EXHIBIT 4(f)(89)
EXECUTION COPY
BACKUP SERVICING AGREEMENT
BACKUP SERVICING AGREEMENT (the "Agreement"), dated as of April 12,
2007, among XXXXX FARGO BANK, NATIONAL ASSOCIATION, a national banking
association organized under the laws of the United States, as backup servicer
(the "Backup Servicer"), and as trust collateral agent (the "Trust Collateral
Agent"), XL CAPITAL ASSURANCE INC., a New York corporation (the "Class A
Insurer"), CREDIT ACCEPTANCE CORPORATION, a Michigan corporation ("Credit
Acceptance" or the "Servicer"), CREDIT ACCEPTANCE FUNDING LLC 2007-1, a Delaware
limited liability company (the "Seller") and CREDIT ACCEPTANCE AUTO DEALER LOAN
TRUST 2007-1, a Delaware statutory trust (the "Trust" or the "Issuer").
WITNESSETH:
WHEREAS, Credit Acceptance, the Seller, the Backup Servicer, the
Issuer and the Trust Collateral Agent have entered into a Sale and Servicing
Agreement, dated as of the Closing Date (as amended, restated, supplemented or
otherwise modified from time to time, the "Sale and Servicing Agreement");
WHEREAS, the parties to the Sale and Servicing Agreement desire to
obtain the services of the Backup Servicer to perform certain servicing
functions and assume certain obligations with respect to the Sale and Servicing
Agreement, all as set forth herein, and the Backup Servicer has agreed to
perform such functions and assume such obligations; and
WHEREAS, for its services hereunder and with respect to the Sale and
Servicing Agreement, the Backup Servicer will receive a fee payable as described
herein;
NOW THEREFORE, in consideration for the mutual agreements contained
herein and for other good and valuable consideration, the receipt and adequacy
of which are hereby acknowledged, the parties hereto agree as follows:
ARTICLE 1
DEFINITIONS
SECTION 1.1. Definitions. All capitalized terms not otherwise defined
herein shall have the meanings specified in, or incorporated by reference to,
the Sale and Servicing Agreement. The following terms shall have the meanings
specified below:
"Aggregate Basis" means verification of only such aggregated amounts
as are stated in the Servicer's Certificate, and not as to any amount related to
any Dealer Loan or Contract.
"Assumption Date" has the meaning specified in Section 2.3(a).
"Backup Servicer Event of Default" has the meaning specified in
Section 4.1.
"Backup Servicer's Certificate" has the meaning specified in Section
2.10.
"Backup Servicing Fee" means, as to each Distribution Date, $4,000;
provided, however, that if the Backup Servicer becomes the successor Servicer,
such fee shall no longer be paid.
"Continued Errors" has the meaning specified in Section 2.2(c)(iii).
"Errors" has the meaning specified in Section 2.2(c)(iii).
"Liability" has the meaning specified in Section 2.2(c)(i).
"Live Data Files" has the meaning specified in Section 2.6(a).
"Material Adverse Change" means any circumstance or event which in the
reasonable judgment of the Class A Insurer: (a) may be reasonably expected to
cause a material adverse change to the validity or enforceability of this
Agreement or the Sale and Servicing Agreement; or (b) may be reasonably expected
to materially impair the ability of the Backup Servicer to fulfill its
obligations under this Agreement or the Sale and Servicing Agreement.
"Servicer's Data File" has the meaning specified in Section 2.1(a).
"Service-Related Activities" means the services and service-related
activities and the servicer-related responsibilities of the Servicer provided
for under the Sale and Servicing Agreement as modified or eliminated herein with
respect to the Backup Servicer.
"Servicing Fee" has the meaning given such term in Section 1.01 of the
Sale and Servicing Agreement.
"Successor Backup Servicer" has the meaning specified in Section
2.4(b).
"Third Party" has the meaning specified in Section 2.9(d).
SECTION 1.2. Usage of Terms. With respect to all terms in this Agreement,
the singular includes the plural and the plural the singular; words importing
any gender include the other gender; references to "writing" include printing,
typing, lithography, and other means of reproducing words in a visible form;
references to agreements and other contractual instruments include all
subsequent amendments thereto or changes therein entered into in accordance with
their respective terms and not prohibited by this Agreement; references to
Persons include their permitted successors and assigns; and the term "including"
means "including without limitation."
SECTION 1.3. Section References. All section references shall be to
Sections in this Agreement (unless otherwise provided).
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ARTICLE 2
ADMINISTRATION AND COLLECTION
SECTION 2.1. Reconciliation of Servicer's Certificate.
(a) The Backup Servicer shall, within one (1) Business Day of receipt
of the Servicer's Data File, load the Servicer's Data File delivered to it in
accordance with Section 4.09(b) of the Sale and Servicing Agreement and confirm
that it is in readable form. If the Backup Servicer determines that the
Servicer's Data File is not in readable form, the Backup Servicer shall
immediately upon discovery thereof notify the Servicer and the Trust Collateral
Agent by telephone, and upon such notification, the Servicer shall prepare and
send a replacement Servicer's Data File to the Backup Servicer satisfying the
Backup Servicer's specifications, for receipt by the Backup Servicer on the next
Business Day.
(b) The Backup Servicer shall review the information contained in the
Servicer's Certificate delivered to it in accordance with Section 4.09(a) of the
Sale and Servicing Agreement against the information on the Servicer's Data
File, on an Aggregate Basis. No later than three (3) Business Days after the
Backup Servicer's receipt of each Servicer's Certificate, the Backup Servicer
shall notify the Servicer, the Trust Collateral Agent, the Indenture Trustee and
the Class A Insurer of any inconsistencies between the Servicer's Certificate
and the information contained in the Servicer's Data File; provided, however, in
the absence of a reconciliation, the Servicer's Certificate shall control for
the purpose of calculations and distributions with respect to the related
Distribution Date. If the Backup Servicer and the Servicer are unable to
reconcile discrepancies with respect to a Servicer's Certificate prior to the
related Distribution Date, the Servicer shall cause a firm of independent
accountants, at the Servicer's expense, to audit the Servicer's Certificate and,
prior to the third Business Day, but in no event later than the fifth calendar
day, of the following month, reconcile the discrepancies. The effect, if any, of
such reconciliation shall be reflected in the Servicer's Certificate for such
next Distribution Date. The Backup Servicer shall only review the information
provided by the Servicer in the Servicer's Certificate and in the Servicer's
Data File and its obligation to report any inconsistencies shall be limited to
those determinable from such information.
