Preview of our top selling Custodial Agreement
Cargill / NAL Financial Group - Custodial Agreement
EXECUTION COPY
================================================================================
MULTI-PARTY CUSTODIAL AND SERVICING AGREEMENT
by and among
CARGILL FINANCIAL SERVICES CORPORATION,
Buyer
AUTORICS, INC.,
Seller
BANKERS TRUST COMPANY,
Custodian
and
NAL ACCEPTANCE CORPORATION,
Servicer
Dated as of May 1, 1996
================================================================================
TABLE OF CONTENTS
Page
----
ARTICLE I
DEFINITIONS
Section 1.1. General........................................................................................... 2
Section 1.2. Certain Defined Terms............................................................................. 2
Section 1.3. Incorporation of Certain Definitions.............................................................. 7
Section 1.4. Reference to Time................................................................................. 7
ARTICLE II
CUSTODIAL ARRANGEMENT
Section 2.1. Documents Maintained by Servicer.................................................................. 8
Section 2.2. List of Contracts................................................................................. 8
ARTICLE III
SERVICING
Section 3.1. Duties of Servicer; Standard of Care.............................................................. 8
Section 3.2. Collection of Payments............................................................................ 9
Section 3.3. Realization upon Contracts........................................................................ 10
Section 3.4. Maintenance of Security Interests in Financed
Vehicles........................................................................................ 10
Section 3.5. Servicer's Certificate............................................................................ 10
Section 3.6. Notice of Default................................................................................. 12
Section 3.7. Servicer Expenses................................................................................. 12
Section 3.8. Establishment of Collection Account............................................................... 12
Section 3.9. Collections....................................................................................... 13
Section 3.10. Representations of Servicer...................................................................... 13
Section 3.11. Merger or Consolidation of, or Assumption of
the Obligations of, Servicer................................................................... 15
Section 3.12. Resignation...................................................................................... 15
Section 3.13. Appointment of Successor......................................................................... 15
i
Section 3.14. Annual Accountants' Report; Quarterly
Compliance Report.............................................................................. 16
Section 3.15. Temporary Release of Deposited Documents......................................................... 17
ARTICLE IV
CUSTODIAL DUTIES
Section 4.1. Transfer of Contracts; Delivery of Documents...................................................... 17
Section 4.2. The Custodial Receipt and Confirmations........................................................... 18
Section 4.3. Custodial Register................................................................................ 19
Section 4.4. Payments.......................................................................................... 19
Section 4.5. Additional Documents Delivered to Custodian
after an Event of Default....................................................................... 20
Section 4.6. Authorized Persons................................................................................ 20
Section 4.7. Copies of Documents............................................................................... 20
ARTICLE V
OWNERSHIP AND TRANSFER OF CONTRACTS
Section 5.1. The Custodial Receipt and Confirmations........................................................... 21
Section 5.2. No Service Charge for Sale or Transfer of
Contracts....................................................................................... 21
Section 5.3. Persons Deemed Owners............................................................................. 21
Section 5.4. Unilateral Transfer of Contracts Owned by
Seller.......................................................................................... 21
Section 5.5. Transfers to Third Persons........................................................................ 22
Section 5.6. Verification Certificate.......................................................................... 23
ARTICLE VI
CUSTODIAN
Section 6.1. Representations, Warranties and Covenants of
Custodian....................................................................................... 23
Section 6.2. Custodian of Documents............................................................................ 24
Section 6.3. Charges and Expenses.............................................................................. 24
Section 6.4. No Adverse Interests.............................................................................. 25
ii
Section 6.5. Inspections.................................................................................... 25
Section 6.6. Insurance...................................................................................... 25
Section 6.7. Limitation of Liability........................................................................ 25
Section 6.8. Indemnification................................................................................ 25
Section 6.9. Concerning Custodian........................................................................... 25
