SERVICING AGREEMENT
This Servicing Agreement (this "Agreement"), effective as of
_________________, 1997, is entered into by and between Tamarack Funding
Corporation, a Texas corporation (the "Servicer"), and Tamarack Lenders
Corporation, a Texas corporation ("Buyer").
BACKGROUND STATEMENT
This Agreement shall govern the collection and servicing responsibilities
with respect to any and all of the Purchased Contracts purchased by Buyer from
Servicer pursuant to that certain Master Contract Purchase Agreement (herein so
called) by and between Buyer and Servicer of even date herewith.
STATEMENT OF AGREEMENT
In consideration of the mutual covenants contained herein and for other
good and valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, Buyer and Servicer agree as follows:
1. APPOINTMENT OF AND ACCEPTANCE BY THE SERVICER OF SERVICING
OBLIGATIONS.
(a) The Servicer, on behalf of Buyer, shall during the term of this
Agreement manage, administer and collect each of the Purchased Contracts (as
defined in the Master Contract Purchase Agreement), shall exercise discretionary
powers involved in such management, administration and collection, and shall
bear all costs and expenses incurred in connection therewith that may be
necessary or advisable in carrying out this Agreement. In the management,
administration and collection of the Purchased Contracts, the Servicer shall use
at least the same care and apply the same policies that it would exercise if it
owned the Purchased Contracts.
(b) The Servicer shall have full power and authority to do those
things in connection with such servicing, administration and collection
activities which it may deem necessary or desirable in order to maximize
receipts collected from Obligors or foreclosure and sale of Financed Vehicles
underlying the Purchased Contracts. Without limiting the generality of the
foregoing, the Servicer is hereby authorized and empowered to execute and
deliver, on behalf of Buyer, instruments of satisfaction or cancellation, or
of partial or full release or discharge, and all other comparable
instruments, in order to evidence payments received with respect to the
Purchased Contracts and, after the delinquency of any Purchased Contracts and
to the extent permitted under and in compliance with applicable law and
regulations, to commence enforcement proceedings with respect to such
Purchased Contracts; PROVIDED, HOWEVER, that the Servicer shall not commence
any legal action against an Obligor in the name
of Buyer without the prior written consent of the Buyer. Buyer shall furnish
the Servicer with any powers of attorney and other documents necessary or
appropriate to enable the Servicer to carry out its servicing and
administrative duties hereunder.
(c) The Servicer may contract with industry-qualified third parties
to perform its obligations hereunder. In particular, the Servicer may
provide that the dealers originating the Purchased Contracts serve as
secondary servicers (the "Secondary Servicers"). The performance by any
third party will not relieve the Servicer from liability for its obligations
under this Agreement.
2. TERM. This Agreement shall commence as of the date first written
above and shall continue until terminated upon 30 days written notice by
either party to the other.
3. COMPENSATION. The Servicer shall be reimbursed by Buyer for any
third-party expenditures with respect to any particular Contract or otherwise
on behalf of Buyer. The Servicer agrees that its reimbursement right will be
subordinate to Buyer's obligations to its Noteholders, and will be payable by
Buyer only to the extent that it has cash flow in excess of the amounts
required to service its Notes and to the extent that Buyer continues to hold
Contract with an aggregate principal balance at least equal to the then
outstanding principal amount of the Notes.
4. REPRESENTATIONS AND WARRANTIES OF THE SERVICER. The Servicer
represents and warrants to Buyer as follows:
(a) ORGANIZATION AND GOOD STANDING. Servicer is a corporation duly
organized, validly existing and in good standing under the laws of Texas, and
has full corporate power, authority and legal right to own its properties and
conduct its business as such properties are presently owned and such business
is presently contemplated, and to execute, deliver and perform its
obligations under this Agreement.
(b) DUE QUALIFICATION. The Servicer is duly qualified and has
registered as a foreign corporation in each state where such qualification is
required in order to perform its obligations pursuant to this Agreement and
has obtained all necessary licenses, approvals or consents as are required
under applicable law to perform its duties hereunder.
(c) DUE AUTHORIZATION. The execution, delivery and performance of
this Agreement has been duly authorized by the Servicer by all necessary
corporate action on the part of the Servicer.
(d) BINDING OBLIGATION. This Agreement constitutes a legal, valid
and binding obligation of the Servicer, enforceable in accordance with its
terms, except as enforceability may be limited by applicable bankruptcy,
insolvency, reorganization, moratorium or other similar laws now or
hereinafter in effect which affect the enforcement of creditors' rights in
general,
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and except as such enforceability may be limited by general principles of
equity (whether considered in a proceeding at law or in equity).
