Exhibit 10.15
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PREMIUM RECEIVABLE SERVICING AGREEMENT
by and among
FPF, INC.,
and
FEDERATED PREMIUM FINANCE, INC.
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Dated as of September 30, 2001
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PREMIUM RECEIVABLE SERVICING AGREEMENT
This PREMIUM RECEIVABLE SERVICING AGREEMENT ("Servicing Agreement") is
made as of September 30, 2001 by and among FPF, INC., a Colorado corporation
("FPF"), as servicer (the "Servicer").
PRELIMINARY STATEMENT
WHEREAS, pursuant to the Master Sale and Assignment Agreement (the
"Sale Agreement") dated of even date herewith by and between FPF and FEDERATED
PREMIUM FINANCE, INC., a Florida corporation, FPF will acquire certain Premium
Receivables originated by the Originator, as seller, and FPF, as purchaser; and
WHEREAS, the parties hereto desire to enter into this Servicing
Agreement to provide for, among other things, the management, administration,
servicing and collections with respect to the Premium Receivables for the
benefit of FPF and its assignees and designees and to perform certain duties as
described herein.
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 I
DEFINITIONS
DEFINED TERMS. Capitalized terms used and not otherwise defined in this
Servicing Agreement shall have the meaning set forth in the Sale Agreement. As
used in this Servicing Agreement, the following terms, unless the context
otherwise requires, have the following meanings (such meanings to be equally
applicable to the singular and plural forms of the terms defined):
"Allowable Coverage Change" means, with respect to a Premium
Receivable, a modification thereof approved by the Servicer in the ordinary
course of its business and in accordance with the standard of care set forth in
Section 2.16 of this Servicing Agreement, which modification does not (a)
provide that the principal and interest on the Premium Receivable can be paid
over an aggregate period extending beyond the Term, (b) decrease the annual
percentage rate of interest payable on the Premium Receivable or (c) reduce the
principal amount of the Premium Receivable or release the Realization Provisions
with respect to such Premium Receivable.
"Approved Expenses" means, with respect to a Person, all reasonable and
documented direct out-of-pocket expenses incurred by such Person including,
without limitation, professional services (such as attorneys, consultants and
accountants), postage, courier services, insurance, stationery, telephone,
facsimile transmission and travel, any of which are incurred specifically in the
performance of its duties under this Servicing Agreement, other than required
reporting duties thereunder and general office overhead.
"Cancellation Standard" means, as of any date, the timely cancellation
by the Servicer of the underlying insurance policies relating to at least
ninety-seven percent (97%) of the Premium Receivables on which payments are
overdue by thirty (30) days or more.
"Change of Control" shall have the meaning set forth in Section 2.11(c)
of this Servicing Agreement.
"Collections Account" means the lock box account or other accounts
established by Servicer in the name of FPF or its designee into which the
Collections are to be deposited pursuant to Section 3.01 of this Servicing
Agreement.
"Daily Servicer Report" means a report in the form of Exhibit A-1 to
this Servicing Agreement, to be delivered to FPF pursuant to Section 2.10(a)
hereof.
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"Event of Servicing Default" shall have the meaning set forth in
Section 5.01 of this Servicing Agreement.
"Loan Documents" means with respect to each Premium Receivable listed
on each Schedule of Premium Receivables (a) the original Premium Finance
Agreement and any Endorsement Additions or other riders thereto, or if any
original has been lost or destroyed, certified copies thereof, each stamped with
an assignment stamp evidencing the Sale thereof to FPF, (b) originals of all
guarantees, if any, executed in connection with such Premium Receivable, (c) all
assumption, modification, consolidation or extension agreements, if any, and (d)
original or facsimile copy of the paid and cancelled check or draft payable to
the applicable Issuing Insurance Company evidencing payment of an amount equal
to or greater than the financed portion of the premium with respect to the
insurance policy issued by such Issuing Insurance Company relating to such
Premium Receivable; provided, however, that with the prior written consent of
FPF or its designees, each of the documents to be included in items (b) and (c)
above may be in the form of a file maintained on an optical scan system.
"Reporting Period" shall mean the period beginning on the first day of
the calendar month and ending on the last day of such calendar month; provided,
that the initial Reporting Period begins on the Effective Date.
"Scheduled Payment" shall mean the monthly payment relating to a
Premium Receivable required to be made by the Obligor thereunder in order to
fully amortize the principal balance of the Premium Receivable under the method,
term and rate stated in the Premium Finance Agreement or similar agreement
evidencing such Premium Receivable.
"Servicing Fee" shall have the meaning specified in Section 2.08 of
this Servicing Agreement.
"Successor Servicer" means that Person succeeding the Servicer under
and pursuant to Section 5.02 of this Servicing Agreement as may be designated by
FPF.
ARTICLE II
ADMINISTRATION AND SERVICING OF PREMIUM RECEIVABLES
SECTION 2.01. APPOINTMENT AND DUTIES OF SERVICER.
(a) FPF hereby appoints the Originator as the Servicer, and
the Originator shall remain as Servicer until the earlier to occur of
(i) the payment in full of all amounts due to FPF under a termination
of the Sale Agreement, (ii) written notice from FPF or its designees to
the Servicer of termination of the Servicer hereunder due to the
occurrence of a Default under the Sale Agreement, or (iii) written
notice from FPF or its designees to the Servicer of termination of the
Servicer hereunder due to the occurrence of an Event of Servicing
Default. The Servicer shall perform the services required of it
pursuant to the terms of this Servicing Agreement. 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
in accordance with the standard of care specified herein.
(b) The Servicer, in making collections of Premium Receivable
payments pursuant to Section 2.02 hereof, shall be deemed to be holding
such funds in trust on behalf of, and as agent for, FPF and its
designees.
(c) FPF shall take all such lawful action in its discretion to
compel or secure the performance and observance by the Servicer of its
obligations to FPF under or in connection with this Servicing
Agreement, in accordance with the terms hereof, and shall exercise any
and all rights, remedies, powers and privileges lawfully available to
FPF under or in connection with this Servicing Agreement.
(d) The Servicer may not delegate any or all of its duties or
obligations hereunder, and the Servicer shall not otherwise permit any
other Person to engage in any servicing, auditing, administrating,
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managing, collecting or other activities with respect to the Premium
Receivables, unless approved in writing by FPF or its designees in each
such Person's absolute discretion.
(e) The Servicer, upon execution of this Servicing Agreement,
shall execute and deliver a power of attorney to FPF and its assigns in
substantially the form of Exhibit C attached hereto.
SECTION 2.02. COLLECTION OF PREMIUM RECEIVABLE PAYMENTS. All servicing
of the Premium Receivables will be performed on a "private label" basis using
the name of Originator on a premium finance software system approved by FPF in
writing. The Servicer shall be responsible for collection of payments called for
under the terms and provisions of the Premium Receivables as and when the same
shall become due. In addition, the Servicer shall be responsible for the
collection of late payments and enforcing the Realization Provisions with
respect thereto, and shall follow such collection procedures as are consistent
with the standard of care set forth in Section 2.16 hereof. In accordance with
the foregoing, the Servicer may grant extensions, rebates or adjustments on a
Premium Receivable, but shall not modify the original due dates, interest rate
or Scheduled Payments on the Premium Receivables except as would constitute an
Allowable Coverage Change. The Servicer may in its discretion waive any late
payment charge or any other fees that may be collected in the ordinary course of
servicing a Premium Receivable.