Section 6.10. Resignation or Removal of Custodian............................................................ 27
Section 6.11. Successor Custodian............................................................................ 28
ARTICLE VII
MISCELLANEOUS PROVISIONS
Section 7.1. Amendment...................................................................................... 28
Section 7.2. Consent to Jurisdiction; Waivers of Jury
Trial........................................................................................ 28
Section 7.3. Notices........................................................................................ 29
Section 7.4. Severability of Provisions..................................................................... 30
Section 7.5. No Partnership................................................................................. 30
Section 7.6. Counterparts................................................................................... 30
Section 7.7. Assignment..................................................................................... 30
Section 7.8. Headings....................................................................................... 30
Section 7.9. Further Assurances............................................................................. 31
Section 7.10. Governing Law.................................................................................. 31
EXHIBIT A Custodial Receipt and Confirmation............................................................. A-1 EXHIBIT B Form of Transfer Instructions.................................................................. B-1 EXHIBIT C-1 Form of Assignment ............................................................................ C-1-1 EXHIBIT C-2 Form of Assignment............................................................................. C-2-1 EXHIBIT D Certification.................................................................................. D-1 EXHIBIT E Documentation Checklist........................................................................ E-1 EXHIBIT F Notice to Custodian............................................................................ F-1 EXHIBIT G Notice of Default Certificate.................................................................. G-1 EXHIBIT H Request for Release of Documents and
Receipt ..................................................................................... H-1 EXHIBIT I Verification Certificate....................................................................... I-1
iii
MULTI-PARTY CUSTODIAL AND SERVICING AGREEMENT
This Multi-Party Custodial and Servicing Agreement (the "Agreement"), dated as of May 1, 1996, is by and among Cargill Financial Services Corporation, a Delaware corporation ("Buyer"), Autorics, Inc., a Delaware corporation ("Seller"), Bankers Trust Company, a New York banking corporation, ("Custodian") and, for the limited purposes set forth herein, NAL Acceptance Corporation ("NAL Acceptance" or "Servicer").
Recitals
--------
NAL Acceptance originates Contracts and sells such Contracts and the Related Assets relating thereto to Seller;
Pursuant to the Repurchase Agreement, Seller may from time to time enter into Transactions, evidenced by confirmations, to transfer and sell certain Securities to Buyer against transfer of funds from Buyer to Seller;
Seller and Buyer desire to provide for the delivery, servicing, custody and management of the Contracts and the Related Assets which may become subject to a Transaction;
In connection with the foregoing, Seller and Buyer desire to engage Custodian to act as custodian of Contracts and as paying agent for the benefit of Seller, Buyer and subsequent purchasers of Contracts from Buyer, as their interests may appear, and as agent and bailee for Buyer to receive delivery of the Contracts and perfect Buyer's ownership and other security interests in the Contracts and the Related Assets on behalf of Buyer by its possession of Custodian's Contract Files and by being named in its capacity or agent and bailee for Buyer as secured party in financing statements;
NAL Acceptance, or any permitted successor thereto, will act as servicer with respect to the Contracts;
Custodian is willing and able to perform the duties and obligations of a custodian, agent and bailee as set forth herein;
NOW, THEREFORE, in consideration of the premises and the mutual agreements hereinafter set forth, Buyer, Seller, Custodian and, for the limited purposes set forth herein, NAL Acceptance agree as follows:
ARTICLE I
DEFINITIONS
Section 1.1. General. For the purpose of this Agreement, except as otherwise expressly provided or unless the context otherwise requires, the terms defined in this Article include the plural as well as the singular, the words "herein," "hereof" and "hereunder" and other words of similar import refer to this Agreement as a whole and not to any particular Article, Section or other subdivision, and Section references refer to Sections of this Agreement.
Section 1.2. Certain Defined Terms. Whenever used in this Agreement, unless the context otherwise requires, the following words shall have the meanings set forth below:
"Agent": Subject to the terms of this Agreement, Custodian in its capacity as agent for Buyer and any other Owner (other than Seller).
"Agreement": This Multi-Party Custodial and Servicing Agreement, including all exhibits hereto, and all amendments hereof and supplements hereto.
"Business Day": Any day other than (i) a Saturday or a Sunday or (ii) another day on which banking institutions in the States of Florida or New York are authorized or obligated by law, executive order, or governmental decree to be closed.
"Buyer": Cargill Financial Services Corporation, a Delaware corporation.
"Collections": As defined in Section 3.9 hereof.
