
Affiliates harmless from all claims, defenses, offsets, counterclaims, loss,
costs, damages, liabilities, causes of action, actions and suits (including, but
not limited to, attorneys' fees, expenses and costs) arising from (i) Seller's
breach of any representation, warranty or covenant contained in this Agreement
or any related documents, (ii) the unauthorized use of drafts provided by WPAC
to Seller for the funding of Premium Finance Agreements, or (iii) the failure of
the Premium Receivables Sold hereunder to be originated in compliance with all
requirements of law. These indemnity provisions are in addition to any other
obligations that the Seller may otherwise have hereunder and shall survive the
termination of this Agreement.
Section 16. Default. Seller shall be deemed in default (a "Default") under
this Agreement upon the occurrence of any one or more of the following:
(a) Seller fails to pay any indebtedness, fails to perform any
obligation, or breaches any covenant, representation or warranty
(other than a breach of any representation or warranty under Section
11 of this Agreement) to WPAC under this Agreement and/or any related
documents and any other present or future agreement with WPAC;
(b) Seller breaches any representation or warranty by Seller under
Section 11 of this Agreement pertaining to Conveyed Property and
Seller fails to repurchase such Conveyed Property within five (5)
Business Days from the date of written notification by WPAC of such
breach in accordance with the terms and conditions of Section 6 of
this Agreement;
(c) Seller permits the entry or service of any garnishment, judgment,
tax levy, attachment or lien against it or any of its property and not
remedied within ten (10) days;
(d) Seller or any Guarantor becomes insolvent or unable to pay its
debts in a timely manner for at least ten (10) calendar days;
(e) Seller or any Guarantor makes a general assignment for the benefit
of its creditors, a receiver or trustee is appointed for all or a
substantial portion of Seller's or Guarantor's respective assets, or a
bankruptcy, insolvency, liquidation or reorganization proceeding is
commenced by or against Seller or Guarantor in any state or federal
court;
(f) Seller challenges the validity of the true Sale of the Premium
Receivables hereunder or the priority, validity or enforceability of
any ownership interest granted by Seller in the Conveyed Property to
WPAC;
(g) Seller ceases to operate its business, or is dissolved or
terminated for any reason;
(h) Any Guarantor dies or any Guarantor fails to perform any
obligation to WPAC under this Agreement or challenges the validity of
its guaranty provision of this Agreement or provides WPAC with notice
of its intent to terminate any guaranty provision of this Agreement to
WPAC or its future obligations under such guaranty provisions for any
reason; or
(i) WPAC, in good faith, believes that Seller's or any Guarantor's
ability to pay and perform any of the obligations described in this
Agreement or any related documents is or shall be impaired or
otherwise deems itself reasonably insecure for any reason and provides
ten (10) day prior written notice thereof to Seller.
(j) An event of default by the Servicer not cured within the permitted
remedy period as stated under the provisions of the Servicing
Agreement.
Section 17. Remedies. In the event of Seller's default under this
Agreement, WPAC may exercise one or more of the following cumulative remedies
without notice or demand of any kind:
(a) terminate immediately any of its remaining obligations under this
Agreement;
(b) collect all amounts due from Seller to WPAC under this Agreement
or any other agreement, together with interest thereon at the Default
Rate until paid, with or without resorting to legal process;
(c) change Seller's mailing address as it relates to the Conveyed
Properly only, open Seller's mail, endorse Seller's name on checks,
bills of exchange, notes, acceptances, money orders, drafts or other
documents or forms of payment and retain any proceeds of the Conveyed
Property;
(d) terminate any Servicing Agreement or lock box agreement pertaining
to the Conveyed Property and change such servicers and lock box
arrangements;
(e) notify Obligors to make payment on Premium Receivables Sold under
this Agreement directly to WPAC or its designee;
(f) enter Seller or any Affiliate's premises during normal business
hours and not less than 24 hours notice to take possession of any
Conveyed Property;
(g) require Seller, at its expense, to deliver and make available to
WPAC any Conveyed Property Sold to WPAC at a place reasonably
convenient to WPAC;
(h) commence a suit for the turnover or replevin of the Conveyed
Property;
(i) collect, compromise, settle, sell or otherwise dispose of any
Conveyed Property that Seller was required to, but did not, repurchase
from WPAC;
(j) set-off Seller's and any Guarantor's obligations owing to WPAC
under this Agreement any other written agreement or by operation of
law against any amounts owed by WPAC to such Persons under this
Agreement or any related documents, respectively, including, but not
limited to, moneys, instruments and other property deposited or
maintained with WPAC or any third party for the benefit of WPAC; and
(k) exercise all other rights available to WPAC under any other
present or future agreement or applicable law.
