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EXHIBIT 10.14
AMENDED AND RESTATED
JOINT VENTURE AGREEMENT
OF
PERFORMANCE ASSET MANAGEMENT FUND IV, LTD.
(a California Joint Venture)
This AMENDED AND RESTATED JOINT VENTURE AGREEMENT ("Agreement") is
made and entered into by and between PERFORMANCE CAPITAL MANAGEMENT, a
California corporation ("PCM") and PERFORMANCE ASSET MANAGEMENT FUND IV, LTD.,
a California Limited Partnership ("▇▇▇ ▇▇") as of September 1, 1996. The Joint
Venture created hereby is sometimes referred to hereafter as the "Venture" and
the parties are sometimes referred to as "Venturers."
RECITALS
A. ▇▇▇ ▇▇ is a limited partnership formed for the purpose of
generating income and cash flow from various charged off retail sales contracts
and credit card contracts assets ("Contract Assets") acquired from lenders and
other creditors and desires to develop and maintain a dedicated collections and
servicing capacity to efficiently collect on the Contract Assets.
B. PCM is a collections and servicing entity with the expertise
to perform the collection and servicing of assets such as the Contract Assets.
C. The Venturers have entered into a series of joint ventures on
essentially identical terms with respect to a number of portfolios of Contract
Assets. The dates of prior joint venture agreements and portfolios of Contract
Assets are identified on Exhibit "A" hereto.
D. By this Agreement, the Venturers wish to amend and restate in
a single document the terms and conditions of their relationship which terms
and conditions will govern such relationship with respect to all Contract
Assets currently owned as well as all Contract Assets acquired in the future,
if any.
NOW, THEREFORE, THE PARTIES HEREBY AGREE AS FOLLOWS:
1. FORMATION OF JOINT VENTURE. The Venturers have formed the
Venture for the limited purposes and scope set forth below and hereby amend,
restate and incorporate the terms of all prior agreements between them.
2. NAME OF THE JOINT VENTURE. The affairs of the Venture shall
be conducted under the name of "▇▇▇ ▇▇ ▇.▇." and such name shall be used at all
times in connection with the Venture's affairs. The Venture shall be governed
by and interpreted in accordance with the laws of the State of California. PCM
is hereby authorized to prepare and file such fictitious business name
statements and/or statements of partnership as PCM deems appropriate or
required.
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3. PURPOSE. The purpose of the Venture shall be to facilitate the
collection of Contract Assets purchased from various lenders and/or other
sources from time to time during the term of the Venture, and to sell, enforce,
foreclose upon, and take any and all actions necessary, convenient or expedient
to maximize income and other benefits to be derived by the Venture from the
Contract Assets in compliance with all applicable requirements of law. The
Venture shall not engage in any other business or economic activity nor acquire
or own any type of property unrelated to the purposes set forth above except
with the prior written approval of both Venturers.
4. General Limitations on Authority of Venturers. No Venturer
shall have any right or power to act for or assume any obligations or
responsibility on behalf of any other Venturer for any purpose whatsoever
except as specifically and expressly provided in this Agreement and neither
Venturer shall be liable for the contracts or acts (of either omission or
commission) of the other Venturer other than those taken on behalf of the
Venture and specifically authorized by the terms of this Agreement. It is not
the purpose or intention of this Agreement to create, and this Agreement shall
never be construed as creating, a general business partnership or any other
relationship except for the specific purposes set forth herein.
5. PLACE OF BUSINESS. The principal office and place of business
of the Venture shall be: ▇▇▇▇▇ ▇▇▇ ▇▇▇▇, ▇▇▇▇▇ ▇▇▇, ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇.
6. MANAGEMENT. Except as otherwise provided herein, all matters
relating to the policies and management of the Venture and the conduct of
business operation and affairs of the Venture shall be determined by unanimous
approval of the Venturers except to the extent, if any, that specific authority
may from time to time be granted in writing by the Venturers to any employed
personnel of the Venture or any other party. Notwithstanding the foregoing,
PCM shall be authorized and empowered to take such actions and enter into such
agreements on behalf of the Venture as are more particularly described in
Section 7, below. All persons and entities dealing with the Venture with
respect to such matters may rely on documents executed by PCM alone in
connection with such matters.
