UNIVERSAL UNDERWRITERS
ACCEPTANCE CORPORATION
SERVICING AGREEMENT
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The "box" you have checked and initialed at Section 6.17 - whether for the
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"Dealer Pool" Advance Program or for the "National Pool" Advance Program
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- -determines whether this Servicing Agreement is "full recourse" or "non-
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recourse",
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This Servicing Agreement is made by and between UNIVERSAL UNDER WRITERS
ACCEPTANCE CORPORATION ("UUAC"), a Kansas corporation with its principal place
of business at -Text Omitted per Request for Confidenital Treatment by Pinnacle
Business Management, Inc. - and LO-CASTRO AND ASSOCIATES, INC. dba All Pro
Auto Mall ("Customer"), a Pennsylvania Corporation with its principal place of
business at -Text Omitted per Request for Confidenital Treatment by Pinnacle
Business Management, Inc. - and will become effective only when countersigned
by a UUAC Vice President, Assistant Vice President or his or their delegee.
UUAC and Customer agree as follows:
ARTICLE 1 -DEFINITIONS
In this Agreement, "we," "us" or "our," refer to UUAC, "you" or "your" refer to
Customer and the words "will" and "shall" are used interchangeably to mean
either determination or future. as appropriate in context. Appendix I
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(Definitions) is a part of this Agreement.
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ARTICLE II
ADMINISTRATION AND SERVICING OF QUALIFIED
RECEIVABLES
Section 2.1. Acceptance of Receivables.
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(a) Your submission of a consumer's credit application means you have
already entered into a credit-sale contract with that consumer, which can be
legally enforced by you and/or any underlying Customer's Dealership, on the one
hand, and the Obligor(s) on the other.
(b) If we issue an Advance approval number for a Contract, you will deliver
the Receivable File for that Contract to us. However, our issuing an approval
number does not by itself constitute our acceptance of the Contract.
(c) Acceptance of a Contract happens, if at all, only after we receive and
approve the related Receivable File. When you submit a Receivable File, you are
simultaneously granting us a security interest in the Receivable, whether or not
the Contract constituting that Receivable contains the signature of either or
both you or any underlying Customer's Dealership and whether or not the
preprinted language of such Contract contains words of assignment in addition to
or in lieu of words concerning the granting of a security interest in such
Contract. Upon our request you will execute and furnish to us any documents we
deem necessary or appropriate to enable us to carry out our Collection Services
duties under this Agreement. You hereby appoint UUAC your special
attorney-in-fact, coupled with an interest, which shall survive as long as you
owe any sums to UUAC, so that UUAC can execute any such documents, including but
not limited to title and application-for- title documents, in your name and
stead, should you fail to execute and furnish them.
(d) When UUAC accepts a Contract, it becomes a Receivable under this
Agreement, and UUAC will perform Collection Services on the Receivable on your
behalf in accordance with the Terms or this Agreement. Our Collection Services
will consist of: collection and posting of all payments; holding the Receivable
Files; collecting payments due under thc Receivables as set forth in Section 2.2
and reapplying the amounts so collected in thc manner set forth elsewhcre in
this Agreement; responding to inquiries of Obligors on the Receivables;
investigating delinquencies; sending monthly payment books or billing
statements; and/or receipts to Obligors. UUAC is hereby authorized and empowered
to: (i) endorse your name on any payments made payable to you: ii) execute and
deliver. in UUAC's name. on your behalf: any and all instruments of satisfaction
or cancellation or of partial or full release or discharge. and all other
comparable instruments, with respect to Receivables or Financed Vehicles: (iii)
waive any late payment charge or any other fee that may be collected in the
ordinary course of servicing a Receivable; (iv) reform Contracts, as deemed
appropriate in UUAC's sole discretion and without notice to you, by way of
extension or other modification of any of the terms and conditions; and (v)
commence a legal action against the Obligor(s) on that Receivable File, whether
we do so in our own name or on your behalf, should we determine it necessary or
reasonable to do so.
(e) Notwithstanding any provision in this Agreement alleged or purported to
be to the contract you and UUAC are each acting as an independent contractor and
shall have no duties or responsibilities to the other except as expressly set
forth in this Agreement and the Dealer Guide and in no case shall we be deemed
or construed to have any fiduciary obligations or duties to you. This Agreement
is for your and our benefit only, and tl1ere are no third-party beneficiaries.
intended or not.
Section 2.2 Collection of Receivable Payments.
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UUAC will use reasonable efforts to collect all payments called for under the
terms and provisions of each Receivable when they become due. If any payments
due on a Receivable are made to you or any Customer's Dealership after the
Receivable has been accepted by UUAC under this Agreement, you will, no later
than the close of business the following Business Day, forward such payment, or
cause it to be forwarded, to UUAC in the form received. If any such payment is
received in cash, you ( or such Customer's Dealership) will: -Text Omitted per
Request for Confidenital Treatment by Pinnacle Business Management, Inc. - You
will do nothing, nor will you permit anything to be done on your behalf, to
discourage an Obligor from making Contract payments to UUAC and, by way of
illustration and not imitation, you wilt neither encourage nor require an
Obligor to make Contract payments to you, rather than to UUAC.
Section 2.3 Foreclosure of Security (interest in Financed Vehicles.
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Acting on your behalf and where we deem it appropriate and practicable, we will
repossess or otherwise obtain possession of the Financed Vehicle securing any
Defaulted Receivable. We will follow such practices and procedures as we deem
necessary or advisable, which may include repair and restoration of the Financed
Vehicle, and we or
1
our agents will sell the Financed Vehicle, subject to applicable law, at public,
or private sale. You will not do anything to thwart or hinder our repossession
efforts, and you will cooperate in every reasonable way with us in those
efforts. If an Obligor, or someone acting on behalf of In Obligor, returns a
Financed Vehicle to your premises (or the premises of any Customer's Dealership
with the reasonably clear express or implied intention that possession of the
Financed Vehicle is thereby being voluntarily surrendered, you will promptly
notify us of the "voluntary repossession" and protect and preserve the Financed
Vehicle in the condition in which it was returned.
- - Text Omitted per Request for Confidenital Treatment by Pinnacle Business
Management, Inc.
Section 2.4 Physical Damage Insurance.
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Text Omitted per Request for Confidenital Treatment by Pinnacle Business
Management, Inc.
Section 2.5 Security Interests in Financed Vehicles.
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You will take all steps necessary to perfect UUAC's first and prior security
interest in each Financed Vehicle, including, in jurisdictions where applicable,
placing UUAC's name as a lienholder on the title certificate for each Financed
Vehicles.
Section 2.6 Access to Certain Documentation and Information Regarding
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Receivables.
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Upon request, you will give us any and all documents you possess which relate to
any Receivable File in our possession and/or to any Obligor on such Receivable
File; provided however, that this Section doesn't require you to violate any
applicable law prohibiting disclosure of information regarding an Obligor.
Section 2.7 Security Interest in Receivables and Financed
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Vehicles: UUAC is not an Assignee.
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You hereby grant UUAC a security interest in all Receivables now or hereafter
transferred to UUAC pursuant to this Agreement and in the financed Vehicles
connected therewith, wherever located, together with all proceeds, as security
for the payment of all your indebtedness to UUAC, including Advances, Collection
Costs, and any other amounts due UUAC hereunder. This grant of a security
interest may -but need not be -repeated in any individual Contract delivered to
UUAC hereunder, and the failure of any such Contract to repeat such grant shall
in no way affect or diminish the security interest UUAC acquires in any such
Contract and/or Financed Vehicle by reason of the language of this Agreement,
alone. While UUAC may also choose to perfect its security interest in all
Receivables previously, now or hereafter delivered to UUAC, its possession of
any Receivable will for all purposes between you and UUAC be deemed perfection.
