FORM OF POOLING AND SERVICING AGREEMENT
among
ASSET BACKED SECURITIES CORPORATION,
as Company,
[ ],
as Servicer
and
[ ],
as Trustee
on behalf of the Certificateholders
Dated as of ___________
CS FIRST BOSTON AUTO RECEIVABLES TRUST 199__
___% Asset Backed Certificates, Class A
___% Asset Backed Certificates, Class B
Table of Contents
Page
ARTICLE I
Definitions.........................1
Section 1.01. Definitions..................................1
ARTICLE II
Conveyance of Receivables; Original Issuance of Certificates17
Section 2.01. Conveyance of Receivables..................17
Section 2.02. Acceptance by Trustee......................18
Section 2.03. Representations and Warranties of
the Company................................18
Section 2.04. Repurchase Upon Breach.....................22
Section 2.05. Custody of Receivable Files................22
Section 2.06. Duties of Servicer as Custodian............23
Section 2.07. Instructions; Authority to Act.............24
Section 2.08. Custodian's Indemnification................24
Section 2.09. Effective Period and Terminations..........24
ARTICLE III
Administration and Servicing of Receivables........25
Section 3.01. Duties of Servicer.........................25
Section 3.02. Collection and Allocation of Receivable
Payments...................................25
Section 3.03. Realization Upon Receivables...............26
Section 3.04. Physical Damage Insurance..................26
Section 3.05. Maintenance of Security Interests
in Financed Vehicles.......................27
Section 3.06. Covenants of Servicer......................27
Section 3.07. Purchase of Receivables Upon Breach........27
Section 3.08. Servicing Fee..............................27
Section 3.09. Servicer's Certificate.....................28
Section 3.10. Annual Statement as to Compliance;
Notice of Default..........................28
Section 3.11. Annual Independent Certified Public
Accountant's Report........................28
Section 3.12. Access to Certain Documentation and
Information Regarding Receivables..........29
Section 3.13. Servicer Expenses..........................29
Section 3.14. Appointment of Subservicer.................29
ARTICLE IV
Accounts..........................30
Section 4.01. Establishment of Trust Accounts............30
Section 4.02. Reserve Account............................32
[Section 4.03. Yield Supplement Account..................35
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ARTICLE V
Payments and Statements to Certificateholders.......36
Section 5.01. Collections................................36
Section 5.02. Application of Collections.................36
Section 5.03. Advances...................................37
Section 5.04. Additional Deposits........................38
Section 5.05. Deposits...................................38
Section 5.06. Statements to Certificateholders...........41
Section 5.07. Accounting and Tax Returns.................42
Section 5.08. Net Deposits...............................42
ARTICLE VI
The Certificates......................42
Section 6.01. The Certificates...........................42
Section 6.02. Authentication of Certificates. ...........43
Section 6.03. Registration of Transfer and Exchange of
Certificates...............................43
Section 6.04. Mutilated, Destroyed, Lost or Stolen
Certificates...............................44
Section 6.05. Persons Deemed Owners......................44
Section 6.06. Access to List of Certificateholders'
Name and Addresses.........................44
Section 6.07. Maintenance of Office or Agency............45
Section 6.08. Book-Entry Certificates....................45
Section 6.09. Notices to Clearing Agency.................46
Section 6.10. Definitive Certificates....................46
[Section 6.11. Limitations on Transfer of the
Class B Certificates.......................47
ARTICLE VII
The Company........................49
Section 7.01. The Company's Representations..............49
Section 7.02. Corporate Existence........................50
Section 7.03. Liabilities of the Company. ..............50
Section 7.04. Merger or Consolidation of, or Assumption
of the Obligations of, the Company.........50
Section 7.05. Limitation on Liability of the
Company and Others.........................51
Section 7.06. The Company May Own Certificates...........51
ARTICLE VIII
The Servicer........................52
Section 8.01 Representations of Servicer................52
Section 8.02. Indemnities of Servicer....................53
Section 8.03. Merger or Consolidation of, or Assumption
of the Obligations of, Servicer............54
Section 8.04. Limitation on Liability of Servicer
and Others.................................54
ARTICLE IX
Default..........................55
Section 9.01. Events of Default..........................55
Section 9.02. Appointment of Successor...................57
Section 9.03. Repayment of Advances......................57
Section 9.04. Notification of Certificateholders.........58
