SERVICING AGREEMENT dated as of April ___, 2011 by and between DURA ROCK LF TRUST (for and with respect to its Rochdale High Yield Advances Fund series) as the Purchaser and SETTLEMENT FUNDING, LLC d/b/a PEACHTREE SETTLEMENT FUNDING as the Servicer
Exhibit 2(k)(9)
dated as of April ___, 2011
by and between
DURA ROCK LF TRUST
(for and with respect to its Rochdale High Yield Advances Fund series)
as the Purchaser
and
SETTLEMENT FUNDING, LLC d/b/a PEACHTREE SETTLEMENT FUNDING
as the Servicer
This SERVICING AGREEMENT (this “Agreement”), dated as of April ____, 2011, is entered into by and between DURA ROCK LF TRUST, a Delaware statutory trust for and with respect to its Rochdale High Yield Advances Fund series (the “Purchaser”), and SETTLEMENT FUNDING, LLC d/b/a PEACHTREE SETTLEMENT FUNDING, a Georgia limited liability company, as servicer hereunder (in such capacity, the “Servicer” or, in its individual capacity, “Settlement Funding”).
WHEREAS, pursuant to that certain Sale and Purchase Agreement, dated as of the date hereof (the “Sale and Purchase Agreement”), by and between Peachtree Funding Northeast, LLC, a New York limited liability company (the “Seller”), and the Purchaser, the Purchaser agrees to purchase from the Seller all of the Seller’s rights, titles and interests in the Purchased Assets (as defined in the Sale and Purchase Agreement); and
ARTICLE I
“Collection Account”: The segregated non-interest bearing trust account number 00000000 established by the Servicer with the Collection Account Bank, for and on behalf of the Issuer, which shall be named “DR SPE, LLC, Collection Account”.
“Collection Account Agreement”: That certain Account Establishment Agreement dated April ____, 2011, executed by and among the Servicer, the Collection Account Bank, the Rochdale Fund and the Issuer, with respect to the Collection Account.
“Collection Account Bank”: Xxxxx Fargo Bank, National Association.
“Credit and Collection Policy”: The standard credit and collection policy of Servicer.
“DACA”: That certain Deposit Account Control Agreement dated April ___, 2011, executed by and among the Servicer, the Collection Account Bank, the Rochdale Fund and the Issuer.
“GAAP”: Generally accepted accounting principles as applied in the United States on a consistent basis.
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“Issuer”: DR SPE, LLC, a Delaware limited liability company.
“Lockbox”: Each of the lockboxes described on Exhibit C or such other lockbox established with the consent of the Purchaser.
“Lockbox Account”: Each of the lockbox accounts described on Exhibit C, or such other lockbox account established with the Seller’s receipt of the prior written consent of the Purchaser.
“Lockbox Bank”: The Bank of New York Mellon, its successors, assigns and replacements.
“Monthly Report”: As defined in Section 5.1.
“Note”: That certain 9.25% Fixed Rate Note, Series 2011-A, dated on or about the date of this Agreement, executed by the Issuer.
“Note Payment Date”: The 15th day of each January, April, July and October, or if such date is not a Business Day, the next succeeding Business Day.
“Payment Date”: The 15th day of each calendar month, or if such 15th day is not a Business Day, the next succeeding Business Day.
“Rochdale Fund”: Rochdale High Yield Advances Fund LLC, a Delaware limited liability company.
“Servicer Advance”: As defined in Section 5.4.
“Servicing Fee”: With respect to any Monthly Period, the fee payable to the Servicer for services rendered during such Monthly Period, which shall be equal to the quotient of (i) the product of (A) the aggregate Outstanding Balances of all Litigation Payments attributable to the Underlying Contracts then owned by Purchaser as of the last day of the preceding month, times (B) the Servicing Fee Rate, divided by (ii) twelve (12).
“Servicing Fee Rate”: 0.50% per annum.
“SUBI Supplement”: That certain SUBI Supplement (Rochdale High Yield Advances Fund) to the Trust Agreement, dated April ___, 2011, by and among Peach Holdings, LLC, a Delaware limited liability company, and Xxxxx Fargo Bank, National Association.
“Trust Agreement”: That certain Trust Agreement of Dura Rock LF Trust, a Delaware statutory trust, dated as of March 21, 2011, by and among Peach Holdings, LLC, a Delaware limited liability company, Xxxxx Fargo Bank, National Association and Xxxxx Fargo Delaware Trust Company, National Association.