This grant of a security interest in all Receivables will survive the
termination of this Agreement until you have paid in any repurchase obligations
you may incur under this Agreement. You agree to execute UCC Financing
Statements and take other actions requested by us in order to perfect any such
security interest. Nothing in this Agreement shall be deemed or construed to
mean that UUAC is an assignee -rather than the grantee of a security interest in
- -as to anyone or more Receivables, whether because of this granting of a
security interest or otherwise, unless such purported assignment is specifically
provided in writing which is not preprinted. Any provision preprinted on any
Contract that contains words of transfer or assignment is, despite such
language, to be, and to be deemed to be, read only as if it grants UUAC a
security interest in such Contract, perfected by possession, thus being
consistent with UUAC's being merely a secured party with respect to such
Contract(s) and not anassignee.
Section 2.8 "Dealer-Remit" Portion of Service-Contract-
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Related Advance.
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At its option, and despite any language to the contrary in the Dealer Guide
and/or any Dealer Bulletin, if an Accepted Receivable evidences sale of a
Vehicle Service Contract ("VSC"), UUAC may remit to the issuer the net premium
payable by Customer or any Customer's Dealership (the so-called "Dealer-Remit")
rather than remitting it to you for subsequent remittance to the issuer. -Text
Omitted per Request for Confidenital Treatment by Pinnacle Business Management,
Inc. -
Section 2.9 Enrollment Fee.
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No later than the effective date of this Agreement, you, for yourself and ,for
any Customer's Dealerships, will pay UUAC a non-refundable Program Enrollment
Fee. Your UUAC or Universal Underwriters Group representative will advise you
of the amount of the Fee and whether or not UUAC is then offering any program
whereby you can receive a refund of a part or all of the Fee and the terms and
conditions of any such program.
2
ARTICLE 111-A*
"DEALER POOL" (FULL RECOURSE) PLAN -
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ADVANCE PROGRAMS, SERVICING PROGRAMS
AND PAYMENTS
* IF YOU HAVE CHOSEN THE NATIONAL POOL
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ADVANCE PLAN, DISREGARD THIS ARTICLE III-A
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IN ITS ENTIRETY.
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Section 3.1 Contract-by-Contract Options as to Advance
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Program/Possible Advance-Rate Changes to Advance Programs.
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Unless this Agreement is amended to provide Otherwise, it is your option which
Advance Program you want applied to any submitted Contract, provided only that
the Contract conforms to the requirements of that Program. The specific
eligibility requirements for each Advance Program are detailed in the Dealer
Guide. As the Dealer Guide provides. it is your responsibility to indicate on
the appropriate "Fax Cover Sheet" which Advance Program you want to have applied
to any particular submitted Contract.
- - Text Omitted per Request for Confidenital Treatment by Pinnacle Business
Management, Inc. -
Section 3.2 Servicing Programs.
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When you elect the Dealer Pool Advance Plan at Section 6.17, you will also have
to elect which of the Servicing Programs (ProfitNow Plus(+)SM Fast50SM or
ProfitMaxSM) you want to apply to all of your Qualified Receivables for as long
as your portfolio exists. Unless UUAC consents to an exception or elects to
unilaterally move your portfolio to another Servicing Program, your Servicing
Program choice is irrevocable. The specific provisions and conditions o(UUAC's
various Servicing Programs are found in the Dealer Guide. Your choice of the
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Dealer Pool Advance Plan is also irrevocable.
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Section 3.3.1 Servicing Fee on Qualified Receivables.
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Our fee ("Servicing Fee") for Collection Services performed on your behalf with
respect to Qualified Receivables is determined by the Servicing Program you
elect for your portfolio at Section 6.15. Our applicable Servicing Fee will be
a percentage of Collections ,net of Collection Costs -received by UUAC or our
designees with respect to your Qualified Receivables portfolio.
Section 3.3.2 Servicing Fee on Non-Qualified Receivables.
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Our Servicing Fee for Collection Services performed on your behalf with respect
to Non-Qualified Receivables (those taken for "Servicing Only") is determined by
reference to the Dealer Guide, as it might be amended, whether by Dealer
Bulletin or otherwise.
Section 3.3.3 Servicing Fee Adjustments.
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The Servicing Fee and other particulars for our various Servicing Programs are
subject to change or adjustment at UUAC's sole discretion, upon 30 days' advance
written notice to you. 1f the change is to UUAC's Servicing Fee, whether it is
to be increased or decreased, the changed Servicing Fee will not apply to those
Receivable already in your portfolio prior to the effective date of any such
change.
Section 3.3.4 Post- Termination Servicing Fee Increase.
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If this Agreement is terminated and you do not remit the amounts recited in
Section 5.5A upon our demand to do so, the Servicing fee which will be
applicable to our Post Termination Collection Services may, at our sole option,
be increased by -Text Omitted per Request for Confidenital Treatment by Pinnacle
Business Management, Inc. - (so, for example, a previous -Text Omitted per
Request for Confidenital Treatment by Pinnacle Business Management, Inc. - %
Servicing Fee would be increased to -Text Omitted per Request for Confidenital
Treatment by Pinnacle Business Management, Inc. - %.)
Section 3.4.1 Application of Funds - Qualified Receivables.
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Collections received by UUAC during any calendar month with respect to a
Qualified Receivables portfolio are first applied to reimburse UUAC for all
Collection Costs and then to pay UUAC its appropriate Servicing Fee (which is
dictated by the Servicing Program you have elected). The application of any
proceeds remaining is dictated by the Servicing Program you have sellected. and
the details of that subsequent application are found in the Dealer Guide and any
applicable Dealer Bulletins.
Section 3.4.2 Application of Funds -Servicing-Only.
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Collections received by UUAC during any calendar month with respect to a
servicing-only portfolio are first applied to reimburse UUAC for all Collection
Costs and then to pay UUAC its Servicing Fee (disclosed in the Dealer Guide).
Any proceeds then remaining are paid to you.
Section 3.5 Timing of Payments to You.
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- - Text Omitted per Request for Confidenital Treatment by Pinnacle Business
Management, Inc.
Section 3.6 Potential Aggregation of all Servicing Program "Lots".
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In certain Servicing Programs, for example Fast50, Receivables are aggregated
into discrete "Lots" for purposes of expediting UUAC's pay-over of Collections
to the dealer, while other program, such as ProfitNow Plus(+) treat all
Receivables as belonging to one Lot. For purposes of the following provisions
of this Section 3.3, "Lot" will be understood to mean both any Servicing
Program-specific discrete Lot and an entire Servicing Program portfolio which is
otherwise not broken-down into Lots. Despite any language to the contrary in
this Agreement and/or in the Dealer Guide, in its sole discretion and at any
time, UUAC may transfer and apply Collections nominally due with respect to one
Lot to any other Lot (treating them as if they were due on such other Lot) and
may charge Advances originally made with respect to one Lot to any other Lot.
This means that UUAC, in its sole discretion, has the ability to attempt to
minimize its losses with respect to some of your Qualified and/or Non-Qualified
Receivables by treating both Collections and Advances as fungible. This also
means that UUAC's obligation to disburse Collections to you, at UUAC's election,
can be a function of your worst-performing Lot.
Section 3.7 Monthly Statement.