SECTION 2.03. PAST-DUE PREMIUM RECEIVABLES; CANCELLED PREMIUM
RECEIVABLES.
(a) In the event an Obligor has not made a payment with regard
to a Premium Receivable, the Servicer shall promptly, but in no event
later than 10 days after such due date, (i) notify the defaulting
Obligor that the Servicer shall request the Issuing Insurance Company
to cancel the insurance coverage pertaining to the Premium Receivable
if payment is not received within 10 days of such Obligor's receipt of
such notice (the "Ten Day Notice"), (ii) upon failure to receive the
payment due from Obligor following the period stated in the Ten Day
Notice (plus such grace period, if any, as determined by the Servicer
but in no event longer than the date 25 days from the original due
date, except as may be required under applicable state law or
regulation), request cancellation of the policy from the Issuing
Insurance Company (such date stated in the cancellation request being
the "Cancellation Date") and (iii) enforce on behalf of FPF and its
designees, any and all Realization Provisions and other rights relating
to the Premium Receivable.
(b) The Servicer may, but is not obligated to, submit a
written request to the applicable Issuing Insurance Company (whereupon
the Servicer shall retain a copy of such request and any response
thereto) to reinstate the insurance policy underlying a Canceled
Premium Receivable; provided, that, prior to such request for
reinstatement, all past due payments have been received by, or credited
to, the Servicer in the form of a money order, certified check, wire
transfer or other means of immediately available funds. In the event
the underlying insurance policy is reinstated by the Issuing Insurance
Company, the Servicer shall make appropriate adjustments in its records
and reports, and such Premium Receivable shall no longer be considered
a Cancelled Premium Receivable.
(c) The Servicer shall, upon receipt of unearned premiums,
unearned commissions, state guaranty funds, broker guarantee funds or
funds from a cash collateral account with respect to the related
Canceled Premium Receivable, remit such funds to the Collections
Account pursuant to Section 3.02 hereof.
SECTION 2.04. DEFAULTED PREMIUM RECEIVABLES. With respect to each
Defaulted Premium Receivable, the Servicer shall promptly provide in its Monthly
Servicer Report notice of such Defaulted Premium Receivable together with the
outstanding principal amount of such Defaulted Premium Receivable and the number
of days such Defaulted Premium Receivable is delinquent. The Servicer shall use
its best efforts, consistent with the standard of care set forth in Section 2.16
hereof, to collect funds on a Defaulted Premium Receivable from the Issuing
Insurance Company, insured or otherwise (any such collections from whatever
source being a "Defaulted Premium Receivable Recovery"). All Defaulted Premium
Receivable Recoveries shall be deposited by the Servicer into the Collections
Account by the close of business on the Business Day following receipt thereof.
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SECTION 2.05. MAINTENANCE OF INTERESTS IN PREMIUM RECEIVABLES. The
Servicer shall take, or cause to be taken, such steps as are necessary or
reasonably required by FPF or its assignees and designees to maintain perfection
of the respective interests of FPF and its assignees and designees in the
Premium Receivables and the other related Conveyed Property.
SECTION 2.06. COVENANTS OF SERVICER.
(a) The Servicer shall (i) not release any Realization
Provisions granted by an Obligor in whole or in part except in the
event of payment in full by the Obligor thereunder or upon
reacquisition of the related Premium Receivable by the Originator, (ii)
not impair the rights of FPF or its assignees in the Premium
Receivables, (iii) not modify the Scheduled Payments due under a
Premium Receivable except as expressly provided by Section 2.02 hereof,
(iv) not Sell or pledge to any other Person, or grant, create, incur,
assume, or suffer to exist any Lien on any Premium Receivable granted
to FPF or any interest therein, (v) immediately notify FPF of the
existence of any Lien on any Premium Receivable which was Sold pursuant
to the Sale Agreement, (vi) defend the perfected ownership interest of
FPF, its designees and assigns in, to, and under the Premium
Receivables Sold to FPF under the Sale Agreement against all claims of
third parties claiming through or under the Servicer, (vii) deposit
into the Collections Account all payments received by the Servicer with
respect to the Premium Receivables in accordance with Article III
hereof, (viii) comply in all respects with the terms and conditions of
the Sale Agreement and not amend, modify, or waive any provision of the
Sale Agreement, (ix) promptly notify FPF of the occurrence of any Event
of Servicing Default hereunder and (x) make at the sole cost and
expense of the Servicer any filings, reports, notices or applications
and seek any consents or authorizations from any and all government
agencies, tribunals or authorities in accordance with the UCC and any
state license or registration authority on behalf of FPF as may be
necessary or advisable to create, maintain and protect a
first-priority, perfected ownership interest of FPF in, to, and on the
Premium Receivables Sold to it or as may be required by such government
agencies, tribunals or authorities.
(b) The Servicer shall promptly make available to FPF or its
designee all information relating to each Premium Receivable being
serviced hereunder in form and manner consistent with the data
processing system maintained by FPF or its designee and the Servicer
shall respond to reasonable directions or requests for information that
FPF or its designees might have with respect to the Premium
Receivables.
SECTION 2.07. REACQUISITION OF PREMIUM RECEIVABLES UPON BREACH OF
REPRESENTATIONS OR WARRANTIES. The Servicer shall inform FPF promptly, in
writing, upon the discovery of any breach by the Originator of any of the
representations, warranties or covenants contained in the Sale Agreement. Unless
the breach shall have been cured within five Business Days after such discovery,
the Servicer, if directed by FPF in accordance with Section 6 of the Sale
Agreement, shall use its best efforts to cause the Originator, within five days
following such cure period, to acquire any Premium Receivable that FPF has
deemed as not being an Eligible Premium Receivable in accordance with the terms
of Section 6 of the Sale Agreement. The Servicer shall remit all Repurchase
Price funds received with respect to the Repurchase Property to the Collections
Account within one Business Day of receipt thereof.
SECTION 2.08. PREMIUM RECEIVABLE SERVICING FEES.
(a) For so long as the Servicer is acting as Servicer pursuant
to this Servicing Agreement, FPF shall pay or cause to be paid to the
Servicer the following monthly Servicing Fee (the "Servicing Fee") for
each Reporting Period payable during the following Reporting Period on
the date specified in the Sale Agreement:
(i) an amount equal to 2.50% multiplied by the
average outstanding principal balance of all Premium
Receivables sold under the Sale Agreement per Premium Finance
Agreement boarded on the servicing data processing system
during such Reporting Period if Originator does not utilize
the FPF point of sale system to originate the Premium
Receivable.
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(b) In the event the initial Servicer is replaced by a
Successor Servicer (which may be FPF, Flatiron Credit Company, Inc. or
any successor designated by FPF) pursuant to this Servicing Agreement,
FPF shall pay or cause to be paid to any Successor Servicer a monthly
servicing fee (the "Successor Servicing Fee"), which Successor
Servicing Fee shall be, with respect to each Reporting Period, an
amount equal to the sum of (i) the Servicing Fee times 150% plus (ii)
all Approved Expenses. The Successor Servicing Fee with respect to a
Reporting Period shall be paid to the Successor Servicer during the
month immediately following such Reporting Period on the date as
provided in the Sale Agreement.