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Section 9.05. Waiver of Past Defaults....................58
ARTICLE X
The Trustee........................58
Section 10.01. Duties of Trustee.........................58
Section 10.02. Certain Matters Affecting Trustee.........59
Section 10.03. Trustee Not Liable for Certificates
or Receivables............................60
Section 10.04. Trustee May Own Certificates..............61
Section 10.05. Trustee's Fees and Expenses...............61
Section 10.06. Eligibility Requirements for Trustee......61
Section 10.07. Resignation or Removal of Trustee.........61
Section 10.08. Successor Trustee.........................62
Section 10.09. Merger or Consolidation of Trustee........63
Section 10.10. Appointment of Co-Trustee or Separate
Trustee...................................63
Section 10.11. Representations and Warranties of Trustee.65
ARTICLE XI
Termination........................66
Section 11.01. Termination of the Trust..................66
Section 11.02. Optional Purchase of All Receivables......67
ARTICLE XII
Miscellaneous Provision..................67
Section 12.01. Amendment.................................67
Section 12.02. Protection of Title to Trust..............68
Section 12.03. Separate Counterparts.....................70
Section 12.04. Limitation on Rights of Certificateholders70
Section 12.05. Governing Law.............................71
Section 12.06. Notices...................................71
Section 12.07. Severability of Provisions................71
Section 12.08. Assignment................................72
Section 12.09. Certificates Nonassessable and Fully Paid.72
Section 12.10. Limitations on Rights of Others...........72
Section 12.11. Headings..................................72
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POOLING AND SERVICING AGREEMENT dated as of ______________, among ASSET BACKED
SECURITIES CORPORATION (the "Company"), as depositor, ____________, as servicer
(the "Servicer"), and ____________, a____________banking corporation, as trustee
(the "Trustee").
RECITALS
WHEREAS, the Company owns certain motor vehicle installment loan
agreements and motor vehicle retail installment sale contracts (collectively,
the "Motor Vehicle Installment Contracts"); and
WHEREAS, the Company and the Trustee wish to set forth the terms and
conditions pursuant to which the Trust (as hereinafter defined) will acquire the
Motor Vehicle Installment Contracts from the Company, and the Servicer will
service the Motor Vehicle Installment Contracts on behalf of the Trust;
NOW, THEREFORE, in consideration of the premises and the mutual
agreements hereinafter set forth, the Company and the Trustee hereby agree as
follows:
ARTICLE I
Definitions
-----------
Section 1.01. Definitions. Whenever used in this Agreement, the
-----------
following words and phrases, unless the context otherwise requires, shall have
the following meanings:
"Account Property" means any account established and maintained
----------------
pursuant to Article IV, all amounts and investments held from time to time in
any such account (whether in the form of deposit accounts, Physical Property,
book-entry securities, uncertificated securities or otherwise), and all proceeds
of the foregoing.
"Advances" means either a Precomputed Advance or a Simple Interest
----------
Advance or both, as applicable .
"Affiliate" means, with respect to any specified Person, any other
---------
Person controlling or controlled by or under common control with such specified
Person. For the purposes of this definition, "control" when used with respect
to any Person means the power to direct the management and policies of such
Person, directly or indirectly, whether through the ownership of voting
securities, by contract or otherwise; and the terms "controlling" and
"controlled" have meanings correlative to the foregoing.
"Agreement" means this Pooling and Servicing Agreement.
-----------
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"Amount Financed" means, with respect to any Receivable, the amount
---------------
advanced under the related Motor Vehicle Installment Contract toward the
purchase price of the Financed Vehicle and any related costs.
"Annual Percentage Rate" or "APR" of a Receivable means the annual
---------------------- ---
rate of finance charges stated in the related Motor Vehicle Installment
Contract.
"Benefit Plan" has the meaning set forth in Section 6.11(b).
------------
"Book-Entry Certificates" means a beneficial interest in the Class A
-----------------------
Certificates ownership and transfers of which shall be registered through book
entries by a Clearing Agency as described in Section 6.08.
"Business Day" means any day other than a Saturday, a Sunday or a day
------------
on which banking institutions or trust companies in ______________ are
authorized or obligated by law, regulation or executive order to be closed.