- ---------------------------------
- - Text Omitted per Request for Confidenital Treatment by Pinnacle Business
Management, Inc. -
3
ARTICLE 111-B
"NATIONAL POOL" (NON-RECOURSE) PLAN.
THE PROFIT POOL and RELATED ITEMS
* IF YOU HAVE CHOSEN THE DEALER POOL
ADVANCE PLAN, DISREGARD THIS ARTICLE III-B
IN ITS ENTIRETY.
Section 3.1 Contract-by-Contract Options as to Advance Program/Possible
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Advance-Rate Changes to Advance Programs.
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Unless and until this Agreement is amendted to provide otherwise, it is your
option which Advance Program you want applied to any submitted Contract,
provided only that the Contract conforms to the requirements of that Program.
The specific eligibility requirements for each Advance Program are detailed in
the Dealer Guide, as it might be-updated and republished from time to time,
whether by Dealer Bulletin updates or otherwise. As the Dealer Guide provides,
it is your responsibility to indicate on the appropriate "Fax Cover Sheet" which
Advance Program you want to have applied to any particular submitted Contract.
We are not obligated to advise you that a potentially more advantageous Program
could have been applied to any Contract. On the other hand, where a submitted
Contract would not Qualify for the Advance Program you selected but would
Qualify under a less advantageous Advance Program, we will tell you. The rate
of Advance and other particulars of the Advance Program under which any specific
Contract is submitted will be the rate and particulars in effect (as determined
by either the then-most-current Dealer Guide or Dealer Bulletin) the day the
Contract is received by UUAC, provided only that the Contract is Accepted within
14 days of the day UUAC receives it. Otherwise, the rate of Advance and
particulars in effect the day of Acceptance will be those applicable to any
specific Contract. We reserve the right to add Advance Programs and modify,
discontinue, supplement or replace any currently-existing Advance Program.
Section 3.2 Limited Option to Deselect the UUAC National Pool Advance Plan.
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If you elect the National Pool Advance Plan, you may make a one-time election
- -but only during the first year this Agreement is in effect -to move your
Receivables portfolio generated after the effective date of your election -over
to the Dealer Pool Advance Plan. That move is irrevocable. Any Receivables in
your portfolio prior to the effective date of your election will remain subject
to the National Pool Advance Plan.
Section 3.3 Servicing Fee on Qualified Receivables.
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Our fee for Collection Services performed on your behalf with respect to
National Pool Advance Plan Qualified Receivables is recited in the Dealer Guide.
Our applicable UUAC fee will be a Dealer-Guide-specified percentage of
Collections -net of Collection Costs -received by UUAC or our designees with
respect to the Qualified Receivables portfolio which comprises any particular
Book. The first Book will be comprised of all Qualified Receivables Accepted by
UUAC at any time through and including December 31, 1999, from Dealers and/or
Acceptance Companies which have executed a National Pool Advance Plan Servicing
Agreement. The second Book will be comprised of all National Pool Advance Plan
Qualified Receivables Accepted by UUAC from January 1, 2000, through December
31,2000, and so on.
Section 3.4 Servicing Fee Adjustments.
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The Servicing Fee and other particulars for the National Pool Advance Plan are
subject to change or adjustment at UUAC's sole discretion, upon 30 days' advance
written notice to you. If the charge is to UUAC's Servicing Fee, whether it is
to be increased or decreased, the changed Servicing Fee will not apply to those
Qualified Receivables in any Book which has already Closed nor to any Qualified
Receivables which are already in the then- currently-open Book as of
thee!1ective date of any such change, unless, in its sole discretion -in case of
a Servicing Fee decrease ,UUAC elects to make: the decrease applicable to one or
more Closed Books and/or the pre-existing portion of the then-current Book.
Section 3.4.1 Post- Termination Servicing Fee Increase.
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If this Agreement is terminated and you do not remit the amounts recited in
Section 5.5-8 upon our demand to do so. the Servicing Fee which will be
applicable to our post-termination Collection Services may, at our sole option,
be increased by -Text Omitted per Request for Confidenital Treatment by Pinnacle
Business Management, Inc. - % (so, for example, a previous -Text Omitted per
Request for Confidenital Treatment by Pinnacle Business Management, Inc. - %
Servicing Fee would be increased to
- - Text Omitted per Request for Confidenital Treatment by Pinnacle Business
Management, Inc. - %).
Section 3.5 Application of Collections.
- -------------------------------------------
While a Book is Open, Collections received by UUAC during any calendar month
with respect to the aggregate Qualified Receivables comprising such Book are
applied:
(i) first, to reimburse UUAC for all Collection Costs;
(ii) second, to pay UUAC its appropriate Servicing Fee, as described in the
Dealer Guide; and
(iii) third, to pay UUAC its unrecovered Advances on the Book.
When a Book has been Closed, Collections received by UUAC during any calendar
month are applied:
(i) first, to reimburse UUAC for all Collection Costs;
(ii) second, to pay UUAC its appropriate Servicing Fee, as described in the
Dealer Guide;
(iii) third, to reimburse UUAC for its Non-Recourse Fee, which is recited
in the Dealer Guide, and is assessed against to UUAC's unrecovered Advances on a
Book, as of the first Business Day following the Close Date for that Book;
(iv) fourth, to pay UUAC its unrecovered Advances on the Book; and, if
there is any surplus,
(v) fifth, to the Profit Pool for that Book.
Section 3.6 Methodologv for Calculation of your Share of the Profit Pool.
- --------------------------------------------------------------------------------
- - Text Omitted per Request for Confidenital Treatment by Pinnacle Business
Management, Inc. -
4
Section 3.7 Timing of Profit Share Payments to You.
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If the annual calculations described in Section 3.5 result in your being
entitled to one or more Profit Shares,- it or they will be distributed to you
approximately -Text Omitted per Request for Confidenital Treatment by Pinnacle
Business Management, Inc. - days after the Calculation Date. If you have any
special instructions concerning payment, they should be sent in writing to UUAC.
Section 3.8 Statements.
- -------------------------
The annual Calculation Date statements will be the only ones furnished to you.
in no event will UUAC make either interim Book or portfolio statements available
any more frequently than quarterly, and in no case before a particular Book is
closed.
ARTICLE IV
REPRESENTATIONS, WARRANTIES AND INDEMNITY
Section 4.1 Customer's Representations and Warranties.
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You make the following representations and warranties, in addition to those
warranties and representations made elsewhere in this Agreement, all of which
UUAC is relying on by accepting Receivables. Each or these representations and
warranties shall be continuing for as long as you have: any remaining contingent
payback obligations to UUAC hereunder. Every time you request UUAC to Advance
against a Receivable under this Agreement will be deemed to, and wi11 be,
reaffirmation of each of the following representations and warranties, as well
as those made elsewhere in this Agreement, as of the date of such request:
(a) Organization and Good Standing. Customer: (i) is duly organized as
whatever form of legal entity has been checked at the beginning of this
Agreement; (ii) is validly existing as the same and in good standing under the
laws of the state of its incorporation or domicile. as applicable: (iii) has
full power and authority to own its properties and to conduct its business, and
has had at all relevant times, the power, authority, and legal right to acquire
and own the Receivables.
(b) Due Qualification. Customer is qualified to do business and has
obtained all necessary licenses and approvals in all jurisdictions in which the
ownership or lease of its property or the conduct of its business requires such
qualification. license, or approval:
(c) Power and Authority. Customer has the power and authority to execute
and deliver this Agreement and to carry out its terms, and the execution,
delivery, and performance of this Agreement has been duly authorized by, as
appropriate for Customer's form of entity, all necessary corporate, partnership
or limited-liability-entity action on the part of Customer.