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financial statements prepared, in accordance with GAAP in effect at the time of execution of this Agreement.
Section 1.4 Computation of Time Periods. In this Agreement, in the computation of a period of time from a specified date to a later specified date, the word “from” means “from and including” and the words “to” and “until” each mean “to but excluding”, and the word “within” means “from and excluding a specified date and to and including a later specified date”.
ARTICLE II
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provided to the Servicer describing such limitation. The Servicer may designate, delegate to, appoint or subcontract to any subservicer to perform the Servicer’s duties and obligations hereunder without the Servicer’s receipt of a prior written consent of the Purchaser; provided, that any such delegation or subcontract shall be at the Servicer’s sole expense and the Servicer shall remain fully liable for the performance of such servicing, administration or collection obligations notwithstanding any such subcontract or delegation.
(a) The Servicer has established and shall maintain or cause to be maintained (i) the Lockbox Account with the Lockbox Bank and (ii) the Collection Account, for and on behalf of the Issuer, with the Collection Account Bank, pursuant to the Collection Account Agreement.
(b) The Seller shall, on behalf of the Purchaser, cause the Claimants to make all payments on all Underlying Contracts, unless and until repurchased pursuant to the terms and conditions of the Sale and Purchase Agreement, only (i) by check mailed to a Lockbox (such payments, upon receipt in such Lockbox, being referred to herein as “Mail Payments”), or (ii) by direct deposit to the Lockbox Account (such payments, upon deposit into the Lockbox Account, being referred to herein as “Direct Deposits”).
(c) By the close of business on each Business Day, the Servicer shall (i) cause the Lockbox Bank to deposit in the related Lockbox Account all Mail Payments received in the related Lockbox during such Business Day and on any preceding day that was not a Business Day and (ii) process all such Mail Payments and Direct Deposits on the date received by recording the amount of the payment received from the Claimant and the applicable Underlying Contract number. No later than the close of business on the next Business Day following the Business Day on which any Direct Deposits or Mail Payments are received, the Servicer shall deposit or cause to be deposited all such Direct Deposits and Mail Payments from the applicable Lockbox Account into the Collection Account.
(d) The name, location and account number of each of the Lockbox Account and the Collection Account are set forth on Exhibit C. The Purchaser shall possess all right, title and interest in and to all items and funds from time to time on deposit in each Lockbox and the Lockbox Account with respect to the Underlying Contracts and all proceeds thereof. The Issuer shall possess all right, title and interest in and to all items and funds from time to time on deposit in the Collection Account with respect to the Underlying Contracts and all proceeds thereof.
(e) To the extent that funds are available in the Collection Account, and to the extent not otherwise prohibited by the DACA, the Servicer shall provide directions to the Collection Account Bank to cause, on each Note Payment Date, a payment to be made on the Issuer’s behalf to the Rochdale Fund in the amount required to pay the quarterly payment of principal and interest due and owing by the Issuer to the Rochdale Fund for such quarter under and in accordance with the Note (which Collection Account Bank has no duty to determine or confirm and upon which directions the Collection Account Bank may conclusively rely). In addition, to the extent that funds are available in the Collection Account, the Servicer shall, to the extent not otherwise prohibited by the DACA, provide directions to the Collection Account Bank to cause, on each Payment Date, a payment to be made on the Issuer’s behalf to the Servicer of the
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servicing compensation set forth in Section 2.4, including the Servicing Fee, and all other fees and expenses arising under the Related Documents for the related Monthly Period in accordance with the terms and conditions of the Related Documents (which Collection Account Bank has no duty to determine or confirm and upon which directions the Collection Account Bank may conclusively rely).
ARTICLE III
The Servicer hereby makes the following representations and warranties to the Purchaser as of the date hereof and on each Monthly Report Date:
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Agreement and the SUBI Supplement shall not conflict with, result in any breach of any of the terms and provisions of, or constitute (with or without notice or lapse of time) a default under, the certificate of formation or operating agreement of the Servicer, or any material indenture, agreement, mortgage, deed of trust or other instrument to which the Servicer is a party or by which it or its properties are bound, or result in the creation or imposition of any Adverse Claim upon any of its properties pursuant to the terms of any such indenture, agreement, mortgage, deed of trust or other instrument, other than this Agreement, or violate in any material respect any law, order, rule or regulation applicable to the Servicer of any court or of any federal or state regulatory body, administrative agency or other governmental instrumentality having jurisdiction over the Servicer or any of its properties.