"Certificate Balance" means, as of any date, the aggregate outstanding
-------------------
principal amount of the Certificates at such date.
"Certificate Owner" means, with respect to a Book-Entry Certificate,
-----------------
the Person who is the beneficial owner of such Book-Entry Certificate, as
reflected on the books of the Clearing Agency or on the books of a Person
maintaining an account with such Clearing Agency (directly as a Clearing Agency
Participant or as an indirect participant, in each case in accordance with the
rules of such Clearing Agency).
"Certificate Pool Factor" means, with respect to each class of
-----------------------
Certificates as of the close of business on the last day of a Collection Period,
a seven-digit decimal figure equal to the outstanding principal amount of such
class of Certificates (after giving effect to any reduction thereof to be made
on the immediately following Distribution Date) divided by the original
outstanding principal amount of such class of Certificates. The Certificate
Pool Factor will be 1.0000000 as of the Closing Date and, thereafter, will
decline to reflect reductions in the outstanding principal amount of such class
of Certificates.
"Certificateholder" or "Holder" means a Person in whose name a
----------------- ------
Certificate is registered in the Certificate Register.
"Certificate Register" and "Certificate Registrar" mean the register
-------------------- ---------------------
maintained and the registrar appointed pursuant to Section 6.03.
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"Certificates" means the Class A Certificates and the Class B
------------
Certificates.
"Class A Certificate" means a ___% Asset Backed Certificate, Class A,
-------------------
evidencing a beneficial interest in the Trust, substantially in the form of
Exhibit A.
"Class A Certificate Balance" means, initially, $__________, and as of
---------------------------
any date of determination thereafter, such initial Class A Certificate Balance
reduced by all amounts previously distributed to Holders of Class A Certificates
and allocable to principal.
"Class A Distributable Amount" means, with respect to any Distribution
----------------------------
Date, the sum of the Class A Principal Distributable Amount and the Class A
Interest Distributable Amount for such date.
"Class A Interest Carryover Shortfall" means, with respect to any
------------------------------------
Distribution Date, the excess of the sum of the Class A Monthly Interest
Distributable Amount for the preceding Distribution Date, and any outstanding
Class A Interest Shortfall on such preceding Distribution Date, over the amount
in respect of interest that Holders of the Class A Certificates actually
received on such preceding Distribution Date, plus 30 days' interest on such
excess, to the extent permitted by law, at the Class A Pass-Through Rate.
"Class A Interest Distributable Amount" means, with respect to any
-------------------------------------
Distribution Date, the sum of the Class A Monthly Interest Distributable Amount
for such Distribution Date and Class A Interest Carryover Shortfall for such
Distribution Date.
"Class A Monthly Interest Distributable Amount" means, with respect to
---------------------------------------------
any Distribution Date, an amount equal to the product of (i) one-twelfth, (ii)
the Class A Pass-Through Rate and (iii) the Class A Certificate Balance on the
preceding Distribution Date (or, the case of the first Distribution Date, the
Closing Date) after giving effect to any amount distributed to Holders of Class
A Certificates on such preceding Distribution Date and allocable to principal.
"Class A Monthly Principal Distributable Amount" means, with respect
----------------------------------------------
to any Distribution Date, the Class A Percentage of the Principal Distribution
Amount.
"Class A Pass-Through Rate" means ___%.
-------------------------
"Class A Percentage" means ___%.
------------------
"Class A Principal Carryover Shortfall" means, as of the close of any
-------------------------------------
Distribution Date, the excess of the Class A Monthly Principal Distributable
Amount and any outstanding Class
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A Principal Carryover Shortfall from the preceding Distribution Date, over the
amount in respect of principal that is actually distributed to Holders of the
Class A Certificates on such current Distribution Date.
"Class A Principal Distributable Amount" means, with respect to any
--------------------------------------
Distribution Date, the excess of the Class A Monthly Principal Distributable
Amount for such Distribution Date and the Class A Principal Carryover Shortfall
as of the closing of the preceding Distribution Date; provided, however, that
the Class A Principal Distributable Amount shall not exceed the Class A
Certificate Balance. In addition, on the Final Scheduled Distribution Date, the
principal required to be included in the Class A Principal Distributable Amount
will include the lesser of (a) the Class A Percentage of (1) any Scheduled
Payments of principal due and remaining unpaid on each Precomputed Receivable
and (2) any principal due and remaining unpaid to each Simple Interest
Receivable, in each case, in the Trust as of the final Scheduled Maturity Date
or (b) the amount that is necessary (after giving effect to the other amounts to
be distributed to Holders of the Class A Certificates on such Distribution Date
and allocable to principal) to reduce the Class A Certificate Balance to zero.