(d) Binding Obligations. This Agreement, as executed by you or on your
behalf, constitutes your legal, valid, and binding obligations and is
enforceable in accordance with its terms, except as enforceability may be
limited by bankruptcy, reorganization, or other similar laws affecting the
enforcement of creditor's rights generally.
(e) No violation, The consummation of the transactions contemplated by this
Agreement and the fulfillment of its terms will not conflict with, result in any
breach of any of the terms and provisions of, nor constitute (with or without
notice of lapse of time) a default under any indenture, agreement, or other
instrument to which you, any of your principals, shareholders, partners, members
or officers and/or any guarantor(s) of this Agreement (collectively, save for
you, "Other Persons" herein and in (f) below) is or are a party or by which it
or they shall be bound; nor result in the creation or imposition of any lien
upon any of your and/or any Other Person's properties pursuant to the terms of
any such indenture, agreement, or other instrument ( other than this Agreement);
nor violate any law, order, rule, or regulation -applicable to any or all of the
foregoing -of any court, regulatgory body, administrative agency or other
governmental entity having jurisdiction over you and/or any Other Persons and/or
your or any Other Person's properties.
(f) No Proceedings, There are no proceedings or investigations pending or,
to your knowledge, threatened before any court, regulatory body, administrative
agency, or other governmental entity having jurisdiction over you or any Other
Persons to which you and/or any Other Person are a party and/or to which your
and/or the property of any Other Person is subject; (i) asserting the invalidity
of this Agreement; (ii) seeking to prevent any of the transactions contemp1ated
by this Agreement; or {iii) seeking any determination or ruling that might
l11at~rially and adversely affect the financial condition of any or al! or you
and ally Other Person; or (iv) the performance by you or your obligations under,
or the validity or enforceability of this Agreement. Neither you nor any Other
5
Person is or are operating under, or subject to, or in default with respect to,
any adjudicatory order, writ, injunction, or decree of any Court, regulatory
body, administrative agency, or other governmental entity, whether domestic or
foreign, related to the conduct of your business; and neither you I)or any Other
Person is or are subject to any cease and desist order, supervisory agreement or
arrangement, or disqualification, consensual or otherwise, with any regulatory
authority which is material to the Receivables or the transactions contemplated
by this Agreement. In addition, you will promptly notify UUAC of any of the
conditions or situations set forth in this paragraph which begin after this
Agreement is signed.
(g) Compliance with Laws, You have complied. and have verified, after
appropriate review, consultation with counsel and other appropriate
investigatory or consultation activities, that every Customer's Dealership has
complied, with all federal, state, and local laws, ordinances, regulations, and
orders applicable to it or the Receivables or the Financed Vehicles. All
licenses, permits, orders, or approvals of any governmental or regulatory body
which are required in connection with your, as well as all Customer's
Dealership's, business ("Permits") are in full force and effect, no violations
are or have been recorded with respect to any such Permits, and no proceedings
are pending or, to your actual or constructive or imputed knowledge, threatened
to terminate, revoke, or limit any of such Permits.
(h) Characteristics of Receivables. Each Receivable was originated by you
or by the underlying Customer's Dealership for the sale of a Financed Vehicle in
the ordinary course of your or such Customer's Dealership's business, was fully
and properly executed by the parties thereto and contains customary and
enforceable provisions for an installment sale of a motor vehicle in the state
in which the Obligor is located. Each Receivable is in compliance with all
applicable consumer laws and regulations.
(i) No Dishonor of Payment Instruments. You have no actual or constructive
knowledge, after reasonably diligent inquiry and investigation (for the purposes
of this sub- paragraph any actual or constructive knowledge of the underlying
Customer's Dealership shall be deemed imputed to you) that any payment
instrument used, or attempted to be used, by or on behalf of any Obligor was
dishonored or, as to such payment instrument, any other defense to payment has
been or has threatened to be raised, either prior to the time UUAC has made an
Advance with respect to the Contract in question or subsequent to that time. If,
subsequent to the time UUAC has made an Advance on a Contract, any instrument
used by or on behalf of an Obligor towards the downpayment on such Contract is
dishonored or otherwise had its payment refused and you have actual or
constructive knowledge of the same, you warrant and represent to UUAC that you
will immediately fax to the UUAC Service Center (at a fax number provided in the
Dealer Guide) appropriate notice of such dishonor or refusal to pay.
j) One Original. There is only one executed original of each Receivable,
and any copy of such Contract and other documents constituting the Receivable
File, and any copy of the Contract and any other such documents given to any
Obligor is a true and correct copy of such executed original Contract or any
other such documents.
(k) Disclosure of Material Facts. The representations and warrenties
contained in this Agreement or any other agreement schedule, exhibit, or other
document delivered to us in connection with it, including, but not limited to,
the Customer Enrollment Packet. does not contain ;U1y untrue statement of a
material tact or omit to state any material tact necessary to make the
statements contained herein or therein not misleading.
(l) Non-Reliance. You or the Customer's Dealership, as appropriate, have,
independently and without reliance upon UUAC or anything UUAC might have
communicated to you via the Dealer Guide or otherwise, and based on such
documents and information as you or Customer's Dealership has deemed
appropriate, made your own appraisal of and investigation into the financial
condition and creditworthiness of each Obligor. and made your own credit
decision to enter into a Contract with such Obligor.
Section 4.2 UUAC's Representations and Warranties.
- -------------------------------------------------------
UUAC makes the following representations to Customer on which Customer is
relying in submitting Receivables to UUAC, and each occasion of UUAC's accepting
a Receivable from Customer hereunder will act as a reaffirmation ion of each of
the following representations as of the date of such acceptance:
(a) Compliance with Laws. UUAC's performance of its Receivables servicing
responsibilities under this Agreement is in material compliance with all
federal, state and local laws. ordinances, regulations and orders applicable to
it.
(b) Characteristics of Contracts. The preprinted language and format of the
most-current version of the form of Contract available to you (and through you
to your Customer's Dealerships) from UUAC, which is to be filled-in and
otherwise completed by Customer, materially complies with all applicable
consumer laws and regulations, provided only that such Contract forms are used
only for their intended purpose: i.eevidencing your or the Customer's
Dealership's retail installment sale of a new or used car or light truck to one
or more consumers for personal, non-commercial use. Notwithstanding the
preceding sentence, however, UUAC's representations concerning compliance: (i)
shall not apply in any instance where you or the Customer's Dealership fail to
use the most recent version of Contract available from UUAC and such most recent
version cures and/or clarifies any alleged or actual non- compliance contained
in the earlier version utilized instead by you or the Customer's Dealership; and
(ii) do not apply to any of the words or figures you, the Customer's Dealership
or the software provider for either or both of you inserts into or onto any
"blanks" on the Contract nor to any words or figures you or the Customer's
Dealership add to the Contract, nor in any case where you or the Customer's
Dealership have deleted preprinted language which, but for such deletion, would
be in compliance with applicable consumer law or regulation.
Section 4.3 Customer Indemnities.
- ------------------------------------
- - Text Omitted per Request for Confidenital Treatment by Pinnacle Business
Management, Inc. -
6
Section 4.4 UUAC Indemnities.
- --------------------------------
- - Text Omitted per Request for Confidenital Treatment by Pinnacle Business
Management, Inc. -
Section 4.5 Indemnification Expenses.
