Exhibit 10.7 [***] TEXT OMITTED AND FILED SEPARATELY CONFIDENTIAL TREATMENT REQUESTED AMENDMENT NO. 1 TO THE SERVICING AGREEMENT AMENDMENT NO. 1 (this “Amendment”), dated as of November 1, 2001, 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"). Capitalized terms used herein and not otherwise defined, shall have the meanings ascribed to them in the Agreement referred to below. Preliminary Statements. (1) The parties hereto have entered into a Servicing Agreement, dated as of December 27, 2000 (said Agreement, as amended or restated from time to time, the “Agreement”) pursuant to which the the Servicer is servicing certain accounts receivable on behalf of the Owner; and (2) The parties hereto desire to amend the Agreement as set forth herein; NOW, THEREFORE, the parties agree as follows: SECTION 1. Amendments to Agreement. (a) Section 2.1 (a) of the Servicing Agreement is hereby amended in its entirety to read as follows: Section 1.1 of the Supplement is hereby amended by replacing the current definition of “Base Servicing Fee” with the following definition: “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. Notwithstanding the foregoing, the percentages set forth in clauses (i) and (ii) above (x) shall be increased on the dates set forth below to the percentages set forth below: [***] Omitted pursuant to a request for confidential treatment. The omitted material has been filed separately with the Securities and Exchange Commission.
Date Percentage May 1, 2002 [***]% May 1, 2003 [***]% May 1, 2004 [***]% May 1, 2005 [***]% and (y) shall be increased to [***]% from and after the first date following which the amount paid to the Parent and the Owner in respect of Collections from the Designated Receivables from and after January 29, 1998 is equal to 100% of the principal of the Advances and interest thereon at the rate set forth in the Credit Agreement. (b) Section 2.1 of the Agreement is hereby amended by adding the following at the end thereof: (g) Section 4.4(c) of the Supplement is hereby amended by adding the following at the end thereof: In addition, the Servicer shall deliver to the Owner, by no later than the fifteenth day of each month, a copy of the internal financial statement prepared by the Servicer in such form as such statements have been prepared in the past for their internal use. (h) Section 1.1 of the Supplement is hereby amended by deleting the definition of the term “Servicing Term” in its entirety and inserting a new definition to read as follows: “Servicing Term” means a period of time beginning on the Effective Date and ending on such date as the Owner and the Servicer shall mutually agree, or such earlier date as the Servicer’s functions hereunder are terminated pursuant to any other provision hereof. (c) Exhibit A attached to the Agreement is hereby deleted in its entirety and replaced as of November 1, 2001 with Exhibit A attached to this Amendment. For the avoidance of doubt, the parties acknowledge that Exhibit A shall be used solely to determine the Servicer’s entitlement to any Additional Servicing Fee. (d) In recognition of Owner’s right to terminate the Servicing Agreement at any time upon 60 days’ notice pursuant to Section 2(a) of this Amendment, (i) the Original Servicing Agreement is amended by deleting Section 3.02 and Section 4.01 thereof in their entirety, and (ii) the Supplement is amended by deleting Section 6.1 in its entirety. (e) In recognition of the Parent’s acceptance, through the Owner, of the Collateral in full satisfaction of all obligations under the Credit Agreement and for the avoidance of doubt, the [***] Omitted pursuant to a request for confidential treatment. The omitted material has been filed separately with the Securities and Exchange Commission.
parties agree that the provisions of Section 7.01 of the Credit Agreement and the definition of “Trigger Event” set forth in Section 1.01 of the Credit Agreement shall not apply to the Servicer. SECTION 2. Other Matters. (a) Notwithstanding anything set forth in the Servicing Agreement, the Owner shall be entitled to terminate the Servicing Agreement, at any time without penalty or the payment of any breakage fees, 60 days following such time as the Owner shall notify the Servicer of such termination; provided that Servicer shall be allowed to continue to service any Designated Receivable, and concurrently receive or collect any Additional or Base Servicing Fee owing thereon, which (at the time of termination, disposition or removal) has: (i) been placed with a Third Party (including but not limited to National Attorney Network or [***]), or (ii) received a payment within ninety (90) days of Servicer’s receipt of notice of termination (except as set forth in the final clause of this paragraph). To the extent any Designated Receivable has been placed with a Third Party, Servicer shall be entitled to service and receive a servicing fee thereon until such time as the assigned Third Party determines (in its reasonable and sole discretion) that the Designated Receivable is uncollectible, or with respect to any Designated Receivable, Servicer shall be entitled to service and receive a servicing fee thereon for so long as any payment is received at any time during any consecutive ninety (90) day period thereafter unless Owner’s termination of the Servicing Agreement is due to (a) Servicer’s failure to comply with clause (ii) or (iii) of Section 2.04(a) of the Original Servicing Agreement relating to maintenance of licenses and compliance with applicable laws, or (b) the bankruptcy (either voluntary or involuntary) of the Servicer or its parent company. (b) The Owner hereby waives any Event of Default arising from the Servicer’s failure to comply with Section 4.4(c) of the Supplement or Sections 2.05(b) or (c) of the Original Servicing Agreement, provided that such non-compliance is cured by no later than January 1, 2002. (c) The Owner hereby approves of the transactions described in the Credit Card Joint Marketing Agreement, dated as of November 9, 2001, by and among the Owner, the Servicer and [***]. The Owner shall be entitled to receive [***]% of all amounts received by the Servicer from [***] under such Agreement. (d) Except as herein expressly amended, the Agreement is ratified and confirmed in all respects and shall remain in full force and effect in accordance with its terms. Each reference in the Agreement to "this Agreement" shall mean the Agreement as amended by this Amendment Agreement, and as hereinafter amended or restated. (e) This Amendment shall be effective as of the date first written above.SECTION 3. Governing Law. THIS AMENDMENT SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK. SECTION 4. Execution in Counterparts.This Amendment may be executed in any number of counterparts and by different parties hereto in separate counterparts, each of which when so executed shall be deemed to be an original and all of which when taken together shall constitute one and the same agreement. Delivery of an executed counterpart of a signature page to this Amendment by telecopier shall be effective as delivery of a manually executed counterpart of this Amendment. [***] Omitted pursuant to a request for confidential treatment. The omitted material has been filed separately with the Securities and Exchange Commission.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be executed by their respective officers thereunto duly authorized, as of the date first above written. MIDLAND CREDIT MANAGEMENT, INC. By: __/s/ J. Brandon Black____ Name: J. Brandon Black Title: EVP DAIWA FINANCE CORPORATION By: ___/s/ Jeffrey M. Chertoff___ Name: Jeffrey M. Chertoff Title: EVP, CFO CCS RECEIVABLES MANAGEMENT, LLC By: DAIWA SECURITIES AMERICA INC. Its: Manager By: ___/s/ Hiroyuki Nomura____ Name: Hiroyuki Nomura Title: SVP