WPAC 's rights and remedies are cumulative and may be exercised together,
separately and in any order.
Section 18. Waiver. No party hereto shall be deemed to have waived any
right or remedy described in this Agreement unless either party has executed and
delivered to the other party a written waiver thereof. A waiver of a right or
remedy on one occasion shall not act as a waiver of that or any other right or
remedy on a future occasion. Without limiting the foregoing, either party's
delay in exercising any right or remedy shall not constitute a waiver of that or
any other right or remedy described in this Agreement.
Section 19. Counterparts/Facsimiles. This Agreement may be executed by
facsimile signature and in one or more counterparts, each of which when taken
together shall constitute one complete Agreement.
Section 20. Essence of Time. Seller and WPAC agree that time is of the
essence.
Section 21. Assignment. WPAC shall be entitled to assign or xxxxx x Xxxx on
its interests hereunder, and the obligations, rights and remedies under this
Agreement to any Person in its sole discretion. Such Persons shall be deemed to
be third party beneficiaries hereunder and shall be entitled to rely on the
provisions hereof for the benefit of WPAC including, without limitation, the
indemnification provisions of Section 15. Any assignee or designee of WPAC shall
be entitled to enforce the provisions of this Agreement against Seller. Seller
shall not be entitled to assign or grant a security interest in any of its
obligations, rights or remedies under this Agreement to any Person without the
prior written consent of WPAC, or its assignees or designees, which consent may
be withheld in the sole discretion of WPAC. No person shall be deemed a third
party beneficiary of Seller.
Section 22. Standard of Care. WPAC shall not be liable to Seller for any
action taken or not taken by WPAC in good faith in connection with this
Agreement. WPAC shall not be deemed a fiduciary of Seller or be required to
perform any of Seller's obligations to WPAC or any third party under any
circumstances.
Section 23. Costs and Expenses/Attorneys Fees.
(a) Seller shall pay all costs and expenses incident to the
performance of its obligations under this Agreement;
(b) Seller shall pay on demand WPAC's reasonable attorneys' fees and
other costs and expenses incurred before tria1, at trial and on appeal
in the enforcement (whether through negotiations, legal proceedings or
otherwise) of this Agreement, including without limitation, all costs,
expenses and attorneys fees incurred by WPAC in connection with any
bankruptcy or insolvency proceeding involving the Seller.
Section 24. Notices. All notices, requests, consents and other
communications hereunder shall be in writing and shall be delivered personally
or mailed by first-class registered and certified mail, postage prepaid or by
telephonic facsimile transmission, electronic mail or overnight delivery
service, postage prepaid, to the parties at the following addresses or such
other addresses that they may provide each other with written notice of in the
future:
If to Seller: Payments, Inc.
0000 Xxxxxxxxx Xxxxxxxx
Xxxx Xxxxxxx, XX 00000
Attn: Xxx Xxxxxxxxx
Facsimile: (000) 000-0000
If to WPAC, Inc.: 000 Xxxxxxxxxxx Xxxxxx, Xxxxx 0000X
Xxxxxx, Xxxxxxxx 00000
Attn: President
Facsimile: (000) 000-0000
Such notices shall be effective upon the earlier of (i) receipt or (ii) two (2)
Business Days after the confirmed delivery by overnight delivery service.