- ----------------------------------------
- - Text Omitted per Request for Confidenital Treatment by Pinnacle Business
Management, Inc. -
ARTICLE V
TERMINATION
Section 5.1 Termination by Customer.
- ----------------------------------------
- - Text Omitted per Request for Confidenital Treatment by Pinnacle Business
Management, Inc. -
Section 5.2 Termination by UUAC.
- ------------------------------------
- - Text Omitted per Request for Confidenital Treatment by Pinnacle Business
Management, Inc. -
Section 5.3 Events of Default.
- ----------------------------------
At our sole option, anyone or more of the following will be Events of Default
under this Agreement: -Text Omitted per Request for Confidenital Treatment by
Pinnacle Business Management, Inc. -
Section 5.4 Your Required, Non-Credit-Default-Related Payback of Advances and
- --------------------------------------------------------------------------------
Collection Costs on Individual Contracts.
- ---------------------------------------------
- - Text Omitted per Request for Confidenital Treatment by Pinnacle Business
Management, Inc. -
7
Section 5.5-A -Dealer Pool Advance Plan Effects of Termination: Full Recourse
- --------------------------------------------------------------------------------
Plus Termination Fee.
- -----------------------
If you have elected the Dealer Pool Advance Plan, once termination by either
you or UUAC becomes effective -except as otherwise provided below -you will be
obligated to pay us the tollowing amounts:
(a) Any unreimbursed Collection Costs:
(b) Any unpaid Advances and all other amounts owing by you to UUAC; and
(c) A termination fee equal to twenty percent (20%) of the then-outstanding
amount of Receivables, as liquidated damages.
We may demand ("Amounts due at Termination Demand") that we receive full payment
in good funds of the above amounts (collectively, "Amounts due at Termination")
as soon as 10 days after Termination has become effective or at such later
time(s) as we might, in our sole discretion, elect.
However, despite any language to the contrary in this Section 5.5-A or elsewhere
- -------
in this Agreement, we will not capriciously terminate this Agreement and, unless
------
and until any or all of the following occur:
- ---------------------------------------------------
(i) UUAC TERMINATES THIS AGREEMENT because of: ( I) your actual or
alleged-in-good-faith fraud or misrepresentation involving any significant
portion of your then-remaining UUAC portfolio: (2) your sale or transfer of all
or any significant portion of your assets other than in the normal course of
your Dealership's business and/or your sale or transfer of control of your
Dealership; (4) your ceasing to continue your Dealership's business, voluntarily
or otherwise; (5) your filing a Petition to be a Debtor in Bankruptcy or an
involuntary Petition is filed against you: or (6) UUAC's at any time(s)
reasonably determining you are or will become unable or unwilling to repay on
demand any shortfall UUAC, using its standard projection model(s), in good faith
projects will remain after the proceeds of complete liquidation of your UUAC
Portfolio balance are applied to the then-current total of Amounts due at
Termination or
(ii) YOU TERMINATE THIS AGREEMENT for any reason whatsoever and UUAC, at
any time(s) in good faith projects a Shortfall and reasonably determines you are
or will become unable or unwilling to pay it upon demand -
UUAC, upon Termination of this Agreement by either party will look initially to
the proceeds of your liquidating portfolio to satisfy your obligations with
respect to paying UUAC the Amounts due at Termination, and will not pursue you
for any or all or them unless and until UUAC, in good faith, projects a
Shortfall and reasonably determines you will be unwilling or unable to pay it
upon demand.
At the time, if ever, that anyone or more of the circumstances described above
in this Section 5.5-A actually occur, you agree that within five business days
of UUAC's written demand that you pay either the then-remaining balance of the
Amounts due at Termination or, in UUAC's sole discretion, the amount of any
projected Shortfall, you will pay such amounts to UUAC in good funds. In the
case of any payment by you of a projected Shortfall, you agree that it is only a
projection. though made in good faith, and that you ultimately remain
responsible for paying UUAC all of the then-remaining actual balance of the
Amounts due at Termination, no later than liquidation of the last Account in
your UUAC Portfolio. By the same token, if UUAC's projected Shortfall turns out
after complete liquidation of your UUAC Portfolio, to be smaller than any
Shortfall amount you were billed for and paid, UUAC will remit the difference to
you within -Text Omitted per Request for Confidenital Treatment by Pinnacle
Business Management, Inc. - business days of its determination of such
Shortfall overstatement, but you will not be entitled to any interest
whatsoever on such difference or any part of it.
Section 5.5-8 -NATIONAL POOL ADVANCE PLAN DEALERS Effects of Termination: Only
- --------------------------------------------------------------------------------
Fraud-Related Recourse.
- ------------------------
If you have elected the National Pool Plan Advance Plan, once termination by
either you or UUAC becomes effective, you will no longer be able to submit
Receivables to UUAC for Qualification. Your then-identified but unfulfilled
payback obligation with respect to anyone or more Receivables, pursuant to
Section 5.4, will survive termination. Subsequent to termination, if UUAC
discovers that any Event of Default recited at sub-sections on 5.3 (b) through
(d), inclusive, exists with respect to any Receivable which has not yet been
fully paid, you will have the same repayment obligation with respect to any such
Receivable(s) as you would under Section 5.4, and any such repayment must be
made so that UUAC receives it no later than -Text Omitted per Request for
Confidenital Treatment by Pinnacle Business Management, Inc. - days after it
makes written demand for payment on you. Post-termination, you will continue to
be eligible for any pro-rata Profit Pool distributions you become entitled to,
although UUAC will have a right of setoff against any such distributions
without regard to the Book(s) as to which UUAC's offset right arises.
Section 5.6 Mitigation of Damages.
- --------------------------------------
To the fullest extent permitted by applicable law, you waive the benefit of
any statute of limitations with respect to UUAC's being able to bring an action
at law and/or in equity on account of any of your unfulfilled payback
obligations. At any time it wishes to do so, UUAC may pursue any or all of its
remedies with respect to your unfulfilled payback obligations. Pending entry of
judgment in
8
any proceeding involving your unfulfilled payback obligations, UUAC will
continue its Collection efforts on your behalf with respect to any Receivables
covered by such proceedings, by way of mitigation of damages and not as an
election or waiver of Remedies. In the course of such Collection efforts, UUAC
will be entitled to its contractual Servicing Fee or to the post- termination
increased Servicing Fee provided above in this Agreement. If you are a Dealer
Pool Advance Plan Dealer, the Receivables base for any Termination Fee will be
reduced as Collections reduce the Receivables balance, At such time as UUAC
receives full payment of any post-termination obligations you owe it, UUAC will
deliver to you any Contracts which have not yet been paid-off, as well as a
release of its lien interest in the vehicle(s) securing such Contract(s).
Section 5.6 Survival of Indemnitv.
- --------------------------------------
The parties' respective rights and obligations with respect to indemnification.
defense and holding the other harmless set out in Article IV of this Agreement
survive any expiration or termination of this Agreement. whether for cause or
otherwise.
ARTICLE VI
MISCELLANEOUS PROVISIONS
Section 6.1 Governing Law: Construction.
- --------------------------------------------
This Agreement shall be construed and enforced in accordance with the laws of
the State of Kansas, except for its conflicts-of-laws provisions. Customer
hereby submits to the non-exclusive jurisdiction of the state and federal courts
of Kansas and consents that service of process may be made upon it in any legal
proceeding relating to this Agreement by any means allowed under Kansas or
federal law. You agree that, when interpreting any or all of this Agreement,
including, but not limited to, interpretation of allegedly ambiguous language,
any arbitrator(s), mediator(s) and/or court(s) with competent jurisdiction over
the subject matter shall not apply any statutory and/or common-law provision(s)
that require ambiguities to be resolved against the drafter of a contract. You
further agree you had every opportunity, at your expense, to have this Agreement
reviewed by legal counsel of your choice and that it represents an arms' length
agreement reached by parties of equal bargaining power.