(e) NO VIOLATION. The execution and delivery of this Agreement by
the Servicer, and the performance of the transactions contemplated by this
Agreement and the fulfillment of the terms hereof applicable to the Servicer,
will not conflict with, violate, result in any breach of any of the material
terms and provisions of, or constitute (with or without notice or lapse of
time or both) a default under, any requirement of law applicable to the
Servicer or any indenture, contract, agreement, mortgage, deed of trust or
other installment to which the Servicer is a party or by which it is bound.
5. REPRESENTATIONS AND WARRANTIES OF THE BUYER. The Buyer represents
and warrants to Servicer as follows:
(a) ORGANIZATION AND GOOD STANDING. Buyer is a corporation duly
organized, validly existing and in good standing under the laws of Texas, and
has full corporate power, authority and legal right to own its properties and
conduct its business as such properties are presently owned and such business
is presently contemplated, and to execute, deliver and perform its
obligations under this Agreement.
(b) DUE QUALIFICATION. The Buyer is duly qualified and has
registered as a foreign corporation in each state where such qualification is
required in order to perform its obligations pursuant to this Agreement and
has obtained all necessary licenses, approvals or consents as are required
under applicable law to perform its duties hereunder.
(c) DUE AUTHORIZATION. The execution, delivery and performance of
this Agreement has been duly authorized by the Buyer by all necessary
corporate action on the part of the Buyer.
(d) BINDING OBLIGATION. This Agreement constitutes a legal, valid
and binding obligation of the Buyer, enforceable in accordance with its
terms, except as enforceability may be limited by applicable bankruptcy,
insolvency, reorganization, moratorium or other similar laws now or
hereinafter in effect which affect the enforcement of creditors' rights in
general, and except as such enforceability may be limited by general
principles of equity (whether considered in a proceeding at law or in
equity).
(e) NO VIOLATION. The execution and delivery of this Agreement by
the Buyer, and the performance of the transactions contemplated by this
Agreement and the fulfillment of the terms hereof applicable to the Buyer,
will not conflict with, violate, result in any breach of any of the material
terms and provisions of, or constitute (with or without notice or lapse of
time or both) a default under, any requirement of law applicable to the Buyer
or any indenture, contract, agreement, mortgage, deed of trust or other
installment to which the Buyer is a party or by which it is bound.
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6. COVENANTS OF THE SERVICER. The Servicer further warrants to and
covenants with Buyer as follows:
(a) COLLECTIONS ACCOUNT. From and after the date hereof until
such time as this Agreement terminates, Servicer shall direct all Obligors on
the Purchased Contracts to remit all collections and payments directly to,
or otherwise, if it utilizes Secondary Services, cause all payments on the
Purchased Contracts to be deposited in, a Collections Account (herein so
called) in the name of the Buyer. Servicer agrees that all cash, checks,
notes, drafts or other items which it receives otherwise than through the
Collections Account attributable to the Purchased Contracts, including
proceeds from resale of repossessed Financed Vehicles and recoveries on
insurance claims, shall be deposited in the Collections Account within two
business days of receipt. All collections and payments attributable to the
Purchased Contracts shall be transferred from the Collections Account to the
Buyer's operating account on at least a weekly basis.
(b) OPERATIONS. The Servicer shall collect payments from the
Purchased Contracts in an orderly and efficient manner consistent with good
business practices and in accordance with all applicable federal, state and
local laws and regulations.
(c) RECORDS. So long as Buyer has not given notice of termination
pursuant to Section 2, the Servicer shall, or shall engage a custodian who
shall (i) hold in trust and safely keep all Purchased Contract closing
documents and such other documents as may be required for the enforcement of
the Purchased Contracts; (ii) keep such accounts and other records as will
enable Buyer to determine the status of the Purchased Contracts; (iii) keep
such books and records at its offices identified in Section 14 herein; and
(iv) permit Buyer and its representatives at any time to inspect, audit,
check and make abstracts from Servicer's accounts, records, correspondence
and other papers pertaining to the Purchased Contracts. Servicer shall
maintain, or cause to be maintained, its respective records with respect to
the Purchased Contracts in a manner such that the Servicer can produce a
computer file containing a listing (by Obligor) of all Purchased Contracts,
together with the account balance of such accounts and the payment history
related thereto. The Servicer shall provide Buyer with monthly reports
updating the information relating to account balances and activity and the
amounts collected on the Purchased Contracts during the proceeding month.
(d) CONTINUATION STATEMENTS. If Buyer so requests, the Servicer
shall execute and file documents which shall create a first priority security
interest in favor of Buyer in Financed Vehicles, including registration of
the Certificates of Title in the name of Buyer, and/or any other documents
requested by Buyer or which may be required by law to preserve and protect
the interest of Buyer in and to the Purchased Contracts.