Section 3.5 No Consents. The Servicer is not required to obtain the consent of any other party or any consent, license, approval or authorization, or registration or declaration with, any Governmental Authority in connection with the execution, delivery, performance, validity or enforceability of this Agreement which has not already been obtained.
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the other Related Documents, the Trust Agreement or the SUBI Supplement to which it is a party or to be subject to review, suspension, revocation, non-renewal, or that would or could make the Seller not comply with any registration or licensing requirement in the first instance.
ARTICLE IV
From the date hereof until the earlier of (a) the date of the termination of this Agreement and (b) the last date on which such Person acts as Servicer, the Servicer hereby covenants that, without the prior written consent of the Purchaser (which consent shall not be unreasonably withheld, delayed or conditioned):
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(a) Except as permitted pursuant to Section 9.1, the Servicer will preserve and maintain its corporate or other existence, rights, franchises and privileges in the jurisdiction of its organization, and will qualify and remain qualified in good standing as a foreign limited liability company in each other jurisdiction where the failure to maintain such qualification could reasonably be expected to have a Material Adverse Effect.
(b) The Servicer will duly satisfy all obligations on its part to be fulfilled under or in connection with each Underlying Contract, under this Agreement, its Related Documents, the Trust Agreement or the SUBI Supplement will maintain in effect all qualifications required under applicable Law in order to properly service each Underlying Contract and will comply with all other requirements of applicable Law in connection with servicing each Underlying Contract.
(a) promptly, and in any event within five (5) Business Days, after a Responsible Officer becoming aware thereof, notice of the occurrence of any Servicer Default or event that, with the giving of notice or lapse of time or both, would constitute a Servicer Default, and, in the case of such a Servicer Default or incipient Servicer Default, the statement of the chief financial
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officer or president of the Servicer setting forth details of such occurrence or event and the action which the Servicer has taken and proposes to take with respect thereto;
(b) each Monthly Report or other statement or report described in Article V, at the times and in the manner therein described; and
(c) promptly, written notification to the Purchaser upon the Servicer’s discovery of any breach of any of the Servicer’s representations and warranties hereunder.
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Purchaser’s ownership interest or securing the rights and preserving the Adverse Claim of the Purchaser. The Servicer shall defend the right, title, and interest of the Purchaser (or permitted assignee) in, to and under any Underlying Contract against all claims of third parties claiming through or under the Servicer except for Permitted Adverse Claims.
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ARTICLE V
Section 5.1 Monthly Report. No later than 11:00 a.m. New York City time on each Determination Date, the Servicer shall deliver to Purchaser and the Rochdale Fund a report (the “Monthly Report”) in the form of Exhibit B related to all Underlying Contracts that are part of the Purchased Assets as of the last Business Day of the immediately preceding month setting forth (a) all information necessary to enable the reconciliation of all deposits to, and withdrawals from, the Collection Account for the related Monthly Period, Payment Date and Note Payment Date, if applicable, (b) each Charged-Off Litigation Payment attributable to any Underlying Contract as of the end of such month and (c) each Underlying Contract which was paid in full as of the end of such month.
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ARTICLE VI
ARTICLE VII
(a) the failure of the Servicer to remit any Collected Funds in accordance with Section 4.2 or any other failure by the Servicer to make any allocation of any material payment, or to make any payment, transfer or deposit, required to be made hereunder or pursuant to any of the other Related Documents, or to give instructions or notice to the Purchaser to make any such payment, transfer or deposit, on or before the date occurring two Business Days after the date on which the Servicer receives notice of such default;
(b) the failure of the Servicer duly to observe or perform in any respect any other covenant or agreement by it hereunder or pursuant to any of the other Related Documents or Transaction Documents, which failure (i) continues unremedied for thirty (30) days after the date upon which written notice of such failure shall have been given to the Servicer by the Purchaser and (ii) has, or could reasonably be expected to have, a Material Adverse Effect on the Purchaser or any material portion of the Eligible Underlying Contracts;
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(c) the determination that any representation, warranty or certification made or deemed to have been made by the Servicer under or in connection with this Agreement or any of the other Related Documents and/or the Transaction Documents was incorrect in any respect when made or deemed to have been made or remade, which incorrectness (i) continues unremedied for thirty (30) days after the earlier of the date upon which a Responsible Officer of such breaching party obtained actual knowledge of such failure and the date upon which written notice of such incorrectness shall have been given to the Servicer by the Purchaser and (ii) has, or could reasonably be expected to have, a Material Adverse Effect on the Purchaser or any material portion of the Eligible Underlying Contracts; or
(d) the occurrence of any Insolvency Event with respect to the Servicer.