"Class B Certificate" means a ___% Asset Backed Certificate, Class B,
-------------------
evidencing a beneficial interest in the Trust, substantially in the form of
Exhibit B.
"Class B Certificate Balance" means initially, $__________, and as of
---------------------------
any date of determination thereafter, such initial Class B Certificate Balance
reduced by all amounts previously distributed to Holders of Class B Certificates
and allocable to principal.
"Class B Distributable Amount" means, with respect to any Distribution
----------------------------
Date, the sum of the Class B Principal Distributable Amount and the Class B
Interest Distributable Amount.
"Class B Interest Carryover Shortfall" means, with respect to any
------------------------------------
Distribution Date, the excess of the sum of the Class B Interest Distributable
Amount for the preceding Distribution Date and any outstanding Class B Interest
Carryover Shortfall on such preceding Distribution Date, over the amount in
respect of interest that Holders of the Class B Certificates actually received
on such preceding Distribution Date, plus 30 days' interest on such excess, to
the extent permitted by law, at the Class B Pass-Through Rate.
"Class B Interest Distributable Amount" means, with respect to any
-------------------------------------
Distribution Date, the sum of the Class B Monthly Interest Distributable Amount
for such Distribution Date and the Class B Interest Carryover Shortfall for such
Distribution Date.
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"Class B Monthly Interest Distributable Amount" means, with respect
----------------------------------------------
to any Distribution Date, an amount equal to the product of (i) one-twelfth,
(ii) the Class B Pass-Through Rate and (iii) the Class B Certificate Balance on
the preceding Distribution Date (or, in the case of the first Distribution Date,
the Closing Date) after giving effect to (a) any amount distributed to Holders
of the Class B Certificates on such preceding Distribution Date and allocable to
principal and (b) any Realized Losses allocated to the Class B Certificates on
such preceding Distribution Date.
"Class B Monthly Principal Distributable Amount" means, with respect
----------------------------------------------
to any Distribution Date, the Class B Percentage of the Principal Distribution
Amount.
"Class B Pass-Through Rate" means___%.
-------------------------
"Class B Percentage" means ___%.
------------------
"Class B Principal Carryover Shortfall" means, as of the close of any
-------------------------------------
Distribution Date, the excess of the Class B Monthly Principal Distributable
Amount and any outstanding Class B Principal Carryover Shortfall from the
preceding Distribution Date, over the amount in respect of principal that is
actually distributed to Holders of the Class B Certificates on such current
Distribution Date.
"Class B Principal Distributable Amount" means, with respect to any
--------------------------------------
Distribution Date, the sum of the Class B Monthly Principal Distributable Amount
for such Distribution Date and the Class B Principal Carryover Shortfall as of
the close of the preceding Distribution Date; provided, however, that the Class
B Principal Distributable Amount shall not exceed the Class B Certificate
Balance. In addition, on the Final Scheduled Distribution Date, the principal
required to be included in the Class B Principal Distributable Amount will
include the lesser of (a) the Class B Percentage of (1) any Scheduled Payments
of principal due and remaining unpaid on each Precomputed Receivable and (2) any
principal due and remaining unpaid on each Simple Interest Receivable, in each
case, in the Trust as of the Final Scheduled Maturity Date or (b) the amount
that is necessary (after giving effect to the other amounts to be deposited in
the Distribution Account on such Distribution Date and allocable to principal)
to reduce the Class B Certificate Balance to zero.
"Clearing Agency" means an organization registered as a "clearing
---------------
agency" pursuant to Section 17A of the Securities Exchange Act of 1934, as
amended.
"Clearing Agency Participant" means a broker, dealer, bank, other
---------------------------
financial institution or other Person for whom from time to time a Clearing
Agency effects book-entry transfers and pledges of securities deposited with the
Clearing Agency.
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"Closing Date" means ______________.
