Exhibit 10.6 [***] TEXT OMITTED AND FILED SEPARATELY CONFIDENTIAL TREATMENT REQUESTED SERVICING AGREEMENT This SERVICING AGREEMENT (the "Agreement") is entered into as of this 27th day of December 2000, by and among CCS RECEIVABLES MANAGEMENT, LLC, a Delaware limited liability company (the "Owner"), DAIWA FINANCE CORPORATION (the “Parent”) and MIDLAND CREDIT MANAGEMENT, INC., a Kansas corporation, the "Servicer"). RECITALS A. The West Capital Financial Services Corp., a California corporation (the "Former Servicer"), West Capital Receivables Corporation I, a California corporation (the "Borrower"), and Wells Fargo Bank Minnesota, National Association, fka Norwest Bank Minnesota, National Association, as collateral agent (the "Collateral Agent"), were parties to that certain Servicing Agreement, dated as of January 29, 1998 (the "Original Servicing Agreement"). Pursuant to the Original Servicing Agreement, the Former Servicer serviced, on behalf of the Borrower and the Collateral Agent, a pool of charged-off consumer accounts that are owned by the Borrower (the "Pool"). The Pool was pledged by the Borrower to the Collateral Agent as security for the obligations of the Borrower pursuant to that certain Credit Agreement, dated as of January 29, 1998, by and among the Borrower, the Parent and West, as the seller and the servicer (as amended, the "Credit Agreement"), and pursuant to the Note (as defined below). Pursuant to the Credit Agreement, the Borrower issued a certain Note to the Parent, dated January 29, 1998, in the original principal amount of Sixty Million Dollars ($60,000,000.00) (the "Note"). The Parent participated a portion of the Note to SunAmerica Inc., a Delaware Corporation ("SunAmerica"), (the "Participants"). The Credit Agreement was amended by that certain First Amendment to Credit Agreement, dated June 28, 1999. B. Pursuant to that certain Supplement to Servicing Agreement, dated as of May 22, 2000, by and among the Former Servicer, the Borrower, the Collateral Agent and MCM (the "Supplement"), MCM assumed certain of the obligations of the Former Servicer under the Original Servicing Agreement subject to the terms and conditions of the Supplement (collectively, the "Servicing Agreement"). SunAmerica and the Parent consented to MCM's assumption of such certain obligations of the Former Servicer. C. On December 19, 2000, the Parent provided written notices (the "Notices") to the Borrower and the Former Servicer stating that: (i) an Event of Default (as defined in the Credit Agreement) had occurred under the Credit Agreement and (ii) the Parent was going to exercise its remedies under the Credit Agreement and retain the "Collateral" (as defined in that certain Security Agreement, dated as of January 28, 1998 among the Borrower, the Former Servicer and the Collateral Agent) pursuant to Section 9-505(2) of the New York Uniform Commercial Code (the "NYUCC") as of the close of business on December 22, 2000 (the "Satisfaction Right"). The Owner and Parent have advised the Servicer that the Parent through the Owner has exercised the Satisfaction Rights and now owns the Designated Receivables, as defined in the Servicing Agreement. D. The Owner and the Parent have requested that the Servicer service the Designated Receivables on the same terms as the Servicing Agreement as modified by Article 11 of this Agreement. Subject to the terms and conditions of this Agreement, the Servicer has agreed to so service the Designated Receivables. 1 [***] Omitted pursuant to a request for confidential treatment. The omitted material has been filed separately with the Securities and Exchange Commission.
E. The Parent and the Servicer are also party to that certain letter agreement dated December 26, 2000 from the Parent and addressed to the Servicer. NOW, THEREFORE, in consideration of the premises and the mutual promises herein made, the parties agree as follows: ARTICLE I SERVICE 1.1 Servicer. MCM agrees to perform as Servicer with respect to the Designated Receivables for the benefit of the Owner and the Parent pursuant to the same terms as the Servicing Agreement as modified by Article 11 of this Agreement. So long as the Parent's and Owner's Satisfaction, Rights and ownership interest are not set aside, MCM waives the rights and claims that it may have under the Servicing Agreement arising from or relating to the Satisfaction Rights or the exercise thereof. 1.2 Costs and Expenses. The Parent and Owner shall file or send all filings, notices or letters required by applicable law as a result of the change of ownership of the Designated Receivables. The Parent, the Owner and the Servicer agree that all out-of-pocket costs and expenses incurred by the Servicer in connection with the preparation and delivery of any filings, notices or letters with respect to the change in ownership of the Designated Receivables shall be promptly and fully reimbursed by the Owner and the Parent jointly and severally by payment to the Servicer, provided that the Servicer shall not be reimbursed for any such costs or expenses in excess of $1,000 that are not approved in writing by the Parent and Owner. 1.3 Indemnity. The Parent and the Owner, jointly and severally, agree to indemnify, defend and hold harmless the Servicer and each of its respective participants, parent corporations, subsidiary corporations, affiliated corporations, successor corporations, and all present and future officers, directors, employees and agents (the "Indemnitees"), from and against any and all liabilities, losses, damages, penalties, judgments, suits, claims, costs and expenses of any kind or nature whatsoever (including, without limitations, the reasonable fees and disbursements of counsel) which may be imposed on, incurred by or asserted against such Indemnitee, to the extent that any such liabilities, losses, damages, penalties, judgments, suits, claims, costs and expenses arose from the exercise by the Owner of the Satisfaction Rights or ownership interest in the Designated Receivables. ARTICLE 11 AMENDMENT 2.1 Definitions. The definitions in the Servicing Agreement are hereby amended as follows: (a) Section 1.1 of the Supplement is hereby amended by replacing the current definition of "Base Servicing Fee" with the following definition: 2