"Collection Account": The account established pursuant to Section 3.8 hereof.
"Computer Tape": A computer tape or other electronic medium in a format acceptable to the Custodian generated by Servicer which provides information relating to the Contracts.
"Contracts": Motor vehicle retail installment sales contracts, installment loan agreements and security agreements and all addenda thereto, as amended or supplemented from time to time, secured by Financed Vehicles and purchased by Seller in the ordinary course of its business from NAL Acceptance, all rights to receive payments which are (i) in the case of a Precomputed Contract, due pursuant thereto on or after the related Cut-off Date and (ii) in the case of a Simple Interest Contract, received by Servicer on or after the related Cut-off Date and all other
2
proceeds thereof (including without limitation any recourse rights against third persons) from and after the Cut-off Date, but excluding, in the case of a Pre-computed Contract, any rights to receive payments which are due prior to the related Cut-off Date.
"Corporate Trust Office": The principal office of Custodian at which at any particular time its corporate trust business shall be administered, which office at the date of the execution of this Agreement is located at Four Albany Street, 10th Floor, New York, New York 10006 (Attention: Structured Finance Administration).
"Custodial Receipt and Confirmation": A confirmation statement issued by Custodian substantially in the form attached hereto as Exhibit A.
"Custodial Register": The register maintained by Custodian pursuant to Section 4.3, which reflects as to each Contract the Owner thereof.
"Custodian": Bankers Trust Company, a New York banking corporation, in its custodial capacity under this Agreement.
"Custodian's Contract File": As defined in Section 4.1 hereof.
"Cut-off Date": In respect of a Transaction, the date as of which the Contract information for such Transaction is given on the Computer Tape in respect of such Transaction delivered by Seller to Buyer.
"Dealer": The dealer who sold a Financed Vehicle to an Obligor and who originated and assigned the Contract relating to such Financed Vehicle to any Person, including but not limited to, NAL Acceptance, Special Finance, Inc. or Auto Analyst, Inc., as the case may be, in the normal course of business under a Dealer Agreement, and any successor to such Dealer.
"Dealer Agreement": Any purchase and sale agreement between a Dealer and any Person in the business of originating such agreements in the ordinary course of business, which Person shall include but not be limited to NAL Acceptance, Special Finance, Inc. and Auto Analyst, Inc., as the case may be, with respect to such Dealer's motor vehicle retail installment sales contracts, installment loan agreements and security agreements and all addenda thereto, substantially in the form attached to the Repurchase Agreement as Exhibit E, which agreement may not be amended in any material respect without Buyer's prior written consent.
3
"Dealer Recourse": With respect to a Contract, all of NAL Acceptance's rights arising under the related Dealer Agreement or otherwise against the Dealer which originated such Contract.
"Eligible Investments": Negotiable instruments or securities represented by instruments in bearer or registered form, or, in the case of deposits described below, deposit accounts held in the name of Custodian for the benefit of Buyer which evidence:
(a) direct obligations of, or obligations fully
guaranteed as to timely payment by, the United States of
America;
(b) demand deposits, time deposits or certificates of
deposit (having original maturities of no more than 365 days)
of depository institutions or trust companies incorporated
under the laws of the United States of America or any state
thereof (or domestic branches of foreign banks) and subject to
supervision and examination by federal or state banking or
depository institution authorities;
(c) commercial paper (having original or remaining
maturities of no more than 30 days);
(d) demand deposits, time deposits and certificates
of deposit which are fully insured by the Federal Deposit
Insurance Corporation;
(e) bankers' acceptances (having original maturities
of no more than 365 days) issued by any depository institution
or trust company referred to in clause (b) above; or
(f) money market funds (including funds for which
Custodian or any of its affiliates is investment manager or
advisor).
"Financed Vehicles": Any new or used automobile or light-duty truck financed by loans and sales contracts arising under Contracts.
"Guaranty": The Limited Guaranty provided by NAL Financial and NAL Acceptance pursuant to the Repurchase Agreement.
"Insurance Policies": Any comprehensive and collision, fire and theft and physical damage insurance policies maintained by Obligors (including, without limitation, the Obligor's
4
comprehensive insurance policy), any credit policy (including without limitation credit life and credit disability) and any Risk Default Policy covering the Contracts, Obligors and/or Financed Vehicles.
