Collection of Receivables Except as otherwise provided in this Security Agreement, such Grantor will collect and enforce, at such Grantor’s sole expense, all amounts due or hereafter due to such Grantor under the Receivables owned by it.
Transfer of Receivables Pursuant to the Sale and Servicing Agreement, the Purchaser will assign all of its right, title and interest in, to and under the Receivables and other assets described in Section 2.1
Servicing of Receivables The Master Servicer shall service the Receivables as required by the terms of this Agreement and in material compliance with its standard and customary procedures for servicing all its other comparable motor vehicle receivables and in compliance with applicable law; and
Conveyance of Receivables (a) Upon the execution of this Agreement by the parties hereto, the Seller, pursuant to the mutually agreed upon terms contained in this Agreement, shall sell, transfer, assign and otherwise convey to the Issuer, without recourse (but subject to the Seller’s obligations in this Agreement), all of its right, title and interest in and to the Receivables and any proceeds related thereto, including any Dealer Recourse and such other items as shall be specified in this Agreement. Concurrently therewith and in exchange therefor, the Issuer shall deliver to, or to the order of, the Seller the Notes and the Certificate.
(b) In consideration of the foregoing and other good and valuable consideration to be delivered to the Seller hereunder, on behalf of the Issuer, the Seller does hereby sell, transfer, assign and otherwise convey to the Issuer, without recourse (subject to the Seller’s obligations herein):
(i) all right, title and interest of the Seller in and to the Receivables and all monies due thereon or paid thereunder or in respect thereof (including proceeds of the repurchase of Receivables by the Seller pursuant to Section 3.02 or the purchase of Receivables by the Servicer pursuant to Section 4.08 or 9.01) after the Cutoff Date;
(ii) the interest of the Seller in the security interests in the Financed Vehicles granted by the Obligors pursuant to the Receivables and any accessions thereto;
(iii) the interest of the Seller in any proceeds of any Insurance Policies relating to the Receivables or the Obligors;
(iv) the interest of the Seller in any Dealer Recourse;
(v) the right of the Seller to realize upon any property (including the right to receive future Liquidation Proceeds) that shall have secured a Receivable and have been repossessed pursuant to the terms thereof;
(vi) the rights and interests of the Seller under the Receivables Purchase Agreement;
(vii) all proceeds of the foregoing; and
(viii) all present and future claims, demands, causes of action and choses in action in respect of any or all of the foregoing and all payments on or under of every kind and nature whatsoever in respect of any or all of the foregoing, including all proceeds of the conversion thereof, voluntary or involuntary, into cash or other liquid property, all cash proceeds, accounts, accounts receivable, notes, drafts, acceptances, chattel paper, checks, deposit accounts, insurance proceeds, condemnation awards, rights to payment of any and every kind and other forms of obligations and receivables, instruments and other property which at any time constitute all or part of or are included in the proceeds of any of the foregoing (collectively, the “Collateral”).
(c) It is the intention of the Seller that the transfer and assignment contemplated by this Agreement shall constitute a sale of the Collateral from the Seller to the Issuer and the beneficial interest in and title to the Collateral shall not be part of the Seller’s estate in the event of the filing of a bankruptcy petition by or against the Seller under any bankruptcy law. The Seller agrees to execute and file all filings (including filings under the UCC) necessary in any jurisdiction to provide third parties with notice of the sale of the Collateral pursuant to this Agreement and to perfect such sale under the UCC.
(d) Although the parties hereto intend that the transfer and assignment contemplated by this Agreement be a sale, in the event such transfer and assignment is deemed to be other than a sale, the parties intend that all filings described in the foregoing paragraph shall give the Issuer a first priority perfected security interest in, to and under the Receivables, and other Collateral conveyed hereunder and all proceeds of any of the foregoing. This Agreement shall be deemed to be the grant of a security interest from the Seller to the Issuer, and the Issuer shall have all the rights, powers and privileges of a secured party under the UCC.
(e) In connection with the foregoing conveyance, the Servicer shall maintain its computer system so that, from and after the time of sale of the Receivables to the Issuer under this Agreement, the Servicer’s electronic files which are maintained for the purpose of identifying retail installment sales contracts which have been transferred in connection with securitizations will show the interest of the Issuer in such Receivable and that the Receivable is owned and controlled by the Issuer. Indication of the Issuer’s ownership of a Receivable shall be deleted from or modified on the Servicer’s computer systems when, and only when, the Receivable has been paid in full, repurchased or assigned pursuant to this Agreement.