SECTION 2.09. SERVICER'S CERTIFICATE AS TO COMPLIANCE. Upon the written
request of FPF, the Servicer shall deliver to FPF, from time to time, an
officers' certificate, signed by an officer of Servicer (including the
President, any Vice President, and Assistant Vice President, the Secretary, the
Treasurer or any other officer customarily performing functions similar to those
performed by any of such designated officers (a "Responsible Officer")) and
dated effective as of the last day of the preceding month, stating, as to each
signer thereof, that (a) a review of the activities of the Servicer during the
preceding six-month period and of performance under this Servicing Agreement has
been made under each such Responsible Officer's supervision, and (b) to the best
of each such officer's knowledge, based on such review, the Servicer has
fulfilled all its obligations under this Servicing Agreement throughout such
six-month period, or, if there has been a default in the fulfillment of any such
obligation, specifying each such default known to each such Responsible Officer
and the nature and status thereof and remedies therefor being pursued.
SECTION 2.10. REPORTING OBLIGATIONS; INSPECTION AND AUDIT RIGHTS.
(a) The Servicer shall make available to FPF or its designee
information sufficient to allow FPF or its designee to generate the
Daily Servicer Reports and the Monthly Servicer Reports regarding
payments received from or on behalf of Obligors and deposited to the
Collections Account representing Collections and other amounts with
respect to Premium Receivables, including, without limitation,
Defaulted Premium Receivable Recoveries and Endorsement Refunds. Such
information shall be delivered (i) with respect to the Daily Servicer
Report, on the Business Day following the date of such report, and (ii)
with respect to the Monthly Servicer Report, on the second Business Day
following the end of the immediately preceding Reporting Period.
(b) The Servicer shall promptly provide to FPF or its
designees such reports, information and documentation as any such
Person may reasonably request with respect to the Servicer, the
Servicer's operations, the Premium Receivables and any other matters to
which this Servicing Agreement relates, which such reports, information
or documentation shall be provided to each such Person by facsimile
copy, hard copy, electronic certified copy or any combination thereof
as such Person may specify. In addition, the Servicer grants to FPF and
any of its designees and hereby authorizes each of them the right to
contact insurers relating to the Premium Receivables, the Obligors and
insurance agents in order to verify, substantiate or reconcile reports,
information and documentation provided by the Servicer to FPF or its
designees pursuant to this Servicing Agreement.
(c) At all times during the term hereof, the Servicer shall
afford FPF and its assignees, authorized agents and designees
reasonable access during normal business hours to all of the Servicer's
books of account, reports, records and computer files relating to the
Premium Receivables and shall cause its personnel to assist in any
examination of such records by any such Person, to make copies and
extracts therefrom, and to discuss the Servicer's affairs, finances and
accounts relating to the Premium Receivables with officers, employees
and independent certified public accountants of each such Person, all
at such reasonable times and as often as may be reasonably requested.
(d) Any such report, information and documentation provided by
the Servicer to FPF or its designees pursuant to this Section 2.10
shall be, to the knowledge of the Servicer, true and correct as of the
time of transmittal and such transmittal (whether by facsimile, hard
copy, electronic transmission or otherwise) shall constitute
certification to such effect.
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SECTION 2.11. FINANCIAL STATEMENTS AND OTHER REPORTS.
(a) REPORTING REQUIREMENTS. The Servicer shall deliver, in
duplicate, to FPF and its designees:
(i) within 45 days after the end of each calendar
quarter of the Servicer (commencing with the quarter ending
September 30, 2001), an unaudited balance sheet and income
statement (prepared in accordance with GAAP without
accompanying notes) for the Servicer and its subsidiaries
covering the preceding quarter, in each case certified by a
principal financial officer of the Servicer to be true,
accurate and complete copies of such financial statements;
(ii) on the earlier of (A) fifteen days after
delivery by an Independent Public Accountant, if any, to the
Servicer or (B) March 15 of each year beginning [March 15,
2002], a balance sheet and income statement (prepared in
accordance with GAAP without accompanying notes) for the
Servicer and its subsidiaries covering such preceding fiscal
year prepared by the Servicer or its accountants, in each case
certified by a principal financial officer of the Servicer to
be true, accurate and complete copies of such financial
statements; and
(iii) such other information respecting the condition
or operations, financial or otherwise, of the Servicer or any
of its subsidiaries as FPF or its designees may from time to
time reasonably request.
(b) REPORT ON PROCEEDINGS. Promptly upon (but in no event more
than three Business days following) the Servicer becoming aware of:
(i) any proposed or pending investigation of the
Servicer, any of its Affiliates or any of their respective
employees by any governmental authority or agency;
(ii) any court or administrative proceeding which
involves or may involve the possibility of materially and
adversely affecting the properties, business, prospects,
profits, management, financial position, results of operation
or general condition of the Servicer or any of its Affiliates;
(iii) an event or development (including, without
limitation, a change in any relevant law or regulation) which
could have a material adverse impact on the properties,
business, prospects, profits, management, financial position,
results of operations or general condition of the Servicer or
any of its Affiliates; or
(iv) any Event of Servicing Default hereunder or any
event which could likely become an Event of Servicing Default
hereunder;
such information shall be provided by the Servicer to FPF and its
designees, as applicable.
(c) CHANGE OF CONTROL. The Servicer shall provide prompt
written notice to FPF and its designees, as applicable, upon the
occurrence of any of the following events (each a "Change of Control"):
(i) the Servicer ceases to be managed and controlled by the Person or
Persons who manage and control the Servicer as of the Effective Date,
(ii) any such Person which is a corporation, partnership, trust or
other entity is dissolved or liquidated or merged with or into any
other Person or for any period of more than 10 days ceases to exist in
its present form and (where applicable) in good standing and duly
qualified under the laws of the jurisdiction of its incorporation or
formation and any jurisdiction in which such standing or qualification
is necessary or advisable in connection with the conduct of business or
(iii) the Servicer commences a Sale of all or substantially all of its
assets, except, if the Originator is then acting as Servicer hereunder,
for the Sale of the Conveyed Property by the Originator to FPF under
the Sale Agreement.
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SECTION 2.12. COSTS AND EXPENSES. All Approved Expenses incurred by any
Successor Servicer and all direct extraordinary out-of-pocket expenses incurred
by FPF or its designees and assignees, as the case may be, in carrying out their
respective duties hereunder, including payments of all fees and expenses
incurred in connection with the enforcement of Premium Receivables (including
enforcement of Defaulted Premium Receivables), and realization under the
Realization Provisions, shall be reimbursed to such Successor Servicer (in
addition to the compensation and expenses, as applicable, to be paid to such
Successor Servicer pursuant to Section 2.08) and paid according to the
provisions of the Sale Agreement.
SECTION 2.13. RESPONSIBILITY FOR OWNERSHIP INTERESTS. The Servicer
shall ensure that FPF has a valid, perfected first priority ownership interest
in, to and under each Premium Receivable by taking all necessary action under
applicable law and by assuring, among other things, that UCC-1 financing
statements and appropriate continuation statements are filed in each
jurisdiction in which filing is necessary for such perfection which financing
statements and continuation statements (a) contain a general description of the
Premium Finance Agreements, amounts payable thereunder, and after-acquired
collateral, and (b) direct subsequent creditors to sources containing more
detailed information, such as the Premium Finance Agreements themselves.
SECTION 2.14. DOCUMENTS HELD BY FPF; DOCUMENTS HELD BY THE SERVICER;
INDICATION OF FPF OWNERSHIP.
(a) FPF or its designees shall be entitled to maintain
physical possession of the Loan Documents in its files with respect to
each Premium Receivable.