(e) PRINCIPAL EXECUTIVE OFFICE. The Servicer shall not, without
providing 30 days' notice to Buyer, and without filing such amendments to any
previously filed financing statements as Buyer may require, (i) change the
county where its principal executive office, or
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the office where the records relating to the Purchased Contracts are kept, is
located, or (ii) change its name, identity or corporate structure in any
manner which would, could or might make any financing statement or
continuation statement filed by Buyer or the Servicer or any provision hereof
seriously misleading within the meaning of Section 9-402(g) of any applicable
enactment of the Texas Uniform Commercial Code.
(f) NO IMPAIRMENT. The Servicer will duly fulfill all obligations
on its part to be fulfilled under or in connection with each Purchased
Contract and will do nothing to materially impair the rights of Buyer in the
Purchased Contracts.
(g) COMPLIANCE WITH LAW. The Servicer will comply in all material
respects with all acts, rules, regulations, orders, decrees and directions of
any governmental authority applicable to the Purchased Contracts or any part
thereof; provided, however, that the Servicer may contest any act,
regulation, order, decree or direction in any reasonable manner which shall
not materially and adversely affect the rights of Buyer in the Purchased
Contracts. The Servicer will comply, in all material respects, with any
obligation of a holder of a Purchased Contract to the Obligor thereof arising
under such Purchased Contract or under applicable law.
(h) SECURITY INTEREST. Except for the transfers of Purchased
Contracts to the Buyer under the Master Contract Purchase Agreement and
except as provided in the Indenture, the Servicer will not sell, pledge,
assign or transfer to any other person, or grant, create, incur, assume or
suffer to exist any lien on any Purchased Contracts, or the books or records
relating to any Purchased Contracts, or any interest therein; the Servicer
shall immediately notify Buyer of the existence of any lien on any Purchased
Contracts; the Servicer shall defend the right, title and interest of Buyer
in, to and under the Purchased Contracts, whether now existing or hereafter
transferred to Buyer, against all claims of third parties claiming through or
under the Servicer.
7. MAINTENANCE OF INTERNAL CONTROL AND PROCEDURES. Servicer shall, at
all times during the term of this Agreement, follow internal control
procedures consistent with loan servicing industry standards and, at the
request of Buyer, will supply same in written form for review purposes.
8. COMPUTER. Servicer shall, at all times during the term of this
Agreement, utilize in the operation of its business the industry standard
computer software and contract information maintenance system.
9. SERVICER EVENTS OF DEFAULT. The occurrence and continuation of any
one of the following events shall be a "Servicer Event of Default" under this
Agreement:
(a) Failure on the part of the Servicer to remit collections on the
Purchased Contracts to the Collections Account or the Buyer's operating
account when due in accordance with Section 6(a) and continuance of such
failure for fifteen business days. For purposes of this
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Agreement, "business day" shall mean any day other than a Saturday, Sunday or
legal holiday; or
(b) An involuntary case is commenced or filed against the Servicer
under the federal bankruptcy laws, as now or hereafter in effect, or any
other present or future federal or state bankruptcy, insolvency or similar
law, or for the appointment of a receiver, liquidator, assignee, trustee,
custodian, sequestrator or other similar official of the Servicer or of any
substantial part of its property, or for the winding up of the affairs of,
liquidation, dissolution, or reorganization of the Servicer and the
continuance of such case or filing unstayed for a period of 30 consecutive
days; or
(c) An order for relief shall be entered in a case under title 11
of the United States Code in which the Servicer is a debtor, or the
commencement by the Servicer of a voluntary case under the federal bankruptcy
laws, as now or hereafter in effect, or any other present or future federal
or state bankruptcy, insolvency or similar law, or the consent by the
Servicer to the appointment of or taking possession by a receiver,
liquidator, assignee, trustee, custodian, sequestrator or other similar
official of the Servicer or of any substantial part of its property or the
making by the Servicer of an assignment for the benefit of creditors.
(d) Failure by Servicer to service and collect amounts due from
Obligors under Purchased Contracts in accordance with normal business
practices and the continuance of such failure for 30 days after written
notice by Buyer of such failure.
10. REMEDIES. If a Servicer Event of Default shall have occurred and be
continuing, Buyer may, by notice given in writing to the Servicer,
immediately terminate all of the rights and obligations of the Servicer under
this Agreement. Notwithstanding any termination of the rights and
obligations of the Servicer, the Servicer shall remain responsible for any
acts or omissions to act by it as Servicer prior to such termination. In the
event of such termination:
(a) Buyer is hereby authorized and empowered (upon the failure of
the Servicer to cooperate) to execute and deliver, on behalf of the Servicer
as attorney-in-fact or otherwise, all documents and other instruments upon
the failure of the Servicer to execute or deliver such documents or
instruments, and to do and accomplish all other acts or things necessary or
appropriate to effect the purposes of a transfer of servicing rights to a
successor servicer;
(b) The Servicer agrees to cooperate with Buyer and any successor
servicer in 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 the Purchased Contracts provided for under this Agreement, including,
without limitation, all authority over all collections which shall on the
date of transfer be held by the Servicer for deposit or which shall
thereafter be received with respect to the Purchase Contracts; and
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(c) The Servicer shall promptly transfer its records relating to
the Purchased Contracts to a successor servicer in such form as such
successor servicer may reasonably request and shall promptly transfer to such
successor servicer all other records, correspondence and documents necessary
for the continued servicing of the Purchased Contracts in the manner and at
such times as the successor servicer shall reasonably request. To the extent
that compliance with this Section shall require the Servicer to disclose to
such successor servicer information of any kind which the Servicer reasonably
deems to be confidential, such successor servicer shall be required to enter
into such customary licensing and confidentiality agreements as the Servicer
shall deem necessary to protect its interest.
