PORTFOLIO SERVICING AGREEMENT
between
SENTINEL ACCEPTANCE CORPORATION
AND
SENTINEL FINANCING LTD., L.P.
EFFECTIVE DATE: ___________, 1997
TABLE OF CONTENTS
PAGE
PRELIMINARY STATEMENT. . . . . . . . . . . . . . . . . . . . . . . . . . . 1
ARTICLE 1.
DEFINITIONS . . . . . . . . . . . . . . . 1
ARTICLE 2.
ADMINISTRATION AND SERVICING OF RECEIVABLES
Section 2.1 Appointment and Duties of Servicer. . . . . . . . . . . . . 3
Section 2.2 Intentionally Omitted . . . . . . . . . . . . . . . . . . . 5
Section 2.3 Collection of Receivable Payments: Defaulted Receivables. . 5
Section 2.4 Realization Upon Receivables. . . . . . . . . . . . . . . . 5
Section 2.5 [THIS SECTION RESERVED].. . . . . . . . . . . . . . . . . . 5
Section 2.6 Maintenance of Security Interests in Financed Vehicles
and Receivables . . . . . . . . . . . . . . . . . . . . . 6
Section 2.7 Covenants of Servicer: Notices. . . . . . . . . . . . . . . 6
Section 2.8 Intentionally Omitted . . . . . . . . . . . . . . . . . . . 7
Section 2.9 Servicing Fee . . . . . . . . . . . . . . . . . . . . . . . 7
Section 2.10 Distribution Date Certificates. . . . . . . . . . . . . . . 7
Section 2.11 Annual Statement as to Compliance . . . . . . . . . . . . . 7
Section 2.12 Financial Statements: Annual Servicing Reports. . . . . . . 7
Section 2.13 Costs and Expenses. . . . . . . . . . . . . . . . . . . . . 8
Section 2.14 Intentionally Omitted . . . . . . . . . . . . . . . . . . . 9
Section 2.15 Delivery of Copies of Documents to the Servicer . . . . . . 9
Section 2.16 Possession of Original Collateral Documents: Servicer
Documents . . . . . . . . . . . . . . . . . . . . . . . . 10
Section 2.17 Warranties, Representations and Indemnity With
Respect to Documents. . . . . . . . . . . . . . . . . . . 11
Section 2.18 Standard of Care. . . . . . . . . . . . . . . . . . . . . . 11
Section 2.19 Records . . . . . . . . . . . . . . . . . . . . . . . . . . 11
Section 2.20 Inspection. . . . . . . . . . . . . . . . . . . . . . . . . 11
Section 2.21 Enforcement . . . . . . . . . . . . . . . . . . . . . . . . 12
Section 2.22 Substitution of Collateral. . . . . . . . . . . . . . . . . 12
ARTICLE 3.
LOCKBOX ACCOUNT; COLLECTIONS;
STATEMENTS TO CLIENT
Section 3.1 Lockbox Account . . . . . . . . . . . . . . . . . . . . . . 12
Section 3.2 Collections . . . . . . . . . . . . . . . . . . . . . . . . 13
Section 3.3 Distributions from the Lockbox Account. . . . . . . . . . . 13
i
ARTICLE 4.
REPRESENTATIONS AND WARRANTIES
Section 4.1 Representations and Warranties of the Servicer. . . . . . . 13
Section 4.2 Representations and Warranties of the Client. . . . . . . . 14
Section 4.3 Survival of Representations and Warranties. . . . . . . . . 15
ARTICLE 5.
DEFAULT, REMEDIES AND LIABILITY
Section 5.1 Events of Default . . . . . . . . . . . . . . . . . . . . . 15
Section 5.2 Remedies. . . . . . . . . . . . . . . . . . . . . . . . . . 16
Section 5.3 Liability of the Servicer . . . . . . . . . . . . . . . . . 16
Section 5.4 Force Majeure . . . . . . . . . . . . . . . . . . . . . . . 17
ARTICLE 6.
TERMINATION OF AGREEMENT
Section 6.1 Term of Agreement . . . . . . . . . . . . . . . . . . . . . 17
Section 6.2 Effect of Termination . . . . . . . . . . . . . . . . . . . 17
Section 6.3 Transfer of Servicing . . . . . . . . . . . . . . . . . . . 17
Section 6.4 Termination of Servicer . . . . . . . . . . . . . . . . . . 17
Section 6.5 Merger or Consolidation of, or Assumption of
the Obligations of, or Resignation of Servicer. . . . . . 18
ARTICLE 7.
MISCELLANEOUS PROVISIONS
Section 7.1 Amendment . . . . . . . . . . . . . . . . . . . . . . . . . 18
Section 7.2 Waivers . . . . . . . . . . . . . . . . . . . . . . . . . . 18
Section 7.3 Notices . . . . . . . . . . . . . . . . . . . . . . . . . . 19
Section 7.4 Severability of Provisions. . . . . . . . . . . . . . . . . 19
Section 7.5 Rights Cumulative . . . . . . . . . . . . . . . . . . . . . 19
Section 7.6 No Offset . . . . . . . . . . . . . . . . . . . . . . . . . 19
Section 7.7 Inspection and Audit Rights . . . . . . . . . . . . . . . . 20
Section 7.8 Powers of Attorney. . . . . . . . . . . . . . . . . . . . . 20
Section 7.9 Captions. . . . . . . . . . . . . . . . . . . . . . . . . . 20
Section 7.10 Decisions and Direction . . . . . . . . . . . . . . . . . . 20
Section 7.11 Assignment and Binding Effect . . . . . . . . . . . . . . . 20
Section 7.12 Legal Holidays. . . . . . . . . . . . . . . . . . . . . . . 20
Section 7.13 Counterparts. . . . . . . . . . . . . . . . . . . . . . . . 21
Section 7.14 Governing Law . . . . . . . . . . . . . . . . . . . . . . . 21
Section 7.15 Parties . . . . . . . . . . . . . . . . . . . . . . . . . . 21
Section 7.16 Confidentiality of Servicer's Proprietary Information . . . 21
Section 7.17 No Solicitation of Employees. . . . . . . . . . . . . . . . 21
ii
Section 7.18 Relationship of the Parties . . . . . . . . . . . . . . . . 22
EXHIBIT A: NOT USED
EXHIBIT B: LIST OF REPORTS
EXHIBIT C: NOT USED
EXHIBIT D: FORM OF DISTRIBUTION DATE CERTIFICATE
iii
PORTFOLIO SERVICING AGREEMENT
This Portfolio Servicing Agreement ("Servicing Agreement") is made as of
June 1, 1997 ("Effective Date"), by and between SENTINEL FINANCING LTD., L.P.
("Client") and SENTINEL ACCEPTANCE CORPORATION, a Florida corporation ("SAC,"
or, the "Servicer").