(b) The Servicer shall maintain the following documents in its
files on behalf of FPF and its designees or have the following
immediately accessible on computer screen with respect to each Premium
Receivable:
(i) Copies of the Loan Documents;
(ii) Copies of all correspondence to the Obligor or
the Issuing Insurance Company, including any notification to
the Obligor and the Issuing Insurance Company of the Sale of
the Premium Receivable and delivery of possession of the
related Premium Finance Agreement to FPF or its designees, to
the extent required by applicable law to perfect an ownership
interest in the Premium Receivable and the related Conveyed
Property;
(iii) Copies of all late notices to the Obligor;
(iv) Copies of cancellation requests to the Issuing
Insurance Company and, if applicable, the Obligor;
(v) Copies of reinstatement notices and related
correspondence;
(vi) Payment history and status of each Premium
Receivable; and
(vii) Such other documents as the Servicer may
customarily retain in connection with its normal servicing
activities under this Servicing Agreement in order to satisfy
its standard of care under Section 2.16.
(c) The Servicer shall keep satisfactory books and records
pertaining to each Premium 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.
(d) The Servicer shall maintain physical possession of the
instruments and documents listed in Section 2.14(b) hereof, such other
instruments or documents that modify or supplement the terms or
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conditions of any of the foregoing, and all other instruments and
documents generated by or coming into the possession of the Servicer
(including, without limitation, insurance premium receipts, ledger
sheets, payment records, correspondence and current and historical
computerized data files) that are required to document or service any
Premium Receivable. Collectively, all of the documents described in
paragraphs (b), (c) and (d) of this Section 2.14 with respect to a
Premium Receivable are referred to as "Servicer Documents." All
Servicer Documents shall remain the property of FPF and shall be held
in trust by the Servicer for the benefit of FPF and its assignees and
designees, to the extent of their interests therein.
SECTION 2.15. MAINTENANCE OF COMPUTER SYSTEMS. The Servicer shall
provide computer backup in a format acceptable to FPF not less than weekly or
such other period as FPF may request. Such computer backup shall contain the
data necessary to enable FPF or its assignee or designees to service the Premium
Receivables in the event any such assignee or designee becomes the Successor
Servicer. The Servicer shall (a) provide FPF and its designee or assignees, as
applicable, with a copy of its computer software used with respect to the
servicing of the Premium Receivables including any licenses needed or required
with respect thereto, and (b) not substitute or materially alter its computer
software or systems or vendor or document forms, without the prior written
consent of FPF.
SECTION 2.16. STANDARD OF CARE. In performing its duties and
obligations hereunder and in administering and enforcing the servicing relating
to the Premium Receivables pursuant to this Servicing Agreement, the Servicer
shall exercise that degree of skill and care consistent with the degree of skill
and care that the Servicer exercises with respect to similar loans owned and/or
serviced by it, and, shall apply in performing such duties and obligations,
those standards, policies and procedures consistent with the standards, policies
and procedures the Servicer applies with respect to similar loans owned or
serviced by it, and to the extent more exacting than the foregoing, shall act
prudently and in accordance with customary and usual servicing procedures for
other servicers of insurance premium finance receivables; 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 Premium Receivable. In performing its duties and
obligations hereunder and in administering and enforcing the servicing relating
to the Premium Receivables pursuant to this Servicing Agreement, 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, shall not impair the rights of
FPF, its designees or assignees in the Conveyed Property, and shall act with
respect to the Premium Receivables as will, in the reasonable judgment of the
Servicer, maximize the amount to be received with respect thereto.
SECTION 2.17. ENFORCEMENT.
(a) The Servicer is hereby authorized and empowered to ▇▇▇ to
enforce or collect upon the Premium Receivables, in its own name, if
possible, or as attorney-in-fact and agent for FPF or its designees. If
the Servicer elects to commence a legal proceeding to enforce a Premium
Receivable, the act of commencement shall be deemed to be an automatic
assignment of the Premium Receivable by FPF to the Servicer solely for
purposes of, and to the extent necessary for, collection only. If,
however, in any enforcement suit or legal proceeding it is held that
the Servicer may not enforce a Premium Receivable on the grounds that
it is not a real party in interest or a holder entitled to enforce the
Premium Receivable, FPF shall, at the Servicer's request and expense,
take such steps as FPF deems necessary or appropriate to enforce the
Premium Receivable, including bringing suit in its name or the name of
FPF.
(b) The Servicer shall exercise any rights of recourse against
third Persons that exist with respect to any Premium Receivable in
accordance with the standard of care required by Section 2.16 hereof.
SECTION 2.18. FIDELITY BOND OR ERRORS AND OMISSIONS INSURANCE. The
Servicer shall maintain, at its own expense, a blanket fidelity bond or an
errors and omissions insurance policy, in form and content acceptable to FPF, in
an amount not less than $500,000 and naming FPF as an additional loss payee or
beneficiary of each such insurance policy or fidelity bond. The Servicer shall
be deemed to have complied with this provision if one of its respective
Affiliates has such fidelity bond or errors and omissions policy coverage and,
by the terms of such fidelity bond or errors and omissions policy, the coverage
afforded thereunder extends to the Servicer. Any such fidelity
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bond or insurance policy shall not be cancelled or modified without ten days'
prior written notice to FPF. Evidence of each such insurance policy or fidelity
bond shall be delivered to FPF by the Servicer in conjunction with the
Responsible Officers' certificate required to be delivered pursuant to Section
2.09 hereof.
ARTICLE III
ACCOUNTS; COLLECTIONS
SECTION 3.01. ACCOUNTS. The Servicer shall establish in the name of FPF
or its designee the Collections Account with a Collections Account Depository
referred to in Section 3.03 hereof. All Obligors, Issuing Insurance Companies
and Originator shall be directed to cause all Collections to be remitted to the
Collections Account so established. All Collections effectuated by
pre-authorized debits of Obligor accounts shall be deposited directly into the
Collections Account. The Servicer shall not alter the instructions to the
Obligors, Originator, the Issuing Insurance Company or any other party regarding
payments to be made to the Collections Account without the prior written
approval of FPF or its designee. All amounts in the Collections Account shall be
retrieved on each Business Day by FPF or its designee.
SECTION 3.02. COLLECTIONS. The Servicer shall segregate all Collections
on the Premium Receivables from its general funds, shall not use such funds for
its benefit and shall hold such funds in trust for the benefit of FPF and its
designee. The Servicer shall remit to the Collections Account and to no other
account, on a daily basis, but in no event later than the close of business on
the Business Day following the day of receipt thereof, all payments received on
or in connection with the Conveyed Property by the Servicer by or on behalf of
the Obligors, the Issuing Insurance Companies or any other party, including,
without limitation, Collections, Endorsement Refunds, broker guarantee funds or
funds from a cash collateral account or Defaulted Premium Receivable Recoveries,
all as collected, in respect of a Premium Receivable being serviced by the
Servicer. The Servicer shall also deposit in the Collections Account the
aggregate Repurchase Price with respect to any Repurchase Property. All such
deposits shall be separately shown in the Daily Servicer Reports.
SECTION 3.03. COLLECTIONS ACCOUNT DEPOSITORY. FPF has appointed City
National, Ft. Lauderdale, Florida as the initial Collections Account Depository
(the "Collections Account Depository") hereunder. The Collections Account
Depository shall transfer funds from the Collections Account as instructed by
the FPF or its designee.
