AMENDED SERVICING AGREEMENT
THIS AGREEMENT is made as of the 1st day of January, 1997, by and between
STERLING FINANCIAL SERVICES, INC., a Florida corporation (the "Servicing
Company") and STERLING FINANCIAL SERVICES OF FLORIDA - I, INC., a Florida
corporation ("Sterling").
RECITALS:
WHEREAS, Sterling is engaged in the business of providing financial
services to the sub-prime mobile home industry, including, among other things,
originating, purchasing and refinancing for its own account retail mobile home
installment sale contracts (the "Contracts") created in connection with the
financing of primarily used as well as some new mobile homes (the "Homes");
WHEREAS, the Servicing Company is engaged in the business of, among other
things, originating, acquiring and servicing loans and accounts; and
WHEREAS, Sterling desires to retain the Servicing Company to provide all
services in connection with Contract origination or acquisition and servicing
(the "Services"), and the Servicing Company agrees to provide such Services in
accordance with the terms of this Agreement.
NOW, THEREFORE, in consideration of the mutual promises and covenants
contained herein and for other good and valuable consideration, the receipt and
adequacy of which are hereby acknowledged, the parties hereto agree as follows:
1. DUTIES AND SERVICES. Sterling hereby retains the Servicing Company and
the Servicing Company hereby agrees to render the Services upon the terms and
conditions hereinafter set forth:
a. The Servicing Company hereby agrees to provide to Sterling the
Services set forth on Schedule A attached hereto.
b. The Servicing Company agrees to operate within the guidelines
established by Sterling from time to time.
c. No funds of Sterling shall be deposited or kept in any account
commingled with funds of the Servicing Company or any other person or
entity.
2. RIGHTS. Nothing herein shall grant any direct or indirect ownership
rights to any aspect of the Services to the Servicing Company.
3. TERM. The initial term of this Agreement shall be January 1,
1997,through June 30, 2002 (the "Term"). This Agreement shall be extended
thereafter in the sole and absolute discretion of Sterling, upon such terms and
conditions as shall be mutually agreed. Either Sterling or the Servicing Company
may voluntarily elect to terminate this Agreement without cause, for any reason;
provided that the terminating party must deliver to the other party written
notice of such intention to terminate not less than fifteen (15) days prior to
the date of such termination.
4. COMPENSATION. So long as the Servicing Company is in full compliance
with all terms and conditions of this Agreement, Sterling will pay the Servicing
Company for services hereunder, as follows:
a. Sterling will pay the Servicing Company an amount equal to all
incurred expenses of the Servicing Company ("Actual Cost") plus twenty
percent(20%) of Actual Cost for services rendered. If the Servicing
Company provides similar services to future Affiliated Entities, Sterling
will pay the Servicing Company as follows: (i) any acquisition or
disposition of cash expenditures, such as attorneys' fees and court costs,
will be paid by the entity which owns the Contract to which such expenses
relate (the "Direct Expenses"); and (ii) an amount equal to Actual Cost
less Direct Expenses will be paid directly by each entity based upon the
ratio of the total number of Contracts held by each entity to the total
number of Contracts held by all entities.
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x. Xxxxxxxx shall reimburse the Servicing Company for reasonable
travel expenses actually incurred by the Servicing Company in the
furtherance of Sterling's business, provided said expenses have been
approved in advance by Sterling and proper itemization of said
expenses is furnished to Sterling by the Servicing Company. All such
expenditures shall be subject to the reasonable control of Sterling.
5. RELATIONSHIP. The Servicing Company is an independent contractor with
respect to this Agreement. This Agreement is not intended to, and shall not be
construed to, create a joint venture or partnership between the said parties or
constitute either of them as agents of the other. Except as otherwise expressed
and provided for in this Agreement or otherwise expressly agreed in writing by
the parties, neither party shall have any power or authority to bind or commit
the other party. The Servicing Company assumes full responsibility for the
actions of any of its employees, officers, directors, independent contractors
or agents including negligence, malfeasance, nonfeasance or other misconduct by
such persons or entities. The Servicing Company shall pay timely and in full
all taxes, federal, state, or local, due in connection with any compensation
payable hereunder.