PRELIMINARY STATEMENT
WHEREAS, Client either currently owns or intends to purchase Receivables
(as defined below); and
WHEREAS, Client desires to enter into an agreement with the Servicer
pursuant to which the Servicer shall manage, administer, service and receive
collections, handle repossessions and all enforcement activities, on certain
motor vehicle retail installment sale contracts and security agreements (the
"Receivables") secured by new or used automobiles and/or light-duty trucks
and all accessions thereto ("Financed Vehicles") as may be identified on one
or more Schedules of Receivable delivered to and accepted by Servicer; and
WHEREAS, the Servicer desires to provide such services to Client; and
NOW THEREFORE, in consideration of the covenants and conditions
contained in this Servicing Agreement, the parties, intending to be legally
bound, hereby agree as follows:
ARTICLE 1.
DEFINITIONS
Defined Terms. Capitalized and defined terms contained in this
Servicing Agreement without definitions have the following meanings unless
the context otherwise requires, and the definitions of such terms are equally
applicable both to the singular and plural forms of such terms and to the
masculine, feminine and neuter genders of such terms.
(a) "Business Day" shall mean any day on which ordinary business
dealings are carried on at Servicer's Coral Springs, Florida offices,
excluding Saturday, Sunday and any day on which the Servicer's offices are
closed because of its regularly scheduled holiday.
(b) Intentionally Omitted.
(c) "Client" means SENTINEL FINANCING LTD., L.P., a Florida limited
partnership.
1
(d) "Collateral" means a Financed Vehicle and any other property in
which a lien has been created, or which has been purchased by an Obligor.
(e) "Collection Period" means the calendar month.
(f) Intentionally Omitted.
(g) "Contract Rate" means, with respect to any Receivable, the interest
rate contained in the Receivable.
(h) "Default" means the failure of an Obligor to pay an amount equal to
or greater than the regularly scheduled payments due under the terms of the
Receivable or a violation of any term or condition of the Receivable which is
a basis for a repossession of the Collateral.
(i) "Defaulted Receivable" means any Receivable with respect to which
(i) at least 90% of a Scheduled Payment is 90 days or more delinquent, (ii)
the Servicer has repossessed the related Financed Vehicle (and any applicable
redemption period has expired), or (iii) the Servicer has determined in good
faith that payments under such Receivable are not likely to be made or
resumed.
(j) "Delinquent Receivable" means any Receivable (i) with respect to
which any payment or portion thereof has been due and unpaid from the Obligor
for 90 days or more, (ii) on which any payment or portion thereof is less
than 90 days past due but as to which the Servicer, in the normal course of
performing its duties hereunder, has determined it is unlikely that past due
payments will be brought current through routine efforts by the Servicer or
(iii) with respect to which a Default has occurred and the Servicer
reasonably believes that, as a result of such Default, such Contract may
become a Defaulted Receivable.
(k) "Distribution Date" means the tenth (10th) Business Day of each
month, beginning the first month following the first Collection Period.
(l) "Distribution Date Certificate" means the Certificate substantially
in the form Exhibit D hereto.
(m) "Effective Date" means ___________, 1997.
(n) "Event of Service Default" has the meaning set forth in Section 5.1.
(o) "Financed Vehicle" means a new or used automobile or light-duty
trucks and all accessions thereto comprising the Collateral, securing an
Obligor's indebtedness under a Receivable.
2
(p) "Insolvency Proceeding" means (i) the commencement by a person as
debtor of any case or proceeding under any bankruptcy, insolvency,
reorganization, liquidation, dissolution or similar law, or such person
seeking the appointment of a receiver, trustee, custodian or similar official
for such person or any substantial part of such person's property, or a
decree or order seeking such appointment or (ii) the commencement of any such
case or proceeding against a person or another seeking such an appointment
which (x) is consented to by such party, (y) results in the entry of an order
for relief, such appointment, the issuance of such a protective decree or the
entry of an order having similar effect or (z) is not dismissed within 15
days, or (iii) the making by a person of a general assignment for the benefit
of creditors or (iv) the admission in writing by a person of such person's
inability to pay such person's debts as they become due.
(q) Intentionally Omitted.
(r) "Liquidation Proceeds" means, with respect to any Receivable, all
funds, collections and proceeds collected from whatever source in respect
thereof and related Financed Vehicle (including, but not limited to,
collections, insurance proceeds, dealer recourse and third party originator
recourse) during such Collection Period.
(s) "Lockbox Depository" means Capital Bank and/or such other financial
institution as may be mutually agreed upon by Servicer and Client.
(t) "Obligor" means, with respect to a Receivable, the purchaser of the
Financed Vehicle, each co-purchaser, co-signer and guarantor, or any other
person responsible for payments under the Receivable.
(u) "Receivable" means a security agreement, loan, contract, motor
vehicle retail installment sale contract and/or other document evidencing the
indebtedness of an Obligor to Client.
(v) "Servicer" or "SAC" means SENTINEL ACCEPTANCE CORPORATION, a
Florida corporation.
ARTICLE 2.
ADMINISTRATION AND SERVICING OF RECEIVABLES
Section 2.1 APPOINTMENT AND DUTIES OF SERVICER. Client hereby appoints
the Servicer to manage, administer, service and receive collections on the
Receivables as specified herein and to otherwise perform the duties of
servicer. In performing its duties hereunder, the Servicer shall have full
power and authority to do or cause to be done any and all things in
connection with such servicing and administration which it may deem necessary
or desirable, within the terms of this Servicing Agreement. Specifically,
Servicer will provide the following services:
3
(a) Boarding Functions:
(i) Maintain Dealer files
(ii) Document review/new loan preparation
(iii) New loan input
(iv) Welcome letters
(v) Review of files to confirm presence of required documents.
(vi) Unless terminated by Client in writing with seven (7) days
advance notice, first payment reminder telephone calls, to be
attempted five (5) days prior to first payment.
(b) File Maintenance/Document Control Functions:
(i) File retention
(ii) Track customer collision insurance
(iii) Paid in full loans
(c) Customer Service Functions
(i) Billing receipts (i.e., monthly statements)
(ii) Customer inquiries
(iii) Research
(iv) Loan maintenance
(v) Document retrieval
(d) Payment Processing Functions:
(i) Coordinate lockbox procedures
(ii) Receive lockbox payments
(iii) Record loan payment information
(iv) ACH transactions
(v) Western Union processing
(vi) NSF referrals
(e) Reporting Functions:
(i) Prepare Servicer's Distribution Date Certificate to Client
(ii) Prepare other reports listed on Exhibit B.
(f) Collection Functions:
(i) Delinquency notices
(ii) Telephone contact with delinquent Obligors
(iii) Skip tracing
4
Section 2.2 Intentionally Omitted.
Section 2.3 COLLECTION OF RECEIVABLE PAYMENTS: DEFAULTED RECEIVABLES.