"List Number": As defined in the Repurchase Agreement.
"List of Contracts": As defined in the Repurchase Agreement.
"NAL Acceptance": NAL Acceptance Corporation, a Florida corporation, and any successor thereto.
"NAL Financial": NAL Financial Group Inc., a Delaware corporation, and any successor thereto.
"Notice Schedule": As defined in Section 5.5 hereof.
"Obligor": The obligor under any Contract.
"Owner": With respect to any Contract and the Related Assets, the Person reflected in the Custodial Register as being the owner thereof.
"Permitted Sale": An arm's length sale of Portfolio Contracts either through (i) a securitization of such Portfolio Contracts or (ii) a "whole loan" sale of such Portfolio Contracts to any Person, which Person shall not be an Affiliate.
"Person": Any legal person, including any individual, corporation, limited liability company, partnership, association, joint venture, joint-stock company, estate, trust, unincorporated organization, governmental entity or other entity of similar nature.
"Portfolio Contract": Each and every Contract purchased by Buyer under the Repurchase Agreement and which has not been otherwise sold, securitized or disposed of by Seller in a Permitted Sale or as otherwise provided in the Repurchase Agreement.
"Precomputed Contract": A Contract pursuant to which the portion of a payment thereon allocable to interest (which may be referred to therein as add-on finance charge) and the portion of a payment thereon allocable to principal (or the amount financed) is determined according to the rule of 78's method or the actuarial method.
"Purchase Date": The date on which Securities are transferred by Seller to Buyer.
5
"Purchase Price": With respect to any Transaction, the price to be paid or deemed to be paid by Buyer for the Contracts.
"Related Assets": (i) Seller's security interest in Financed Vehicles, (ii) Seller's rights, remedies, powers and privileges under the Contracts, including any personal guaranty thereof, (iii) Seller's rights, remedies, powers and privileges under the Related Documents, (iv) Seller's rights, remedies, powers and privileges under the Dealer Agreements, including but not limited to Dealer Recourse and any holdback amounts, (v) insurance proceeds under Insurance Policies, (vi) such other financing interests and assets as shall be acceptable to Buyer in its sole discretion, (vii) Records and (viii) all proceeds of the foregoing.
"Related Document": With respect to Seller, this Agreement, the Sale and Purchase Agreement, and the Repurchase Agreement, and with respect to NAL Acceptance, the Sale and Purchase Agreement, the Guaranty and this Agreement, and with respect to NAL Financial, the Guaranty.
"Repurchase Agreement": The Master Repurchase Agreement, dated as of May 1, 1996 between Buyer and Seller, including all amendments and supplements and addenda thereto.
"Repurchase Date": With respect to any Transaction, the date on which the Contracts and the Related Assets are to be repurchased pursuant to the Repurchase Agreement.
"Responsible Officer": When used with respect to Custodian, any officer within the Corporate Trust Office of Custodian including any Vice President, Assistant Vice President, Assistant Treasurer, Assistant Secretary or any other officer of Custodian customarily performing functions similar to those performed by any of the above designated officers and also, with respect to a particular matter, any other officer to whom such matter is referred because of such officer's knowledge of and familiarity with such particular subject.
"Risk Default Policy": Any risk default insurance policy providing default insurance with respect to any Contract.
"Sale and Purchase Agreement": The Sale and Purchase Agreement dated as of May __, 1996, by and between NAL Acceptance and Seller pursuant to which NAL Acceptance originates or purchases Contracts and sells the Contracts to Seller, as such document may be amended from time to time with Buyer's prior written consent.
"Seller": Autorics, Inc., a Delaware corporation, and any successor thereto.
6
"Servicer": NAL Acceptance, and any successor thereto.
"Servicer's Certificate": As defined in Section 3.5.
"Servicer's Fee": An amount computed as the quotient of (x) the product of (i) three percent (3%), and (ii) the aggregate outstanding amount of Purchased Securities subject to the Repurchase Agreement, determined as of the first day of the immediately preceding Collection Period, and (y) 12.