ARTICLE IV
REPRESENTATIONS AND WARRANTIES
SECTION 4.01. REPRESENTATIONS AND WARRANTIES OF THE SERVICER. The
Servicer hereby represents, warrants and covenants to FPF that as of the date of
this Servicing Agreement and, for so long as the Servicer shall continue to act
as Servicer hereunder, that the representations, warranties and covenants
contained in Sections 1 and 2 of Exhibit B hereto are true and correct and shall
remain true and correct.
SECTION 4.02. REPRESENTATIONS AND WARRANTIES OF FPF. As of the date of
the Servicing Agreement FPF represents, warrants and covenants to Servicer each
of the matters referred to in Section 2 of Exhibit B hereto.
ARTICLE V
DEFAULT, REMEDIES AND INDEMNITY
SECTION 5.01. EVENTS OF SERVICING DEFAULT. Any of the following acts or
occurrences shall constitute an Event of Servicing Default under this Servicing
Agreement:
(a) any failure by the Servicer to make any payment, transfer
or deposit to the Collections Account within one Business Day after
receipt;
10
(b) any failure by the Servicer to provide any notices to FPF
pursuant to this Servicing Agreement relating to the transfer or
calculation of funds which has not been cured within two Business Days
after the date of receipt of notice of such failure;
(c) any failure by the Servicer to request cancellation of the
policy from the Issuing Insurance Company pursuant to Section 2.03,
unless otherwise approved by FPF or its designee in writing.
(d) failure on the part of the Servicer to either duly to
observe or perform any other covenants or agreements of the Servicer
set forth in this Servicing Agreement; or the Servicer shall attempt to
assign any of its duties hereunder;
(e) any representation, warranty or certification made by the
Servicer (or any officer of the Servicer) in this Servicing Agreement,
or any certificate delivered pursuant to this Servicing Agreement,
shall prove to have been incorrect when made, which could have an
adverse effect on FPF and which continues to be incorrect in any
material respect;
(f) the Servicer shall consent to the appointment of a
conservator or receiver or liquidator in any insolvency, readjustment
of debt, marshalling of assets and liabilities or similar proceedings
of or relating to the Servicer, or the Servicer shall admit in writing
its inability to pay its debts generally as they become due, file a
petition or commence an action to take advantage of any applicable
insolvency or reorganization statute, make any assignment for the
benefit of its creditors or voluntarily suspend payment of its
obligations;
(g) any Change in Control unless the same is approved in
writing by FPF, in its absolute discretion;
(h) an event or development shall occur which is expected by
FPF (in its sole discretion) to have a material adverse impact on the
ability of the Servicer to perform its obligations under this Servicing
Agreement;
(i) the Servicer shall not be in compliance with the
Cancellation Standard.
SECTION 5.02. REMEDIES.
(a) If an Event of Servicing Default shall have occurred and
then be continuing, then by notice given in writing to the Servicer
(the "Terminated Party") (together with any termination notice
described in Section 2.01(a) hereof, (a "Termination Notice"), all of
the rights and obligations of the Terminated Party, shall be terminated
upon the later of (i) the date, if any, specified in the Termination
Notice or (ii) upon receipt of the Termination Notice.
(b) After receipt by the Terminated Party of a Termination
Notice, all authority and power of the Terminated Party under this
Servicing Agreement shall pass to and be vested in a Successor
Servicer; and, without limitation, FPF or its designees are hereby
authorized and empowered to execute and deliver, on behalf of the
Terminated Party, as attorney-in-fact, authorized agent or otherwise,
all documents and other instruments upon the failure of the Terminated
Party 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 such transfer of servicing rights. The Servicer
hereby agrees to cooperate with FPF, its designees and such Successor
Servicer in effecting the termination of the responsibilities and
rights of the Terminated Party to conduct servicing under this
Servicing Agreement, including, without limitation, the transfer to
such Successor Servicer of all authority of the Terminated Party to
service the Premium Receivables provided for under this Servicing
Agreement, including, without limitation, the right to receive all
collections, all authority over all collections which shall on the date
of transfer be held by the Terminated Party for deposit or which have
been deposited by the Terminated Party in the Collections Account or
which shall thereafter be received with respect to the Premium
Receivables, and in assisting the
11
Successor Servicer and in enforcing all rights to Realization
Provisions. The Terminated Party shall immediately transfer its
electronic records relating to the Premium Receivables to the Successor
Servicer in such electronic form as the Successor Servicer may request.
The Terminated Party shall immediately relinquish all rights in, to and
under the Loan Documents and the Servicing Documents and shall
immediately transfer to the Successor Servicer all Loan Documents and
Servicing Documents with respect to the Premium Receivables in the
manner and at such times as the Successor Servicer shall request.
Immediately upon receipt of a Termination Notice, the Terminated Party
shall not amend, alter or modify any of the Loan Documents or Servicing
Documents without FPF's prior written consent. The Terminated Party
shall give notices of the transfer of servicing to the Obligors,
Issuing Insurance Companies and state guaranty funds, all in the manner
and at such times as the Successor Servicer shall request.
(c) On and after the receipt by the Terminated Party of a
Termination Notice pursuant to this Section 5.02, the Terminated Party
shall continue to perform all servicing functions under this Servicing
Agreement until the date specified in the Termination Notice or
otherwise specified by FPF in writing.
(d) Upon its appointment, the Successor Servicer shall be the
successor in all respects to the Terminated Party, with respect to
servicing functions under this Servicing Agreement.
(e) In connection with such appointment and assumption, FPF
may make such arrangements for the compensation of itself and the
Successor Servicer out of collections of Premium Receivable payments,
as it and such Successor Servicer shall agree.
(f) All authority and power granted to the Servicer or the
Successor Servicer under this Servicing Agreement shall automatically
cease and terminate upon payment in full of all Obligations and
termination of the Sale Agreement, and shall pass to and be vested in
FPF or its designee.
SECTION 5.03. INDEMNITY BY THE SERVICER. The Servicer shall indemnify
and hold FPF, its Affiliates, its designees and assigns and each of their
respective officers, directors, employees and agents and any Person holding an
interest in the Conveyed Property or acting as a trustee therefor (collectively,
the "Indemnified Parties") harmless against any liability, loss, damage,
penalty, fine, forfeiture, legal or accounting fees, court reporting expenses,
expert witness fees, and all other fees or costs of any kind, judgments or
expenses, resulting from or arising out of a breach of this Servicing Agreement
by the Servicer; provided, however, the Servicer shall not be liable to the
Indemnified Parties by reason of any act, contract or transaction performed in
good faith by the Servicer pursuant to this Servicing Agreement in accordance
with the standard of care under Section 2.16 nor shall it be liable for any loss
resulting therefrom, so long as such act, contract or transaction shall, at the
time at which it was performed or entered into, have been reasonable and prudent
under the circumstances and shall have conformed to the express provisions of
this Servicing Agreement. The rights of the Indemnified Parties to indemnity,
reimbursement or limitation on its liability pursuant to this Section 5.03 shall
survive any Event of Servicing Default or termination of the Servicer pursuant
to the provisions hereof and the transfer of the rights, duties and obligations
of the Servicer to a Successor Servicer.
SECTION 5.04. WAIVER OF EVENTS OF SERVICING DEFAULT. FPF may waive any
Event of Servicing Default by the Servicer in the performance of its obligations
hereunder and its consequences. Upon any such waiver of an event of Servicing
Default, such default shall cease to exist, and any default arising therefrom
shall be deemed to have been remedied for every purpose of this Servicing
Agreement. No such waiver shall extent to any subsequent or other default or
impair any right consequent thereon except to the extent expressly so waived.