(c) The Backup Servicer and the Servicer shall attempt to reconcile
any such inconsistencies and/or to furnish any omitted information and the
Servicer shall amend the Servicer's Certificate to reflect the results of the
reconciliation or to include any omitted information.
(d) On or before the end of the second Business Day prior to each
Determination Date, the Servicer shall provide to the Backup Servicer, or its
agent, information on the Dealer Loans and related Contracts sufficient to
enable the Backup Servicer to assume the responsibilities as successor servicer
under the Sale and Servicing Agreement and service and collect the Dealer Loans
and related Contracts.
(e) The Servicer shall provide the Backup Servicer with any and all
updates to the master file data layout and copy book information necessary due
to system changes or modifications, which may require changes to the Backup
Servicer's applications necessary to read the Servicer's Data File.
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SECTION 2.2. Review and Verification.
(a) Notwithstanding anything in Section 2.1 to the contrary, on or
before the end of the second Business Day prior to each Determination Date, the
Servicer and the Trust Collateral Agent shall provide sufficient data to the
Backup Servicer to allow the Backup Servicer to review and to verify the
mathematical accuracy of the Servicer's Certificate on an Aggregate Basis
related thereto and determine the following:
(i) that such Servicer's Certificate is complete on its face;
(ii) that the amounts credited to and withdrawn from the
Collection Account and the balance of such account, as set forth in
the records of the Trust Collateral Agent are the same as the amount
set forth in the Servicer's Certificate; and
(iii) that the amounts credited to and withdrawn from the Reserve
Account and the balance of such account, as set forth in the records
of the Trust Collateral Agent are the same as the amount set forth in
the Servicer's Certificate.
(b) The Backup Servicer shall, on or before the Determination Date
with respect to any Collection Period, verify the mathematical accuracy of the
Servicer's Certificate in its entirety, which shall include but not be limited
to the following:
(i) the amount of the related distribution allocable to
principal;
(ii) the amount of the related distribution allocable to
interest;
(iii) the amount of the related distribution payable out of the
Reserve Account;
(iv) the Aggregate Outstanding Net Eligible Loan Balance, the
Aggregate Outstanding Eligible Loan Balance and the aggregate
Outstanding Balance of all Eligible Contracts as of the close of
business on the last day of the preceding Collection Period;
(v) the Class A Note Balance and the Pool Factor;
(vi) the amount of the Servicing Fee paid to the Servicer with
respect to the related Collection Period and/or due but unpaid with
respect to such Collection Period or prior Collection Periods, as the
case may be;
(vii) the Class A Interest Carryover Shortfall, if any;
(viii) the total amount of Collections for the related Collection
Period; and
(ix) the aggregate Purchase Amount for the Ineligible Loans and
Ineligible Contracts, if any, that was paid in such period.
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(c) The Backup Servicer shall provide written notice to the Class A
Insurer and the Trust Collateral Agent with respect to whether there are any
inconsistencies or deficiencies with respect to its review and verification set
forth in paragraphs (a) and (b) above and, if any, shall provide a description
thereof as set forth in Section 2.10 hereof. In the event of any discrepancy
between the information set forth in subparagraphs (a) and (b) above, as
calculated by the Servicer, from that determined or calculated by the Backup
Servicer, the Backup Servicer shall promptly notify the Servicer and, if within
five (5) days of such notice being provided to the Servicer, the Backup Servicer
and the Servicer are unable to resolve such discrepancy, the Backup Servicer
shall promptly notify the Class A Insurer and the Trust Collateral Agent of such
discrepancy.
(i) Other than as specifically set forth elsewhere in this
Agreement, the Backup Servicer shall have no obligation to supervise,
verify, monitor or administer the performance of the Servicer and
shall have no duty, responsibility, obligation, or liability
(collectively "Liability") for any action taken or omitted by the
Servicer.
(ii) The Backup Servicer shall consult with the Servicer as may
be necessary from time to time to perform or carry out the Backup
Servicer's obligations hereunder, including the obligation, if
requested in writing by the Class A Insurer, to succeed within thirty
(30) days to the duties and obligations of the Servicer pursuant to
Section 2.3.
(iii) Except as otherwise provided in this Agreement, the Backup
Servicer may accept and reasonably rely on all accounting, records and
work of the Servicer without audit, and the Backup Servicer shall have
no Liability for the acts or omissions of the Servicer or for the
inaccuracy of any data provided, produced or supplied by the Servicer.
If any error, inaccuracy or omission (collectively, "Errors") exists
in any information received from the Servicer, and such Errors should
cause or materially contribute to the Backup Servicer making or
continuing any Errors (collectively, "Continued Errors"), the Backup
Servicer shall have no Liability for such Continued Errors; provided,
however, that this provision shall not protect the Backup Servicer
against any Liability which would otherwise be imposed by reason of
willful misfeasance, bad faith or gross negligence in discovering or
correcting any Error or in the performance of its duties hereunder or
under the Sale and Servicing Agreement. In the event the Backup
Servicer becomes aware of Errors and/or Continued Errors which, in the
opinion of the Backup Servicer impairs its ability to perform its
services hereunder, the Backup Servicer: (i) shall promptly notify the
Servicer and the Class A Insurer of such Errors and/or Continued
Errors; and (ii) may, with the prior consent of the Class A Insurer,
use its best efforts to reconstruct and reconcile such data as it
deems appropriate to correct such Errors and/or Continued Errors and
prevent future Continued Errors. The Backup Servicer shall be entitled
to recover its costs thereby expended from the Servicer.
(iv) The Backup Servicer and its officers, directors, employees
and agents shall be indemnified by the Servicer and the Issuer,
jointly and severally,
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from and against all claims, damages, losses or expenses reasonably
incurred by the Backup Servicer (including reasonable attorney's fees
and expenses) arising out of claims asserted against the Backup
Servicer on any matter arising out of this Agreement to the extent the
act or omission giving rise to the claim accrues before the Assumption
Date, except for any claims, damages, losses or expenses arising from
the Backup Servicer's own willful misfeasance, bad faith or gross
negligence. The obligations of the Servicer and the Issuer under this
Section shall survive the termination of this Agreement and the
earlier resignation or removal of the Backup Servicer.
(v) To the extent the Backup Servicer requires any information
supplementing reports or data that is to be provided to it pursuant to
the Basic Documents in order to complete its verification duties, the
Backup Servicer's verification duties are conditioned upon timely
receipt by the Backup Servicer of such information.
SECTION 2.3. Assumption of Servicer's Obligations.