7. REPRESENTATIVES OF VENTURERS. In order to facilitate the
management and operation of the Venture, each Venturer shall designate a
representative as the party authorized on behalf of such Venturer to make
decisions with respect to the Venture. The other Venturer shall be entitled to
rely upon the authority of such designated representative until informed in
writing to the contrary by the other Venturer. The designated representative
of PCM shall be ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇, and the designated representative of ▇▇▇
▇▇ shall be ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇. Because of its specialized expertise in the
purchase and collections of Contract Assets, the representatives of the
Venturers designate PCM:
A. To collect revenues due or to become due to the
Venture and deposit such revenues in a bank clearing or trust account or bank
accounts (as selected by the Venturers);
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B. To exclusively assign accounts for collections to
third parties including but not limited to, outside collection agencies and to
hire attorneys from time to time to assist in such efforts. Further, in
connection with the authority granted herein to PCM, PCM shall also have the
right to assign, transfer, or convey a portion of its ownership interest in the
Venture to such third parties;
C. To make such contracts, if any, relating to the
conduct of the business as they shall deem advisable;
D. To negotiate and deal with regulatory authorities
relative to matters involving the business and affairs of the Venture;
E. To prepare and deliver to each other Venturer
periodic reports, not less frequently than monthly, showing results of
operation of the Venture and distribution of all funds of the Venture;
F. To take such other action, to make all other routine
day-to-day decisions of the Venture, and to Perform such other services as are
necessary, customary or appropriate for engaging in the economic activity
constituting the purpose of the Venture referred to in Section 3 of this
Agreement;
G. To borrow funds for the benefit of the Venture and to
secure such borrowing by granting security interests, assignments, pledges or
to otherwise hypothecate the Contract Assets as security for such loans;
H. To sell, transfer, assign or otherwise liquidate all
or any portion of the Contract Assets on such terms as PCM, in its sole
discretion, deems in the best interest of the Venture; and
I. To admit additional Venturers in exchange for
contributions of cash, equity or other value to and for the benefit of the
Venture conditioned, however, upon such new venturer executing a written
agreement to be bound by all of the terms hereof.
8. UNAUTHORIZED ACTS. If any Venturer purports to do any act on
behalf of the Venturer or to bind the Venture other than in strict compliance
with the terms of this Agreement, such Venturer shall be deemed to have
breached this Agreement and, in addition to all other liabilities of such
Venturer thereby resulting, such Venturer shall, at such Venturer's own cost
and expense, indemnify and hold harmless the other Venturers and the Venture
from all claims, causes of action, costs, expenses, obligations and liabilities
thereby arising.
9. ACCOUNTING. The Venture shall keep and maintain adequate
books of account and other financial records on a cash basis, in accordance
with generally accepted accounting principles that consistently applied. Such
books of account and other records shall be open to inspection by any Venturer
at any time during reasonable business hours.
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10. DISTRIBUTIONS. All "Distributable Funds" (as hereinafter
defined ) of the Venture from time to time on hand shall be distributed as
follows:
A. With respect to Distributable Funds generated from
payments collected under the Contract Assets, such Distributable Funds shall be
distributed between the Venturers in the following ratio: 55% to ▇▇▇ ▇▇ and
45% to PCM; or as noted on Exhibit A.
B. With respect to Distributable Funds generated from
the sale or other disposition of Contract Assets, such Distributable Funds
shall be distributed between the Venturers in the following ratio: 85% to ▇▇▇
▇▇ and 15% to PCM.
The term "Distributable Funds," as used herein, means the amount (if
any), on any date, of cash collected on behalf of the Venture either from the
collection, sale or other disposition of Contract Assets less reasonable
reserves, current expenses and expenses incurred but not yet disbursed.
11. ALLOCATION OF INCOME, CREDITS, DEDUCTIONS, GAINS AND LOSSES.
For accounting and federal and state income tax purposes, all income,
deductions, credits, gains and losses of the Venture shall be allocated to the
Ventureres as of the last day of the relevant fiscal year with respect to which
such allocation is to be made as follows:
A. With respect to items of income, credits, deductions,
gains and losses generated from payments collected under the Contract Assets,
such items shall be allocated between the Venturers in the following ratio: 55%
to ▇▇▇ ▇▇ and 45% to PCM; or as noted on Exhibit A.
