Looking for an agreement? Search from over 1 million agreements now.

Loan Participation & Servicing Agreement

This is an actual contract by Midwestone Financial Group.

Save time and money with our Premium Packages.
Buy all (8) recommended agreements for
$140.00 (50% savings)
Agreement Preview
Sectors: Banking
Effective Date: February 05, 1999
Search This Document
EXHIBIT 10.3.4
--------------


STATES RESOURCES CORP. LOAN PARTICIPATION
AND SERVICING AGREEMENT
-----------------------


THIS AGREEMENT is effective as of this 5th day of February 1999, between States Resources Corp., an Iowa Corporation (SRC) and Mahaska Investment Company, an Iowa Corporation ("MIC" and/or "Participants").


WITNESSETH:


WHEREAS, SRC is engaged in the business of purchasing assets from banks, savings associations or other entities (collectively referred to as the "Seller(s)");


WHEREAS, the Participant may from time to time approve and agree to fund SRC's bids to purchase such assets:


WHEREAS, SRC and the Participant wish to formalize their Agreement providing for the liquidation of the assets purchased from Seller (Assets) and division of the revenue from the liquidation of the Assets.


NOW, THEREFORE, in consideration of the premises and mutual covenants contained herein, it is agreed:


SECTION 1: DEFINITIONS
-----------------------


1.1 The term "Agreement" shall mean this States Resources Corp. Loan Participation and Servicing Agreement.


1.2 The term "Allocated Costs" shall have the meaning given to it in Section 6.2 of this Agreement.


1.3 The term "Assets" shall mean the Assets purchased by SRC from Seller and described in the Loan Sale Agreements between SRC and Seller(s).


1.4 The term "Participants' Return on Investment (ROI)" shall have the meaning given to it in Section 7 of this Agreement.


1.5 The term "Budget" shall have the meaning given to it in Section 6.4 of this Agreement.


1.6 The term "Certificates of Participation" shall have that meaning given to it in Section 3.3 of this Agreement.


-1-


1.7 The term "Costs" shall have that meaning given to it in Section 6.2 of this Agreement.


1.8 The term "Costs Reimbursement" shall have that meaning given to it in Section 2.3 of this Agreement.


1.9 The term "CSRC/MRC/ARC Loans" shall have the meaning given to it in Section 6.2 of this Agreement.


1.10 The term "Interest Income" shall mean that portion of the Receipts attributable to interest paid on the unpaid principal balances of the Assets.


1.11 The term "Net Interest Income" shall mean the Interest Income less that portion of the Costs which bears the same relationship to total Costs as the Interest Income bears to the Receipts.


In the event of a Termination With Cause, the term "Net Interest Income" shall include the meaning given to it in Section 9.4(c) of this Agreement.


1.12 The term "Net Basis Recoveries" shall mean the Basis Recoveries less that portion of the Costs which bears the same relationship to the total Costs as the Basis Recoveries bears to the Receipts.


1.13 The term "Net Receipts" shall mean the Receipts less items set forth in Section 7.3.


1.14 The term "New Servicing Corporations" shall have the meaning given to it in Section 6.2 of this Agreement.


1.15 The term "New Servicing Corporations' Loans"shall have the meaning given to it in Section 6.2 of this Agreement.


1.16 The term "Other SRC Loans" shall have the meaning given to it in Section 6.2 of this Agreement.


1.17 The term "Participants" shall mean the participants identified in the first paragraph of this Agreement.


1.18 The term "Participants' Account" shall have that meaning given to it in Section 6.1 of this Agreement.


1.19 The term "Parties" shall mean the parties to this Agreement.


1.20 The term "Basis Recoveries" shall mean that portion of the Receipts attributable to reductions of the Purchase Price. The Basis Recoveries portion of Receipts shall be equal to the same ratio as the principal recoveries on the Assets bears to the total principal of the Assets.