(a) The Backup Servicer agrees that within 30 days of receipt of a
written notice from the Class A Insurer, or the Trust Collateral Agent if a
Class A Insurer Default has occurred and is continuing, of the termination of
the rights and obligations of Credit Acceptance as Servicer pursuant to the Sale
and Servicing Agreement, and without further notice, the Backup Servicer shall,
subject to the exclusions stated herein, assume the Service-Related Activities
of Credit Acceptance under the Sale and Servicing Agreement (the "Assumption
Date") and further agrees that it shall assume all such Service-Related
Activities in accordance with the requirements, terms and conditions set forth
in the Sale and Servicing Agreement and this Agreement. In the event of a
conflict between any provision of the Sale and Servicing Agreement and this
Agreement, this Agreement shall be controlling.
(b) In the event of an assumption by the Backup Servicer of the
Servicer-Related Activities of Credit Acceptance under the Sale and Servicing
Agreement, the Backup Servicer shall not be obligated to perform the obligations
imposed in the following Sections of the Sale and Servicing Agreement: Sections
3.02 (provided that the Backup Servicer shall be obligated to inform the other
parties to this Agreement of the breaches or failures set forth in Section 3.02
of which a Responsible Officer has actual knowledge), 4.01(c), 4.01(d)(i),
4.01(d)(ii), 4.04, 4.06(a)(iii), 4.06(a)(v), 4.06(a)(vi)(B), 4.06(a)(ix),
4.06(a)(x), 4.06(b)(i), 4.06(b)(ii), 4.06(b)(v) (only with respect to the
Servicer's obligation to defend the right, title and interest of the Trust
Collateral Agent in the Trust Property against the claims of third parties),
4.07 (provided that the Backup Servicer shall be obligated to inform the other
parties to this Agreement of certain breaches detailed in Section 4.07 of which
a Responsible Officer has actual knowledge in the manner described therein),
4.11, 5.01(b), 5.01(c), 5.02 (only with respect to the amount of time in which
the Servicer is required to remit Collections to the Collection Account which,
in the case of Xxxxx Fargo Bank, National Association, after the Assumption
Date, will be within one (1) Business Day of receipt of such Collections with
respect to cleared funds, and in all other cases will be within three (3)
Business Days of receipt of such Collections), 5.09(b), 5.10(b), 7.01, 7.02
(provided that the Backup Servicer shall be liable under Section 7.02(iii) of
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the Sale and Servicing Agreement as to action taken by it as successor
Servicer), 7.03, 7.06, 8.01(v), 9.05 or 10.01(b).
SECTION 2.4. Servicing and Retention of Servicer.
(a) Subject to early termination of the Backup Servicer due to the
occurrence of a Backup Servicer Event of Default, or pursuant to Article 4, or
as otherwise provided in this Section 2.4, on and after the Assumption Date, the
Backup Servicer shall be responsible for the servicing, administering, managing
and collection of the Dealer Loans and Contracts in accordance herewith and the
Sale and Servicing Agreement.
(b) In the event of a Backup Servicer Event of Default, the Class A
Insurer shall have the right to terminate the Backup Servicer as successor
Servicer and Backup Servicer hereunder. Upon the termination or resignation of
the Backup Servicer hereunder, the Class A Insurer shall have the right to
appoint a successor Backup Servicer (the "Successor Backup Servicer") and enter
into a backup servicing agreement with such Successor Backup Servicer at such
time and exercise all of its rights under Section 4.15 of the Sale and Servicing
Agreement; provided, however, that if such termination or resignation of the
Backup Servicer occurs prior to the Assumption Date, the appointment of the
Successor Backup Servicer shall be mutually acceptable to Credit Acceptance and
the Class A Insurer. Such backup servicing agreement shall specify the duties
and obligations of the Successor Backup Servicer, and all references herein and
in the Sale and Servicing Agreement to the Backup Servicer shall be deemed to
refer to such Successor Backup Servicer.
(c) The Backup Servicer shall not resign from the obligations and
duties imposed on it by this Agreement or the Sale and Servicing Agreement, as
successor servicer or as Backup Servicer, as applicable, except upon a
determination that by reason of a change in legal requirements, the performance
of its duties hereunder or under the Sale and Servicing Agreement would cause it
to be in violation of such legal requirements in a manner which would have a
material adverse effect on the Backup Servicer, and the Class A Insurer does not
elect to waive the obligations of the Backup Servicer to perform the duties
which render it legally unable to act or to delegate those duties to another
Person. Any such determination permitting the resignation of the Backup Servicer
pursuant to this Section 2.4(c) shall be evidenced by an opinion of counsel to
such effect delivered and acceptable to the Class A Insurer. No resignation of
the Backup Servicer shall become effective until an entity reasonably acceptable
to the Class A Insurer shall have assumed the responsibilities and obligations
of the Backup Servicer.
(d) Any Person: (i) into which the Backup Servicer may be merged or
consolidated; (ii) resulting from any merger or consolidation to which the
Backup Servicer shall be a party; (iii) which acquires by conveyance, transfer
or lease substantially all of the assets of the Backup Servicer; or (iv)
succeeding to the business of the Backup Servicer, in any of the foregoing cases
shall execute an agreement of assumption to perform every obligation of the
Backup Servicer under this Agreement and the Sale and Servicing Agreement,
whether or not such assumption agreement is executed, shall be the successor to
the Backup Servicer under this Agreement and the Sale and Servicing Agreement
without the execution or filing of any paper or any further act on the part of
any of the parties to this Agreement or the Sale and Servicing Agreement,
anything herein or therein to the contrary notwithstanding; provided, however,
that
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nothing contained herein or therein shall be deemed to release the Backup
Servicer from any obligation hereunder or under the Sale and Servicing
Agreement.
(e) Following the Assumption Date, beginning with the calendar year
ending December 31, 2007, the Backup Servicer shall be required to deliver to
the Indenture Trustee, the Trust Collateral Agent and the Class A Insurer on or
before one hundred twenty (120) days after the end of the Backup Servicer's
fiscal year, with respect to such fiscal year, a copy of its annual SAS-70 and
its audited financial statements for such fiscal year.
(f) Concurrently with the delivery of the financial reports delivered
under (e) above, a report in substantially the form attached to this Agreement
as Exhibit I and certified by the chief financial officer of the Backup
Servicer, certifying that no Backup Servicer Event of Default and no event
which, with the giving of notice or the passage of time, would become a Backup
Servicer Event of Default has occurred and is continuing or, if any such Backup
Servicer Event of Default or other event has occurred and is continuing, such a
Backup Servicer Event of Default has occurred and is continuing, the action
which the Backup Servicer has taken or proposes to take with respect thereto,
shall be delivered to the Indenture Trustee, the Trust Collateral Agent and the
Class A Insurer.