(f) Ownership and control of the Receivables, as between the Issuer and the Indenture Trustee (on behalf of the Noteholders) shall be governed by the Indenture.
Purchase of Receivables (a) Upon the terms and subject to the conditions hereof, Buyer hereby agrees to purchase, and Originator hereby agrees to sell, all of Originator’s right, title and interest in and to all of the Receivables (each such transaction, a “Purchase”). On the date of the initial Purchase from Originator, Buyer shall purchase, and Originator shall sell, transfer and convey, all of Originator’s right, title and interest in and to all Receivables then outstanding, together with all Related Security relating thereto and all Collections thereof. On each Business Day thereafter until the Termination Date, Buyer shall purchase, and Originator shall sell, transfer and convey, all of Originator’s right, title and interest in and to all Receivables which were not previously purchased by Buyer hereunder, together in each case with all Related Security relating thereto and all Collections thereof. Prior to making the initial Purchase hereunder, Buyer may request of Originator, and Originator shall deliver, such approvals, opinions, information, reports or documents as Buyer may reasonably request.
(b) It is the intention of the parties hereto that each Purchase of Receivables made hereunder shall constitute a “sale of accounts” (as such term is used in Article 9 of the UCC), which sales are absolute and irrevocable and shall provide Buyer with the full benefits of ownership of the Receivables. Except for the Purchase Price Credits, Repurchase Prices and Special Adjustment Credits owed pursuant to Section 1.3, each sale of Receivables hereunder is made without recourse to Originator; provided that (i) Originator shall be liable to Buyer for all representations, warranties and covenants made by Originator pursuant to the terms of the Transaction Documents to which Originator is a party, and (ii) such sale does not constitute and is not intended to result in an assumption by Buyer or any assignee thereof of any obligation of Originator or any other Person arising in connection with the Receivables, the related Contracts, the Related Security or any other obligations of Originator. In view of the intention of the parties hereto that the Purchases of Receivables made hereunder shall constitute sales of such Receivables rather than loans secured thereby, Originator agrees, on or prior to the Initial Cutoff Date and in accordance with Section 4.1(f)(ii), to mxxx its master data processing records relating to the Receivables with a legend acceptable to Buyer and to the Program Agent (as Buyer’s assignee), evidencing that Buyer has purchased such Receivables as provided in this Agreement and to note in its financial statements that the Receivables have been sold to Buyer. Upon the request of Buyer or the Program Agent (as Buyer’s assignee), Originator will execute and file such financing or continuation statements, or amendments thereto or assignments thereof, and such other instruments or notices, as may be necessary or appropriate to perfect and maintain the perfection of Buyer’s ownership interest in the Receivables and the Related Security and Collections with respect thereto, or as Buyer or the Program Agent (as Buyer’s assignee) may reasonably request.
Sale of Receivables (a) The Seller sells and assigns, without recourse (except as provided in this Agreement), to the Buyer the following property on and as of the dates specified below:
(i) on the first Closing Date, (A) all of its right, title and interest in, to and under each Sold Receivable originated in each Initial Account and all Related Security with respect to such Sold Receivables owned by the Seller at the close of business on the Cutoff Date and (B) all monies due or to become due and all amounts received with respect to any of the foregoing and all proceeds (including “proceeds,” as defined in the UCC) and Recoveries thereof;
(ii) on the applicable Addition Date, (A) all of its right, title and interest in, to and under each Sold Receivable originated in each Additional Account and all Related Security with respect to such Sold Receivables owned by the Seller at the close of business on the applicable Additional Cutoff Date, and (B) all monies due or to become due and all amounts received with respect to any of the foregoing and all proceeds (including “proceeds,” as defined in the UCC) and Recoveries thereof; and
(iii) on each Sale Date, (A) all of its right, title and interest in, to and under each Sold Receivable originated in each Account on such Sale Date and all Related Security with respect to such Sold Receivable owned by the Seller at the close of business on the applicable Sale Date and not previously sold to the Buyer pursuant to this Agreement and (B) all monies due or to become due and all amounts received with respect to any of the foregoing and all proceeds (including “proceeds,” as defined in the UCC) and Recoveries thereof.
(b) The foregoing sales, and any subsequent sales, do not constitute, and are not intended to result in, the creation, or an assumption by the Buyer, of any obligation of the Servicer, the Seller, Ford or any other Person in connection with the Accounts or the related Receivables or under any related agreement or instrument, including any obligation to any Dealers or Ford. The foregoing sales are not sales of the Accounts but rather are sales of the Sold Receivables originated in the Accounts.