6. AUTHORITY. Each party represents and warrants that it has the full
right, power and authority to enter into this Agreement on the terms and
conditions hereof and that the parties executing this Agreement on behalf of
each party have been duly authorized to do so.
7. INDEMNIFICATION. The Servicing Company agrees to indemnify, defend and
hold Sterling harmless from any liabilities, claims, losses, damages, demands
or expenses, including reasonable attorneys' fees, that may be made by anyone
due to a breach of any representation, warranty or agreement of the Servicing
Company contained in or made pursuant to this Agreement. Sterling agrees to
indemnify, defend and hold the Servicing Company harmless from any liabilities,
claims, losses, damages, demands or expenses, including reasonable attorneys'
fees, that may be made by anyone due to a breach of any representation,
warranty or agreement of Sterling contained in or made pursuant to this
Agreement.
8. NOTICES. All notices, requests, consents, and other communications
under this Agreement shall be in writing and shall be deemed to have been
delivered on the date personally delivered or the date mailed, postage prepaid
by certified mail, return receipt requested, or faxed and confirmed, if
addressed to the respective parties as follows:
If to the Servicing Company: Sterling Financial Services, Inc.
00000 Xxxxx Xxxxxxx Xxxxxx Xxxxx, XX
00000
If to Sterling: Sterling Financial Services of Florida- I, Inc.
00000 Xxxxx Xxxxxxx Xxxxxx Xxxxx, XX
00000
Either party may change its address for the purpose of receiving notices,
demands and other communications by giving written notice to the other party of
the change.
9. SUCCESSORS AND ASSIGNS. All of the terms and conditions of this
Agreement shall be binding upon and shall inure to the benefit of the parties
and their respective successors and assigns. Neither party may assign this
Agreement without the prior written consent of the other.
10. NO WAIVER. The failure of either party to object to a breach of any
term or condition of this Agreement shall not be deemed a waiver of any right
or remedy the non-breaching party may have arising out of the breach, nor shall
it be deemed a waiver of its right to subsequently enforce the term or
condition. Each remedy under this Agreement is cumulative and shall be in
addition to all other rights or remedies existing in this Agreement or in law,
equity or bankruptcy.
11. SEVERABILITY. If any clause of this Agreement is determined to be
invalid or unenforceable, the validity or enforceability of any other
provisions hereof will not be affected thereby.
12. NUMBER AND GENDER. In this Agreement whenever the context so requires,
the masculine gender includes the feminine and/or neuter, and vice versa, and
the singular number includes the plural.
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13. COUNTERPARTS. This Agreement may be executed in counterparts, and any
number of counterparts signed in the aggregate by the parties hereto shall
constitute but one single original Agreement.
14. THE PARTIES HERETO HEREBY KNOWINGLY, VOLUNTARILY, ANDINTENTIONALLY
WAIVE THE RIGHT TO A TRIAL BY JURY IN RESPECT TO ANY LITIGATIONARISING OUT OF OR
IN CONNECTION WITH THIS AGREEMENT AND ALL PAST, PRESENT ANDFUTURE AGREEMENTS
INVOLVING THE PARTIES. THIS WAIVER OF TRIAL BY JURY PROVISIONIS A MATERIAL
INDUCEMENT FOR THE PARTIES TO ENTER INTO THIS AGREEMENT.
15. COMPLIANCE WITH LAWS. The Servicing Company will comply with all
federal and state laws, rules and regulations relating to any of its
responsibilities and duties with Sterling and will not violate any such laws,
rules and regulations.
16. VOLUNTARY AGREEMENT. The Servicing Company represents that it has not
been pressured, misled or induced to enter this Agreement based upon any
representation by Sterling not contained herein.
17. PROVISIONS TO SURVIVE. The parties hereto acknowledge that many of the
terms and conditions of this Agreement are intended to survive the term of this
Agreement. Therefore, any terms and conditions that are intended by the nature
of the promises or representations to survive the term of this Agreement shall
survive the term of this Agreement regardless of whether such provision is
expressly stated as so surviving.