------------
"Code" means the Internal Revenue Code of 1986, as amended.
----
"Collection Account"
------------------
means the account designated as such, established and maintained pursuant to
Section 4.01.
"Collection Period" means a calendar month (or in the case of the
-----------------
first Distribution Date, the period from and including the Cutoff Date to and
including the last day of the calendar month in which the Closing Date occurs).
Any amount stated as of the last day of a Collection Period or as of the first
day of a Collection Period or as of the first day of a collection Period shall
give effect to the following calculations as determined as of the close of
business on such last day: (a) all applications of collections, (b) all current
and previous Payaheads, (c) all applications of Payahead Balances, (d) all
Advances and reductions of Advances and (e) all distributions to be made on the
following Distribution Date.
"Corporate Trust Office" means the principal corporate trust office of
----------------------
the Trustee, which at the time of execution of this agreement is located at
______________________. Attention: ________________, or at such other address as
the Trustee may designate from time to time by notice to Certificateholders, the
Company and the Servicer, or the principal corporate trust office of any
successor Trustee (of which address such successor Trustee shall notify the
Certificateholders, the Company and the Servicer).
"Cutoff Date" means _______________.
-----------
"Cutoff Date Pool Balance" means the sum of the aggregate Principal
------------------------
Balance of the Receivables as of the Cutoff Date.
"Definitive Certificates" shall have the meaning specified in Section
-----------------------
6.11.
"Delivery" when used with respect to Account Property means:
--------
(a) with respect to bankers' acceptances, commercial paper, negotiable
certificates of deposit and other obligations that constitute "instruments"
within the meaning of Section 9-105(1)(i) of the UCC and are susceptible of
physical delivery, transfer thereof to the Trustee or its nominee or custodian
by physical delivery to the Trustee or its nominee or custodian endorsed to, or
registered in the name of, the Trustee or its nominee or custodian or endorsed
in blank, and, with respect to a certificated security (as defined in Section 8-
102 of the UCC) transfer thereof (i) by delivery of such certificated security
-6-
endorsed to, or registered in the name of, the Trustee or its nominee or
custodian or endorsed in blank to a financial intermediary (as defined in
Section 8-313 of the UCC) and the making by such financial intermediary of
entries on its books and records identifying such certificated securities as
belonging to the Trustee or its nominee or custodian and the sending by such
financial intermediary of a confirmation of the purchase of such certificated
security by the Trustee or its nominee or custodian, or (ii) by delivery thereof
to a "clearing corporation" (as defined in Section 8-102(3) of the UCC) and the
making by such clearing corporation of appropriate entries on its books reducing
the appropriate securities account of the transferor and increasing the
appropriate securities account of a financial intermediary by the amount of such
certificated security, the identification by the clearing corporation of the
certificated securities for the sole and exclusive account of the financial
intermediary, the maintenance of such certificated securities by such clearing
corporation or a "custodian bank" (as defined in section 8-102(4) of the UCC) or
the nominee of either, subject to the clearing corporations' exclusive control,
the sending of a confirmation by the financial intermediary of the purchase by
the Trustee or its nominee or custodian of such securities and the making by
such financial intermediary of entries on its books and records identifying such
certificated securities as belonging to the Trustee or its nominee or custodian
(all of the foregoing, "Physical Property"), and, in any event, any such
Physical Property in registered form shall be in the name of the Trustee or its
nominee or custodian; and such additional or alternative procedures as may
hereafter become appropriate to effect the complete transfer of ownership of any
such Account Property to the Trustee or its nominee or custodian, consistent
with changes in applicable law or regulations or the interpretation thereof;
(b) with respect to any securities issued by the U.S. Treasury, the
Federal Home Loan Mortgage Corporation or by the Federal National Mortgage
Association that are book-entry securities held through the Federal Reserve
System pursuant to federal book-entry regulations, the following procedures, all
in accordance with applicable Law, including applicable federal regulations and
Articles 8 and 9 of the UCC: book-entry registration of such Account Property to
an appropriate book-entry account maintained with Federal Reserve Bank by a
financial intermediary that is also a "depository" pursuant to applicable
federal regulations and issuance by such financial intermediary of deposit
advice or other written confirmation of such book-entry registration to the
Trustee or its nominee or custodian of the purchase by the Trustee or its
nominee or custodian of such book-entry securities; the making by such financial
intermediary of entries in its books and records identifying such book-entry
security held through the Federal Reserve System pursuant to federal book-entry
regulations as belonging to the Trustee, or its nominee or custodian and
indicating that such custodian holds such Account Property solely as agent for
the Trustee or its
-7-
nominee or custodian; and such additional or alternative procedures as may
hereafter become appropriate to effect complete transfer of ownership of any
such Account Property to the Trustee or its nominee or custodian consistent with
changes in applicable law or regulations or the interpretation thereof; and
(c) with respect to any item of Account Property that is an
uncertificated security under Article 8 of the UCC and that is not governed by
clause (b) above, registration on the books and records of the issuer thereof
in the name of the financial intermediary, the sending of a confirmation by the
financial intermediary of the purchase by the Trustee or its nominee or
custodian of such uncertificated security, and the making by such financial
intermediary of entries on its books an records identifying such uncertificated
certificates as belonging to the Trustee or its nominee or custodian.
