********************************************************************************
Administrative Services Agreement (Project Brave).rtf
********************************************************************************
▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ LLP
EXECUTION COPY
--------------------------------------------------------------------------------
ADMINISTRATIVE SERVICES AGREEMENT
dated as of August 8, 2000
between
PROJECT BRAVE LIMITED PARTNERSHIP
and
FIRST UNION SECURITIES, INC.
--------------------------------------------------------------------------------
TABLE OF CONTENTS
PAGE
Section 1. DEFINED TERMS....................................................1
Section 2. APPOINTMENT AND AUTHORITY OF ADMINISTRATIVE AGENT................1
Section 3. ADMINISTRATIVE AGENT'S SERVICES AND DUTIES.......................2
Section 4. RELIANCE ON INFORMATION OBTAINED FROM THIRD PARTIES..............2
Section 5. STANDARD OF CARE; CONFORMITY WITH LAW; INDEMNITY.................3
Section 6. REPRESENTATIONS OF THE ISSUER....................................4
Section 7. EXPENSES OF THE ISSUER...........................................5
Section 8. COMPENSATION OF THE ADMINISTRATIVE AGENT.........................5
Section 9. SOURCE OF FUNDS..................................................6
Section 10. TERMINATION......................................................6
Section 11. CONFIDENTIALITY..................................................6
Section 12. NONEXCLUSIVE SERVICES............................................6
Section 13. EXECUTION IN COUNTERPARTS........................................7
Section 14. AMENDMENTS.......................................................7
Section 15. WAIVERS; CONSENTS AND APPROVALS..................................7
Section 16. NOTICES..........................................................7
Section 17. HEADINGS.........................................................8
Section 18. NO THIRD PARTY RIGHTS............................................8
Section 19. ASSIGNMENTS AND DELEGATIONS......................................8
Section 20. SEVERABILITY.....................................................8
Section 21. NO RECOURSE......................................................8
Section 22. INTEGRATION......................................................9
Section 23. GOVERNING LAW....................................................9
ADMINISTRATIVE SERVICES AGREEMENT
ADMINISTRATIVE SERVICES AGREEMENT, dated August 8, 2000, between PROJECT
BRAVE LIMITED PARTNERSHIP, a Delaware limited partnership (the "ISSUER"), and
FIRST UNION SECURITIES, INC., a Virginia corporation ("FUSI" or the
"ADMINISTRATIVE AGENT").
WITNESSETH:
WHEREAS, the Issuer intends to issue certain notes (the "NOTES"), pursuant
to that certain Indenture, dated as of August 8, 2000 (the "INDENTURE") among
▇▇▇▇▇ Fargo Bank Minnesota, National Association ("▇▇▇▇▇ FARGO"), as indenture
trustee, FUSI, as collateral agent and the Issuer and to use the proceeds
thereof to acquire, among other things, a portfolio of motor vehicle retail
installment sale contracts and purchase money loans, certain rights in various
spread accounts, certain rights to servicing fees and certain charged off
receivables pursuant to that certain Transfer and Servicing Agreement, dated as
of August 8, 2000 (the "TRANSFER AND SERVICING AGREEMENT") among the Issuer,
FIFS Acquisition Funding Company, L.L.C., as seller, First Investors Servicing
Corporation, as servicer and a seller party, ALAC Receivables Corp., as a seller
party, FUSI, as deal agent and collateral agent and ▇▇▇▇▇ Fargo, as backup
servicer, collateral custodian and indenture trustee;
WHEREAS, the Issuer has requested that the Administrative Agent
temporarily provide advice and assistance to the Issuer and temporarily perform
various other services for the Issuer in connection with its issuance and sale
of the Notes; and the Administrative Agent is willing to so act, subject to the
terms and conditions of this Agreement;
NOW, THEREFORE, in consideration of the premises and the mutual covenants
herein contained and for other consideration, the receipt of which is hereby
acknowledged, the Issuer and the Administrative Agent agree as follows:
SECTION 1. DEFINED TERMS.
Capitalized terms, unless otherwise defined herein, shall have the
meanings assigned such terms in the Indenture.
SECTION 2. APPOINTMENT AND AUTHORITY OF ADMINISTRATIVE AGENT.
The Issuer hereby appoints First Union Securities, Inc. as its
Administrative Agent, for the term specified in SECTION 10 below, to supervise
and perform, on the Issuer's behalf, only those management and administrative
functions that are specified herein. First Union Securities, Inc. hereby agrees
to supervise and perform such management and administrative functions for such
term.