(c) In connection with the foregoing sales, the Seller will record and file, at its own expense, a financing statement on form UCC-1 or any other applicable form (and continuation statements when applicable) with respect to the Sold Receivables sold by the Seller, for the sale, for UCC purposes, of “tangible chattel paper,” “payment intangibles,” “general intangibles” or “accounts” (each as defined in the UCC), meeting the requirements of Applicable Law in such manner and in such jurisdictions as are necessary to perfect the sale and assignment, for UCC purposes, of the Sold Receivables and the Related Security to the Buyer, and to deliver a file-stamped copy of such financing statements or other evidence of such filing to the Buyer on or before the first Closing Date, in the case of the Initial Accounts, and (if any additional filing is necessary) the applicable Addition Date, in the case of Additional Accounts. The Buyer is under no obligation whatsoever to file such financing statement, or a continuation statement to such financing statement, or to make any other filing under Applicable Law in connection with such sales.
(d) The Seller and the Buyer intend that all transfers of Sold Receivables under this Agreement constitute sales of such Sold Receivables and not transfers of such Sold Receivables as security for a loan. However, if the transfers of the Sold Receivables under this Agreement were to be characterized as transfers of security for a loan and not as sales, then (i) the Seller will have Granted, and Grants, to the Buyer a security interest in each Sold Receivable and the Related Security, whether now owned or hereafter acquired, and all monies due or to become due and all amounts received with respect to any of the foregoing and all proceeds (including “proceeds,” as defined in the UCC) and Recoveries thereof and (ii) this Agreement constitutes a security agreement.
(e) On or before the first Closing Date, in the case of the Initial Accounts, and on or before the applicable Addition Date, in the case of Additional Accounts, the Seller will, at its own expense:
(i) indicate in its computer files that the Sold Receivables and the Related Security have been (A) sold and assigned to the Buyer pursuant to this Agreement, (B) sold and assigned by the Buyer to the Issuer pursuant to the Sale and Servicing Agreement and (C) pledged by the Issuer to the Indenture Trustee for the benefit of the Secured Parties pursuant to the Indenture and the Indenture Supplements;
(ii) in the case of the Initial Accounts, deliver to the Buyer the Initial Account Schedule; and
(iii) in the case of Additional Accounts, deliver to the Buyer an Additional Account Schedule.
(f) The Account Schedule, as amended, supplemented or otherwise modified from time to time, will be marked as Schedule 1 to this Agreement and is incorporated into and made a part of this Agreement.
(g) The purchase price for the Sold Receivables sold pursuant to this Agreement will be equal to the principal amount of the Sold Receivables, or such other price as may be agreed to by the Buyer and the Seller at the time of acquisition by the Buyer. The purchase price will not be materially less favorable than prices for transactions of a generally similar character at the time of the acquisition, taking into account the quality of such Sold Receivables the Seller’s cost of originating such Sold Receivables and a reasonable return on such costs, and other pertinent factors; provided that such consideration will in no event be less than reasonably equivalent value therefor. The Depositor and the Buyer each represents and warrants to the other that the amount of cash paid by the Depositor on any Sale Date, together with the increase in the value in the Buyer’s capital in the Depositor, is equal to the fair market value of the Sold Receivables sold on such Sale Date.
(h) Notwithstanding anything in this Agreement or in the other Transaction Documents to the contrary, in originating the Receivables, the Seller acts solely in its individual capacity and not in the capacity of agent or nominee of the Issuer. Furthermore, in connection with all sales of Sold Receivables by the Seller to the Buyer under this Agreement, the Seller is under no obligation, and does not intend, to inform the related Dealers of such sales by the Seller to the Buyer or of the transfer thereof by the Buyer to the Issuer under the Sale and Servicing Agreement or of the pledge thereof by the Issuer to the Indenture Trustee under the Indenture.
Nature of Receivables Each of the Receivables shall be a bona fide and valid account representing a bona fide indebtedness incurred by the Customer therein named, for a fixed sum as set forth in the invoice relating thereto (provided immaterial or unintentional invoice errors shall not be deemed to be a breach hereof) with respect to an absolute sale or lease and delivery of goods upon stated terms of a Borrower, or work, labor or services theretofore rendered by a Borrower as of the date each Receivable is created. Same shall be due and owing in accordance with the applicable Borrower’s standard terms of sale without dispute, setoff or counterclaim except as may be stated on the accounts receivable schedules delivered by Borrowers to Agent.