Section 25. Successors and Assigns. Except as provided in Section 21 hereof
limiting assignments by Seller, this Agreement shall inure to the benefit of and
be binding upon the successors, assigns, trustees, receivers, heirs and personal
representatives of the parties hereto.
Section 26. Severability. Any part, provision, agreement, representation,
warranty or covenant of this Agreement which is prohibited or unenforceable or
is held to be void or unenforceable in any jurisdiction shall, as to such
jurisdiction, be ineffective to the extent of such prohibition or
unenforceability without invalidating the remaining provisions hereof, and any
such prohibition or unenforceability in any jurisdiction shall not invalidate or
render unenforceable such provision in any other jurisdiction. To the extent
permitted by applicable law, the parties waive any provision of law which
prohibits or renders void or unenforceable any provision hereof. If the
invalidity of any part, provision, agreement, representation, warranty or
covenant of this Agreement shall deprive any party of the economic benefit
intended to be conferred by this Agreement, the parties shall negotiate in good
faith to develop a structure the economic effect of which is as nearly as
possible the same as the economic effect of the transactions contemplated
hereunder without regard to such invalidity.
Section 27. Force Majeure. Neither party shall be liable for damages due to
delay or failure to perform any obligation under this Agreement if such delay or
failure results directly or indirectly from circumstances beyond the control of
such party. Such circumstances shall include, but shall not be limited to, acts
of God, acts of war, civil commotions, riots, strikes, lockouts, acts of the
government, disruption of telecommunications transmissions accident, fire, water
damages, flood, earthquake or other natural catastrophes.
Section 28. Governing Law. THIS AGREEMENT AND ANY RELATED DOCUMENTS SHALL
BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE SUBSTANTIVE LAWS OF THE
STATE OF COLORADO WITHOUT REGARD TO CONFLICT OF LAW PROVISIONS.
Section 29. Jurisdiction and Waiver of Certain Damages. THE PARTIES HERETO
HEREBY IRREVOCABLY SUBMIT TO THE EXCLUSIVE JURISDICTION OF THE COURTS OF THE
STATE OF COLORADO AND THE UNITED STATES DISTRICT COURT OF COLORADO IN ANY ACTION
OR PROCEEDING ARISING OUT OF OR RELATING TO THIS AGREEMENT AND THE PARTIES
HEREBY IRREVOCABLY AGREE THAT ALL CLAIMS IN RESPECT OF SUCH ACTION OR PROCEEDING
MAY BE HEARD AND DETERMINED IN SUCH COURTS. THE PARTIES HEREBY IRREVOCABLY
WAIVE, TO THE FULLEST EXTENT IT MAY EFFECTIVELY DO SO, THE DEFENSE OF AN
INCONVENIENT FORUM TO THE MAINTENANCE OF SUCH ACTION OR PROCEEDING AND
IRREVOCABLY CONSENT TO THE SERVICE OF ANY SUMMONS AND COMPLAINT AND ANY OTHER
PROCESS BY THE MAILING OF COPIES OF SUCH PROCESS TO THEM AT THEIR RESPECTIVE
ADDRESSES AS SPECIFIED IN THIS AGREEMENT. THE PARTIES HEREBY
AGREE THAT A FINAL JUDGMENT IN ANY SUCH ACTION OR PROCEEDING SHALL BE CONCLUSIVE
AND MAY BE ENFORCED IN OTHER JURISDICTIONS BY SUIT ON THE JUDGMENT OR IN ANY
OTHER MANNER PROVIDED BY LAW. NOTHING IN THIS SECTION SHALL AFFECT THE RIGHT OF
WPAC TO SERVE LEGAL PROCESS IN ANY OTHER MANNER PERMITTED BY LAW OR PRECLUDE THE
ENFORCEMENT OF ANY JUDGMENT OR ORDER OBTAINED IN SUCH FORUM OR THE TAKING OF ANY
ACTION UNDER THIS AGREEMENT TO ENFORCE SAME IN ANY OTHER APPROPRIATE FORUM OR
JURISDICTION. NOTWITHSTANDING ANYTHING CONTAINED IN THIS AGREEMENT TO THE
CONTRARY, NO CLAIM MAY BE MADE BY THE SELLER AGAINST WPAC OR ANY OF ITS
AFFILIATES FOR ANY LOST PROFITS, OR ANY SPECIAL, INDIRECT OR CONSEQUENTIAL
DAMAGES IN RESPECT TO ANY BREACH OR WRONGFUL CONDUCT (OTHER THAN WILLFUL
MISCONDUCT CONSTITUTING FRAUD) ARISING OUT OF OR IN ANY WAY RELATED TO THE
TRANSACTIONS CONTEMPLATED HEREUNDER.