(a) The Servicer shall be responsible for collection of payments called
for under the terms and provisions of the Receivables, as and when the same
shall become due and shall follow collection procedures as it follows with
respect to all comparable automobile receivables that it services for itself
or others and consistent with loan servicing industry standards. The
Servicer may grant extensions, rebates or adjustments on a Receivable, or
modify the original due date of a Receivable (i) if such extensions are
limited to two (2), one (1) month extensions in any consecutive twelve (12)
month period, (ii) six (6) consecutive payments have been made by the Obligor
at the time such extension is made, and (iii) a sufficient amount of interest
due shall have been collected to forward the due date. The Servicer may in
its reasonable discretion waive any late payment charge or any other fees
that may be collected in the ordinary course of servicing a Receivable. In no
event shall the principal balance of a Receivable be reduced, except in
connection with a settlement in the event the Receivable becomes a Defaulted
Receivable (as defined above).
(b) If Servicer shall follow the following collection procedures with
respect to each Receivable. If a scheduled payment due under a Receivable is:
(i) 5 days past due - a past due notice is mailed.
(ii) 10 days past due - a second past due notice is mailed.
(iii) 15 days past due - telephone and written communication is
commenced with the Obligor.
(iv) 30 days past due - a repossession order is issued.
(v) On the day of repossession, a Notice of Sale is mailed to the
Obligor.
(c) The Servicer shall include information regarding Delinquent
Receivables and Defaulted Receivables in the Distribution Date Certificate to
Client.
Section 2.4 REALIZATION UPON RECEIVABLES. Title tracking,
repossession, repair, sale of collateral, filing of insurance claims, dealer
repurchase, and litigation are client responsibilities, and Servicer will not
perform these functions. Servicer, however, at the request of the Client
will engage repossession firms to repossess Financed Vehicles securing
Defaulted Receivables.
Section 2.5 [THIS SECTION RESERVED].
5
Section 2.6 MAINTENANCE OF SECURITY INTERESTS IN FINANCED VEHICLES AND
RECEIVABLES.
(a) The Servicer shall retain all responsibility regarding obtaining
and maintaining perfection of the security interest created by each
Receivable in the related Financed Vehicles.
Section 2.7 COVENANTS OF SERVICER: NOTICES.
(a) The Servicer shall (1) not release any Financed Vehicle securing
any Receivable from the security interest granted by such Receivable in whole
or in part except in the event of payment in full by the Obligor thereunder
or upon transfer of the Financed Vehicle to a successor purchaser of the
vehicle following repossession by the Servicer, (2) not impair the rights of
Client in the Receivable, (3) not increase the number of scheduled payments
due under a Receivable except as permitted herein, (4) not sell, pledge,
assign, or transfer to any other person, or grant, create, incur, assume, or
suffer to exist any lien on any Receivable transferred to Client or any
interest therein, (5) immediately notify Client of the existence of any lien
on any such Receivable, (6) defend the right, title, and interest of Client
in, to and under such Receivables, against all claims of third parties
claiming through or under the Servicer, (7) promptly notify Client of the
occurrence of any Event of Servicing Default and any breach by Client of any
of its covenants or representations and warranties contained herein.
(b) The Servicer shall promptly notify Client of any actual knowledge
on its part of any (i) abandonment of any Financed Vehicle, (ii) adverse
material change in the condition of any Financed Vehicle, (iii) failure on
the part of the related Obligor to keep any Financed Vehicle insured or in
operating condition and repair, (iv) permanent or substantial injury to any
Financed Vehicle caused by accident, unreasonable use, abuse or neglect, and
(v) any unusual matter which would adversely affect or result in diminution
of the value of any Financed Vehicle.
(c) The Servicer shall promptly notify Client upon learning of any
Insolvency Proceeding involving any Obligor, or the death or incapacity of
any Obligor (including co-signers and guarantors).
(d) The Servicer will promptly advise Client of any inquiry received
from an Obligor which contemplates the consent of Client and as to which the
Servicer does not have the express authority to give to grant without the
prior approval of Client. Inquiries requiring consent of Client shall
include, but not be limited to, inquiries about settlement of any unasserted
claim or defense, or compromise of any amount an Obligor owes or any other
matters the Servicer should reasonably understand are not within the
Servicer's authority under this Servicing Agreement.
(e) The Servicer shall maintain an errors and omissions insurance
policy providing coverage in an amount of not less than $1,000,000 and a
fidelity bond in an
6
amount of not less than $100,000, in such form as is customary for loan
servicers acting in respect of mortgage loans or consumer loans on behalf of
institutional investors therein.
Section 2.8 Intentionally Omitted.
Section 2.9 SERVICING FEE. The Servicer shall be paid a monthly
servicing fee ("Servicing Fee") with respect to each Receivable serviced
under this Servicing Agreement during a Collection Period of $15.00 per
Receivable. The Servicer shall be paid a one-time boarding fee of $10.00 per
Receivable and a one time administrative fee of $100 per Receivable. The
Servicing Fee for any Receivables which are not part of a Conforming Pool
shall be separately quoted by Servicer, based upon Servicer's evaluation of
the quality of the Receivables. The Servicing Fee shall be payable on the
Distribution Date following each Collection Period, and shall be deducted by
the Servicer from the Collections received. The Servicing Fee shall be full
compensation for the services contemplated herein (except for the services
provided for in Section 2.13 (b) hereof, which shall be paid as set forth
herein). The Servicer shall be entitled to a one time marketing fee of
$150.00 per contract.
Section 2.10 DISTRIBUTION DATE CERTIFICATES. The Servicer shall
deliver to Client on the Distribution Date, a Distribution Date Certificate
hereto containing all information necessary for Client to make the
distributions required on such date to the trustee under that certain Trust
Indenture dated _____, 1997 between Client and ___, as Trustee Servicer,
Client, or any other parties entitled to a distribution on such Distribution
Date.
Section 2.11 ANNUAL STATEMENT AS TO COMPLIANCE. The Servicer shall
deliver to Client on or before March 31 of each year, a certificate of an
officer of the Servicer, dated effective as of December 31 of the preceding
year, stating that (i) a review of the activities of the Servicer during the
preceding 12-month period and of its performance under this Servicing
Agreement has been made under such officer's supervision, and (ii) based on
such review, the Servicer has materially fulfilled all its obligations under
this Servicing Agreement throughout such year, or, if there has been a
default in the fulfillment of any such obligation, specifying each such
default known to such officer and the nature and status thereof.
Section 2.12 FINANCIAL STATEMENTS: ANNUAL SERVICING REPORTS.
(a) Commencing on the anniversary date of the Agreement, on or before
ninety (90) days after the end of each fiscal year of the Servicer, the
Servicer shall deliver to Client, a copy of the financial statements of
Servicer containing a report of a firm of independent public accountants of
recognized national standing selected by the Servicer to the effect that such
firm has examined certain books and records of Servicer and that, on the
basis of such examination conducted substantially in compliance with
generally accepted audit standards such financial statements accurately
reflect the financial condition of Servicer.