Section 6.2 Compliance with the Gramm-Leach Bliley Act and the Federal Trade
- --------------------------------------------------------------------------------
Commission's "Privacy of Consumer Financial Information": Final Rule ("Rule").
- --------------------------------------------------------------------------------
a. UUAC agrees it will only use "nonpublic personal financial information"
- -as defined in the Rule -concerning any consumer on whom you furnished to UUAC
only for purposes relevant to this Agreement and for no other purpose(s), except
as permitted by law. In addition, as long as an Obligor's Receivable is being
collected by UUAC hereunder as an "active account" and has not been charged-off,
paid-off, "unwound" or otherwise terminated, UUAC will send such Obligor any
Annual Privacy Notice(s) that are required by the Rule.
b. You agree that, as long as UUAC requests you do so, you will give each
new potential Obligor a Universal Underwriters Group Initial Privacy Notice
("IPN") at the time the Obligor completes a Customer Information Sheet that you
have or otherwise submit to UUAC. You understand that your giving a UUGIPN, as
required above, in no way satisfies any obligation you might have to give each
such potential new Obligor your own IPN as required by the Rule.
Section 6.3 Notices.
- ----------------------
All notices, demands, and communications under this Agreement shall be in
writing and delivered personally, by certified mail with return receipt
requested, by overnight delivery service providing evidence of delivery or by
telecopier (but in the case of sending by telecopier, a hard copy of the writing
so transmitted must be immediately sent to the other party via one of the media
referenced above. Delivery shall be deemed complete kupon first attempted
delivery of certified mail or overnight delivery service; and upon receipt if
delivered personally or by telecopier, at the address specified in the first
paragraph of this Agreement, or such other place as shall be designated in
writing by Customer or UUAC for delivery of such notices, demands, and
communications. Nothing in this Section 6.2 shall be interpreted to affect the
transmission of routine bulletins or other day-to-day, business-in-the-ordinary-
course communications between UUAC and Customer, which may be transmitted in any
manner the parties find mutually agreeable, including, but not limited to UUAC's
distribution of Dealer Guide editions, Dealer Bulletins and other materials
affecting the Dealer Guide, as well as Customer's submission of Receivables and
material affecting Receivables.
Section 6.4 Assignment.
- -------------------------
Any corporation (a) into which UUAC may be merged or consolidated, (b) which
may result from any merger, conversion, or consolidation to which UUAC may be a
party, or (c) which may succeed to the business of UUAC, shall be the successor
to this Agreement without any further act on the part of the parties to this
Agreement. Your right to assign this Agreement is subject to the relevant
provisions of Section 5.3. This Agreement shall inure to the benefit of
Customer and UUAC and their respective permitted successors and assigns.
Section 6.5 UUAC's Delegation of Duties; Liability.
- ---------------------------------------------------------
UUAC may execute any of its duties under this Agreement by or through agents,
nominees, or attorneys-1n-fact. UUAC is not be responsible for the negligence
or misconduct of any agents, nominees, or attorneys-in-fact selected by it with
reasonable care. Neither UUAC nor any of its officers, directors, employees,
nominees, attorneys-in-fact, or affiliates shall be liable for any action
lawfully taken or omitted to be taken with respect to this Agreement, except for
gross negligence or willful misconduct
Section 6.6 Rights Cumulative.
- ---------------------------------
All rights and remedies to which UUAC is entitled pursuant to this Agreement
are cumulative and none is exclusive of another. No delay or omission in
insisting upon strict observance or performance of any provision of this
Agreement or in exercising any right or remedy shall be construed as a waiver or
relinquishment of such provision, nor shall it impair such right or remedy.
Section 6.7 Setoff.
- ---------------------
UUAC may, at any time and from time to time, at its option and without prior
notice, set-off and apply any funds of Customer and/or any funds which with the
passage of time would be funds of Customer, against any amounts due or, using
UUAC's reasonable projection models, projected to be due UUAC, as well as
against any amounts due any affiliate of UUAC from Customer and/or -but only if
such Customer's Dealership is \V holly owned or controlled by Customer -any
Customer's Dealership Such right of setoff and application also applies to any
funds which would have been owed to UUAC had it given notice of termination
hereunder which it was otherwise entitled to give pursuant to Section 5.2 (a) or
(b) but opted not to timing and effect of Dealer Bulletins and/or Dealer Guide
editions.
9
Section 6.15 Records.
- -----------------------
You agree to keep true and complete records and accounts of all transactions
related to Receivables which shall be open at all reasonable times to the
Inspection by duly authorized representatives of UUAC.
Section 6.16 Effective Date.
- -------------------------------
This Agreement becomes effective only when accepted by UUAC and signed on its
behalf by a Vice President or one of its other officers. The effective date of
the Agreement will be the date shown below the authorized signature for UUAC;
provided, however, that if no such date is filled-in, the effective date shall
be the date shown below the authorized signature for Customer.
Section 6.17 Advance Plan Election and Servicing Program Election for "Dealer
- --------------------------------------------------------------------------------
Pool" Dealers.
- ---------------
a. Choice of Advance Plan. By "x'ng" or "checking" and then initialing one
-----------------------
of the two boxes below, you will have indicated your election of either the
Dealer Pool Advance Plan, which is full-recourse, or the National Pool Advance
Plan, which is non-recourse. You must choose one or the other.
X DEALER POOL ADVANCE PLAN (initial)
- ---
/s/ MJ
- ------
NATIONAL POOL ADVANCE PLAN (initial)
- ---
- ------
b. Choice of Servicing Program. If you have selected the Dealer Pool
-------------------------------
Advance Plan, you must also choose one of the following Servicing Programs
(indicate your choice by your initials): PROFITNOW PLUS(+);
---
PROFITMAX; X-Fast50. Your choice is irrevocable.
- ------ -----
IN WITNESS WHEREOF, the p;U1ies have caused this Servicing Agreement to be duly
executted by their authorized respective officers or other persons.
Signatures.
11
APPENDIX I -DEFINITIONS
This Appendix 1 is a part of the Serving Agreement that precedes it. Unless
otherwise required by the context, the following words and phrases used in this
Agreement have the following meanings and are associated ,with the following
propositions:
"ACCEPT" is what UUAC contracts to do -as spelled out in Section 2.1 of this
Agreement -with respect to a Receivable when and if all of the prerequisites to
acceptance recited at Section 2.1 have occurred. In this Agreement, such a
Receivable is sometimes said to have been " Accepted".
II ACCEPTANCE CORPORATION" means: (i) any entity -~ a corporation or otherwise
- -which purchases Contracts from one or more retail new- and/or used-car
dealerships it owns or controls, and thereafter submits such Contracts to UUAC'
or (ii) any other non-retail-dealer-entity which UUAC permits to enter into a
Servicing Agreement.
II ADVANCE'I means any amount paid to Customer with respect to, or on account
of, a particular Receivable accepted for Advance-
" ADVANCE PLAN" means the UUAC "Dealer Pool" (Full- Recourse) Advance Plan.