Section 30. Entire Agreement. This Agreement (including any Servicing
Agreement between Seller and WPAC ) contains the complete and integrated
understanding and agreement between the parties and their respective Affiliates
pertaining to the subject matter hereof, and all other prior and contemporaneous
discussions, negotiations, agreements and proposal letters, written or oral,
express or implied shall be of no force and effect.
Section 31. Waiver of Jury Trial. EACH OF THE PARTIES HEREBY IRREVOCABLY
WAIVES ALL RIGHT TO A TRIAL BY JURY IN ANY ACTION, PROCEEDING OR COUNTERCLAIM
ARISING OUT OF OR RELATING TO THIS AGREEMENT.
IN WITNESS WHEREOF, the undersigned duly authorized officers of the parties
have executed this Agreement as of the day first stated above.
PAYMENTS, INC.
By: /s/ Xxxxxxx X. Xxxxxxxxx
-------------------------
Xxxxxxx X. Xxxxxxxxx
Title: Vice President
FLATIRON CREDIT COMPANY, INC.
By: /s/ Xxxxx X. Xxxxx
-------------------------
Name: Xxxxx X. Xxxxx
Title: President
WESTCHESTER PREMIUM
ACCEPTANCE CORP.
By:
Name:
Title:
AGREED TO WITH RESPECT TO SECTION 6(b):
DCAP GROUP, INC.
By: /s/ Xxxxxx X. Xxxxxxxxx
Name: Xxxxxx X. Xxxxxxxxx
Title: Chairman
PROCEEDING OR COUNTERCLAIM ARISING OUT OF OR RELATING TO THIS
AGREEMENT.
IN WITNESS WHEREOF, the undersigned duly authorized officers of the parties
have executed this Agreement as of the day first stated above.
PAYMENTS, INC.
By:________________________
Name:______________________
Title: ____________________
FLATIRON CREDIT COMPANY, INC.
By /s/ Xxxxx X. Xxxxx
---------------------
Name: Xxxxx X. Xxxxx
Title: President
WESTCHESTER PREMIUM
ACCEPTANCE CORP.
By /s/ Xxxxxx X. Xxxxxx
-----------------------
Name: XXXXXX X. XXXXXX
----------------
Title: VICE PRESIDENT
AGREED TO WITH RESPECT TO SECTION 6(b):
-----------------------------
Xxxxx X. Xxxx
-----------------------------
Xxxxxxx X. Xxxxxxxxx
SCHEDULE A
This Schedule A forms a part of the Sale and Assignment Agreement
("Agreement") to which it is attached and is incorporated therein.
Section A-1. Definitions. The following definitions shall have the
following meanings:
"Agent Statement Unpaid Balance Trigger" shall mean an Agent Statement
Unpaid Balance in excess of $100 that remains unpaid by the Agent for a period
in excess of 90 days.
"Down Payment Requirement" means (i) twelve and one-half percent (12.5%) in
the case of a twelve (12) month Premium Finance Agreement policy, and (ii)
twenty-five percent (25%) in the case of a six month Premium Finance Agreement
policy.