-2-


1.21 The term "Purchase Price" shall have that meaning given to it in Section 3.2 of this Agreement.


1.22 The term "Receipts" shall have that meaning given to it in Sections 6.1.


1.23 The term "Seller" shall have that meaning given to it in the first recital paragraph of this Agreement.


1.24 The term "Servicing Fee" shall have the meaning given to it in Section 7.1 of this Agreement.


1.25 The term "Termination Date" shall have the meaning given to it in Section 9.1 of this Agreement.


1.26 The term "Termination With Cause" shall have the meaning given to it in Section 9.1 of this Agreement.


SECTION 2: REVIEW, EVALUATION AND PURCHASE OF THE ASSETS
--------------------------------------------------------


2.1 SRC purchased the Assets with the prior approval of the Participants. This Agreement shall not be construed as creating an exclusive right of any Participant to participate in funding the purchase of any particular assets in the future if the Parties fail to agree on the terms of a bid to purchase such assets or the terms of a servicing agreement with respect thereto; provided, however, that SRC does commit to sell participations to Mahaska Investment Company ("MIC"), or its related or affiliated entities to the extent they have funds available for such purchases if this same Servicing Agreement is implemented and the terms of the bid are agreed to by SRC and MIC or such related or affiliated entity. In order to provide SRC with the ability to plan purchases of assets, MIC and its related and affiliated entities shall provide SRC with a statement each month of the funds they will have available for the purchase of participation interests in assets purchased by SRC during the following sixty (60) day period.


SRC shall periodically provide to Participants relevant information about prospective Asset acquisitions to permit Participants the opportunity to anticipate and plan for future capital needs.


2.2 The Participants acknowledge and agree that SRC's assessment of the value of the Assets was a matter of judgment and that SRC shall not be liable to the Participants for any errors in judgment in valuing the Assets.


2.3 The costs actually incurred by SRC in evaluating the Assets including any fee charged by Seller for reviewing the Assets (Costs Reimbursement) shall be expensed by SRC as part of SRC's costs to be reimbursed as provided by Section 6.2.


2.4 SRC will not receive any compensation for the evaluation of the Assets separate from the


-3-


compensation set out in this Agreement.


2.5 MIC has already approved the bids submitted by SRC to Sellers for the purchase of certain Assets as evidenced by copies of the Agreements and Certificates of Participation attached hereto as Exhibits 1 through 7. The MIC has funded the purchase of the Assets by paying the purchase price (bid amount) to Seller required by the terms of the Loan Sale Agreement between SRC and Sellers. MIC has purchased a participation representing a 100% participation interest in the Assets.


2.6 SRC shall not purchase a specific group of Assets without the prior approval of the Participants who are going to participate in funding the purchase of such specific group of Assets. Such prior approval may be oral, but shall subsequently be memorialized by a Purchase Addenda. This Agreement shall not be construed as creating an exclusive right of the Participants to participate in funding the purchase of any particular assets. If the parties fail to agree on the terms of a bid to purchase assets or the terms of a Purchase Addenda with respect thereto SRC may seek funding from a different participant but shall notify MIC in writing prior to using any other participant for the funding of a particular asset.


2.7 Upon SRC being the successful bidder for the purchase of each specific group of Assets, the Participants shall fund the purchase of such specific group of Assets.


SECTION 3: OWNERSHIP OF THE ASSETS
----------------------------------


3.1 The Assets shall be owned by SRC and shall be subject to the interests of the Participants.


3.2 The money transferred by Participants to SRC to fund the bid to purchase the Assets shall equal the Purchase Price of the Participants for their participation interests in the Assets. Money advanced by Participants to SRC to fund escrows or purchased interest related to a bid to purchase Assets shall not be included in the Purchase Price, but shall be deemed an advance to be returned to the Participants by SRC as soon as the escrows or purchased interest is returned.


3.3 Subject to SRC's fees to be paid by the Participants to SRC and SRC's Costs, the Participants shall hold participations representing 100% of the interests in the Assets. The Participants' interests shall be represented by Certificates of Participation, a sample copy of which is attached hereto and labeled Exhibit "A". Each Participant shall own an undivided participation interest in the Assets equal to that percentage calculated by dividing the amount of the Purchase Price funded by each of them by the total Purchase Price.


3.4 The Purchase Price advanced by the Participants for their participation interests in the Assets is not a loan by the Participants to SRC. Nothing contained in this Agreement shall be construed to create a debtor- creditor relationship between SRC and the Participants.


SECTION 4: ASSET DOCUMENTATION
-------------------------------


4.1 SRC shall cooperate with any regulators having authority over any Participant in their


-4-


examination of the Assets or the documentation related to the Assets.