SECTION 5.05. SURVIVAL. The agreements in this Article V shall survive
the termination of this Servicing Agreement and the payment in full of all sums
and obligations owed to FPF under the Sale Agreement.
12
ARTICLE VI
TERMINATION OF SERVICING AGREEMENT
SECTION 6.01. TERM. Unless terminated in accordance with the provisions
of Section 2.01(a), this Servicing Agreement shall remain in effect until all
obligations due to FPF pursuant to the Sale Agreement have been paid in full.
ARTICLE VII
MISCELLANEOUS PROVISIONS
SECTION 7.01. NO OFFSET. Prior to the termination of this Servicing
Agreement, the obligations of the Servicer under this Servicing Agreement shall
not be subject to any defense, counterclaim or right of offset which the
Servicer may have against FPF or its assignees or designees, whether in respect
of this Servicing Agreement or the Sale Agreement, any Premium Receivable or
otherwise.
SECTION 7.02. POWERS OF ATTORNEY. FPF shall, from time to time, provide
to the employees of the Servicer with 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 FPF shall not be required to provide such powers with respect to any matter
for which FPF does not have authority to perform itself.
SECTION 7.03. ASSIGNMENTS; THIRD PARTY BENEFICIARIES. This Servicing
Agreement may be assigned by FPF and shall inure to the benefit of FPF's
assignees and designees (all of whom shall be deemed third party beneficiaries
hereunder). Without limiting the generality of the foregoing, all
representations, covenants and agreements in this Servicing Agreement which
expressly confer rights upon FPF shall be for the benefit of and run directly to
each assignee and designee, and each such assignee and designee shall be
entitled to rely on and enforce such representations, covenants and agreements
to the same extent as if it were a party hereto. The Servicer shall not assign
its rights or obligations under this Servicing Agreement without the written
approval and consent of FPF. With such written approval and consent of FPF
contemplated hereby, this Servicing Agreement shall be binding upon the parties
hereto, and their respective successors, legal representatives and assigns; 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. There shall be no third party beneficiaries of
Servicer without the written approval and consent of FPF.
SECTION 7.04. AMENDMENT. This Servicing Agreement may be amended from
time to time by a written amendment duly executed and delivered by each of the
parties hereto and no waiver of any of the terms hereof shall be effective
unless it is in writing and signed by the party or parties whose rights are
being waived.
SECTION 7.05. WAIVERS. No failure or delay on the part of FPF or any of
its assignees or designees in exercising any power, right or remedy under this
Servicing Agreement shall operate as a waiver thereof, nor shall any single or
partial exercise of any such power, right or remedy preclude any other or
further exercise thereof or the exercise of any other power, right or remedy. No
such waiver shall extend to any subsequent or other default or impair any rights
consequent thereon, except to the extent expressly so waived. Each of the
rights, powers and remedies described in this Servicing Agreement is cumulative
and not exclusive of, and shall not prejudice, any other right, power or remedy
provided in this Servicing Agreement, the Sale Agreement or by law. Each such
right, power and remedy may be exercised from time to time as deemed necessary
by FPF or any of its assignees or designees, as applicable, and in such order
and manner as such applicable party may determine. The parties hereto hereby
acknowledge and agree that with respect to a violation or breach by the Servicer
of any representation, warranty, covenant or other term or provision of this
Servicing Agreement, it shall be the Servicer's obligation to prepare and obtain
a written waiver for such breaches or violations from FPF or its designee, as
applicable. FPF or its designee, as applicable, may grant or deny any such
requested waiver in its sole and absolute discretion. At no time may the
13
parties hereto infer a course of dealing among the parties that would negate the
requirement to obtain a written waiver from FPF or its designee, as applicable.
SECTION 7.06. 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, electronic mail and overnight delivery
service, postage prepaid, to the parties to this Servicing Agreement; provided,
that notices shall be effective upon receipt, and in any case addressed to the
Servicer as provided in the introductory paragraph of this Servicing Agreement
and to FPF at ▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇,
Attention: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇.
SECTION 7.07. GOVERNING LAW. THIS SERVICING AGREEMENT SHALL BE GOVERNED
BY AND CONSTRUED IN ACCORDANCE WITH THE SUBSTANTIVE LAWS OF THE STATE OF
COLORADO WITHOUT REGARD TO CONFLICT OF LAW PROVISIONS.
SECTION 7.08. JURISDICTION. THE PARTIES HERETO HEREBY IRREVOCABLY
SUBMIT TO THE NON-EXCLUSIVE JURISDICTION OF THE COURTS OF THE STATE OF COLORADO
AND THE UNITED STATES DISTRICT COURT OF COLORADO IN ANY ACTION OR PROCEEDING
ARISING OUT OF OR RELATING TO THIS SERVICING AGREEMENT AND THE PARTIES HEREBY
IRREVOCABLY AGREE THAT ALL CLAIMS IN RESPECT OF SUCH ACTION OR PROCEEDING MAY BE
HEARD AND DETERMINED IN SUCH COURTS. THE PARTIES HEREBY IRREVOCABLY WAIVE, TO
THE FULLEST EXTENT IT MAY EFFECTIVELY DO SO, THE DEFENSE OF AN INCONVENIENT
FORUM TO THE MAINTENANCE OF SUCH ACTION OR PROCEEDING AND IRREVOCABLY CONSENT TO
THE SERVICE OF ANY SUMMONS AND COMPLAINT AND ANY OTHER PROCESS BY THE MAILING OF
COPIES OF SUCH PROCESS TO THEM AT THEIR RESPECTIVE ADDRESSES AS SPECIFIED IN
SECTION 7.06. THE PARTIES HEREBY AGREE THAT A FINAL JUDGMENT IN ANY SUCH ACTION
OR PROCEEDING SHALL BE CONCLUSIVE AND MAY BE ENFORCED IN OTHER JURISDICTIONS BY
SUIT ON THE JUDGMENT OR IN ANY OTHER MANNER PROVIDED BY LAW. NOTHING IN THIS
SECTION 7.08 SHALL AFFECT THE RIGHT OF FPF TO SERVE LEGAL PROCESS IN ANY OTHER
MANNER PERMITTED BY LAW OR PRECLUDE THE ENFORCEMENT OF ANY JUDGMENT OR ORDER
OBTAINED IN SUCH FORUM OR THE TAKING OF ANY ACTION UNDER THIS SERVICING
AGREEMENT TO ENFORCE SAME IN ANY OTHER APPROPRIATE FORUM OR JURISDICTION.
SECTION 7.09. WAIVER OF JURY TRIAL. EACH OF THE PARTIES HEREBY
IRREVOCABLY WAIVES ALL RIGHT TO A TRIAL BY JURY IN ANY ACTION, PROCEEDING OR
COUNTERCLAIM ARISING OUT OF OR RELATING TO THIS SERVICING AGREEMENT.
SECTION 7.10. SEVERABILITY OF PROVISIONS. Any part, provision,
agreement, representation, warranty or covenant of this Servicing Agreement
which is prohibited or unenforceable or is held to be void or unenforceable in
any jurisdiction shall, as to such jurisdiction, be ineffective to the extent of
such prohibition or unenforceability without invalidating the remaining
provisions hereof, and any such prohibition or unenforceability in any
jurisdiction shall not invalidate or render unenforceable such provision in any
other jurisdiction. To the extent permitted by applicable law, the parties waive
any provision of law which prohibits or renders void or unenforceable any
provision hereof. If the invalidity of any part, provision, agreement,
representation, warranty or covenant of this Servicing Agreement shall deprive
any party of the economic benefit intended to be conferred by this Servicing
Agreement, the parties shall negotiate in good faith to develop a structure the
economic effect of which is as nearly as possible the same as the economic
effect of the transactions contemplated hereunder without regard to such
invalidity.