7
(b) On or before ninety (90) days after the end of its fiscal year, the
Servicer shall cause a firm of independent public accountants which is a
member of the American Institute of Certified Public Accountants (which firm
shall be reasonably acceptable to Client) to furnish a statement to Client,
to the effect that such firm has examined certain documents and records
relating to the servicing of the Receivables and the reporting requirements
with respect thereto and that, on the basis of such examination, such
servicing and reporting requirements have been conducted in compliance with
this Agreement, except for (i) such exception as such firm shall believe to
be immaterial, and (ii) such other exceptions as shall be set forth in such
statement. The cost to Servicer of such accountant's statements shall be
limited to 2% of the revenue payable to the Servicer under this Agreement for
the fiscal year in question, and any excess shall be paid by the Client or
other party who requested such accountant's statements.
Section 2.13 COSTS AND EXPENSES.
(a) Except as set forth in Section 2.13(b) below, all costs and
expenses incurred by the Servicer in carrying out its duties hereunder, fees
and expenses of independent accountants and all other fees and expenses shall
be paid or caused to be paid by the Servicer out of the compensation to be
paid to or retained by the Servicer pursuant to Section 2.9.
(b) During the term of this Servicing Agreement, the Servicer shall be
reimbursed by Client for all actual out of pocket costs and expenses incurred
in connection with the performance of its duties hereunder including, but not
limited to the following:
(i) Any compensation paid to outside legal counsel retained at
Client's direction to protect the interests of Client, or if Client
is not the owner of the Receivables, the Owner's interest in assets
administered under this Servicing Agreement;
(ii) Any compensation paid to professional accountants retained
at Client's direction to review the assets administered under this
Servicing Agreement;
(iii) Any sales, franchise, income, excise, personal property or
other taxes arising from or related to any Receivables administered
under the Servicing Agreement;
(iv) Other requested services will be quoted on a time and
materials basis utilizing the Servicer's current pricing schedule;
and paid by requesting party;
(v) Expenses for special forms and materials, freight, tapes,
communications, lock-box charges and other expenses approved by
Client.
8
(c) Servicer's rights to reimbursement of expenses shall not be
contingent upon success in skip tracing.
(d) Unless prior approval from Client is obtained, skip tracing
expenses shall be limited to $350.00.
(e) In the event Client requests Servicer to perform any functions
requiring Servicer to incur additional out-of-pocket expenses other than
those described in Section 2.13(b) above, Client will give Servicer written
authorization to perform such services, which shall entitle Servicer to
reimbursement for the out-of-pocket expenses incurred in connection
therewith. Unless such prior written authorization is given, Servicer shall
not be obligated to undertake any matters which would incur any out-of-pocket
expenses not described in Section 2.13(b) above.
(f) In the event Servicer seeks but does not obtain in a specific
instance approval to incur expenses in excess of those stated herein,
Servicer shall not be obligated to proceed with the recommended activity as
to which such approval is sought.
Section 2.14 Intentionally Omitted.
Section 2.15 DELIVERY OF COPIES OF DOCUMENTS TO THE SERVICER.
(a) The Servicer shall maintain copies or originals of the following
documents in its files with respect to each Receivable and the Financed
Vehicle related thereto, provided such is delivered to Servicer by Client:
(i) the application of the Obligor for credit;
(ii) a copy (but not the original) of the retail installment sale
contract and any amendments thereto; provided, however, that the
Servicer shall deliver any original amendments to the retail
installment sale contract to Client or escrow agent, if applicable,
immediately following execution thereof;
(iii) a copy of the certificate of insurance or application
therefor with respect to the Financed Vehicle securing the
Receivable;
(iv) a monthly delinquency report on all outstanding Receivables
in form and content reasonably acceptable to Client (provided, that
individual delinquency reports need not be kept in such
individual's files);
(v) a copy of the score sheet, proof of income and references,
credit report and AAP approval sheet utilized by Client in the
origination of the Loan to the Obligor,
9
(vi) a copy of the Vehicle Invoice;
(vii) a copy of the Service contract, if any, on the Financed
Vehicle;
(viii) Intentionally Omitted;
(ix) such other documents as the Servicer may reasonably request
in order to accomplish its duties under this Servicing Agreement.
The Servicer shall keep satisfactory books and records pertaining to
each Receivable and shall make periodic reports in accordance with this
Servicing Agreement. Such records may not be destroyed or otherwise disposed
of except as provided herein and as allowed by applicable laws, regulations
or decrees, provided, however, that Servicer may periodically purge records
in accordance with Servicer's standard record retention policies, which shall
comply with all applicable laws. All documents, whether developed or
originated by the Servicer or not, reasonably required to document or to
properly administer any Receivable shall remain at all times the property of
Client. The Servicer shall not acquire any property rights with respect to
such records, and shall not have the right to possession of them except as
subject to the conditions stated in this Servicing Agreement. The Servicer
shall bear the entire cost of restoration in the event any Collateral
Documents (as defined below) shall become damaged, lost or destroyed while in
the Servicer's possession or under the Servicer's control.
Section 2.16 POSSESSION OF ORIGINAL COLLATERAL DOCUMENTS: SERVICER
DOCUMENTS.
(a) The original titles and retail installment contracts shall be held
by the CSC Logic, a division of Computer Sciences Corporation or other party
designated by Client. Unless otherwise specified herein, the Servicer shall
maintain physical possession of good and legible copies of the instruments
and documents listed in paragraph 2.15(a) above, and such other instruments
or documents that modify or supplement the terms or conditions of any of the
foregoing. Collectively, all of the documents described in this paragraph
2.16(a) with respect to a Receivable are referred to as "Collateral
Documents". The Servicer shall hold all Collateral Documents in trust for the
benefit of Client, and all Collateral Documents shall remain the property of
Client. The Servicer shall respond to all third party inquiries concerning
ownership of the Receivables by indicating that the Receivables are the
property of Client.
(b) The Servicer shall maintain physical possession of good and legible
copies of all instruments, documents, correspondence and memoranda generated
by or coming into the possession of the Servicer (including, but not limited
to, proof of auto insurance policy, insurance premium receipts, ledger
sheets, payment records, insurance claim files, correspondence and current
and historical computer data files, that are required to document or service
any Receivable. Collectively, all the documents described in this paragraph
2.16(b), with respect to a Receivable are referred to as the "Servicer
Documents"). The Servicer hereby agrees that the computer files and other
physical
10
records of the Receivables maintained by the Servicer will bear an indication
reflecting that the Receivables are owned by Client and that all Servicer
Documents shall remain the property of Client.