11. SUCCESSORS AND ASSIGNS. This Agreement shall be binding upon and
inure to the benefit of the parties hereto and their respective successor and
assigns. The Servicer may contract with others for the performance of any or
all of its obligations arising hereunder but no such contract shall relieve
Servicer from liability for its performance hereunder.
12. BUYER EVENT OF DEFAULT; SERVICER'S REMEDIES. In the event that
Buyer should fail to pay any fees or compensation due under this Agreement,
within ten (10) days of the date they are due or are submitted for payment,
whichever is less, or shall fail to perform any of its duties or to observe
or perform any other term, covenant, condition or agreement provided within
this Agreement, said failure shall constitute an event of default by the
Buyer. In the event of such default, Servicer shall have the option of
immediately terminating this Agreement by written notice to Buyer in addition
to all remedies available in equity or law.
13. MODIFICATIONS AND WAIVERS. No delay on the part of any party in
exercising any right, power or privilege hereunder shall operate as a waiver
thereof, nor shall any waiver of any right, power or privilege hereunder
operate as a waiver of any other right, power or privilege hereunder, nor
shall any single or partial exercise of any right, power or privilege
hereunder preclude any other or further exercise thereof, or the exercise of
any other right, power or privilege hereunder. All rights and remedies
herein provided are cumulative and are not exclusive of any rights or
remedies which the parties hereto may otherwise have at law or in equity. No
waiver shall be valid in the absence of the written and signed consent of the
party against which enforcement of such is sought.
14. NOTICE. Except as otherwise specifically provided herein, any
notice hereunder shall be in writing (including telecopy communication) and,
if mailed, shall be deemed to be given when sent by registered or certified
mail, postage prepaid or if telecopied when transmitted, or otherwise when
delivered in person to the addressee and a receipt given therefor, in all
such instances addressed to the respective parties as follows:
To Servicer: Tamarack Funding Corporation
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇
Attn: ▇▇▇▇▇ ▇▇▇▇▇▇, President
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To Buyer: Tamarack Lenders Corporation
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇
Attn: ▇▇▇▇▇ ▇▇▇▇▇▇, President
or at such other address as the addressee may, by written notice received by the
other party hereto, designate as the appropriate address for purposes of notice
hereunder.
15. AMENDMENT. This Agreement may be amended, supplemented or modified
only with the written consent of each of the parties hereto.
16. CHOICE OF LAW. THIS AGREEMENT AND THE VALIDITY AND ENFORCEMENT
HEREOF, SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE SUBSTANTIVE
LAWS OF THE STATE OF TEXAS.
17. SEVERABILITY. If any provision of this Agreement is held to be
illegal, invalid or unenforceable under present or future laws effective during
the term of this Agreement, the legality, validity and enforceability of the
remaining provisions of this Agreement shall not be affected thereby, and in
lieu of each such illegal, invalid or unenforceable provision there shall be
added automatically as a part of this Agreement a provision as similar in terms
to such illegal, invalid or unenforceable provision as may be possible and be
legal, valid and enforceable.
18. ENTIRE AGREEMENT. This instrument embodies the entire agreement
between the parties relating to the subject matter hereof and supersedes all
prior agreement and understandings, if any, relating to the subject matter
hereof.
19. COUNTERPARTS. This Agreement may be executed in one or more
counterparts, each of which for all purposes is to be deemed an original.
20. SURVIVAL. All covenants, agreements, undertakings, indemnities,
representations and warranties made herein shall survive both the execution and
the termination hereof and shall not be affected by any investigation made by
any party.
IN WITNESS WHEREOF, the parties have executed this Agreement as of the day
and year first hereinabove written.
BUYER:
TAMARACK LENDERS CORPORATION
By:
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▇▇▇▇▇ ▇. ▇▇▇▇▇▇
President
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SERVICER:
TAMARACK FUNDING CORPORATION
By:
----------------------------
▇▇▇▇▇ ▇. ▇▇▇▇▇▇
President
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