SECTION 3. ADMINISTRATIVE AGENT'S SERVICES AND DUTIES.
(a) The Administrative Agent's duties on behalf of the Issuer shall be the
following:
(i) provided that the Issuer, or the Servicer on behalf of the
Issuer, provides the Administrative Agent with all of the information
necessary for such purposes as contemplated in the Basic Documents,
providing the following review services:
(A) review each Monthly Report, Servicer's Certificate and
each other statement delivered by the Issuer and/or the Servicer to
assure compliance with the reporting requirements of the Basic
Documents;
(B) review and monitor the performance of all Hedge
Transactions to assure compliance with Section 3.8 of the Indenture;
and
(C) review the books and records of the Issuer in preparation
for inspection pursuant to Section 3.27 of the Indenture;
(ii) instructing the Paying Agent to make distributions pursuant to
Section 3.1 of the Indenture;
(iii) maintaining records with respect to the Notes, including
without limitation, such records as would indicate the Notes Outstanding
under the Indenture, Note Interest due thereon, and the principal amount
outstanding;
(iv) taking such other actions as may be requested by the Issuer to
assist the Issuer in complying with the requirements of the Basic
Documents;
(v) taking such other actions as are reasonably necessary to the
accomplishment of the duties of the Administrative Agent set forth in this
SECTION 3.
(b) Notwithstanding anything herein to the contrary, the Administrative
Agent shall not be required to perform any of the duties set forth in this
SECTION 3 until such time as it has received a written to request to perform by
the Issuer.
SECTION 4. RELIANCE ON INFORMATION OBTAINED FROM THIRD PARTIES.
The Issuer recognizes that the accuracy and completeness of the records
maintained and the information supplied by the Administrative Agent hereunder
are dependent upon the accuracy and completeness of the information obtained by
the Administrative Agent from the Issuer, the parties to the Basic Documents and
other sources and the Administrative Agent shall not be responsible for any
inaccuracy in the information so obtained or for any inaccuracy in the records
maintained by the Administrative Agent hereunder which may result from such
inaccuracy.
2
SECTION 5. STANDARD OF CARE; CONFORMITY WITH LAW; INDEMNITY.
(a) The Administrative Agent shall perform its duties under SECTION 3 with
the same degree of care that it exercises or would exercise in connection with
the administration of its own or similar operations.
(b) Notwithstanding any provision to the contrary elsewhere in this
Agreement, the Administrative Agent assumes no liability for anything other than
to render the services called for in SECTION 3 and neither the Administrative
Agent nor any of its directors, officers, stockholders, incorporators, employees
or affiliates shall be liable for any liabilities or other obligations of the
Issuer under the Basic Documents or be responsible for (i) any action of the
Issuer, the Servicer, the Indenture Trustee, the Liquidity Banks, any other
party to a Basic Document or the directors, officers or employees of any thereof
or (ii) performing any functions or duties or exercising any rights under or in
connection with the Basic Documents (other than this Agreement). The
Administrative Agent shall be entitled to rely, and shall be fully protected in
relying, upon any writing, resolution, notice, consent, certificate, affidavit,
letter, cablegram, telegram, telecopy, telex or teletype message, statement,
order or other document or conversation reasonably believed by it to be genuine
and correct and to have been signed, sent or made by the proper person or
persons and upon advice and statements of legal counsel (including, without
limitation, counsel to the Issuer), independent accountants and other experts
selected by the Administrative Agent.
(c) The Administrative Agent will not, in performing its obligations under
SECTION 3, knowingly take any action that would cause the Issuer to be in
violation of any law, rule or regulation applicable to it or of any provision of
the charter or bylaws of the Issuer or cause the Issuer to become "controlled
by", or subject to, regulation as an "investment company" under the Investment
Company Act or cause the exemption from the registration requirements of the
Securities Act set forth in Section 4(2) thereof to become inapplicable to the
issuance and sale of any Notes; PROVIDED, HOWEVER, that the Administrative Agent
shall not be responsible for the actions of any party to a Basic Document
causing the Issuer to be in violation of any such provisions.