B. With respect to items of income, credits, deductions,
gains and losses generated from the sale or other disposition of Contract
Assets, such items shall be distributed between the Venturers in the following
ratio: 85% to ▇▇▇ ▇▇ and 15% to PCM.
12. COMPENSATION TO VENTURERS. Except as set forth herein and
except as may hereafter be expressly authorized in writing by all of the
Venturers, neither Venturer shall be entitled to receive, directly or
indirectly, any compensation, commission or other payment from or on account
of, or in connection with, the performance of any service for the Venture, or
be entitled to reimbursement for overhead costs or similar expenses relating to
any service performed for the Venture by such party.
13. BEST EFFORTS. PCM hereby agrees to utilize its best
reasonable efforts to collect all amounts owed to the Venture by the obligors
under the Contract Assets and to prepare monthly reports (in a form similar to
the report attached hereto as Exhibit "B", which is attached hereto and made a
part hereof for all purposes) detailing the cash receipts of the Venture and
the distribution of all funds of the Venture. Notwithstanding anything to the
contrary contained herein, PCM shall be entitled to payment for all actual
collection services provided to the Venture (such as ▇▇▇▇▇▇▇ letters, account
loading,
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credit report inquiry, computerized account, etc.) so long as PCM uses its best
reasonable efforts to collect the amounts owing to the Venture by the obligors
under the Contract Assets, including, without limitation, arranging for
employees of PCM to collect such revenues. In addition, PCM shall be entitled
to reimbursement for actual expenses incurred in connection with the sale of
any assets of the Venture. On accounts referred for litigation or assigned to
a third party collection entity, PCM shall be entitled to an additional five
percent (5%) of the total monthly revenues collected and received by the
Venture on such accounts as reimbursement for the additional costs and expenses
incurred by PCM in connection with such collection efforts and such amounts
shall be in addition to actual expenses paid to attorneys and third party
collection entities. The Venture agrees to indemnify PCM as provided below
from all claims or causes of action arising out of PCM's collection of or
attempts to collect revenues on behalf of the Venture. The Venturers
acknowledge and understand that the Contract Assets consist of accounts charged
off as uncollectible or bad debts by others and that it is expected that a
large portion of the face amount of the Contract Assets will not and cannot be
collected and that the acquisition price of the Contract Assets reflects the
foregoing risk.
14. CAPITAL CONTRIBUTIONS. The Venturers have contributed to the
Venture, as their respective original capital contributions, the Contract
Assets, and, accordingly, the capital account of each respective Venturer has
been credited with the amount of such particular Venturer's capital
contribution and the Percentage Interests in the Venture thereby acquired by
the various Venturers.
15. PROHIBITED ASSIGNMENTS. Except as otherwise provided, without
the consent of all other Venturers, no interest in this Venture or rights under
this Agreement may be sold, assigned, transferred, mortgaged, encumbered,
hypothecated, or disposed of in any manner; and except as so provided, any
attempt to take any such action and such purported sale, assignment, transfer,
mortgage encumbrance, hypothecation or other disposition shall be void.
16. TERM. The Venture and this Agreement shall remain in full
force and effect from the date hereof until termination of the Venture in
accordance with the provisions hereof. The Venture shall terminate upon the
earlier to occur of any of the following:
A. December 31, 2005; or
B. The voluntary dissolution of the Venture by the vote
of the holders of a majority of the Percentage Interests in the Venture; or
C. The insolvency of any Venturer or the filing of a
voluntary or involuntary petition under any Chapter of the United States
Bankruptcy Code or any similar state statute naming an Venturer as debtor or
any assignment for benefit of creditors by any Venturer.
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17. INDEMNIFICATION OF PCM. The Venture shall indemnify and defend
PCM, its agents, employees, affiliated entities and individuals, officers and
directors (collectively referred to as PCM in this Section) in connection with
any threatened, pending or completed action, lawsuit or proceeding including
arbitration or other means of dispute resolution, against any and all costs,
expenses (including attorneys fees), costs of investigation, fines, judgments,
amounts paid in settlement, actually and reasonably incurred by PCM in
connection with such action, lawsuit or proceeding if in connection with the
actions allegedly giving rise to the claims upon which the action, lawsuit or
proceeding is based PCM acted in good faith in a manner it reasonably believed
to be in or not adverse to the best interest of the Venture.