"Simple Interest Contract": A Contract pursuant to which the portion of a payment thereon allocable to interest is equal to the product of the interest rate for such Contract times the unpaid principal balance times the period of time elapsed since the date on which the preceding payment of interest was made; the remainder of such payment, if any, is allocated to principal.
"Successor Servicing Fee": An amount computed as the quotient of (x) the product of (i) three percent (3%), and (ii) the aggregate outstanding amount of Purchased Securities subject to the Repurchase Agreement, determined as of the first day of the immediately preceding Collection Period, and (y) 12.
"Third Person": A Person other than Seller, Buyer or Custodian which has acquired an interest in the Contracts from Buyer, directly or indirectly, and continues to have an interest in such Contracts.
"Transaction": As defined in the Repurchase Agreement.
"Transfer Instruction": With respect to each Transaction, notification, substantially in the form of Exhibit B hereto, of a Transaction provided by Seller to Custodian. Transfer Instructions may be provided in writing and must be received by Custodian prior to 10:00 a.m. on the Purchase Date or Repurchase Date, as applicable.
Section 1.3.Incorporation of Certain Definitions. All capitalized terms used herein and not otherwise defined shall have the meanings assigned in the Repurchase Agreement unless the context clearly indicates otherwise.
Section 1.4. Reference to Time. All references to time herein shall be deemed to refer to New York time unless otherwise provided.
7
ARTICLE II
CUSTODIAL ARRANGEMENT
Section 2.1. Documents Maintained by Servicer. Prior to the occurrence of an Event of Default under the Repurchase Agreement, Servicer shall retain possession of the documents and files with respect to the Related Assets (which shall include copies of the documents listed in clauses (1) through (6) of Section 4.1 that have been delivered to Custodian). All documents held by Servicer shall be held by it as agent of Custodian for the benefit of the Owner of the related Contracts and the Related Assets as indicated on the Custodial Register.
Section 2.2. List of Contracts. Custodian shall maintain the most recent version of the List of Contracts for each Transaction, as such list may be amended from time to time as set forth below. Custodian shall receive a printed copy of each amended List of Contracts with each revised copy of the Computer Tape. Each List of Contracts in respect of a Transaction in the custody of Custodian shall be the definitive List of Contracts for such Transaction for all purposes under this Agreement.
ARTICLE III
SERVICING
Section 3.1. Duties of Servicer; Standard of Care.
(a) The parties hereto agree and acknowledge that, notwithstanding the purchase and sale of the Contracts and Related Assets contemplated hereby, NAL Acceptance shall continue to service the Contracts and Related Assets for the benefit of Buyer and, if Buyer shall exercise its rights to sell the Contracts and Related Assets pursuant to this Agreement prior to the related Repurchase Date, Buyer's assigns; provided, however, that the obligation of NAL Acceptance to service Contracts and Related Assets for the benefit of Buyer as aforesaid shall cease upon the payment to Buyer of the Repurchase Price therefor.
(b) Servicer shall manage, service, administer and make collections on the Contracts. Servicer's duties shall include collection and posting of all payments, responding to inquiries of Obligors on the Contracts and accounting for collections. Without limiting the generality of the foregoing, Servicer is authorized and empowered to execute and deliver, on behalf of itself and Owner any and all instruments of satisfaction or cancellation, or partial or full release or discharge, and all other comparable instruments, with respect to the Contracts or to the Financed Vehicles securing such Contracts.
8
In performing its duties and obligations hereunder, Servicer shall comply with all applicable state and federal laws and shall exercise that degree of skill and care consistent with the highest degree of skill and care that Servicer exercises with respect to similar motor vehicle retail installment sales contracts serviced by Servicer for its own account or others and that is consistent with prudent industry standards. At all times during the term of this Agreement, Servicer shall maintain in force both fidelity bond and errors and omissions coverage in an amount equal to or greater than the amounts (i) maintained by companies with similar scope, nature, and extent of operations and that service rated securitization transactions, and (ii) that is consistent with prudent industry standards.