SECTION 2.5. Servicing Duties of the Backup Servicer. On and after the
Assumption Date:
(a) The Backup Servicer shall take or cause to be taken all such
action as may be necessary or advisable to collect all amounts due under the
Dealer Loans and Contracts from time to time, all in accordance with applicable
laws, rules and regulations, with reasonable care and diligence, and in
accordance with the Collection Guidelines. There shall be no recourse to the
Backup Servicer with regard to the Dealer Loans and Contracts. The Backup
Servicer shall hold in trust for the Trust Collateral Agent all records which
evidence or relate to all or any part of the Trust Estate. In the event that a
Successor Backup Servicer is appointed, the outgoing Backup Servicer shall
deliver to the Successor Backup Servicer and the Successor Backup Servicer shall
hold in trust for the Trust Collateral Agent all records which evidence or
relate to all or any part of the Trust Estate.
(b) The Backup Servicer shall as soon as practicable upon demand,
deliver to the Issuer all records in its possession which evidence or relate to
indebtedness of an Obligor which is not a Dealer Loan or Contract.
(c) The Backup Servicer shall remit to the Collection Account within
two (2) Business Days of receipt, all Collections.
(d) In addition to the obligations of the Backup Servicer under this
Agreement, the Backup Servicer shall perform all of the obligations of the
Servicer as servicer under the Sale and Servicing Agreement, except as set forth
in Section 2.3(b) hereof or as otherwise modified by this Agreement or the Sale
and Servicing Agreement. Without limiting the foregoing and anything provided
for herein, the Backup Servicer shall perform the following in substantially the
same manner and level at which Credit Acceptance performs such on the date
hereof: (a) customer service inquiries/responsibilities; (b) collections on
delinquent and charged-
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off contracts; (c) insurance monitoring and the making of claims with respect
thereto; (d) creating the Servicer's Certificates; (e) repossession and other
legal actions; (f) statements to performing contracts and other correspondence;
(g) reconciliation of dealer holdback payments; (h) inventory management; (i)
maintenance of lock-box accounts; (j) electronic skip tracing; and (k) document
storage and title maintenance.
SECTION 2.6. Other Obligations of the Backup Servicer and Servicer.
(a) No later than 45 days after the Closing Date, Credit Acceptance
shall provide a Live Data File (as defined below) transmission to the Backup
Servicer, which shall include the Dealer Loan and Contract master file, the
transaction history file and all other files necessary to carry out the
Service-Related Activities received in connection herewith (the "Live Data
Files"). Within 60 days of the Closing Date, the Backup Servicer shall convert
the Live Data Files to its internal systems, and no later than five (5) Business
Days after the receipt thereof, shall confirm in writing to Credit Acceptance
the accuracy and completeness of the conversion; provided, however, that such
confirmation shall not be deemed to apply to the accuracy of the Live Data Files
as provided by Credit Acceptance, but shall be deemed only to apply to the
accuracy of the conversion of the Live Data Files to the Backup Servicer's
internal systems. In the event of any changes in format with respect to either
Credit Acceptance or the Backup Servicer, Credit Acceptance and the Backup
Servicer shall coordinate with each other for the replacement of the data files
with files in the correct format, modified accordingly.
(b) In connection with the Backup Servicer assuming the obligations of
Servicer hereunder and under the Sale and Servicing Agreement, Credit Acceptance
agrees that it shall: (i) promptly make available to the Backup Servicer access
to all records and information in the possession of Credit Acceptance related to
the Dealer Loans and the Contracts as may be necessary or reasonably requested
by the Backup Servicer in connection with the performance of the Backup
Servicer's obligations hereunder and thereunder; and (ii) cooperate in good
faith with the Backup Servicer and the Trust Collateral Agent in connection with
any transition of the servicing of the Dealer Loans and Contracts to the Backup
Servicer.
SECTION 2.7. Servicing Compensation. As compensation for the performance of
its obligations under this Agreement and with respect to the Sale and Servicing
Agreement, the Backup Servicer is entitled to: (i) prior to the Assumption Date,
the Backup Servicing Fee and (ii) after the Assumption Date, the sum of: (A) the
Servicing Fee, (B) any Repossession Expenses, (C) any Reliening Expenses and (D)
any Transition Expenses.
SECTION 2.8. Trust Collateral Agent's Rights. At any time following the
Assumption Date:
(a) The Trust Collateral Agent or the Backup Servicer may direct that
payment of all amounts payable under any Dealer Loans or Contracts be made
directly to the Backup Servicer, the Trust Collateral Agent or its designee.
(b) The Servicer shall, (unless otherwise directed by the Trust
Collateral Agent) (i) assemble all of the records relating to the Trust Estate
and shall make the same available to the Backup Servicer (or the Trust
Collateral Agent if so directed by the Trust
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Collateral Agent) at a place selected by the Backup Servicer or the Trust
Collateral Agent, as applicable; provided, however, that the Servicer will be
entitled to retain copies of all records provided pursuant to this Section
2.8(b), and (ii) segregate all cash, checks and other instruments received by it
from time to time constituting Collections in a manner acceptable to the Trust
Collateral Agent and shall, promptly upon receipt but no later than one (1)
Business Day after receipt, remit all such cash, checks and instruments, duly
endorsed or with duly executed instruments of transfer, as directed by the Trust
Collateral Agent or the Backup Servicer.
(c) Credit Acceptance hereby authorizes the Trust Collateral Agent and
the Backup Servicer to take any and all steps in Credit Acceptance's name and on
behalf of Credit Acceptance necessary or desirable, in the determination of the
Backup Servicer or the Trust Collateral Agent acting in "good faith" (as such
term is defined in Article 9 of the UCC), to collect all amounts due under any
and all of the Dealer Loans, including, without limitation, endorsing Credit
Acceptance's name on checks and other instruments representing Collections and
enforcing the Dealer Loans and Contracts; provided, however, that the Trust
Collateral Agent shall not have an affirmative obligation to carry out such
duties.
SECTION 2.9. Liability of the Backup Servicer; Standard of Care.
(a) The Backup Servicer shall not be liable for its actions or
omissions hereunder except for its negligence, willful misconduct or breach of
this Agreement not caused by another party to this Agreement, or for any
recitals, statements, representations or warranties made expressly by the Backup
Servicer.
(b) The Backup Servicer shall indemnify, defend and hold harmless the
Servicer and its respective officers, directors, agents and employees from and
against any and all costs, expenses, losses, claims, damages and liabilities to
the extent that such cost, expense, loss, claim, damage or liability arose out
of, or was imposed upon the Servicer through the Backup Servicer's breach of
this Agreement, the willful misfeasance, bad faith or negligence of the Backup
Servicer in the performance of its duties under this Agreement or by reason of
reckless disregard of its obligations and duties under this Agreement.