(d) The Administrative Agent hereby agrees to indemnify the Issuer, and
hold the Issuer harmless, from and against any and all losses, liabilities
(including liabilities for penalties), actions, suits, judgments, demands,
damages, costs and expenses (including, without limitation, interest and
reasonable attorneys' fees and expenses, but excluding any internal
administrative and overhead costs of the Issuer) to the extent arising out of or
resulting from the Administrative Agent's gross negligence or willful misconduct
in performing or failing to perform its duties or obligations in accordance with
SECTION 3 of this Agreement. The Issuer will promptly after receipt of notice of
commencement of any action, suit or proceeding against it, in respect of which a
claim is to be made against the Administrative Agent under this SECTION 5,
notify the Administrative Agent of the commencement of such action, suit or
proceeding, enclosing a copy
3
of any papers served, and, only if the Administrative Agent shall have
acknowledged in writing to the Issuer its obligation to indemnify the Issuer
under this SECTION 5, then the Administrative Agent shall be entitled to
participate in, and to assume the defense of, such action, suit or proceeding
with counsel reasonably satisfactory to the Issuer.
(e) The Issuer hereby agrees to indemnify the Administrative Agent, and
hold the Administrative Agent harmless, from and against any and all losses,
liabilities (including liabilities for penalties), actions, suits, judgments,
demands, damages, costs and expenses (including, without limitation, interest
and reasonable attorneys' fees and expenses, but excluding any internal
administrative and overhead costs of the Administrative Agent) to the extent
arising out of or resulting from the Issuer's gross negligence or willful
misconduct in performing or failing to perform its duties or obligations in
accordance with this Agreement. The Administrative Agent will promptly after
receipt of notice of commencement of any action, suit or proceeding against it,
in respect of which a claim is to be made against the Issuer under this SECTION
5, notify the Issuer of the commencement of such action, suit or proceeding,
enclosing a copy of any papers served, and the Issuer shall be entitled to
participate in, and to assume the defense of, such action, suit or proceeding
with counsel reasonably satisfactory to the Administrative Agent.
SECTION 6. REPRESENTATIONS OF THE ISSUER.
To induce the Administrative Agent to enter into this Agreement, the
Issuer represents and warrants to the Administrative Agent that:
(a) the Issuer is a limited partnership duly incorporated, validly
existing and in good standing under the laws of Delaware, and is duly qualified
to do business, and is in good standing, in every jurisdiction where the nature
of its business requires it to be so qualified, except where the failure to so
qualify would not have a material adverse effect on its business, condition or
operations;
(b) the execution, delivery and performance by the Issuer of this
Agreement are within the Issuer's corporate powers, have been duly authorized by
all necessary corporate action, and do not contravene (i) the Issuer's
partnership agreement, (ii) any law, rule or regulation applicable to the
Issuer, (iii) any contractual restriction binding on or affecting the Issuer or
its property or (iv) any order, writ, judgment, award, injunction or decree
binding on or affecting the Issuer or its property;
(c) there is no pending or threatened action or proceeding affecting the
Issuer before any court, governmental agency or arbitrator which may materially
adversely affect the financial condition or operations of the Issuer or the
ability of the Issuer to perform its obligations under this Agreement, or which
purports to affect the legality, validity or enforceability of this Agreement;
4
(d) no consent of any other person (including, without limitation,
stockholders or creditors of the Issuer), and no consent, license, permit,
approval or authorization of, exemption by, notice or report to, or
registration, filing or declaration with any governmental authority, is required
in connection with the execution, delivery, performance, validity or
enforceability of this Agreement by or against the Issuer;
(e) this Agreement has been duly executed and delivered by the Issuer; and
(f) this Agreement constitutes a legal, valid and binding obligation of
the Issuer enforceable against the Issuer in accordance with its terms, except
as enforceability may be limited by applicable bankruptcy, insolvency,
reorganization, moratorium or similar laws affecting the enforcement of
creditors' rights generally or by general principles of equity.
SECTION 7. EXPENSES OF THE ISSUER.
The Administrative Agent shall not be liable for any expenses of the
Issuer including, but not limited to, the fees of any placement agent for the
sale of the Notes; any fees or other amounts owing to the Liquidity Banks; any
loss of the Issuer, and any taxes assessed against, or applicable to, the income
of the Issuer; PROVIDED, HOWEVER, that the Administrative Agent shall be
responsible for any salaries, expenses or other compensation of its own
officers, employees, and directors.
SECTION 8. COMPENSATION OF THE ADMINISTRATIVE AGENT.