Section 2.17 WARRANTIES, REPRESENTATIONS AND INDEMNITY WITH RESPECT TO
DOCUMENTS. As to each document set forth in paragraph 2.16(a) hereof, the
Client represents that the Receivables are free of illegal or prohibited
powers or provisions. Client warrants that the enforcement thereof by the
Servicer will not subject the Servicer to liability under any federal, state
or local law, provided such enforcement by the Servicer is conducted in
accordance with the provisions of this Servicing Agreement and the Servicer's
normal operating procedures, and will indemnify Servicer from all liability
and costs, including reasonable legal fees, incurred as a result of the
presence of any such illegal or prohibited provision.
Section 2.18 STANDARD OF CARE. In performing its duties and
obligations hereunder pursuant to this Servicing Agreement, the Servicer
will comply with all applicable state and federal laws and will exercise that
degree of skill and care consistent with the highest degree of skill and care
that the Servicer exercises with respect to similar motor vehicle retail
installment sales contracts or loans owned and/or serviced by the Servicer
and that is consistent with prudent industry standards, and will apply in
performing such duties and obligations, those standards, policies and
procedures consistent with the best standards, policies and procedures the
Servicer applies with respect to similar motor vehicle retail installment
contracts or loans owned or serviced by it; provided, however, that
notwithstanding the foregoing, the Servicer shall not, except pursuant to a
judicial order from a court of competent jurisdiction, or as otherwise
required by applicable law or regulation, release or waive the right to
collect the unpaid balance on any Receivable. In performing its duties and
obligations hereunder, the Servicer shall comply with all applicable federal
and state laws and regulations, shall maintain all state and federal licenses
and franchises necessary for it to perform its servicing responsibilities
hereunder, and shall not impair the rights of Client (and, if applicable, any
escrow agent) in the Receivables.
Section 2.19 RECORDS. The Servicer shall maintain or cause to be
maintained such books of account and other records as will enable Client to
determine the status of each Receivable.
Section 2.20 INSPECTION.
(a) At all times during the term hereof, the Servicer shall afford
Client, its authorized agents, and any escrow agent, if applicable,
reasonable access during normal business hours to the Servicer's records
relating to the Receivables and will cause its personnel to assist in any
examination of such records. The examination referred to in this Section 2.20
will be conducted in a manner which does not unreasonably interfere with the
Servicer's normal operations or customer or employee relations. Without
otherwise limiting the scope of the examination Client or any applicable
escrow agent may, using
11
generally accepted audit procedures, verify the status of each Receivable and
compliance with the standards represented to exist as to each Receivable in
this Servicing Agreement. Nothing herein shall require Client or any
applicable escrow agent to conduct any inspection pursuant to this Section.
Nothing in this Section shall affect the obligation of the Servicer to
observe any applicable law prohibiting disclosure of information regarding
the Obligors, and the failure of the Servicer to provide access to
information as a result of such obligation shall not constitute a breach of
this Section 2.20. To the extent that Client shall participate in any
securitization or collateralization financing, the Servicer shall cooperate
with Client and the entities involved in such financing by preparing such
reports, tabulations, reconciliations and other data production activities
necessary for such financing at Client's expense.
(b) All information obtained by Client or any applicable escrow agent
regarding the Obligors and the Receivables, whether upon exercise of its
rights under this Section 2.20 or otherwise, shall be maintained by Client or
any applicable escrow agent in confidence to the degree required by
applicable privacy or other laws, and shall not be disclosed to any other
person, except as permitted or required by applicable law or regulation.
Section 2.21 ENFORCEMENT. All costs of enforcement of the Receivables
will be reimbursed to Servicer by Client.
Section 2.22 SUBSTITUTION OF COLLATERAL. In the event a Financed
Vehicle sustains significant physical damage such that the insurance company
carrying the physical damage insurance covering such Financed Vehicle
determines that the Financed Vehicle is not repairable, the Servicer or an
affiliate thereof may permit the Obligor to pledge a vehicle of equal or
greater market value than that of the Financed Vehicle immediately prior to
sustaining the physical damage. The second vehicle shall be substituted as
the collateral ("Substituted Financed Vehicle") for the Receivable and the
terms of the Receivable shall not be amended or modified except to reflect
the substituted collateral. The Servicer shall, within 90 days of the
purchase of the Substituted Financed Vehicle, cause the certificate of title
for the Substituted Financed Vehicle to be delivered to Client or the escrow
agent, as applicable. The Servicer shall make appropriate notation in its
records of the substitution of the collateral.
ARTICLE 3.
LOCKBOX ACCOUNT; COLLECTIONS;
STATEMENTS TO CLIENT
Section 3.1 LOCKBOX ACCOUNT. The Client with the assistance of the
Servicer has established the initial Lockbox Account Depository with respect
to the Receivables. Prior to the appointment of a successor Lockbox
Depository, the Servicer shall provide 30 days' notice to the Client of such
proposed appointment and obtain the written consent of such appointment from
Client, which consent shall not be unreasonably withheld.
12
Section 3.2 COLLECTIONS. The Servicer shall remit to the Lockbox
Account as soon as practical, but in no event later than the close of
business (Florida time) on the Business Day after receipt thereof by the
Servicer, all payments by or on behalf of the Obligors, including proceeds
from repurchase of Receivables, as Liquidation Proceeds, collected during the
Collection Period, in respect of a Receivable being serviced by the Servicer;
provided, however, that amounts remitted by or on behalf of Obligors under
the terms of, or with respect to, the Receivables, representing NSF charges,
late fees, extension fees or prepayment charges allowed by applicable law,
shall be retained by the Servicer as additional compensation.
Section 3.3 DISTRIBUTIONS FROM THE LOCKBOX ACCOUNT.
(a) The Servicer shall provide the Lockbox Account Depository with a
report providing instructions related to cleared funds from the Lockbox
Account. Such reports shall also indicate amounts on deposit representing
uncleared funds.
(b) On or before the eighth (8th) Business Day of each month,
commencing the first month following the first Collection Period, the
Servicer shall submit the Distribution Date Certificate to Client. The
Distribution Report shall contain a description of all amounts then due and
owing the Servicer, Client and to all other parties for such Collection
Period. Client shall instruct the Lockbox Account Depository to distribute
all uncontested amounts to the recipients thereof on or before the
Distribution Date. Any amounts that are contested shall be distributed upon
the direction of Client to the recipient thereof following the resolution of
the amount to the satisfaction of Client. Client shall instruct the Lockbox
Account Depository to make or permit withdrawals from the Lockbox Account
only as provided in this Servicing Agreement and to transmit data on all
amounts received or paid from the Lockbox Account to the Servicer.
ARTICLE 4.
REPRESENTATIONS AND WARRANTIES
Section 4.1 REPRESENTATIONS AND WARRANTIES OF THE SERVICER. The
Servicer hereby represents, warrants and covenants to Client that as of the
date of this Servicing Agreement or as of such date specifically provided
herein:
(a) The Servicer is a corporation duly organized and validly existing
under the laws of the State of Florida.