(c) The Servicer shall indemnify, defend and hold harmless the Backup
Servicer and its respective officers, directors, agents and employees from and
against any and all costs, expenses, losses, claims, damages and liabilities to
the extent that such cost, expense, loss, claim, damage or liability arose out
of, or was imposed upon the Backup Servicer through the Servicer's breach of
this Agreement, the willful misfeasance, bad faith or negligence of the Servicer
in the performance of its duties under this Agreement or by reason of reckless
disregard of its obligations and duties under this Agreement.
(d) The Backup Servicer may accept and reasonably rely on all
accounting and servicing records and other documentation provided to the Backup
Servicer by or at the direction of the Servicer, including documents prepared or
maintained by any originator, or previous servicer, or any party providing
services related to the Dealer Loans or Contracts (collectively, the "Third
Party"). The Servicer agrees to indemnify (subject to the limitation provided in
subsection (e) below) and hold harmless the Backup Servicer, its respective
officers, employees and agents against any and all claims, losses, penalties,
fines, forfeitures, legal fees
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and related costs, judgments, and any other costs, fees and expenses that the
Backup Servicer may sustain in any way related to the negligence or misconduct
of any Third Party with respect to the Dealer Loans or Contracts. The Backup
Servicer shall have no Liability for the acts or omissions of any such Third
Party or for the inaccuracy of any data provided, produced or supplied by such
Third Party. If any Error exists in any information provided to the Backup
Servicer and such Errors cause or materially contribute to the Backup Servicer
making a Continuing Error, the Backup Servicer shall have no liability for such
Continued Errors; provided, however, that this provision shall not protect the
Backup Servicer against any liability which would otherwise be imposed by reason
of willful misfeasance, bad faith or gross negligence in discovering or
correcting any error or in the performance of its duties contemplated herein.
(e) Indemnification under this Article shall include, without
limitation, reasonable fees and expenses of counsel and expenses of litigation.
If the indemnifying party has made any indemnity payments pursuant to this
Article and the recipient thereafter collects any of such amounts from others,
the recipient shall promptly repay such amounts collected to the indemnifying
party, together with any interest earned thereon.
(f) In performing the Service-Related Activities contemplated by this
Agreement, the Backup Servicer agrees to comply in all respects with the
applicable state and federal laws and will carry out such activities with the
same degree of care as that provided for the Servicer under the Sale and
Servicing Agreement. The Backup Servicer shall maintain all state and federal
licenses and franchises necessary for it to perform Service-Related Activities.
The Backup Servicer shall not have any Liability for any Error or Continued
Error by the Servicer, or for any error, inaccuracy or omission of the Servicer
before the Backup Servicer assumes the Service-Related Activities.
(g) Neither the Backup Servicer nor any of the directors or officers
or employees or agents of the Backup Servicer shall be under any liability to
the Servicer or any party to this Agreement or the Sale and Servicing Agreement
except as provided in this Agreement, for any action taken or for refraining
from the taking of any action in good faith pursuant to this Agreement;
provided, however, that this provision shall not protect the Backup Servicer or
any such person against any liability that would otherwise be imposed by reason
of a breach of this Agreement or willful misfeasance, bad faith or gross
negligence (excluding errors in judgment) in the performance of duties, by
reason of reckless disregard of obligations and duties under this Agreement or
any violation of law by the Backup Servicer or such person, as the case may be.
The Backup Servicer and any director, officer, employee or agent of the Backup
Servicer may conclusively rely and shall be fully protected in acting or
refraining from acting upon any document, certificate, instrument, opinion,
notice, statement, consent, resolution, entitlement order, approval or
conversation believed by it to be genuine and made by the proper person and upon
the advice or opinion of counsel or other experts selected by it. The Backup
Servicer shall not be liable for an error of judgment made in good faith by a
Responsible Officer of the Backup Servicer, unless it shall be proven that the
Backup Servicer was negligent in ascertaining the pertinent facts.
(h) The Backup Servicer shall maintain its existence and rights as a
national banking association under the laws of the jurisdiction of its
organization, and will obtain and
11
preserve its qualification to do business in each jurisdiction in which the
failure to so qualify would have an adverse effect on the validity or
enforceability of any Contract, Dealer Agreement, this Agreement or on the
ability of the Backup Servicer to perform its duties under this Agreement.
(i) The provisions of this Section shall survive the termination of
this Agreement.
(j) The Backup Servicer shall not be bound to make any investigation
into the facts or matters stated in any resolution, certificate, statement,
instrument, opinion, report, notice, request, consent, entitlement order,
approval or other paper or document.
(k) The Backup Servicer may execute any of the trusts or powers
hereunder or perform any duties hereunder either directly or by or through
agents, attorneys, custodians or nominees appointed with due care.
(l) To the extent that the Backup Servicer is not indemnified by the
Servicer pursuant to Section 2.2 hereunder and under the Sale and Servicing
Agreement, such amounts shall be reimbursable by the Issuer pursuant to Section
5.08(a) of the Sale and Servicing Agreement.
SECTION 2.10. Monthly Backup Servicer's Certificate. Prior to the
Assumption Date, on or before 12:00 noon (New York City time) on the Business
Day preceding each Distribution Date, the Backup Servicer shall deliver or cause
to be delivered to the Class A Insurer and the Trust Collateral Agent a
certificate (the "Backup Servicer's Certificate"), in form and substance
satisfactory to the Class A Insurer, signed by an officer of the Backup
Servicer, stating that: (i) the Backup Servicer has loaded the Servicer's Data
File as described in Section 2.1(a) on its hardware; (ii) a review of the
Servicer's Certificate for the related Distribution Date has been made under
such officer's supervision; (iii) the Backup Servicer has received the Live Data
File described in Section 2.6(a); and (iv) to such officer's knowledge: (x) the
electronic media is in readable form; (y) with respect to the review and
verification set forth in Section 2.2(a) and 2.2(b), the data on the Servicer's
Data File tie to the related Servicer's Certificate resulting in no
discrepancies between them; and (z) the Servicer's Certificate does not contain
any errors in accordance with the review criteria set forth in Section 2.2(a)
hereunder. If the preceding statements cannot be made in the affirmative, the
applicable officer shall state the nature of any and all anomalies,
discrepancies and errors, and indicate all actions it is currently taking with
the Servicer to reconcile and/or correct the same. Each Backup Servicer's
Certificate shall be dated as of the related Determination Date. Upon the
request of the Indenture Trustee, the Trust Collateral Agent or the Class A
Insurer, a Backup Servicer's Certificate shall be accompanied by copies of any
third party reports relied on or obtained in connection with the Backup
Servicer's duties hereunder. The Backup Servicer, with respect to the Backup
Servicer's Certificate, shall not be responsible for delays attributable to the
failure of the Servicer or any other Person to deliver information, defects in
the information supplied by the Servicer or any other Person or other
circumstances beyond the control of the Backup Servicer. After the Assumption
Date, the Backup Servicer shall deliver the Servicer's Certificate in accordance
with Section 4.09 of the Sale and Servicing Agreement.