18. GENERAL MATTERS.
18.1 NOTICES. Any and all notices permitted or required
to be given under the terms of this Agreement shall be in writing and may be
served by: (a) registered or certified mail, return receipt requested, postage
prepaid, and addressed to the party to be notified at the appropriate address
specified below; (b) delivering the same in person to such party, or by prepaid
telegram, addressed to the party to be notified at said address; (c) delivery
by Federal Express or other nationally recognized courier service, addressed to
the party to be notified at such address; or (d) telecopy (provided that such
telecopy is confirmed by mail or other delivery in the manner previously
described). Notice given by certified mail as a fore said shall be deemed
given and received three (3) days after mailing, whether or not actually
received. Any notice given in any other above authorized manner shall be
deemed received upon actual receipt; but shall also be deemed received upon
attempted delivery if such delivery is not accepted. The addresses of the
parties are as follows:
IF TO PCM: Performance Capital Management
Attn: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
▇▇▇▇▇ ▇▇▇ ▇▇▇▇
▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇, ▇▇. ▇▇▇▇▇
Telecopy: (▇▇▇) ▇▇▇-▇▇▇▇
IF TO ▇▇▇ ▇▇: Performance Asset Management Fund IV, Ltd.
Performance Development, Inc., General Partner
▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇. ▇▇▇▇▇
Attention: ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇
Telecopy: (▇▇▇) ▇▇▇-▇▇▇▇
The addresses of any party may be changed by notice given in the
manner provided in this Section.
18.2 ENTIRE AGREEMENT. This Agreement contains the entire
agreement between the parties hereto relative to the formation, operation,
governance and other
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aspects of the Venture hereby formed. No variation, modification, or change of
this Agreement shall be binding upon any party hereto unless set forth in a
document duly executed by such party (or duly authorized agent of such party)
and all other Venturers.
18.3 SEVERABILITY. If any provision of this Agreement or
application thereof to any person of circumstance shall be invalid or
unenforceable to any extent, the remainder of this Agreement and the
application of such provision to other persons or circumstances shall not be
affected thereby and shall be enforced to the greatest extent permitted by law.
18.4 BINDING AGREEMENT. This Agreement shall inure to the
benefit of and be binding upon the undersigned parties and their respective
successors and assigns. Whenever, in this instrument, a reference to any party
is made, such reference shall be deemed to include a reference to the
successors and assigns of such party, however, neither this Section nor any
other portion of this Agreement shall be interpreted to constitute a consent to
any assignments or transfer other than pursuant to and in accordance with the
other provisions of this Agreement.
18.5 ATTORNEYS' FEES. If any party hereto commences an
action, including arbitration or other form of dispute resolution, against any
other party hereto to enforce any of the terms hereof or because of the breach
by any party hereto of any of the terms hereof, the losing or defaulting party
shall pay the prevailing party reasonable attorneys' fees, costs and expenses
incurred in connection with the prosecution or defense of such action (whether
by arbitration or in court of law), and in connection with any action to
collect any judgment rendered thereunder.
This Agreement may be executed in multiple counterparts, each of which
shall have the force and effect of an original, as of the date first set forth
above ("Effective Date").
PERFORMANCE CAPITAL MANAGEMENT,
A CALIFORNIA CORPORATION
By: [SIG]
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▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇, President
PERFORMANCE ASSET MANAGEMENT
FUND IV, LTD., A CALIFORNIA LIMITED
PARTNERSHIP
BY: PERFORMANCE DEVELOPMENT, INC.,
GENERAL PARTNER
By: [SIG]
--------------------------------
▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇, President
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#EXHIBIT "A"
OF THE
AMENDED AND RESTATED
JOINT VENTURE AGREEMENT
DATED 09/01/96
PERFORMANCE ASSET MANAGEMENT FUND IV, LTD.
DATE PARTNERSHIP CODE CORPORATION COMMENTS
09/26/93 ▇▇▇ ▇▇ PH2083/3083 PCM HRSI
09/28/93 ▇▇▇ ▇▇ PCH103 PCM CHEMICAL BANK
10/20/96 ▇▇▇ ▇▇ PHF113 PCM HOUSEHOLD FIN.