"ADVANCE PROGRAM" means any and all of the Advance Programs described in the
Dealer Guide (e.g., "Basic," "Book," "Optimum Book" and "Select") .Each Advance
Program has different qualifying criteria; the maximum Advance available on any
Contract depends on the Advance Program for which the Contract is eligible and
what, if any, "additional deducts" might be applicable. II AGREEMENT" means
this Servicing Agreement, together with all Addenda, Amendments and Supplements
to it. All references to "Section(s)" refer to the appropriate Section(s) of
this Agreement.
"BUSINESS DAY" means any day other than Saturday, Sunday or a day on which
banking institutions in Kansas are allowed or obligated by law, executive order
or government decree to be closed.
"COLLECTION COSTS" means all out-of-pocket expenses, coSts, fees and retainers
of every type, without limitation or qualification, reasonably and/or
necessarily incurred or paid by UUAC in the administration, servicing, or
collection of a Qualified Receivable, including, without limitation or
qualification, those incidental to any or all of the repossession, storage or
sale of a Financed Vehicle or the forced-placement of collateral-protection
insurance covering a Financed Vehicle. "COLLECTIONS" means all amOunts received
by UUAC with respect to a Qualified Receovable including principal, interest,
penalties, fees and Liquidation Proceeds.
"CONTRACT" means a retail installment sale contract, on a form approved by UUAC,
pursuant to which Customer or a Customer's Dealership is financing or has
financed the purchase of a new or used automobile or light truck by one or more
consumers for personal. non-business use.
"CUSTOMER ENROLLMENT PACKET" means that compilation of documents identified as
the "Customer Enrollment Packet" (or some similar title) on its cover, which
you will complete and which by this reference is incorporated herein in its
entirety and made a part hereof.
"CUSTOMER'S DEALERSHIP" is a term that only applies if Customer is an
Acceptance Corporation or other non-retail- dealer-entity ("Non-Dealer"). In
such cases, it means and refers to any franchised or independent retail new
and/or used-car dealership accepted by UUAC as an "Additional Dealership" and so
designated by Customer on the " Additional-Dealership-Location Info Sheet" found
in the Customer Enrollment Packet. In addition to being so designated, such
retail car dealership must be operated as a subsidiary of Customer or be an
entity affiliated with Customer, unless UUAC allows an exception (e.g., for a
dealer-owned or dealer-operated trade association). If there will be any
Customer's Dealerships, UUAC suggests that before Customer begins to submit
Customer's Dealership's Receivables to UUAC, Customer enter into a Purchase &
Sale Agreement with each Customer's Dealership covering the rights and
responsibilities of each with respect to Receivables. Any actions or failures
to act on the part of a Customer's Dealership, if there be any, including, but
not limited to, representations made directly or indirectly to UUAC, shall be
conclusively deemed and construed for all purposes to be actions or failures to
act of Customer, as well.
"DEALER" means a retail dealership, franchised or not, which is licensed to sell
new and/or used cars and light trucks to Obligors and has either signed this
Servicing Agreement or is a Customer's Dealership.
"DEALER BULLETIN" means those bulletins, designated as "UUAC Dealer Bulletin" or
some similar title, which UUAC from time to time and at any time may send to
some or all of its Dealers and Acceptance Corporations in connection with
transactions covered by this Agreement. UUAC uses Dealer Bulletins to update
and/or amend certain provisions of the then-current Dealer Guide, to add
provisions to the Dealer Guide and to otherwise address various aspects of
UUAC's and its Dealers' and Acceptance Corporations' business operations. If a
Dealer Bulletin includes "National Pool" or "Dealer Pool" in its title, it
affects only the National Pool or Dealer Pool Advance Program and/or the Dealer
Guide as it relates to that Advance Program.
1
"DEALER GUIDE" means: (i) that compilation of various materials and documents
which UUAC publishes under that title from time to time for the benefit,
instruction and guidance of its Dealers and Acceptance Corporations which have
entered into Servicing Agreements. To the extent there is a conflict between
the provisions of this Agreement and the provisions of the then most-current
edition of the Dealer Guide -as it might have been modified or amended by one or
more Dealer Bulletins -the Dealer Guide will prevail, but only to the extent
necessary to resolve the conflict. In all other cases, the provisions of this
Agreement and the applicable edition of the Dealer Guide are cumulative.
"DEALER POOL" is the feature that differentiates the UUAC's full-recourse Dealer
Pool Advance Plan from its non- Recourse National Pool Advance Plan. Dealer
Pool signifies the fact that only the Receivables portfolio of any particular
Dealer signed-up for the Dealer Pool Advance Plan will be used to detel1Yline
whether -and to what extent -that Dealer will be entitled to any so-called
"back-end" profit. In turn, the timing of any back-end-profit distribution to
which such a Dealer might be entitled to is detel1Ylined by the Service Program
the Dealer has selected Section 6.16b.
"DEFAULT" means an Event of Default in Section 5.3
"DEFAULTED RECEIVABLE" means a Receivable on which the Obligor has ceased making
payments at a time when there was a remaining balance owed on the Receivable.
"DISTRIBUTION DATE" means the last Business Day of the month following the month
in which relevant Collections are received by UUAC.
"DOWNPAYMENT" means the amount of any cash downpayment paid by the Obligor with
respect to the purchase of a Financed Vehicle, less any insurance.
"ELIGIBLE RECEIVABLE" means a Contract that meets UUAC's eligibility and credit
standards, and, depending upon the facts and circumstances, is later designated
by UUAC as either a Qualified Receivable or a Non-Qualified Receivable.
"FINANCED VEHICLE" means an automobile or light truck listed in the appropriate
one of the current N.A.D.A. Official Used Car Guide or -but only for Financed
Vehicles retailed in California, Arizona, Nevada or Oregon -Kelley Blue Book,
securing an Obligor's indebtedness under a Qualified Receivable.
"FULL RECOURSE" applies only to the UUAC Dealer Pool Advance Plan and means
that, upon any termination of this Agreement, you will be liable to UUAC for the
total of its then-unrecovered Advances plus a Termination Fee, without regard to
whether or not an Event of Default has occurred and/or whether any of the
Receivables then in your portfolio are Defaulted Receivables; however the timing
and method of your repayment of these post-termination obligations is subject to
certain conditions, more fully described in the main body or this Agreement.
"LIQUIDATION PROCEEDS" means cash proceeds realized from liquidation of a
Financed Vehicle securing a Defaulted Receivable, less any excess required law
to be remitted to the Obligor, Collateral liquidation may be accomplished by any
appropriate means. including but not limited to, public or private sale or
insurance proceeds.
"NON-QUALIFIED RECEIVABLE" means an Eligible Receivable which, as further
explained in the Dealer Guide. is not a Qualified Receivable and therefore.
while eligible for Servicing, is not eligible for Advance.
"OBLIGOR" means any and all persons indicated as the buyer, co-buyer, purchaser
or co-purchaser of a Financed Vehicle, as well as any other person who is
contractually obligated to pay money due on a Contract.
"PERSON" means and includes a natural person as well as any legal person,
including, by way of illustration and not limitation, any individual,
corporation, estate, general partnership, limited partnership, joint venture,
limited-liability company, association, joint stock company, trust,
unincorporated organization, or duly-constituted government, including agencies
and subdivisions thereof.
"QUALIFICATION" means the UUAC process to determine whether or not a Receivable
submitted to it by Customer under this Agreement is a Qualified Receivable.