12
SECTION 2.11. Backup Servicer's Expenses. The Backup Servicer shall be
required to pay all expenses incurred by it in connection with its activities
hereunder, including fees and disbursements of independent accountants, taxes
imposed on the Backup Servicer and expenses incurred in connection with
distributions and reports to the Servicer, the Trust Collateral Agent and the
Class A Insurer. When the Backup Servicer incurs expenses after the occurrence
of a Servicer Default specified in Section 8.01 of the Sale and Servicing
Agreement or an Indenture Event of Default specified in Section 5.1 of the
Indenture, the parties hereto intend that such expenses constitute expenses of
administration under the Bankruptcy Code or any other applicable Federal or
State bankruptcy, insolvency or similar law.
ARTICLE 3
REPRESENTATIONS AND WARRANTIES
SECTION 3.1. Representations and Warranties of the Backup Servicer. The
Backup Servicer represents, warrants and covenants as of the date of execution
and delivery of this Agreement:
(a) Organization and Good Standing. The Backup Servicer has been duly
organized and is validly existing as a national banking association in good
standing under the laws of its jurisdiction, with power, authority and legal
right to own its properties and to conduct its business as such properties are
currently owned and such business is currently conducted, and had at all
relevant times, and now has, power, authority and legal right to enter into and
perform its obligations under this Agreement or the Sale and Servicing
Agreement.
(b) Due qualification. The Backup Servicer is duly qualified to do
business as a national banking association in good standing, and has obtained
all necessary licenses and approvals, in all jurisdictions where the failure to
do so would materially and adversely affect the performance of its obligations
under this Agreement or the Sale and Servicing Agreement.
(c) Power and Authority. The Backup Servicer has the power and
authority to execute and deliver this Agreement and to carry out the terms
hereof; and the execution, delivery and performance of this Agreement have been
duly authorized by the Backup Servicer by all necessary corporate action.
(d) Binding Obligation. This Agreement shall constitute the legal,
valid and binding obligation of the Backup Servicer enforceable in accordance
with its terms, except as enforceability may be limited by bankruptcy,
insolvency, reorganization or other similar laws affecting the enforcement of
creditors' rights generally and by equitable limitations on the availability of
specific remedies, regardless of whether such enforceability is considered in a
proceeding in equity or at law.
(e) No Violation. The execution and delivery of this Agreement, the
consummation of the transactions contemplated by this Agreement, and the
fulfillment of the terms hereof, shall not conflict with, result in any breach
of any of the terms and provisions of, or constitute (with or without notice or
lapse of time, or both) a default under, the certificate of incorporation or
bylaws of the Backup Servicer, or any indenture, agreement, mortgage, deed of
trust or other instrument to which the Backup Servicer is a party or by which it
is bound, or result
13
in the creation or imposition of any lien upon any of its properties pursuant to
the terms of any such indenture, agreement, mortgage, deed of trust or other
instrument, other than this Agreement, or violate any law, order, rule or
regulation applicable to the Backup Servicer of any court or of any federal or
state regulatory body, administrative agency or other governmental
instrumentality having jurisdiction over the Backup Servicer or any of its
properties.
(f) No Proceedings. There are no proceedings or investigations pending
or, to the Backup Servicer's knowledge, threatened against the Backup Servicer,
before any court, regulatory body, administrative agency or other tribunal or
governmental instrumentality having jurisdiction over the Backup Servicer or its
properties: (i) asserting the invalidity of this Agreement, (ii) seeking to
prevent the consummation of any of the transactions contemplated by this
Agreement, or (iii) seeking any determination or ruling that might materially
and adversely affect the performance by the Backup Servicer of its obligations
under, or the validity or enforceability of, this Agreement.
(g) The Backup Servicer is not required to obtain the consent of any
other party or any consent, license, approval or authorization, or registration
or declaration with, any governmental authority, bureau or agency in connection
with the execution, delivery, performance, validity or enforceability of this
Agreement.
(h) Facilities. The Backup Servicer has adequate facilities and
employees in place to handle the following, in accordance with its Collection
Guidelines, including, but not limited to: (i) customer service
inquiries/responsibilities; (ii) collections on delinquent and charged-off
contracts; (iii) insurance monitoring and the making of claims with respect
thereto; (iv) creating the Servicer's Certificate; (v) repossession and other
legal actions; (vi) statements to performing accounts and other correspondence;
(vii) reconciliation of dealer holdback payments; (viii) inventory management;
(ix) maintenance of lock-box accounts; (x) electronic skip tracing; and (xi)
document storage and title maintenance.
(i) The Backup Servicer shall take all actions it deems necessary to
commence servicing within 30 days of receipt of written notice from the Class A
Insurer, including without limitation, hiring and training new personnel and
purchasing any necessary equipment.
(j) The Backup Servicer will keep gateways, hardware, software,
systems and the interface used to fulfill its obligations hereunder up-to-date
as necessary to ensure continuing compatibility with Credit Acceptance's
systems, utilized by Credit Acceptance in its capacity as Servicer, and
otherwise maintain a technology platform that will enable the Backup Servicer to
fulfill its obligations at all times, provided that the Backup Servicer will not
be responsible for ensuring compatibility with systems changed or modified by
Credit Acceptance unless Credit Acceptance notifies the Backup Servicer of such
changes or modifications.
(k) The Backup Servicer and all of its employees performing the
services described hereunder will perform such services in accordance with
industry standards applicable to the performance of such services, and with the
same degree of care as it applies to the performance of such services for any
assets which the Backup Servicer holds for its own account.
14
(l) Upon a Backup Servicer Event of Default, the Backup Servicer shall
promptly notify the Class A Insurer, or, if a Class A Insurer Default has
occurred and is continuing, the Indenture Trustee who shall distribute such
notice to the Class A Noteholders, that a Backup Servicer Event of Default has
occurred.
ARTICLE 4
TERMINATION
SECTION 4.1. Backup Servicer Event of Default.