In consideration of and as compensation for all services to be rendered by
the Administrative Agent as described in this Agreement, the Issuer will pay the
Administrative Agent a monthly fee of 20% of all amounts in the Collection
Account after all distributions have been made pursuant to Section 3.1 of the
Indenture (the "MANAGEMENT FEE"). The Management Fee shall be payable each month
prior to (and including) the Distribution Date on which the cumulative compound
internal rate of return to the Initial Class B Noteholder based on an initial
invested amount of $24.92 million as of October 2, 1998 and giving effect to (i)
all cash payments constituting payments of interest or yield received by the
Initial Class B Noteholder under (a) the Loan and Security Agreement (which
amount shall include the Structuring Fee as defined in the Original Agreement)
and (b) the Class B Note (ii) equals or exceeds 25% (such Distribution Date, the
"TARGET RETURN DATE"). Such Management Fee shall be paid on each Distribution
Date up to and including the Target Return Date. Subject to the limitation set
forth in SECTION 10, the Issuer shall pay or reimburse the Administrative Agent
for reasonable costs and expenses incurred by the Administrative Agent in
connection with its performance of this Agreement, including the fees and
expenses of any independent accountants and the reasonable fees and expenses of
attorneys or other advisors engaged to perform professional services for the
Issuer (including, without limitation, reasonable fees and expenses of counsel
to the Issuer and Administrative Agent in connection with the preparation of
this Agreement, and the other Basic Documents).
5
SECTION 9. SOURCE OF FUNDS.
Notwithstanding any provisions contained in this Agreement to the
contrary, the Issuer shall not be obligated to pay any amount pursuant to
SECTIONS 5(E) and 10 unless the Issuer has excess cash flow from operations and
all payments pursuant to Section 3.1 of the Indenture have been made.
SECTION 10. TERMINATION.
This Agreement shall terminate upon the Target Return Date or, if the
parties hereto shall so agree in writing, upon any date after the Target Return
Date as specified in any notice of termination given by the Issuer, to the
Administrative Agent or by the Administrative Agent to the Issuer (which date
shall be at least 30 days after the giving of such notice). The provisions of
SECTIONS 7 and 11 shall survive any termination of this Agreement.
SECTION 11. CONFIDENTIALITY.
The Administrative Agent agrees to establish such systems and procedures
as may be reasonable to maintain the confidentiality of nonpublic information
relating to the Issuer, the Servicer or the Indenture Trustee which may be
obtained by the Administrative Agent in connection with its services to the
Issuer as Administrative Agent; PROVIDED, that such information may be disclosed
(a) as required by law or in connection with any litigation; PROVIDED, HOWEVER,
that prior to such disclosure, the Administrative Agent shall notify the Issuer,
the Servicer or the Indenture Trustee, as the case may be, in writing of the
reason and basis for such disclosure, and shall use all reasonable efforts to
obtain a stop order, a protective order, or any other protection for private and
confidential information under any applicable law, (b) to governmental or
regulatory authorities having jurisdiction over the Administrative Agent or any
of its affiliates, (c) to the Administrative Agent's legal counsel and auditors,
if the Administrative Agent reasonably determines that they have a reason to
know, and (d) if it has become publicly available other than as a result of a
breach of this Section.
SECTION 12. NONEXCLUSIVE SERVICES.
The services of the Administrative Agent to the Issuer under this
Agreement are not to be deemed exclusive, and the Administrative Agent shall be
free to render similar services to others. Nothing in this Agreement shall limit
or restrict the right of any director, officer or employee of the Administrative
Agent or any director, officer, employee or partner of any of its affiliates who
may also be a director, officer or employee of the Issuer to engage in any other
business or to devote time and attention in part to the management or other
aspects of any other business, nor to limit or restrict the right of the
Administrative Agent or of any of its affiliates to engage in any other business
or to render services of any kind to any other corporation, firm, individual or
association.
6
SECTION 13. EXECUTION IN COUNTERPARTS.
This Agreement may be executed by the parties hereto in separate
counterparts, each of which shall be deemed to be an original, and all such
counterparts shall together constitute but one and the same instrument. Delivery
of an executed counterpart of a signature page to this Agreement by facsimile
shall be effective as delivery of a manually executed counterpart of this
Agreement.
SECTION 14. AMENDMENTS.
This Agreement may be supplemented, modified or amended only by written
instrument signed on behalf of both parties hereto by their duly authorized
officers. No amendment to the terms defined in the Indenture which are used
herein shall be effective for the purposes of this Agreement unless the
Administrative Agent shall have consented thereto.