"Effective Date" means the Effective Date of this Agreement which shall be
____________________ 1999.
"Guarantor" means, collectively, DCAP Group, Inc., a Delaware corporation
whose headquarters are located at 0000 Xxxxxxxxx Xxxxxxxx, Xxxx Xxxxxxx, Xxx
Xxxx, Xxx Xxxx 00000.
"Loss Ratio Trigger" shall be one percent (1.0%).
"Maximum Purchase Commitment" shall be $3,000,000.
"Purchase Premium" The Purchase Premium shall be equal to the following
amount:
(a) for Premium Finance Agreements re1ating to the financing of annual
automobile insurance policies, the Purchase Premium shall be payable as
follows:
Down Payment Level Base Amount Paid
------------------ ----------------
15% and higher $20.00
12.50% - 14.99% $20.00*
Less than 12.50% -0-
* For a down-payment level of 12.50% - 14.99%, it is
agreed that at the sixty (6th) month following the
Closing, Flatiron will analyze the performance of
such contracts and if unsatisfactory to Flatiron,
then Flatiron and Seller shall mutually agree on such
other Base Amount. If agreement is not reached, then
Flatiron may notify Seller that beginning on the
225th day following the Closing, WPAC will pay $10.00
for Eligible Contracts with a down payment falling in
the 12.50% to 14.99% range.
No Purchase Premium will be due or paid for Contracts relating
to (i) Additional Premium financing on an existing financed
insured (ii) Amounts Financed less than
$500, or (iii) for any insured who is financed within
forty-five (45) days of a prior "no-pay" cancellation of that
insured.
For Prior Month Walk-In Reduction to Per Contract
Percentage Origination Fee
0-12.5% -0-
12.5%-25.0% ($5.00)
25.1% and higher ($10.00)
This calculation will not start until 60 days after the closing of the
transaction. The adjustment to the contract price, if applicable, will
be calculated every 30 days thereafter and apply to the following
month's origination.
(b) for 6-month Premium Finance Agreements relating to the financing
of automobile insurance, the Purchase Premium shall be $10.00.
"Repurchase Price" means the sum of (a) the lesser of (i) the Up-front
Purchase Price paid to Seller by FPF for the Premium Receivables and other
related Conveyed Property or (ii) the amount owing by the Obligors at the time
of repurchase under the applicable Premium Finance Agreement(s) with respect to
the Repurchase Property, plus (b) interest due under the Premium Receivables
from the date that FPF advanced funds to purchase the Premium Receivables less
interest payments received by FPF on the Premium Receivables to the date of
payment by Seller of the Repurchase Price, plus (c) the Purchase Premium paid to
Seller, if any.
"Tangible Net Worth" shall not be the greater of $25,000 or the minimum
amount required by the New York Department of Banking.
"Term" means the Term of this Agreement commencing on the Effective Date
and, if not earlier terminated as provided in this Agreement, terminating on
September 1, 2002.
"Up-front Purchase Price" shall mean 100% of the Amount Financed.
Section A-2. Additional Provision. The following Additional Provisions
shall be a part of this Agreement.
Schedule B
Concentration Limits
Each Eligible Insurance Company shall be subject to the following concentration
test limits:
A. For Eligible Insurance Companies admitted and covered by a state guaranty
association acceptable to WPAC, the following allocations shall apply:
Insurance Company's Maximum % of Eligible
A.M. Contracts Outstanding
Best Rating per Carrier
"A-" or better no limit
"B++" or "B+" 25.0%
"B" or "B-" 17.5%
all others* 5.00%
*Note: Under "All others" above, "C", "D", "E", "F", "N/F", "S"
are not eligible.
B. For companies not covered by a state guaranty association acceptable to
Flatiron, no more than 15% of the Contracts outstanding may be written
by such insurance companies and the following per company allocations
shall apply:
Insurance Company's Maximum % of Eligible
A.M. Contracts Outstanding
Best Rating per Carrier
"A-" or better 7.5%
"B++" or "B+" 5.0%
WPAC shall provide notice to Seller when any insurance company concentration
levels are nearing or exceed the above criteria.