Reassignment of Ineligible Receivables (a) In the event any representation or warranty under Subsection 4.02(a)(ii), (iii), (iv), (vii), (viii), (ix) or (x) is not true and correct in any material respect as of the date specified therein with respect to any Receivable or the related Account and as a result of such breach RFC VIII is required under Subsection 2.6(a) of the Transfer Agreement to accept reassignment of such Receivables previously sold by TRS to RFC VIII pursuant to this Agreement, TRS shall accept reassignment of such Receivables on the terms and conditions set forth in Subsection 6.01(b).
(b) TRS shall accept reassignment of any Receivables described in Subsection 6.01(a) from RFC VIII on the date on which such Receivables are reassigned to RFC VIII pursuant to Subsection 2.6(a) of the Transfer Agreement, and shall pay for such reassigned Receivables by paying to RFC VIII in immediately available funds an amount equal to the unpaid balance of such Receivables. Upon reassignment of such Receivables, RFC VIII shall automatically and without further action sell, transfer, assign, set-over and otherwise convey to TRS, without recourse, representation or warranty, all the right, title and interest of RFC VIII in and to such Receivables, all Recoveries allocable to such Receivables, all monies due or to become due and all amounts received or receivable with respect thereto, all Collections with respect thereto, and all proceeds (including “proceeds” as defined in the UCC) thereof. Such reassigned Receivables shall be treated by RFC VIII as collected in full as of the date on which they were reassigned. RFC VIII shall execute such documents and instruments of transfer or assignment and take such other actions as shall reasonably be requested by TRS to effect the conveyance of such Receivables and other property pursuant to this Subsection.
Collection of Receivable Payments; Modifications of Receivables (a) Consistent with the standards, policies and procedures required by this Agreement, the Servicer shall make reasonable efforts to collect all payments called for under the terms and provisions of the Receivables as and when the same shall become due, and shall follow such collection procedures as it follows with respect to all comparable motor vehicle receivables that it services for itself or others. The Servicer is authorized in its discretion to waive any prepayment charge, late payment charge or any other similar fees that may be collected in the ordinary course of servicing any Receivable.
(b) Subject to Section 4.06, the Servicer may grant extensions, rebates, deferrals, amendments, modifications or adjustments on a Receivable in accordance with its customary servicing practices; provided, however, that if the Servicer (i) extends the date for final payment by the Obligor of any Receivable beyond the last day of the Collection Period prior to the Class C Stated Maturity Date or (ii) reduces the APR or unpaid principal balance with respect to any Receivable other than as required by applicable law, it will promptly purchase such Receivable in the manner provided in Section 4.07.
(c) The Servicer may, but is not required to, make any advances of funds or guarantees regarding collections, cash flows or distributions. Payments on the Receivables, including payoffs made in accordance with the related documentation for such Receivables, shall be posted to the Servicer’s Obligor records in accordance with the principal, interest or other items in accordance with the related documentation for such Receivables.
(d) Subject to the provisions of Section 4.02(b), the Servicer and its Affiliates may engage in any marketing practice or promotion or any sale of any products, goods or services to Obligors with respect to the Receivables so long as such practices, promotions or sales are offered to obligors of comparable motor vehicle receivables serviced by the Servicer for itself and others, whether or not such practices, promotions or sales might result in a decrease in the aggregate amount of payments on the Receivables, prepayments or faster or slower timing of the payment of the Receivables.
(e) Notwithstanding anything in this Agreement to the contrary, the Servicer may refinance any Receivable and deposit the full Principal Balance of such Receivable into the Collection Account. The receivable created by such refinancing shall not be property of the Issuer. The Servicer and its Affiliates may also sell insurance or debt cancellation products, including products which result in the cancellation of some or all of the amount of a Receivable upon the death or disability of the Obligor or any casualty with respect to the Financed Vehicle.
(f) Records documenting collection efforts shall be maintained during the period a Receivable is delinquent in accordance with the Credit and Collection Policy. Such records shall be maintained on at least a periodic basis that is not less frequent than as set forth in the Credit and Collection Policy, and describe the entity’s activities in monitoring delinquent pool assets including, for example, phone calls, letters and payment rescheduling plans in cases where delinquency is deemed temporary (e.g., illness or unemployment) in accordance with the Credit and Collection Policy.
Eligibility of Receivables The Seller makes the following representations and warranties as to the Receivables on which the Purchaser is deemed to have relied in acquiring the Receivables. Such representations and warranties speak as of the Cutoff Date and as of the Closing Date (unless, by its terms, a representation or warranty speaks specifically as of the Cutoff Date or the Closing Date, in which case, such representation or warranty speaks specifically as of such date only).