ARTICLE VIII
(a) In the event the Purchaser shall have obtained a replacement servicer (such replacement servicer, which may be the Purchaser, a “Successor Servicer”) in connection with the termination or resignation of the Servicer (such replacement, a “Service Transfer”), as of the date of appointment of such Successor Servicer, without limitation, the Purchaser is hereby authorized, empowered and instructed (upon the failure of the Servicer to cooperate or to execute or deliver such documents or instruments) to execute and deliver, on behalf of the Servicer, as attorney-in-fact or otherwise, all documents and other instruments, and to do and accomplish all other acts or things necessary or appropriate to effect the purposes of such Service Transfer. The Servicer hereby agrees to cooperate, at its expense (other than with respect to out-of-pocket costs and expenses payable to third parties, which amounts shall be reimbursed by the Successor Servicer), with the Purchaser and such Successor Servicer in (i) effecting the termination of the responsibilities and rights of the Servicer to conduct servicing hereunder, including, without limitation, the transfer to such Successor Servicer of all authority of the Servicer to service on behalf of the Purchaser the Purchased Assets as provided under this Agreement, including such
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authority over all Collected Funds which shall on the date of such Service Transfer be held in trust by the Servicer for deposit to the Collection Account, or which have been deposited by the Servicer to the Collection Account, or which shall thereafter be received with respect to the Purchased Assets. The Servicer shall, at its expense (other than with respect to out-of-pocket costs and expenses payable to third parties), (x) as soon as practicable, and in any event within three (3) Business Days of such Service Transfer, assemble such documents, instruments and other records (including computer tapes and disks), which evidence the affected Purchased Assets, and which are necessary or desirable to collect payments on the affected Purchased Asset, and shall make the same available to the Successor Servicer or the Purchaser or its designee at a place selected by the Successor Servicer or the Purchaser and in such form as the Successor Servicer or the Purchaser may reasonably request, and (y) segregate all cash, checks and other instruments received by it from time to time constituting Collected Funds of the Purchased Assets in a manner reasonably acceptable to the Successor Servicer and the Purchaser, and, promptly upon receipt, remit all such cash, checks and instruments to the Successor Servicer or the Purchaser or its designee.
(b) On and after the receipt by the Servicer of a Termination Notice pursuant to Section 8.1 and upon a resignation by the Servicer pursuant to Section 9.2, the Servicer shall continue to perform all servicing functions under this Agreement, until (i) in the case of any such receipt, the date specified in such Termination Notice or otherwise specified by the Purchaser in writing, and (ii) in the case of any such resignation, until the earlier of (A) the effective date of the Service Transfer and (B) the date that is sixty (60) days after the date of such resignation notice.
ARTICLE IX
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a result of this Agreement or the interest conveyed hereunder or thereunder in the Purchased Assets. In addition, in no event shall “Servicer Indemnified Losses” include any consequential, special or punitive damages. The agreement contained in this Section 9.1 shall survive the termination of this Agreement and the Sale and Purchase Agreement and the payment of all amounts otherwise due hereunder and under the Sale and Purchase Agreement. Any Servicer Indemnified Losses payable under this Section 9.1 shall be paid by the Servicer to the applicable Indemnified Party within five (5) Business Days following such Indemnified Party’s written demand therefor, setting forth in reasonable detail the basis for such demand. Each Indemnified Party will notify the Servicer as soon as reasonably practicable of the commencement of any legal proceeding which may give rise to any Servicer Indemnified Loss under the foregoing indemnity and shall, from time to time during the pendency of such proceeding, provide the Servicer with updates regarding the status of such proceeding; provided, however, that the Indemnified Party shall be under no obligation to permit the Servicer to participate in the defense or settlement of any such proceeding. The provisions of this Section 9.1 shall survive the termination of this Agreement.
ARTICLE X
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discussions, correspondence, communications, representations, understandings, proposals, drafts and agreements, written or oral, between the parties hereto relating to the subject matter hereof, all of which are merged into this Agreement. No prior drafts of this Agreement and no words or phrases from any such prior drafts shall be admissible into evidence in any action or proceeding involving this Agreement.