(b) All necessary partnership, regulatory or other similar action has
been taken to authorize and empower the Servicer and the officers or
representatives acting on the Servicer's behalf, and the Servicer has full
power and authority to execute, deliver and perform this Servicing Agreement;
13
(c) This Servicing Agreement has been duly authorized, executed and
delivered by the Servicer and the performance and compliance with the terms
of this Servicing Agreement will not violate the Servicer's partnership
agreement or constitute a default (or an event which, with notice or lapse of
time, or both, would constitute a default) under, or result in the breach of,
any material contract, indenture, lease, credit agreement or any other
agreement or instrument to which the Servicer is a party or which may be
applicable to the Servicer or any of its assets;
(d) The Servicer is duly licensed and qualified to perform the
functions specified herein and this Servicing Agreement constitutes a valid,
legal and binding obligation of the Servicer, enforceable in accordance with
its terms, subject to applicable bankruptcy, insolvency, reorganization,
moratorium and other laws affecting the enforcement of creditors' rights
generally and to general principles of equity;
(e) The Servicer is not in violation of, and the execution, delivery
and performance of this Servicing Agreement by the Servicer will not
constitute a violation with respect to any order or decree of any court or
any order, regulation or demand of any federal, state, municipal or
governmental agency, which violation might have consequences that would
materially and adversely affect the condition (financial or other) or
operations of the Servicer or its properties or might have consequences that
would affect the performance of its duties hereunder,
(f) No proceeding of any kind, including but not limited to litigation,
arbitration, judicial or administrative, is pending or threatened against or
contemplated by the Servicer which would under any circumstance have an
adverse effect on the execution, delivery, performance or enforceability of
this Servicing Agreement;
(g) No information, certificate of an officer, statement furnished in
writing or report delivered to Client, or if applicable any escrow agent, by
the Servicer will, to the knowledge of the Servicer, contain any untrue
statement of a material fact or omit a material fact necessary to make the
information, certificate, statement or report not misleading, and
(h) Intentionally Omitted.
Section 4.2 REPRESENTATIONS AND WARRANTIES OF THE CLIENT. The Client
hereby represents, warrants and covenants to the Servicer that as of the date
of this Servicing Agreement or as of such date specifically provided herein:
(a) DUE ORGANIZATION AND GOOD STANDING. The Client is a limited
partnership duly organized and in good standing under the laws of the State
of Florida, with power and authority to own its properties and to conduct its
business as such properties are owned and such business is presently
conducted.
14
(b) POWER AND AUTHORITY. The Client has the power and authority to
execute and deliver this Servicing Agreement and to carry out its terms; and
the execution, delivery, and performance of this Servicing Agreement have
been duly authorized by the Client by all necessary corporate or partnership
action.
(c) BINDING OBLIGATIONS. This Servicing Agreement shall constitute a
legal, valid, and binding obligation of the Client enforceable in accordance
with its terms, except as enforceability may be limited by bankruptcy,
insolvency, reorganization, or other similar laws affecting the enforcement
of creditors' rights in general and by general principles of equity,
regardless of whether such enforceability shall be considered in a proceeding
in equity or at law.
(d) NO VIOLATION. The consummation of the transactions contemplated by
this Servicing Agreement and the fulfillment of the terms thereof shall not
conflict with, result in any breach of any of the terms, and the provisions
of, nor constitute (with or without notice or lapse of time) a default under,
the articles of organization, charter or by-laws of the Client, or to the
best of the Client's knowledge, after reasonable investigation, any
indenture, agreement, or other instrument to which the Client is a party or
by which it shall be bound; nor result in the creation or imposition of any
lien upon any of its properties pursuant to the terms of any such indenture,
agreement, or other instrument (other than the Agreement); nor violate any
law or, to the best of the Client's knowledge, any order, rule, or regulation
applicable to the Client of any court or of any federal or state regulatory
body, administrative agency, or other governmental instrumentality having
jurisdiction over the Client or its properties.
(e) NO PROCEEDINGS. There are no proceedings or investigations pending
or, to the Client's best knowledge, threatened before any court, regulatory
body, administrative agency, or other governmental instrumentality having
jurisdiction over the Client or its properties (A) asserting the invalidity
of this Servicing Agreement, (B) seeking to prevent the consummation of any
of the transactions contemplated by this Servicing Agreement, or (C) seeking
any determination or ruling that might materially and adversely affect the
performance by the Client of its obligations under, or the validity or
enforceability of, this Servicing Agreement.
Section 4.3 SURVIVAL OF REPRESENTATIONS AND WARRANTIES. The
representations and warranties set forth in this Article IV are continuous
and shall survive the date of this Servicing Agreement. Upon discovery by
either Client or the Servicer of a breach of any of the foregoing
representations and warranties, the party discovering such breach shall give
prompt written notice to the other parties.
ARTICLE 5.
DEFAULT, REMEDIES AND LIABILITY
Section 5.1 EVENTS OF DEFAULT. Any of the following acts or occurrences
shall constitute an Event of Default under this Servicing Agreement:
15
(a) The failure to make any payment required to be made under the terms of
this Servicing Agreement which failure continues unremedied for a period of
thirty (30) Business Days after written notice of such failure shall have been
given to the party required to make such payment;
(b) The failure to observe or perform in any material respect any
covenant or agreement required to be performed under this Servicing Agreement
which failure continues unremedied for a period of fifteen (15) days after
written notice of such failure shall have been given to the breaching party;
(c) The entry with respect to either Client or the Servicer of a decree
or order for relief by a court or agency or supervisory authority having
jurisdiction under any present or future federal or state bankruptcy,
insolvency or similar law;
(d) A conservator, receiver or liquidator is appointed with respect to
either Client or the Servicer in any insolvency, readjustment of debt,
marshalling of assets and liabilities or similar proceedings;
(e) Client or the Servicer shall admit in writing its inability to pay
its debts generally as they become due, file a petition to take advantage of
any applicable insolvency or reorganization statute, make an assignment for
the benefit of its creditors or voluntarily suspend payment of its
obligations; or
(f) Any representation, warranty or statement made in this Servicing
Agreement or in any certificate, report or other writing delivered pursuant
hereto shall prove to be incorrect in any material respect as of the time
when the same shall have been made.
Section 5.2 REMEDIES. If an Event of Default as described in Section
5.01 shall have occurred and be then continuing the non-breaching party may
exercise any right or remedy available to it under this Servicing Agreement
or under applicable law and, in addition, may terminate the rights and duties
of the defaulting party under this Servicing Agreement by giving such party
thirty (30) days prior written notice. If an Event of Default occurs as
described in Section 5.01 (a) or (c) through (f) above, this Servicing
Agreement may be terminated effective immediately upon either Client's or
Servicer's notice of default under Section 5.01 (a) or (c) through (f) above.