4.2 If required by regulators having authority over any Participant, SRC will obtain such lien searches and current collateral inspections and appraisals with respect to the Assets as may be necessary. In all other cases, SRC shall not be required to obtain formal collateral appraisals or inspections from third party contractors when SRC determines that the cost is prohibitive or that inspections and appraisals by SRC's employees will sufficiently demonstrate the value of the Assets.


SECTION 5:
----------
SRC REPORTING REQUIREMENTS AND AUDITS OF SRC'S RECORDS
------------------------------------------------------


5.1 SRC shall provide the Participants with such reports, in an agreed upon format, showing all Receipts and Costs and SRC's activities with respect to the Assets as shall be mutually agreed upon by SRC and the Participants.


5.2 The Participants shall have an unlimited right, at the sole expense of the Participant exercising such right, to audit SRC's records.


SECTION 6: SRC'S OPERATIONS AND COSTS OF LIQUIDATION
-----------------------------------------------------


6.1 The Participants shall open a bank account into which all funds received by SRC from the collection of the Assets, including without limitation principal repayment, interest, loan fees and other charges (Receipts) shall be deposited (Participants' Account). Subject to the obligations of the Participants to fund SRC's Costs of operation as provided in Paragraph 6.2 below, the Participants shall have the right to withdraw the interests of the Participants in the Receipts and the Receipts shall be deemed to have been paid to the Participants on the day the Receipts are deposited in the Participants' Account. MIC or such other Participant as may be designated in writing by the Parties shall be responsible for distributing the interests of the Participants in the Receipts to the other Participants.


SRC shall not be responsible for the distribution of Receipts to the Participants after deposits are made by SRC in the Participants' Account.


MIC or such other Participant as may be designated in writing by the Parties shall give SRC written advices of all funds withdrawn by it from the Participants' Account, showing the amounts and dates of each withdrawal.


6.2 The funds necessary to meet SRC's actual costs of operation, including expenses for protective advances and similar costs with respect to the Assets (Costs), shall be funded from the Receipts by the Participants issuing checks drawn on the Participants' Account payable to SRC. Such funds paid to SRC shall be sufficient to continue the operation of SRC with respect to the Assets for the ensuing thirty (30) day period and on a month to month basis thereafter.


-5-


The funds paid by the Participants to SRC to meet the Costs shall not be deemed to be an advance under Paragraph 3.2 above and shall not be included in the Purchase Price of the Participants for their participation interests in the Assets.


The Parties acknowledge and agree that (i) Central States Resources, Corp. (CSRC), a corporation wholly owned by Randal Vardaman; All States Resources Corp. (ARC), a corporation wholly owned by Randal Vardaman and Nyle Johnson, and Midstates Resources Corp. (MRC), a corporation wholly owned by Randal Vardaman and Nyle Johnson have purchased loans from FDIC, RTC and other entities and may in the future purchase additional loans or other assets from other sellers (collectively referred to herein as the "CSRC/MRC/ARC Loans"), (ii) Randal Vardaman may form additional corporations (collectively referred to herein as the "New Servicing Corporations") for the purchase of loans or other assets from sellers (collectively referred to herein as the "New Servicing Corporations' Loans"), (iii) SRC has purchased and may in the future purchase additional assets from sellers (collectively referred to herein as the "Other SRC Loans") and (iv) CSRC, ARC, SRC and the New Servicing Corporations now employ and may in the future employ common facilities and employees.


Certain costs and expenses incurred by SRC (with respect to the Assets and Other SRC Loans), CSRC, MRC and ARC (with respect to the CSRC/MRC/ARC Loans) and/or the New Servicing Corporations (with respect to the New Servicing Corporations' Loans), such as rent, heat, light, wages (excluding contractors' fees), FICA, federal and state unemployment, health insurance, pension or retirement plan contributions, employee benefits, equipment repairs and maintenance, casualty insurance, office supplies, telephone and postage, are not, or will not be, readily allocable to the service and collection of the Assets, Other SRC Loans, the CSRC/MRC/ARC Loans or New Servicing Corporations' Loans ("Allocated Costs"). The Parties therefore agree with SRC that for purposes of calcula
-- End of Preview --
Home| About Us| FAQ| Subscription | Contact Us |

Privacy Policy   Terms of Service  3.88.220.93