SECTION 7.11. COUNTERPARTS. For the purpose of facilitating the
execution of this Servicing Agreement and for other purposes, this Servicing
Agreement may be executed simultaneously in any number of counterparts, each of
which shall be deemed to be an original, and together shall constitute and be
one and the same instrument.
14
SECTION 7.12. CAPTIONS. The article, paragraph and other headings
contained in this Servicing Agreement are inserted for convenience only and
shall not in any way affect the meaning or construction of any provision of this
Servicing Agreement.
SECTION 7.13. 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 New York, New York or Denver,
Colorado, such action, delivery or payment need not be made on that date, but
may be made on the next succeeding Business Day.
SECTION 7.14. ADVICE FROM INDEPENDENT COUNSEL. The parties understand
that this Servicing Agreement is a legally binding agreement that may affect
such party's rights. Each party represents to the others that it has received
legal advice from counsel of its choice regarding the meaning and legal
significance of this Servicing Agreement and that it is satisfied with its legal
counsel and the advice received from it.
SECTION 7.15. JUDICIAL INTERPRETATION. Should any provision of this
Servicing Agreement require judicial interpretation, it is agreed that a court
interpreting or construing the same shall not apply a presumption that the terms
hereof shall be more strictly construed against any Person by reason of the rule
of construction that a document is to be construed more strictly against the
Person who itself or through its agent prepared the same, it being agreed that
each party has participated in the preparation of this Servicing Agreement.
(SIGNATURE PAGE FOLLOWS)
15
IN WITNESS WHEREOF, the parties hereto have caused this Servicing
Agreement to be duly executed by their respective authorized officers as of the
date first written above.
FPF, INC.
By /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇
-------------------------------------
Name ▇▇▇▇▇ ▇. ▇▇▇▇▇
-------------------------------------
Title President
-------------------------------------
FEDERATED PREMIUM FINANCE, INC.
By /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇
-------------------------------------
Name ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇
-------------------------------------
Title President
-------------------------------------
16
EXHIBIT A-1
DAILY SERVICER REPORT
Date of Report
----------------------------
Date of Deposit
----------------------------
--------------- ---------------- ------------------------ -------------
GROSS DEPOSITS NSF DELETIONS OTHER NETTING INTEREST NET DEPOSIT
1.
--------------- ---------------- ------------------------ -------------
-------- ------- ------- -------
Specify Other Netting Items:
The undersigned [Name of Servicer] (the "Servicer") hereby certifies
that this report complies with the requirements of, and is being delivered
pursuant to, Section 2.10(a) of the Premium Receivable Servicing Agreement (the
"Servicing Agreement") dated as of September ___, 2001 by and among FPF and the
Servicer. Capitalized terms used and not otherwise defined herein shall have the
meaning ascribed to such terms in the Servicing Agreement.
Dated: FEDERATED PREMIUM FINANCE, INC.
-----------------------------
By
----------------------------------
Name
--------------------------------
Title
-------------------------------
EXHIBIT B
REPRESENTATIONS AND WARRANTIES
SECTION 1. REPRESENTATIONS AND WARRANTIES OF THE SERVICER WITH RESPECT
TO SECTION 4.01 OF THE PREMIUM RECEIVABLE SERVICING AGREEMENT.
(a) POWER AND AUTHORITY. The Servicer has the power and
authority to execute and deliver the Premium Receivable Servicing
Agreement and to carry out the terms thereof; there are no injunctions,
writs, restraining orders or any other order of any nature which
adversely affects the Servicer's performance of the Premium Receivable
Servicing Agreement or any transactions contemplated thereby; and no
consent, approval or authorization which has not been obtained is
required for the consummation by the Servicer of the transactions
contemplated by the Premium Receivable Servicing Agreement.
(b) NO VIOLATION. The consummation of the transactions
contemplated by the Premium Receivable Servicing Agreement and the
fulfillment of the terms thereof do not conflict with, result in any
breach of any of the terms and provisions of, nor constitute (with or
without notice or lapse of time) a default under, the certificate of
incorporation or bylaws of the Servicer, or any indenture, agreement or
other instrument to which the Servicer is a party or by which it or its
properties is 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; nor violate any applicable
laws, rules, regulations or orders regarding the conduct of the
Servicer's business or the ownership of its properties; nor violate any
law or any order, rule or regulation applicable to the Servicer of any
court or of any federal or state regulatory body, administrative
agency, or other governmental instrumentality having jurisdiction over
the Originator or its properties except, in each case, for such
violations, conflicts, breaches, Liens and defaults which could not, in
the reasonable judgment of the Servicer, have an adverse effect on the
condition (financial or otherwise) of the Servicer, any Premium
Receivable or the Servicer's obligations under the Premium Receivable
Servicing Agreement.
(c) ABILITY TO PERFORM. There has been no impairment in the
ability of Servicer to perform its obligations under the Premium
Receivable Servicing Agreement.
(d) FINANCIAL STATEMENTS. The Servicer's financial statements
dated as of [ ], and [ ], as delivered to FPF and the financial
statements of the Servicer to be delivered pursuant to Section 2.11 of
this Servicing Agreement, present or will present fairly, in all
material respects, the information presented therein, and no material
adverse change has occurred in the Servicer's financial status since
the date thereof.
(e) NO MATERIAL LIABILITIES. The Servicer does not have
material liabilities or obligations other than those disclosed in the
financial statements referred to in subparagraph (d) above or for which
adequate reserves are reflected in such financials.
(f) NO MATERIAL MISSTATEMENTS OR OMISSIONS. No information,
certificate of an officer, statement furnished in writing or report
delivered to FPF by the Servicer contains any untrue statement of a
material fact or omits a material fact necessary to make such
information, certificate, statement or report not misleading; provided,
that the Servicer makes no representation or warranty with respect to
any information incorporated into or forming the basis of any officer's
certificate, information, statement or report provided by the Servicer
that is provided to the Servicer by any other Person.
(g) CAPABILITY TO PERFORM. The Servicer has the knowledge, the
experience and the systems, financial and operational capacity
available to timely perform each of its obligations under the Premium
Receivable Servicing Agreement.
B-2
(h) OTHER AGREEMENTS. The Servicer is not a party to any
indenture, loan or credit agreement, lease or other instrument or
agreement which is likely to have a material adverse effect on the
business, properties, assets, operations or operation, financial or
otherwise, of the Servicer or the ability of the Servicer to perform
its obligations under this Servicing Agreement.
(i) NO MATERIAL ADVERSE CHANGE. No material adverse change has
occurred in the business, properties, operating results, prospects,
assets, operations or condition, financial or otherwise, of the
Servicer from the Closing Date or the immediately preceding Acquisition
Date, as the case may be.
SECTION 2. REPRESENTATIONS AND WARRANTIES WITH REGARD TO SECTION 4.01
AND 4.02 OF THE PREMIUM RECEIVABLE SERVICING AGREEMENT. (References in this
Section 2 to "such Person" refer to the Person making the representation and
warranty pursuant to the Premium Receivable Servicing Agreement.)
(a) ORGANIZATION, ETC. Such Person is duly organized and is
validly existing as a corporation or limited liability company, as the
case may be, in good standing under the laws of the state of its
organization with full power and authority to execute and deliver the
Premium Receivable Servicing Agreement and to perform the terms and
provisions thereof.