10/27/93 ▇▇▇ ▇▇ PCH3N3 PCM CHEMICAL BANK
11/23/93 ▇▇▇ ▇▇ PHF123 PCM HOUSEHOLD FIN.
11/30/93 ▇▇▇ ▇▇ PCH2N3 PCM CHEMICAL BANK
02/01/94 ▇▇▇ ▇▇ PCH014 PCM CHEMICAL BANK
02/25/94 ▇▇▇ ▇▇ PFU024 PCM FIRST USA
02/28/94 ▇▇▇ ▇▇ PCH024 PCM CHEMICAL BANK
03/30/94 ▇▇▇ ▇▇ PCH034 PCM CHEMICAL BANK
03/31/94 ▇▇▇ ▇▇ PHR034 PCM HRSI
04/27/94 ▇▇▇ ▇▇ PCH044 PCM CHEMICAL BANK
05/25/94 ▇▇▇ ▇▇ P4CB15 PCM CHEMICAL BANK
05/31/94 ▇▇▇ ▇▇ P4FU16 PCM FIRST USA
06/01/94 ▇▇▇ ▇▇ P4HF17 PCM HOUSEHOLD FIN.
06/28/94 ▇▇▇ ▇▇ P4CB20 PCM CHEMICAL BANK
07/27/94 ▇▇▇ ▇▇ P4CB21 PCM CHEMICAL BANK
08/24/94 ▇▇▇ ▇▇ P4CB24 PCM CHEMICAL BANK
09/30/94 ▇▇▇ ▇▇ P4CB26 PCM CHEMICAL BANK
10/04/94 ▇▇▇ ▇▇ P4GE27 PCM GENERAL ELEC.
10/31/94 ▇▇▇ ▇▇ P4CB28 PCM CHEMICAL BANK
11/29/94 ▇▇▇ ▇▇ P4CB30 PCM CHEMICAL BANK
11/30/94 ▇▇▇ ▇▇ P4CB31 PCM CHEMICAL BANK
12/23/94 ▇▇▇ ▇▇ P4CB34 PCM CHEMICAL BANK
12/23/94 ▇▇▇ ▇▇ P4CB35 PCM CHEMICAL BANK
01/24/95 ▇▇▇ ▇▇ P4BA36 PCM BANK OF AMER.
03/10/95 ▇▇▇ ▇▇ P4CC38 PCM COMM. CRED.
09/05/95 ▇▇▇ ▇▇ P4FU39 PCM FIRST USA
09/23/95 ▇▇▇ ▇▇ P4FU40 PCM FIRST USA
10/11/95 ▇▇▇ ▇▇ P4AG41 PCM AMER. GENERAL
11/15/95 ▇▇▇ ▇▇ P4KF42 PCM KENT FINANCIAL
11/27/95 ▇▇▇ ▇▇ P4FU43 PCM FIRST USA
01/03/96 ▇▇▇ ▇▇ P4FU44 PCM FIRST USA
02/13/96 ▇▇▇ ▇▇ P4FU45 PCM FIRST USA
03/08/96 ▇▇▇ ▇▇ P4FU48 PCM FIRST USA
03/28/96 ▇▇▇ ▇▇ P4FU49 PCM FIRST USA
03/25/96 ▇▇▇ ▇▇ P4SF50 PCM SEAFIRST BANK
04/29/96 ▇▇▇ ▇▇ P4FU51 PCM FIRST USA
08/30/96 ▇▇▇ ▇▇ P4CM52 PCM CHASE MANHATT.
08/30/96 ▇▇▇ ▇▇ P4CM53 PCM CHASE MANHATT.
11/26/96 ▇▇▇ ▇▇ P4CM54 PCM CHASE MANHATT.
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12/18/96 ▇▇▇ ▇▇ P4CM55 PCM CHASE MANHATT.
12/18/96 ▇▇▇ ▇▇ P4LV56 PCM ▇▇▇▇▇▇
12/27/96 ▇▇▇ ▇▇ P4CM57 PCM CHASE MANHATT.
06/19/97 ▇▇▇ ▇▇ P4CM58 PCM CHASE MANHATT.
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EXHIBIT "B"
(form of Monthly Report on Collections)