18. MERGER. This Agreement represents the entire Agreement between the
parties and shall not be subject to modification or amendment by any oral
representation, or any written statement by either party, except for a dated
written amendment to this Agreement signed by an authorized officer of the
Servicing Company and an authorized officer of Sterling.
19. VENUE AND APPLICABLE LAW. This Agreement shall be enforced and
construed in accordance with the laws of the State of Florida, and venue for any
action or arbitration under this Agreement shall be Hillsborough County,
Florida.
20. ASSIGNMENT. This Agreement shall not be assignable by either party
without the written consent of the other party. This Agreement shall be binding
upon and inure to the benefit of the parties hereto and their respective heirs,
personal representatives, successors and assigns.
21. ARBITRATION. Any controversy or claim arising out of or relating to
this Agreement or any provision thereof shall be settled by binding arbitration
in a manner agreed upon by the parties, or if not otherwise agreed upon, then in
accordance with the rules of the American Arbitration Association in effect at
that time. Judgment upon the award so rendered may be entered in any court
having competent jurisdiction there over. The costs of the arbitration shall be
borne by the non-prevailing party, including the cost of experts, evidence and
legal counsel (and all employees and assistants) of the prevailing party.
22. DEFAULT AND REMEDIES. a. It shall be an event of default under this
Agreement upon the happening of any of the following events (an "Event of
Default"):
i.If the Corporation fails to timely remit to Servicing Company any
Compensation or other amounts due under this Agreement which are due and
payable and such failure to pay continues for a period of ten days form
the date of the mailing or delivery of an invoice from Servicing Company.
ii. If any representation or warranty of the Corporation in this
Agreement is false, incorrect or misleading in any material respect, or if
any representation or warranty contained in any reports, documents,
certificates or other papers delivered to Servicing Company from time to
time is false, incorrect or misleading in any material respect, and is not
cured within 30 days of written notice thereof to the Corporation.
iii. If the Corporation breaches or fails to perform or observe any
obligation or condition to be performed or observed by it under this
Agreement in any material respect and such breach or default is not cured
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within 30 days after Servicing Company has given the Corporation written
notice demanding that such breach or default be cured.
iv. If any representation or warranty of Servicing Company in this
Agreement is false, incorrect or misleading in any material respect, or if
any representation or warranty contained in any reports, documents,
certificates or other papers delivered to the Corporation from time to
time is false, incorrect or misleading in any material respect and is not
cured within30 days of written notice thereof to Servicing Company;
v. If Servicing Company breaches or fails to perform or observe any
obligation or condition to be performed or observed by it under this
Agreement in any material respect and such breach or default is not cured
within 30 days after the Corporation has given Servicing Company written
notice demanding that such breach or default be cured.
vi. If Servicing Company fails, in any material respect, to perform
its obligations under this Agreement in conformance with industry
standards applicable to servicing of similar Accounts and such failure is
not cured within 30 days after the Corporation has given Servicing Company
written notice demanding such failure be cured.
a.Upon the happening of an Event of Default, after the expiration of any
opportunity to cure such Default, the non-defaulting party may terminate this
Agreement by notice in writing to the defaulting party sent by facsimile or
certified mail, postage prepaid, or by hand delivery. In the event of
termination, Servicing Company agrees to make available to the Corporation such
computer records as are reasonably required to effect an orderly conversion to
another computer system.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement effective
as of the day and year first above written.
"Servicing Corporation"
STERLING FINANCIAL SERVICES, INC.,
a Florida corporation
By: ------------------------------------------
Xxxxxxx X. Xxxxxx
President
"Sterling"
STERLING FINANCIAL SERVICES OF
FLORIDA - I, INC., a Florida corporation
By: ------------------------------------------
Xxxxxxx X. Xxxxxx
President
SCHEDULE A
ORIGINATION
The Corporation intends to originate Contracts, as opposed to purchasing
Contracts at a discount from Dealers or others. The Corporation will contact
borrowers as well as Park owners and Dealers directly or by telephone or
mailing to advise them of the Corporation's program for Contract origination.