Section 5.3 LIABILITY OF THE SERVICER. Servicer shall be strictly
accountable to Client for all payments actually received on Receivables,
without limitation as to amount. However, in no event shall Servicer be
liable for any consequential, incidental or special damages including, but
not limited to, damages for loss of currency, funds, data, profits, goodwill
or prospective business opportunity. In event of any error, mistake, or
breach of this Agreement by Servicer, other than misappropriation of funds as
described in the first sentence of this Section 5.03, (collectively
"errors"), it is agreed that the measure of Servicer's liability shall be:
(a) the amounts by Client to third parties to correct or as the direct result
of, any errors by Servicer, and (b) any amount by which Client is underpaid
16
as a result of Servicer's errors, which Client is unable to recover after
making reasonable efforts to do so; but in no event shall Servicer's
liability exceed the lesser of $50,000.00 or the total servicing fees paid by
Client to Servicer during the twelve (12) months immediately preceding the
assertion of a claim by Client. All software provided or selected by Client,
is without warranty by Servicer, and Client assumes all risk for any
software-based errors. Any errors in third party software selected by
Servicer shall not subject Servicer to any liability unless Servicer had
actual knowledge of such errors or should have been aware of such errors. The
only warranties made by Servicer are the specific obligations contained in
this Agreement, and there are no other warranties, express or implied,
including but not limited to merchantability or fitness for a particular
purpose.
Section 5.4 FORCE MAJEURE. Notwithstanding anything herein to the
contrary, the Servicer shall not be considered in default hereunder or have
any liability to any party for any failure to perform if such failure arises
out of the following causes beyond the control of the Servicer: acts of God
or a public enemy, fire, flood or war.
ARTICLE 6.
TERMINATION OF AGREEMENT
Section 6.1 TERM OF AGREEMENT. The initial term of this Agreement shall
begin on the Effective Date as set forth above and shall continue for a
period of five (5) years. Thereafter, this Agreement shall automatically
renew for periods of one (1) year each unless either Client or the Servicer
gives notice of non-renewal (a "Non-Renewal Notice") to the other party at
least ninety (90) days prior to the expiration of the initial term or any
renewal term.
Section 6.2 EFFECT OF TERMINATION. Upon termination of this Servicing
Agreement, the Servicer shall, at the direction of Client, promptly return
all Collateral Documents and Servicer Documents and any related files and
correspondence in its possession as are related to the management of the
Receivables and the services provided hereunder.
Section 6.3 TRANSFER OF SERVICING. Upon termination of this Servicing
Agreement, the Servicer shall cooperate in the transfer of the Servicer
Documents and Collateral Documents. Any matters pending at the effective
termination date will continue to be processed in an orderly and timely
fashion; it being intended, however, that responsibility for the Receivables
shall transfer as quickly as practicable and in any event within thirty (30)
days after the termination date.
Section 6.4 TERMINATION OF SERVICER.
(a) Either the Servicer or the Client may terminate this Servicing
Agreement by giving written notice of such termination to the other party no
less than ninety (90) days prior to the effective date of such termination.
17
(b) Appointment of Successor Servicer. Upon receipt of notice of
termination pursuant to Section 6.04 hereof, the predecessor Servicer shall
continue to perform its functions as Servicer only until the date specified
in such termination notice or, if no such date is specified in a notice of
termination, until the date 90 days from receipt of such notice.
Section 6.5 MERGER OR CONSOLIDATION OF, OR ASSUMPTION OF THE
OBLIGATIONS OF, OR RESIGNATION OF SERVICER. Any person (a) into which the
Servicer may be merged or consolidated, (b) which may result from any merger
or consolidation to which the Servicer shall be a party, (c) which may
succeed to the properties and assets of the Servicer substantially as a
whole, or (d) which may succeed to the duties and obligations of the Servicer
under this Servicing Agreement following the resignation of the Servicer,
which person executes an agreement of assumption to perform every obligation
of the Servicer hereunder, shall be the successor to the Servicer or under
this Servicing Agreement without further act on the part of any of the
parties to this Servicing agreement; provided, however, that (i) immediately
after giving effect to such transaction, no Event of Servicing Default (as
defined in Section 5.01), and no event which, after notice or lapse of time,
or both, would become an Event of Servicing Default shall have happened and
be continuing, (ii) the Servicer shall have delivered to Client an Officer's
Certificate and an Opinion of Counsel each stating that such consolidation,
merger, succession or resignation and such agreement of assumption comply
with this Section 6.05 and that all conditions precedent provided for in this
Servicing Agreement relating to such transaction have been complied with and
(iii) the Servicer shall have delivered to Client an Opinion of Counsel
either (A) stating that, in the opinion of such counsel, all financing
statements, continuation statements and amendments and notations on
certificates of title thereto have been executed and filed that are necessary
fully to preserve and protect the interest of Client in the Receivables and
the Financed Vehicles, and reciting the details of such filings, or (B)
stating that, in the opinion of such counsel, no such action shall be
necessary to preserve and protect such interest.
ARTICLE 7.
MISCELLANEOUS PROVISIONS
Section 7.1 AMENDMENT. This Servicing Agreement may only be amended by
mutual written consent of the parties hereto. Other agreements made
contemporaneously as part of the acquisition of the Receivables (such as any
purchase agreement, escrow agreement, etc.) to which Servicer is not a party
may be amended without Servicer's consent, but no amendment thereon
disadvantageous to the Servicer shall be binding upon the Servicer unless
Servicer shall have consented to such change in writing.
Section 7.2 WAIVERS. The provisions of this Servicing Agreement may
only be waived by written consent of the party making the waiver. The failure
of either party at any time to require performance by the other of any
provision of this Servicing Agreement shall in no way affect that party's
right to enforce such provision, nor shall the waiver by
18
either party of any breach of any provision of this Servicing Agreement be
taken or held to be a waiver of any further breach of the same provision or
any other provision.
Section 7.3 NOTICES. All notices, requests, consents and other
communications hereunder shall be in writing and shall be delivered
personally or mailed by first-class registered or certified mail, postage
prepaid, or by telephonic facsimile transmission and overnight delivery
service, postage prepaid, in any case addressed as follows:
To the Servicer: SENTINEL ACCEPTANCE CORP.
000 X. Xxxxxxxxxx Xxxxx, Xxxxx 000
Xxxxx Xxxxxxx, Xxxxxxx 00000
ATTN: Xxxx Xxxxx
(000) 000-0000; FAX: (000) 000-0000
To Client: SENTINEL FINANCING LTD., L.P.
000 X. Xxxxxxxxxx Xxxxx, Xxxxx 000
Xxxxx Xxxxxxx, Xxxxxxx 00000
ATTN: Xxxx Xxxxx
(000) 000-0000; FAX: (000) 000-0000
Such notice, request, consent or other communication shall be deemed given
when so delivered, or if mailed two days after deposit with the U.S. Postal
Service.