For purposes of this Agreement, any of the following shall constitute
a "Backup Servicer Event of Default":
(a) Failure on the part of the Backup Servicer duly to observe or
perform in any material respect any covenant or agreement of the Backup Servicer
set forth in this Agreement, which failure continues unremedied for a period of
30 days after the date on which written notice of such failure, requiring the
same to be remedied, shall have been given to the Backup Servicer by the Class A
Insurer.
(b) Any failure by the Backup Servicer (x) after the Assumption Date
to deposit to the Collection Account any amount required to be deposited by the
Servicer (except for any amounts required to be deposited by the Servicer under
Section 4.07 of the Sale and Servicing Agreement) and such failure shall
continue unremedied for a period of two (2) days or (y) to deliver to the Trust
Collateral Agent or the Class A Insurer the Backup Servicer's Certificate on the
related Distribution Date that shall continue unremedied for a period of one (1)
Business Day.
(c) The entry of a decree or order by a court or agency or supervisory
authority having jurisdiction in the premises for the appointment of a
conservator, receiver, or liquidator for the Backup Servicer in any insolvency,
readjustment of debt, marshalling of assets and liabilities, or similar
proceedings, or for the winding up or liquidation of its respective affairs, and
the continuance of any such decree or order unstayed and in effect for a period
of 60 consecutive days or the entry of any decree or order for relief in respect
of the Backup Servicer under any bankruptcy, reorganization, compromise,
arrangement, insolvency, readjustment of debt, or similar law, whether now or
hereafter in effect, which decree or order for relief continues unstayed and in
effect for a period of 60 consecutive days.
(d) The consent by the Backup Servicer to the appointment of a
conservator or receiver or liquidator in any insolvency, readjustment of debt,
marshalling of assets and liabilities, or similar proceedings of or relating to
the Backup Servicer or relating to substantially all of its property; or the
admission by the Backup Servicer in writing of its inability to pay its debts
generally as they become due, the filing by the Backup Servicer of a petition to
take advantage of any applicable insolvency or reorganization statute, the
making by the Backup Servicer of an assignment for the benefit of its creditors,
or the voluntarily suspension by the Backup Servicer of payment of its
obligations.
(e) Any representation, warranty or statement of the Backup Servicer
made in this Agreement or any certificate, report or other writing delivered by
the Backup Servicer
15
pursuant hereto shall prove to be incorrect in any material respect as of the
time when the same shall have been made and, within 30 days after written notice
thereof shall have been given to the Backup Servicer by the Class A Insurer, the
circumstances or condition in respect of which such representation, warranty or
statement was incorrect shall not have been eliminated or otherwise cured.
SECTION 4.2. Consequences of a Backup Servicer Event of Default.
If a Backup Servicer Event of Default has occurred and is continuing,
the Class A Insurer may, by notice given in writing to the Backup Servicer,
terminate all of the rights and obligations of the Backup Servicer under this
Agreement. On or after the receipt by the Backup Servicer of such written
notice, all authority, power, obligations and responsibilities of the Backup
Servicer under this Agreement shall be terminated. The terminated Backup
Servicer agrees to cooperate with the Class A Insurer in effecting the
termination of the responsibilities and rights of the terminated Backup Servicer
under this Agreement.
SECTION 4.3. Backup Servicing Termination.
Prior to the time the Backup Servicer receives a notice from the Trust
Collateral Agent that the Backup Servicer will become the Servicer, the Backup
Servicer may terminate this Agreement for any reason in its sole judgment and
discretion upon delivery of 90 days advance written notice to the Class A
Insurer or the Trust Collateral Agent of such termination.
SECTION 4.4. Return of Confidential Information.
Upon termination of this Agreement, the Backup Servicer shall, at the
direction of the Class A Insurer or the Trust Collateral Agent, promptly return
all written confidential information and any related electronic and written
files and correspondence in its possession as are related to this Agreement and
the Service-Related Activities contemplated hereunder. The Backup Servicer shall
provide reasonable access to its facilities and assistance to any successor
servicer or other party assuming the servicing responsibilities, provided,
however, that such access shall not unreasonably interfere with the Backup
Servicer conducting its day to day operations.
ARTICLE 5
MISCELLANEOUS
SECTION 5.1. Notices, Etc.
(a) On and after the Assumption Date, Credit Acceptance and the Trust
Collateral Agent hereby agree to provide to the Backup Servicer all notices
required to be provided to the Servicer pursuant to the Sale and Servicing
Agreement and the other Basic Documents, as well as a hard copy sent by a
nationally recognized courier service with item tracking capability.
(b) Except where telephonic instructions or notices are authorized
herein to be given, all notices, demands, instructions and other communications
required or permitted to be given to or made upon any party hereto shall be in
writing and shall be sent electronically or by facsimile transmission with a
confirmation of the receipt thereof and shall be deemed to be given
16
for purposes of this Agreement on the day that the receipt of such facsimile
transmission is confirmed in accordance with the provisions of this Section 5.1.
Unless otherwise specified in a notice sent or delivered in accordance with the
foregoing provisions of this Section, notices, demands, instructions (including
payment instructions) and other communications in writing shall be given to or
made upon the respective parties hereto at their respective addresses and
accounts indicated below, and, in the case of telephonic instructions or
notices, by calling the telephone number or numbers indicated for such party
below:
If to the Issuer:
Credit Acceptance Auto Dealer Loan Trust 2007-1
c/o U.S. Trust Bank National Association
000 Xxxxxxxx Xxxxxx, 0xx Xxxxx
Xxxxxxxxxx, XX 00000
Telephone: (000) 000-0000
Telecopy: (000) 000-0000
If to the Servicer:
Credit Acceptance Corporation
Silver Triangle Building
00000 Xxxx Xxxxxx Xxxx Xxxx, Xxxxx 0000
Xxxxxxxxxx, Xxxxxxxx 00000-0000
Attention: Xxxxx Xxxxxxx
Telephone: (000) 000-0000 (ext. 4217)
Telecopy: (000) 000-0000
If to the Trust Collateral Agent:
Xxxxx Fargo Bank, National Association
MAC #0000-000
Xxxxx Xxxxxx and Xxxxxxxxx Xxxxxx
Xxxxxxxxxxx, Xxxxxxxxx 00000
Attention: Corporate Trust Services - Asset-Backed Administration
Telephone: (000) 000-0000
Telecopy: (000) 000-0000
If to the Class A Insurer:
XL Capital Assurance Inc.