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If to the Servicer:
Settlement Funding, LLC
Settlement Funding, LLC
0000 Xxxxxxx Xxxx.
Xxxxxxx Xxxxx, XX 00000
Attention: Chief Executive Officer, with a copy to the General Counsel
Telephone: 0 000 000 0000
Facsimile: 1 800 839 0784
If to the Purchaser:
Dura Rock LF Trust
c/o Wells Fargo Bank,
National Association
MAC X0000-000
0xx & Xxxxxxxxx Xxxxxx
Xxxxxxxxxxx, XX 00000
Attention: Asset Backed Securities
with copies to:
c/o Rochdale Investment Management, LLC
000 Xxxxxxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxxx Xxxxxxxxxxx, Senior Executive Vice President & General Counsel
Facsimile.: (000)000-0000
or to such other address as any party to this Agreement may have furnished to the other parties in writing.
Any such notice or other communication shall be deemed to have been given or made as of the date received.
Section 10.8 Governing Law. THIS AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED UNDER THE LAWS OF THE STATE OF NEW YORK (WITHOUT REGARD TO ANY CONFLICTS OF LAWS OR PRINCIPLES THEREOF, OTHER THAN SECTION 5-1401 OF THE GENERAL OBLIGATIONS LAW).
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WITH ITS LEGAL COUNSEL AND THAT IT KNOWINGLY AND VOLUNTARILY WAIVES ITS JURY TRIAL RIGHTS FOLLOWING CONSULTATION WITH SUCH LEGAL COUNSEL. THIS WAIVER IS IRREVOCABLE, MEANING THAT IT MAY NOT BE MODIFIED EITHER ORALLY OR IN WRITING, AND THE WAIVER SHALL APPLY TO ANY SUBSEQUENT AMENDMENTS, MODIFICATIONS, SUPPLEMENTS OR RESTATEMENTS HEREOF. IN THE EVENT OF LITIGATION, THIS AGREEMENT MAY BE FILED AS A WRITTEN CONSENT TO A TRIAL BY THE COURT.
(Signatures on following page)
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IN WITNESS WHEREOF, the Purchaser and the Servicer have caused this Servicing Agreement to be duly executed by their respective officers or agents thereunto duly authorized as of the date first above written.
SETTLEMENT FUNDING, LLC, as Servicer
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By: | ||
Name: | ||
Title: | ||
DURA ROCK LF TRUST, for and with respect to its Rochdale High Yield Advances Fund series, as Purchaser
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By: |
Xxxxx Fargo Bank, National Association, not in its individual capacity, but solely as Trustee
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By: | ||
Name: | ||
Title: |
EXHIBIT A
Form of Servicer’s Certificate
Reference is made to that certain Servicing Agreement (as amended, modified, supplemented or restated from time to time, the “Servicing Agreement”), dated as of April ___, 2011, by and between Dura Rock LF Trust, for and with respect to its Rochdale High Yield Advances Fund series, as the purchaser (the “Purchaser”), and Settlement Funding, LLC d/b/a Peachtree Settlement Funding, as the servicer (the “Servicer”). All capitalized terms used but not defined herein shall have the meanings provided in the Servicing Agreement.
Pursuant to Section 4.10 of the Servicing Agreement, the undersigned, a duly elected Responsible Officer of the Servicer hereby certifies to the Purchaser and its respective successors and assigns as follows:
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1.
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Attached hereto is the Monthly Report dated as of [date of monthly report] (the “Monthly Report Date”) required to be delivered by the Servicer pursuant to Section 5.1 of the Servicing Agreement.
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2.
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The representations and warranties of the Servicer contained in Article III of the Servicing Agreement are true and correct in all material respects as of the Monthly Report Date, except for changes to the schedules to the Servicing Agreement and the other Related Documents reflecting events, conditions or transactions permitted by or not in violation of this Agreement and except to the extent that any such representation or warranty speaks expressly only as of a different date.
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3.
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The Servicer is in compliance with its covenants under Article IV of the Servicing Agreement as of the Monthly Report Date.
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4.
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No Servicer Default, or event or condition which with notice, passage of time or both would constitute a Servicer Default has occurred since the later of the date of the Servicing Agreement or the immediately preceding Monthly Report Date.
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By:
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Name:
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Title:
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EXHIBIT B
Form of Monthly Report
EXHIBIT C
Account Information
Lockbox Account
The Bank of New York Mellon
Account No. 000-0000-000
Collection Account
Xxxxx Fargo Bank, National Association
Account No. 00000000