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Mercantile Bank of St. Louis. In order to implement the
provisions of the Administrator Agreement for release and
forfeiture of reserves, it would nevertheless have been necessary
to account for the reserves attributable to each Dealership
separately. The Administrator Agreement states:
All reserves in the Escrow Account(s) shall be held
for the primary benefit of Contract holders to secure
Dealer's performance under the Contracts and to pay for
valid claims arising under the Contracts. Dealer shall
have no beneficial or other property interest in the
Reserves or investment income in the Escrow Account(s);
nor can Dealer assign, pledge or transfer such
Reserves.
The disposition of the purchase price collected from the
contract holder was subject to detailed procedures set forth in
the Administrator Agreement. The Dealership retained a portion
as its profit. Of the remainder, specified amounts were payable
to the PLRF as reserves, to Travelers as a premium for excess
loss insurance over the full term of the contract (Premium), to
MBP or API as a fee for administrative services (Fees), and to
each of BPI and the company that marketed the VSC program on the
Administrator's behalf as a commission (Commissions). The
Administrator Agreement provides that "Dealer agrees to accept
and hold such monies as a fiduciary in trust and shall be
responsible for the proper and timely remittance of the same to
the Administrator, Managing Agent or Escrow Accounts(s)." The
PLRF deposits, Premiums, Fees, and Commissions payable with
respect to all VSC's sold during a given month were required to
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Last modified: May 25, 2011