(b) DUE QUALIFICATION. Such Person is duly qualified to do
business as a foreign business entity in good standing, and has
obtained all required licenses and approvals, if any, in all
jurisdictions in which the ownership or lease of property or the
conduct of its business requires such qualifications except those
jurisdictions in which failure to be so qualified would not have an
adverse effect on the business or operations of such Person or any
Premium Receivable.
(c) DUE AUTHORIZATION. The execution, delivery and performance
by such Person of the Premium Receivable Servicing Agreement have been
duly authorized by all necessary action of such Person, do not require
any approval or consent of any governmental agency or authority, do not
and will not conflict with any provision of its constituent documents,
and do not and will not conflict with or result in a breach which would
constitute (with or without notice or lapse of time) a default under
any agreement binding upon or applicable to it or its property, or any
law or governmental regulation or court decree applicable to it or its
property.
(d) NO LITIGATION. No litigation or administrative proceeding
of or before any court, tribunal or governmental body is presently
pending, or threatened, against such Person or its properties, which,
if adversely determined could, in the reasonable opinion of such
Person, have an adverse effect on the transactions contemplated by the
Premium Receivable Servicing Agreement or on such Person's ability to
perform any of its obligations thereunder.
(e) ENFORCEABILITY. The Premium Receivable Servicing Agreement
constitutes the valid, legal and binding obligation of such Person,
enforceable against such Person in accordance with the terms thereof,
subject to applicable bankruptcy, insolvency, reorganization,
moratorium and other laws affecting the enforcement of creditor's
rights generally and to general principles of equity, regardless of
whether such enforcement is considered in a proceeding in equity or at
law.
SECTION 3. SURVIVAL OF REPRESENTATIONS AND WARRANTIES. The
representations and warranties set forth in this Exhibit B shall survive the
date of the Premium Receivable Servicing Agreement. Upon discovery by FPF or its
designee 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 thereto; provided, however, that failure to give such notice shall not
affect the rights of such other parties with respect to such breach.
B-3
EXHIBIT C
POWER OF ATTORNEY
FEDERATED PREMIUM FINANCE, INC. a corporation organized and existing
under the laws of the State of Florida (the "Servicer"), hereby grants to FPF,
INC. ("FPF") pursuant to that certain Premium Receivable Servicing Agreement,
dated as of September 30, 2001, among the Servicer and FPF, Inc., as the same
may be amended or otherwise modified from time to time (the "Servicing
Agreement"), an irrevocable power of attorney, with full power of substitution,
coupled with an interest, to take any and all actions at the option of FPF or
its assigns at any time after the occurrence and during the continuance of any
Event of Servicing Default, in the name of the Servicer or its assigns, to
execute such documents or instruments and to do and accomplish all other acts or
things necessary or appropriate to effect the transfer of servicing rights under
the Servicing Agreement.
Capitalized terms used and not otherwise defined herein shall have the
meaning ascribed to such terms in the Servicing Agreement.
IN WITNESS WHEREOF, the undersigned a duly authorized officer of
FEDERATED PREMIUM FINANCE, INC. hereunto sets his hand this 30 day of September,
2001.
FEDERA
FEDERATED PREMIUM FINANCE, INC.
By /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇
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Name ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇
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Title President
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STATE OF FL )
) ss:
COUNTY OF BROWARD )
BE IT REMEMBERED, that on this 30 day of September, 2001 before me the
undersigned, a Notary Public in and for the County and State aforesaid, came
▇▇▇▇▇▇▇ ▇▇▇▇▇, a Officer of FEDERATED PREMIUM FINANCE, INC., a corporation duly
organized, incorporated and existing under and by virtue of the laws of Florida,
who is personally known to me to be such officer, and who is personally known to
me to be the same person who executed, as such officer, the within instrument on
behalf of said corporation, and such person duly acknowledged the execution of
the same to be the act and deed of said corporation.
IN WITNESS WHEREOF, I have hereunto set my hand and affixed my official
seal, the day and year last above written.
/s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
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Notary Public Sept. 30, 2001
My commission expires:
[SEAL] ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
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Commission #CC902275
Expires Feb. 28, 2004
Bonded Thru
Atlantic Bonding Co., Inc.
TABLE OF CONTENTS
Article I
DEFINITIONS....................................................................2
Article II
ADMINISTRATION AND SERVICING OF PREMIUM RECEIVABLES
Section 2.01. Appointment and Duties of Servicer...........................3
Section 2.02. Collection of Premium Receivable Payments....................4
Section 2.03. Past-Due Premium Receivables; Cancelled Premium Receivables..4
Section 2.04. Defaulted Premium Receivables................................5
Section 2.05. Maintenance of Interests in Premium Receivables..............5
Section 2.06. Covenants of Servicer........................................5
Section 2.07. Reacquisition of Premium Receivables Upon Breach of
Representations or Warranties..............5
Section 2.08. Premium Receivable Servicing Fees............................6
Section 2.09. Servicer's Certificate as to Compliance......................6
Section 2.10. Reporting Obligations; Inspection and Audit Rights...........6
Section 2.11. Financial Statements and Other Reports.......................7
Section 2.12. Costs and Expenses...........................................8
Section 2.13. Responsibility for Ownership Interests.......................8
Section 2.14. Documents Held by FPF; Documents Held by the Servicer;
Indication of FPF Ownership.............8
Section 2.15. Maintenance of Computer Systems..............................9
Section 2.16. Standard of Care.............................................9
Section 2.17. Enforcement.................................................10
Section 2.18. Fidelity Bond or Errors and Omissions Insurance.............10
Article III
ACCOUNTS; COLLECTIONS
Section 3.01. Accounts....................................................10
Section 3.02. Collections.................................................10
Section 3.03. Collections Account Depository..............................11
Article IV
REPRESENTATIONS AND WARRANTIES
Section 4.01. Representations and Warranties of the Servicer..............11
Section 4.02. Representations and Warranties of FPF.......................11
TABLE OF CONTENTS
(continued)
Page
Article V
DEFAULT, REMEDIES AND INDEMNITY
Section 5.01. Events of Servicing Default.................................11
Section 5.02. Remedies....................................................12
Section 5.03. Indemnity by the Servicer...................................13
Section 5.04. Waiver of Events of Servicing Default.......................13
Section 5.05. Survival....................................................13
Article VI
TERMINATION OF SERVICING AGREEMENT
Section 6.01. Term........................................................13
Article VII
MISCELLANEOUS PROVISIONS
Section 7.01. No Offset...................................................13
Section 7.02. Powers of Attorney..........................................13
Section 7.03. Assignments; Third Party Beneficiaries......................13
Section 7.04. Amendment...................................................14
Section 7.05. Waivers.....................................................14
Section 7.06. Notices.....................................................14
Section 7.07. Governing Law...............................................14
Section 7.08. Jurisdiction................................................14
Section 7.09. Waiver of Jury Trial........................................15
Section 7.10. Severability of Provisions..................................15
Section 7.11. Counterparts................................................15
Section 7.12. Captions....................................................15
Section 7.13. Legal Holidays..............................................15
Section 7.14. Advice from Independent Counsel.............................15
Section 7.15. Judicial Interpretation.....................................15
EXHIBIT A-1 FORM OF SERVICER'S DAILY REPORT
EXHIBIT B REPRESENTATIONS AND WARRANTIES
EXHIBIT C POWER OF ATTORNEY
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