"Base Servicing Fee" means for any Advance Date, an amount equal to the aggregate of (i) [***%] of the Servicing Fee Collections, (ii) [***%] of the proceeds from the sale of Bankruptcy Receivables pursuant to Section 4.5 of the Supplement that, in the aggregate, do not exceed $250,000 (or with the prior written consent of the Parent, such greater amount in a month), and (iii) [***%] of all Net Third Party Collections received since the immediately-preceding Advance Date. The Base Servicing Fee shall also include the reimbursements (as additional servicing fee) as provided for and pursuant to the penultimate paragraph of Section 4.6 of the Supplement and Section 4.12 of the Supplement. (b) Section 1.1 of the Supplement is hereby amended by adding the following definition: "Net Third Party Collections" means Third Party Collections, minus Third Party Fees and Third Party Costs. (c) Section 1.1 of the Supplement is hereby amended by adding the following definition: "Third Party Cost " means all out-of-pocket costs and expenses incurred by any party other than Servicer in connection with collection actions or proceedings related to the enforcement or collection of any Designated Receivable. (d) Section 1.1 of the Supplement is hereby amended by adding the following definition: "Third Party Fees" means with respect to a Designated Receivable, the amount of any fees or compensation paid or owed to unrelated third-parties (generally, contingency fee lawyers) retained or otherwise engaged by the Servicer under the fee or compensation arrangements that are contingent upon, and determined by reference to, amounts recovered in respect of the related Designated Receivable. (e) Notwithstanding the definition of "Additional Servicing Fee." 1. The following shall be applicable to January, February and March 2001: The "Additional Servicing Fee" will be paid for January 2001 if the Lender Net Collections for January 2001 equal or exceeds 106% of the aggregate Projected Lender Net Collections for January 2001; The "Additional Servicing Fee" will be paid for February 2001 if the aggregate Lender Net Collections for January and February 2001 equal or exceeds 106% of the aggregate Projected Lender Net Collections for January and February 2001; 3 [***] Omitted pursuant to a request for confidential treatment. The omitted material has been filed separately with the Securities and Exchange Commission.
The "Additional Servicing Fee" will be paid for March 2001 if the aggregate Lender Net Collections for January, February and March 2001 equal or exceeds 106% of the aggregate Projected Lender Net Collections for January, February and March 2001; 2. All references in such definition to "100 percent (100%)" shall read " 106 percent (106%)." (f) The reference in Section 6.1(f) of the Supplement to "September 30, 2000" shall read "April 30, 2001." 2.2 Modification to Exhibit. Exhibit B attached to the Supplement is hereby deleted in its entirety and replaced as of November 24, 2000 with Exhibit A attached to this Agreement. ARTICLE III MISCELLANEOUS 3.1 Complete Agreement; Successors and Assigns; Relationship of Parties. This Agreement constitutes the complete agreement between the parties hereto with respect to the subject matter hereof and supersedes all existing agreements and all oral, written or other communications between them concerning its subject matter. This Agreement shall be binding upon the parties hereto and their respective successors and permitted assigns and shall inure to the benefit of the parties hereto and their respective successors and permitted assigns. 3.2 No Waiver. Any failure by the Borrower, the Servicer, the Parent, the Owner or the Collateral Agent, at any time or times, to require strict performance by any other party of any provision of this Agreement shall not waive, affect or diminish its respective right thereafter to demand strict compliance and performance therewith. 3.3 Severability. Any provision of this Agreement which is prohibited 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. 3.4 Amendments; Governing Law. This Agreement and the rights and obligations of the parties hereunder (a) may not be changed orally but only by an instrument in writing signed by the party against which enforcement is sought and (b) shall be construed in accordance with and governed by the laws of the State of New York. 3.5 Counterparts. This Agreement may be executed in any number of copies (including copies sent by facsimile or other electronic transmission), and by the different parties hereto on the same or separate counterparts, each of which shall be deemed to be an original instrument. 4
3.6 Headings. Section headings used in this Agreement are for convenience of reference only and shall not affect the construction or interpretation of this Agreement. [Remainder of page intentionally blank.] 5
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be executed by their respective officers thereunto duly authorized as of the day and year first above written. MIDLAND CREDIT MANAGEMENT, INC., a Kansas corporation By: ___/s/ Timothy W. Moser___ Name: Timothy W. Moser Title: Executive Vice President 5775 Roscoe Court San Diego, California 92123 Facsimile: 858-309-6977 “Servicer” DAIWA FINANCE CORPORATION By: __/s/ H. illegible]_______________ Its: __Executive Vice President_______ “Daiwa” CCS RECEIVABLES MANAGEMENT, LLC By: LORD SECURITIES CORPORATION Its: Manager By: ___/s/ Dwight Jenkins______________ Its: ___Senior Vice President___________ C/o Daiwa Finance Corporation 32 Old Slip New York, NY 10005 Facsimile: 212-612-6172 “Owner” S-1
Consented and agreed to this 27th day of December 2000. SUNAMERICA INC., a Delaware Corporation, as participant By: ______________________________ Its: ______________________________ "Participant" S-2