Section 7.4 SEVERABILITY OF PROVISIONS. If one or more of the
provisions of this Servicing Agreement shall be held invalid for any reason,
such provisions shall be deemed severable from the remaining provisions of
this Servicing Agreement and shall in no way affect the validity or
enforceability of such remaining provisions. To the extent permitted by law,
the parties hereto hereby waive any law which renders any provision of this
Servicing Agreement prohibited or unenforceable.
Section 7.5 RIGHTS CUMULATIVE. All rights and remedies under this
Servicing Agreement are cumulative, and none is intended to be exclusive of
another. No delay or omission in insisting upon the strict observance or
performance of any provision of this Servicing Agreement, or in exercising
any right or remedy, shall be construed as a waiver or relinquishment of such
provision, nor shall it impair such right or remedy. Every right and remedy
may be exercised from time to time and as often as deemed expedient.
Section 7.6 NO OFFSET. Prior to the termination of this Servicing
Agreement, the obligations of the Servicer and Client under this Servicing
Agreement shall not be subject to any defense, counterclaim or right of
offset which the Servicer or Client may have against the other, whether in
respect of this Servicing Agreement, any Receivable or otherwise, but this
provision shall not limit the Servicer's right to pay its Servicing Fees and
Expenses from the Collections received.
19
Section 7.7 INSPECTION AND AUDIT RIGHTS. The Servicer agrees that,
upon prior written notice, it will permit any representative of Client,
during the Servicer's normal business hours, to examine the Collateral
Documents or the Servicer Documents, all the books of account, records,
reports and other papers of the Servicer relating to the Receivables, to make
copies and extracts therefrom, to cause such books to be audited by
independent certified public accountants selected by the Servicer or Client,
as the case may be, and to discuss its affairs, finances and accounts
relating to the Receivables with its officers, employees and independent
certified public accountants, all at such reasonable times and as often as
may be reasonably requested. Any expense incident to the exercise by Client
of any right under this paragraph 7.7 shall be borne by Client, provided that
if an audit is made during the continuance of an Event of Default by
Servicer, the expense incident to such audit shall be borne by the Servicer.
Section 7.8 POWERS OF ATTORNEY. Servicer is made Client's
attorney-in-fact for the limited purpose of signing documents necessary to
release a lien upon full payment of a Receivable. With respect to other
matters, Client shall, from time to time, provide to the employees of the
Servicer limited, revocable powers of attorney or other such written
authorizations as may be appropriate to enable the Servicer to perform its
obligations under this Servicing Agreement; provided however, that Client
shall not be required to provide such powers with respect to any matter for
which Client does not have authority to perform itself.
Section 7.9 CAPTIONS. The article, paragraph and other headings
contained in this Servicing Agreement are for reference purposes only, and
shall not limit or otherwise affect the meaning hereof.
Section 7.10 DECISIONS AND DIRECTION. Whenever the Servicer shall
submit a matter to the Client for decision and/or direction, the Client shall
within a reasonably prompt period advise the Servicer of its decision or of
the further information needed for a decision; provided that if no comment is
received by the Servicer within five (5) business days of such submission or
request for additional information (whichever is later) that matter may be
deemed determined affirmatively in respect to the Servicer's recommendation,
if any, and the Servicer may act accordingly.
Section 7.11 ASSIGNMENT AND BINDING EFFECT. This Servicing Agreement
may be assigned only with the written consent of the parties hereto; however,
in the event of an assignment, all provisions of this Servicing Agreement
shall be binding upon and inure to the benefit of the respective successors
and assigns of the parties hereto. Notwithstanding the generality of the
foregoing the rights of Client hereunder maybe assigned to any Indenture
Trustee for debt obligations of Client.
Section 7.12 LEGAL HOLIDAYS. In the case where the date on which any
action required to be taken, document required to be delivered or payment
required to be made is not a Business Day in Coral Springs, Florida, such
action, delivery or payment need not be made on that date, but may be made on
the next succeeding Business Day.
20
Section 7.13 COUNTERPARTS. This Servicing Agreement may be executed
simultaneously in any number of counterparts, each of which counterparts
shall be deemed to be an original, and such counterparts shall constitute but
one and the same instrument.
Section 7.14 GOVERNING LAW. This Servicing Agreement shall be deemed
entered into with and shall be governed by and interpreted in accordance with
the laws of the State of Florida, except to the extent that it is mandatory
that the laws of some other jurisdiction apply.
Section 7.15 PARTIES. This Servicing Agreement shall inure solely to
the benefit of and shall be binding upon the parties hereto, and their
respective successors, legal representatives and assigns, and no other person
shall have or be construed to have any equitable right, remedy or claim under
or in respect of or by virtue of this Servicing Agreement or any provision
contained herein.
Section 7.16 CONFIDENTIALITY OF SERVICER'S PROPRIETARY INFORMATION.
Client acknowledges that the designs, specifications, manuals, documentation
and other materials related to the services performed and the products
produced hereunder by Servicer (collectively "Documentation"), and all other
systems, programs, designs, specifications, manuals, documentation and other
materials which are utilized, developed or made available by the Servicer in
connection with this Servicing Agreement (collectively "Other Materials") are
the confidential, proprietary and/or trade secret property and information of
the Servicer and shall remain as such property and information of the
Servicer, both before and after the term of this Agreement. Client shall not
copy, sell, assign, transfer, distribute or disclose all or any part of the
Documentation or Other Materials to any other person, partnership,
corporation or other entity. Client shall confine the knowledge and use of
the Documentation and Other Materials only to its employees who require such
knowledge and use in the ordinary course and scope of their employment, and
Client and such employees shall use such Documentation and Other Materials
solely in connection with Client's own purposes under this Servicing
Agreement. Upon any expiration or termination of this Agreement, Client shall
promptly return to the Servicer all property or information which is covered
by this section.
Section 7.17 NO SOLICITATION OF EMPLOYEES. During the term of this
Agreement, and for a period of three (3) years after any expiration or
termination of this Agreement, Client shall not directly or indirectly
solicit, attempt to employ or retain, or employ or retain any employee or
representative of the Servicer, independent contractor or otherwise, or take
any other action to induce any person to leave the employ of the Servicer or
to terminate any other relationship with the Servicer.
21
Section 7.18 RELATIONSHIP OF THE PARTIES. The relationship of the
parties to this Agreement is that of independent contractors. Neither this
Servicing Agreement nor any of the activities contemplated hereby shall be
deemed to create any partnership, joint venture, agency or employer/employee
relationship between the Servicer or Client.
IN WITNESS WHEREOF, the parties have caused this Servicing Agreement to
be duly executed by their respective authorized representatives on the 1st
day of June, 1997.
SENTINEL FINANCING LTD., L.P.
as Client
By: Sentinel Acceptance Corporation
General Partner
By: ___________________________________________
Xxxx Xxxxx, President
SENTINEL ACCEPTANCE CORPORATION
as Servicer
By: ___________________________________________
Xxxx Xxxxx, President
22