1221 Avenue of the Xxxxxxxx
00xx Xxxxx
Xxx Xxxx, XX 00000-0000
Attention: Surveillance
Telephone: (000) 000-0000
Telecopy: (000) 000-0000
17
If to the Backup Servicer:
Xxxxx Fargo Bank, National Association
MAC #0000-000
Xxxxx Xxxxxx and Xxxxxxxxx Xxxxxx
Xxxxxxxxxxx, Xxxxxxxxx 00000
Attention: Corporate Trust Services - Asset-Backed Administration
Telephone: (000) 000-0000
Telecopy: (000) 000-0000
SECTION 5.2. Successors and Assigns. This Agreement shall be binding upon
the Backup Servicer, and shall inure to the benefit of the Trust Collateral
Agent and the Class A Insurer and their respective successors and permitted
assigns; provided that the Backup Servicer shall not assign any of its rights or
obligations hereunder without the prior written consent of the Class A Insurer,
and any such assignment in contradiction of the foregoing shall be null and
void.
SECTION 5.3. No Bankruptcy Petition Against the Seller and the Issuer. The
parties hereto agree that until one year and one day after such time as the
Class A Notes issued under the Indenture are paid in full, they shall not: (i)
institute the filing of a bankruptcy petition against the Seller or the Issuer
based upon any claim in its favor arising hereunder or under the Basic
Documents; (ii) file a petition or consent to a petition seeking relief on
behalf of the Seller or the Issuer under the Bankruptcy Law; or (iii) consent to
the appointment of a receiver, liquidator, assignee, trustee, sequestrator (or
similar official) of the Seller or the Issuer or any portion of the property of
the Seller or the Issuer. The parties hereto agree that all obligations of the
Issuer and the Seller are non-recourse to the Issuer and the Seller except as
specifically set forth in the Basic Documents.
SECTION 5.4. Reserved.
SECTION 5.5. Severability Clause. Any provisions of this Agreement which
are prohibited or unenforceable in any jurisdiction shall, as to such
jurisdiction, be ineffective to the extent of such prohibition or
unenforceability without invalidating the remaining provisions hereof, and any
such prohibition or unenforceability in any jurisdiction shall not invalidate or
render unenforceable such provision in any other jurisdiction.
SECTION 5.6. Amendments. This Agreement and the rights and obligations of
the parties hereunder may not be changed orally but only by an instrument in
writing signed by the parties hereto.
SECTION 5.7. GOVERNING LAW. THIS AGREEMENT SHALL BE GOVERNED BY AND
CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK WITHOUT GIVING
EFFECT TO THE CONFLICTS OF LAW PRINCIPLES THEREOF.
SECTION 5.8. Counterparts. This Agreement may be executed in any number of
copies, and by the different parties hereto on the same or separate
counterparts, each of which shall be deemed to be an original instrument.
18
SECTION 5.9. Headings. Section headings used in this Agreement are for
convenience of reference only and shall not affect the construction or
interpretation of this Agreement.
[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]
19
IN WITNESS WHEREOF, the Servicer, the Class A Insurer, the Backup
Servicer, the Trust Collateral Agent, the Issuer and the Seller have caused this
Backup Servicing Agreement to be executed by their respective officers thereunto
duly authorized as of the day and year first above written.
CREDIT ACCEPTANCE CORPORATION,
as Servicer
By: /s/ Xxxxxxx X. Xxxx
-----------------------------------
Name: Xxxxxxx X. Xxxx
Title: Treasurer
XL CAPITAL ASSURANCE INC.,
as Class A Insurer
By: /s/ Xxxxxxxxx X. Xxx
-----------------------------------
Name: Xxxxxxxxx X. Xxx
Title: Managing Director, Group Head
XXXXX FARGO BANK, NATIONAL ASSOCIATION,
as Backup Servicer and Trust
Collateral Agent
By: /s/ Xxxxxxxx X. Xxxxxxxx
-----------------------------------
Name: Xxxxxxxx X. Xxxxxxxx
Title: Vice President
CREDIT ACCEPTANCE AUTO DEALER LOAN
TRUST 2007-1, as Issuer
By: U.S. Bank Trust National
Association, not in its individual
capacity but solely as Owner
Trustee
By: /s/ Xxxxxxxx X. Xxxxxxx
-----------------------------------
Name: Xxxxxxxx X. Xxxxxxx
Title: Vice President
CREDIT ACCEPTANCE FUNDING LLC 2007-1,
as Seller
By: /s/ Xxxxxxx X. Xxxx
-----------------------------------
Name: Xxxxxxx X. Xxxx
Title: Treasurer
-i-
Exhibit I
Backup Servicer Certification
-ii-
TABLE OF CONTENTS
PAGE
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ARTICLE 1 DEFINITIONS.................................................... 1
SECTION 1.1. Definitions............................................. 1
SECTION 1.2. Usage of Terms.......................................... 2
SECTION 1.3. Section References...................................... 2
ARTICLE 2 ADMINISTRATION AND COLLECTION.................................. 3
SECTION 2.1. Reconciliation of Servicer's Certificate................ 3
SECTION 2.2. Review and Verification................................. 4
SECTION 2.3. Assumption of Servicer's Obligations.................... 6
SECTION 2.4. Servicing and Retention of Servicer..................... 7
SECTION 2.5. Servicing Duties of the Backup Servicer................. 8
SECTION 2.6. Other Obligations of the Backup Servicer and Servicer... 9
SECTION 2.7. Servicing Compensation.................................. 9
SECTION 2.8. Trust Collateral Agent's Rights......................... 9
SECTION 2.9. Liability of the Backup Servicer; Standard of Care...... 10
SECTION 2.10. Monthly Backup Servicer's Certificate................... 12
SECTION 2.11. Backup Servicer's Expenses.............................. 13
ARTICLE 3 REPRESENTATIONS AND WARRANTIES................................. 13
SECTION 3.1. Representations and Warranties of the Backup Servicer... 13
ARTICLE 4 TERMINATION.................................................... 15
SECTION 4.1. Backup Servicer Event of Default........................ 15
SECTION 4.2. Consequences of a Backup Servicer Event of Default...... 16
SECTION 4.3. Backup Servicing Termination............................ 16
SECTION 4.4. Return of Confidential Information...................... 16
ARTICLE 5 MISCELLANEOUS.................................................. 16
SECTION 5.1. Notices, Etc............................................ 16
SECTION 5.2. Successors and Assigns.................................. 18
SECTION 5.3. No Bankruptcy Petition Against the Seller and the
Issuer.................................................. 18
SECTION 5.4. Reserved................................................ 18
SECTION 5.5. Severability Clause..................................... 18
SECTION 5.6. Amendments.............................................. 18
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TABLE OF CONTENTS
(continued)
PAGE
----
SECTION 5.7. Governing Law........................................... 18
SECTION 5.8. Counterparts............................................ 18
SECTION 5.9. Headings................................................ 19
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