SECTION 15. WAIVERS; CONSENTS AND APPROVALS.
No party hereto shall be deemed to have consented to, approved or waived
any matter under this Agreement, unless any purported consent, approval or
waiver is expressly set forth in writing and signed by the party giving the
consent, approval or waiver. No failure on the part of any party hereto to
exercise, and no delay in exercising, any right hereunder shall operate as a
waiver thereof nor shall any single or partial exercise of any right hereunder
preclude any other or further exercise thereof or the exercise of any other
right or be construed as a waiver to or of any other breach of the same or any
other covenant, condition or duty.
SECTION 16. NOTICES.
All notices, demands and communications hereunder shall be in writing
(which shall include electronic transmission), shall be personally delivered,
express couriered, electronically transmitted (in which case a hard copy shall
also be sent by regular mail) or mailed by registered or certified mail and
shall, unless otherwise expressly provided herein, be effective when received at
the address specified below or at such other address as shall be specified in a
notice furnished hereunder.
If to the Issuer:
PROJECT BRAVE LIMITED PARTNERSHIP
c/o FIFS Acquisition Funding Company, L.L.C.
▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇ Duck
7
Telephone No.: (▇▇▇) ▇▇▇-▇▇▇▇
Facsimile No.: 713) 977-0657
If to the Administrative Agent:
First Union Securities, Inc.
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇-▇
▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇ ▇▇▇▇▇▇▇▇▇
Tel. No: (▇▇▇) ▇▇▇-▇▇▇▇
Facsimile No: (▇▇▇) ▇▇▇-▇▇▇▇
SECTION 17. HEADINGS.
Section headings used in this Agreement are for convenience of reference
only and shall not affect the construction or interpretation of this Agreement.
SECTION 18. NO THIRD PARTY RIGHTS.
Except as specifically set forth herein, no provision hereof is intended
or shall be construed to confer upon or to give to any person, firm or
corporation, other than the parties hereto, any right, remedy or claim under or
by reason of this Agreement or of any term, covenant or condition hereof, and
all the terms, covenants, conditions, promises and agreements contained herein
shall be for the sole and exclusive benefit of the parties hereto and their
successors and permitted assigns.
SECTION 19. ASSIGNMENTS AND DELEGATIONS.
This Agreement and the rights and obligations hereunder may not be
assigned or delegated by either party without the prior written consent of the
other party.
SECTION 20. SEVERABILITY.
If any provision of this Agreement is invalid or unenforceable, the
balance of this Agreement shall remain in effect and, if any provision is
inapplicable to any person or circumstance, it shall nevertheless remain
applicable to all other persons and circumstances.
SECTION 21. NO RECOURSE.
The obligations of the Issuer under this Agreement are solely the
corporate obligations of the Issuer. No recourse shall be had for the payment of
any amount owing by the Issuer under
8
this Agreement, or for the payment by the Issuer of any fee in respect hereof or
any other obligation or claim of or against the Issuer arising out of or based
on this Agreement, against FUSI, or against any stockholder, employee, officer,
director or incorporator of the Issuer. For purposes of this SECTION 21, the
term "FUSI" shall mean and include FUSI and all affiliates thereof and any
employee, officer, director, incorporator, stockholder or beneficial owner of
any of them; provided, however, that the Issuer shall not be considered to be an
affiliate of FUSI for purposes of this SECTION 21.
SECTION 22. INTEGRATION.
This Agreement contains a final and complete integration of all prior
expressions by the parties hereto with respect to the subject matter hereof and
shall constitute the entire Agreement among the parties hereto with respect to
the subject matter hereof, superseding all prior oral or written understandings.
SECTION 23. GOVERNING LAW.
THIS AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH, THE
LAW OF THE STATE OF NEW YORK.
[remainder of page intentionally left blank]
9
IN WITNESS WHEREOF, the Issuer and the Administrative Agent have caused
this Agreement to be executed as of the day and year first above written.
PROJECT BRAVE LIMITED PARTNERSHIP
BY: FIFS ACQUISITION FUNDING COMPANY, L.L.C.,
AS GENERAL PARTNER,
BY: FIALAC HOLDING, INC.
By:________________________________________
Name:______________________________________
Title:_____________________________________
FIRST UNION SECURITIES, INC.
By:________________________________________
Name:______________________________________
Title:_____________________________________
10