"QUALIFIED RECEIVABLE" means a Receivable which has gone through Qualification,
on which UUAC has made an Advance and which conforms to and complies with the
following specifications, the correctness of which Customer represents and
warrants to UUAC each and every time Customer submits a Contract and Receivable
File to UUAC for Qualification under this Agreement:
a) it is a valid, binding and enforceable obligation of the Obligor(s);
b) it is not in default at the date of transfer to UUAC;
c) it is owned by Customer, free and clear of all liens, claims, options,
encumbrances, security interests, and other rights ( other than liens in favor
of UUAC);
d) it is enforceable against each Obligor for the amount shown as owing in
the Contract, and such amount is reflected as a receivable in Customer's (and
any underlying Customer's Dealership's) books and records;
e) it complied at the time it was originated or made, and is currently in
compliance in all respects, with all requirements of applicable federal, state,
and local laws and regulations thereunder, including, without limitation, the
Federal Truth-in-Lending Act, the Equal Credit Opportunity Act, the Fair Credit
Billing Act, the Fair Credit Reporting Act, the Fair Debt Collection Practices
Act, the Federal Trade Commission Act. the Federal Trade Commission's Used Car
Rule, the Federal Trade Commission's Holder-in-Due-Course Rule, the
Magnuson-Moss Warranty Act, Federal Reserve
2
Board Regulations B and l, state retail credit-sale installment statutes and
regulations, state usury statutes, state adaptations or the National Consumer
Act and of the Uniform Consumer Credit Code, and any other appropriate
consumer-credit statute, Order, regulation or Rule. However, if Customer (or any
underlying Customer's Dealership) used the then most- currently-available Retail
Installment Contract form prescribed by, and printed on behalf of UUAC and made
no deletions from the preprinted text and no additions other than those clearly
called for by any "blanks" to be filled-in, Customer's representation and
warrenty with respect to Regulation l compliance shall only extend to whether or
not Customer (or any underlying Customer's Dealership) has correctly filled-in
any or all "blanks" on such Retail Installment Contract; t) it is not subject to
any offset, defense, credit, allowance or adjustment, nor, to the actual or
constructive knowledge of Customer, after reasonable investigation, has the
Obligor disputed his, her, their or its liability under the Contract, including,
but not limited to, any threatened or actual assertion of any so-called "right
of rescission" or other expression of "buyer remorse", However, Customer makes
no representations or warranties regarding offsets, defenses, credits,
allowances or adjustments arising solely out of the preprinted language on any
Retail Installment Contract which complies with the provisos of sub-section (e)
immediately above and not out of any a9ts and/or failures to act by Customer
and/or any underlying Customer's Dealership; g) there are no "pick-up" or other
deferred payments in connection with the cash downpayment, and such cash
downpayment has been paid in full in good funds; h) Customer or the underlying
Customer's Dealership received the cash downpayment and/or trade-in described in
the Contract and mirrored in the Downpayment Verification Letter and other
documents as prescribed by UUAC; no check or other instrument used by an Obligor
for all or any part of the downpayment has been dishonored or post-dated; and no
such check or other instrument has been discounted or transferred to any
third-party check-guaranty entity or negotiable-instrument factor or discounter;
i) neither Customer nor any of its employees or representatives, nor, to the
best of Customer's actual or constructive knowledge, any other person (except
for an immediate blood relative of the Obligor) or entity, including but not
limited to any underlying Customer's Dealership or its employees or
representatives, has loaned or advanced any part of the downpayment to or on
behalf of any Obligor; j) with respect to the Financed Vehicle securing such
Receivable, Customer guarantees UUAC will be named as first priority lienholder
on the original title for such Financed Vehicle and/or on the records of the
appropriate state's governmental agency tasked with recording lienholder
interests in motor vehicles. Customer further guarantees to accomplish all of
the preceding so that UUAC's first and prior lien will be of record with such
governmental agency or department within the time-frame which is the lesser of
that provided in the such state's purchase-money-security-interest perfection
statute or that provided by the Bankruptcy Code and will be superior to the lien
of a Bankruptcy Trustee or any person or entity claiming by or through the
Trustee. 05-01 All Pro Modified Appendix k) the Financed Vehicle is adequately
insured. as required by the Contract and according to those criteria which UUAC
will from time to time communicated to Customer, for its re-transmission to any
Customer's Dealership. by a policy or policies involving so-called
"comprehensive and collision" coverage. and each such policy names UUAC as the
loss payee or lienho1der; I) any representations and \warranties contained in
any "assignment" section of the Contract are true and correct as of the date of
transfer by Customer to UUAC. and. where appropriate that such be continuing,
that they do continue to be true and correct; m) Customer has complied with all
procedures established by UUAC from time to time for the execution of the
Contract and the granting of a first and prior security interest in it to UUAC;
n) all signatures on the Contract are genuine: 0) when the Financed Vehicle was
sold to the Obligor, it was in satisfactory operating condition with no material
defects known -or which would have been known after reasonable inspection -to
Customer and/or to the underlying Customer's Dealership but not disclosed to the
Obligor in writing on a document acknowledged by the Obligor and included with
the Receivable File; further, to Customer's, as well as the underlying
Customer's Dealership's, actual or constructive knowledge, after reasonable
inquiry: (i) the mileage indicated on the odometer of the Financed Vehicle is
the Vehicle's true mileage; and (ii) the Financed Vehicle was never "salvaged,"
"water- or flood-damaged," reported "stolen" or used or for commercial purposes;
p) The Value (according to the "Used Car Guide" which the Dealer Guide makes
applicable to your portfolio) indicated for the Financed Vehicle on the Fax
Cover Sheet submitted in connection with a Contract includes any "deducts" which
a reasonable dealer would consider appropriate considering the mechanical and
cosmetic (both exterior and interior) condition of the Financed Vehicle. q) If
the Obligor traded-in a vehicle as part or all of the downpayment on the
Financed Vehicle, the purchase and financing of the Financed Vehicle does not
involve any so-called "negative equity" not disclosed on the Contract, and the
Contract is consistent with UUAC's policy of not accepting Contracts with
disclosed negative equity. r) Customer or the underlying Customer's Dealership
delivered the Financed Vehicle to the Obligor, and the Financed Vehicle
satisfies all warranties, express or implied, made to the Obligor; s) Obligor
owns the Financed Vehicle free of all liens or encumbrances except the security
interest granted in the Contract; and t) all amounts indicated in the Contract
as being financed by the Contract and payable by Customer or the underlying
Customer's Dealership to any third party have been paid, including, but not
limited to. all sales taxes. insurance premiums, and extended warranty or
service contract charges.
The breach of any one or more representations or warranties recited in this
definition of "Qualified Receivable" as being made by any Customer's Dealership
Shall, for any and all applicable purposes, be imputed to Customer, as if
Customer had made such representation or warranty,
"RECEIVABLE" means a Contract submitted to UUAC for an Advance or for
Servicing-only under this Agreement,
"RECEIVABLE FILE" means all writings (including the executed Contract) and
business records relating to a Receivable and which UUAC requires that Customer
deliver to it in connection with Qualification of any Receivable.
"SERVICING FEE" means the fee (which is a percentage of Collections net of
Collection Costs) to which UUAC is entitled as partial compensation for its
Collection Servicesperformed hereunder, by itself or by its designee, and is
determined by the Advance Plan and/or the Servicing Program Customer has elected
to have applied to Customer's Receivables portfolio.
"SERVICING PROGRAM" applies only to the UUAC Dealer Pool Advance Plan and means
the particular program under which the Dealer has elected to receive any
so-called "back-end" profit which might accrue on that Dealer's Receivables
portfolio (e.g., "ProfitNow Plus (+)sm Profit Maxsm or Fast50sm).