It is not anticipated that the Corporation will be dependent upon one or a few
Park owners or Dealers for identifying potential borrowers under Contracts
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originated by the Corporation. In addition, the Corporation may use print
advertising directed at individual borrowers. It is anticipated that a Park
owner, Dealer or potential borrower will contact the Corporation regarding the
availability of financing, and the Corporation will make a credit application
available directly to the borrower.
When the credit application from the borrower is received, an investigator
will review the application and obtains the applicant's credit bureau and other
information.
Contract origination guidelines include the following minimum acceptable
criteria:
- Employment history - at least six months on the job;
- Income - depends on the amount of the loan and the debt to income ratio
(see below)of the borrower;
- Time at residence - at least one year at current residence;
- Debt to income ratio - personal debt cannot exceed 50% of the borrower's
net income;
- Bankruptcy - all debts must have been fully discharged at least one year
prior to application for the loan;
- Child support - if the borrower is paying child support, it will be
treated as a personal debt and factored into the debt to income ratio; if
the borrower is receiving child support, such income will only be
considered if court mandated;
- Repossessions - must have occurred at least one year prior to application
for the loan;
- Liens/judgments - will be decided on a case-by-case basis, depending on
the type of lien or judgment, the amount involved and the age thereof;
- Previous delinquencies, collections and charge-offs - will be decided on
a case-by-case basis with consideration taken for mitigating
circumstances, such as divorce, disability, extended illness or layoff
due to downsizing; and 8 9
- Co-buyers and co-signers - will also be subject to the minimum acceptable
criteria set forth above.
There are no fixed criteria pursuant to which material deviation these
guidelines will be permitted. However, no Contract will be originated to a
borrower deviating from these guidelines for which there is not an increased
down payment or a co-signer meeting the guidelines, or both. The additional
down payment required will increase with the increase in deviation from the
guidelines, although there is no fixed formula for determining the amount of
increased down payment required.
In addition, the Corporation will not finance more than 130% of National
Automobile Dealers Association (NADA) manufactured home book retail value. It
will not finance Homes manufactured before 1980. Contracts under$10,000 will
have no more than a 10-year term, and Contracts between $10,000and $25,000 will
not have more than a 15-year term. The Corporation will not finance amounts in
excess of $25,000. See "Business - Consumer Finance Laws and Regulations."
When this process is complete, an application will be approved
unconditionally or with conditions, such as adjustments to the interest rate,
down payment, maximum loan to value, co-maker or other significant conditional
criteria. It is anticipated that no more than ten percent (10%) of the
Contracts originated will deviate materially from these guidelines, although
there is no specific limitation imposed thereon.
Prior to closing the funding, the Corporation reviews the financing to
determine the following: (i) all required documentation has been included,
(ii)the math is correct, (iii) the regulatory requirements have been
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satisfied,(iv) the amount financed does not exceed the maximum loan allowed,
and (v) any conditions imposed have been satisfied. The Corporation will
contact the insurance carrier to confirm insurance.
SERVICING
Billing. The Servicing Company generates bi-monthly statements which are
sent to the borrower.
Collections.The Corporation has established certain collection guidelines,
which guidelines will not necessarily be followed in all cases and which are
subject to modification at any time.
When a delinquency occurs, a Collector will make a call by the first day
of the delinquency. By the third day of delinquency, if the account has not
been brought current, the Collector will personally visit the delinquent
borrower. If the borrower is unable to make all required payments on a current
basis, the Collector may make reasonable payment arrangements to cure the
delinquency. If all of these collection processes are not successful, there
possession process commences immediately.
Repossessions and Resale Department. Either the borrower voluntarily
agrees to vacate the Home, or an attorney is contacted by the Corporation to
effect an involuntary repossession. All costs associated with the repossession
are an obligation of the borrower. To effect an involuntary repossession, in
general, the borrower is first given written notice of intent to repossess, and
a period of time, generally five days, to cure all defaults. If the defaults
are not cured within said time period, a complaint is filed and a judgment
obtained. After the judgment is obtained, a writ of possession is obtained and
given to the appropriate law enforcement agencies, who evict the borrower from
the Home. The Home will be renovated as necessary and sold in its then current
location, if possible, or moved to a Dealer's lot or another Park for resale.
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