(c) If Servicer shall commence a legal proceeding to enforce a Contract, the Owner of such Contract shall thereupon be deemed to have automatically assigned, solely for the purpose of collection, such Contract to Servicer. If in any enforcement suit or legal proceeding it shall be held that Servicer may not enforce a Contract on the ground that it shall not be a real party in interest or a holder entitled to enforce such Contract, the Owner of such Contract shall, at Servicer's expense and direction, take steps to enforce such Contract, including bringing suit in its name. Such Owner shall upon the written request of Servicer furnish Servicer with any powers of attorney and other documents reasonably necessary or appropriate to enable Servicer to carry out its servicing and administrative duties hereunder.
(d) For the term of this Agreement, Servicer shall conduct quarterly and annual performance reviews of the Dealers and provide to Owner the information with respect to such Dealers specified upon Buyer's request based on such reviews. In addition, Servicer shall perform all administrative responsibilities relating to Dealers in respect of the Contracts.
Section 3.2. Collection of Payments. Servicer shall make diligent efforts to collect all payments called for under the terms and provisions of the Contracts as and when the same shall become due. Servicer shall allocate collections between principal and interest in accordance with the terms of the Contracts. Servicer may grant extensions, rebates or adjustments on a Contract consistent with its customary practices; provided, however, that except as required or permitted by law in connection with disaster, military and other credit relief policies and procedures implemented by Servicer with respect to Contracts in connection with defaults thereon, Servicer shall not modify the original due dates of the scheduled payments on any Contract for more than one month for each full year of the original term of such Contract or change the dollar amount of the scheduled payments thereunder. Servicer may in its discretion
9
waive any late payment charge or any other fees that may be collected in the ordinary course of servicing a Contract.
Section 3.3. Realization upon Contracts. On behalf of Owner, Servicer shall use diligent efforts to repossess or otherwise convert the ownership of the Financed Vehicle securing any Contract as to which Servicer shall have determined eventual payment in full is unlikely, which may include selling the Financed Vehicle at public or private sale, and shall make diligent efforts to realize all insurance proceeds and any Dealer Recourse with respect thereto; provided, however, that in any case in which the Financed Vehicle shall have suffered damage, Servicer shall not expend funds in connection with the repair or the repossession of such Financed Vehicle unless it shall determine in its discretion that such repair and/or repossession will increase the proceeds by an amount greater than the amount of such expenses. Servicer shall not release the Financed Vehicle securing any Contract from the security interest granted by such Contract in whole or in part except in the event of payment in full by the Obligor thereunder or other discounted settlement of the obligations of the Obligor thereunder in connection with a workout of such Contract.
On behalf of Owner, Servicer shall use diligent efforts to pursue any claims under the Insurance Policies or exercise any rights with respect to Dealer Recourse.
Section 3.4. Maintenance of Security Interests in Financed Vehicles. Servicer shall take such steps as are necessary to maintain perfection of the security interest created by each Contract in the related Financed Vehicle in the name of Seller. Servicer is hereby authorized to take such steps as are necessary to reperfect such security interest on behalf of Owner in the event of the relocation of a Financed Vehicle or for any other reason.
Section 3.5. Servicer's Certificate. (a) On the second Business Day prior to any Payment Date, with respect to each Transaction and the Contracts subject thereto, Servicer shall deliver to Owner and Custodian a certificate (the "Servicer's Certificate") setting forth the following information, and such other information as Buyer may from time to time request:
(i) The number of Contracts subject to such Transaction;
(ii) The aggregate of payments received on such Contracts
during the preceding Collection Period allocable to
principal;
10
(iii) The aggregate of payments received on such Contracts during the
preceding Collection Period allocable to interest;
(iv) The aggregate principal balance of such Contracts as of the close
of business on the last day of the preceding Collection Period, after
giving effect to payments allocated to principal on such day;
(v) The weighted average contract rate of such Contracts as of the
beginning of the preceding Collection Period;
(vi) The amount (and number) of such delinquencies 1 to 30 days, 31 to
60 days, 61 to 90 days, 91 to 120 days and 121 or more days as of the
end of the preceding Collection Period;
(vii) The percentage of such Contracts secured by new Financed
Vehicles, and the percentage of Contracts secured by used Financed
...
View agreement details