"Depository Agreement" means the agreement dated __________, among the
--------------------
Trustee and The Depository Trust Company, as the initial Clearing Agency,
substantially in the form of Exhibit C.
"Determination Date" means the ____day of each calendar month or, if
------------------
such day is not a Business Day, the immediately following Business Day.
"Distribution Account" means the account designated as such,
--------------------
established and maintained pursuant to Section 4.01.
"Distribution Date" means, with respect to each Collection Period, the
-----------------
___ day of the following calendar month or, if such day is not a Business Day,
the immediately following Business Day, commencing on ____
"Eligible Deposit Account" means either (a) a segregated account with
------------------------
an Eligible Institution or (b) a segregated trust account with the corporate
trust department of a depository institution organized under the laws of the
United States of America or any one to the states thereof or the District of
Columbia (or any domestic branch of a foreign bank), having corporate trust
powers and acting as trustee for funds deposited in such account, so long as any
of the securities of such depository institution shall have a credit rating from
each Rating Agency in one of its generic rating categories that signifies
investment grade.
"Eligible Institution" means (a) the corporate trust department of the
--------------------
Trustee or (b) a depository institution organized under the laws of the United
States of America or any one of the states thereof or the District of Columbia
(or any domestic branch of a foreign bank), which (1) has either (A) a long-term
unsecured debt rating of AAA or better by Standard & Poor's and A1 or better by
Moody's or (B) a certificate of
-8-
deposit rating of A-1+ by Standard & Poor's and P-1 or better by Moody's or any
other long-term, short-term or certificate of deposit rating acceptable to the
Rating Agencies and (2) whose deposits are insured by the FDIC. If so
qualified, the Trustee may be considered an Eligible Institution for the
purposes of clause (b) of this definition.
"Eligible Investments" mean book-entry securities, negotiable
--------------------
instruments or securities represented by instruments in bearer or registered
form which evidence;
(a) direct obligations of, and obligations fully guaranteed as to
timely payment by, the United States of America;
(b) demand deposits, time deposits or certificates of deposit of any
depository institution or trust company incorporated under the laws of the
United States of America or any state thereof (of any domestic branch of a
foreign bank ) and subject to supervision and examination by federal or state
banking or depository institution authorities; provided, however, that at the
time of the investment or contractual commitment to invest therein, the
commercial paper or other short-term unsecured debt obligations thereof (other
than such obligations the rating of which is based on the credit of a Person
other than such depository institution or trust company) shall have a credit
rating of A-1+ from Standard & Poor's and P1 from Moody's;
(c) commercial paper having, at the time of the investment or
contractual commitment to invest therein, a rating of A-1+ from Standard &
Poor's and P1 from Moody's;
(d) investments in money market funds having a rating of AAA-m or
AAAm-G from Standard & Poor's and Aaa from Moody's;
(e) bankers' acceptances issued by any depository institution or trust
company referred to in clause (b) above;
(f) repurchase obligations with respect to any security that is a
direct obligation of, or fully guaranteed by, the United States of America or
any agency or instrumentality thereof the obligations of which are backed by the
full faith and credit of the United States of America, in either case entered
into with a depository institution or trust company (acting as principal)
described in clause (b);
(g) any other investment with respect to which the Trustee or the
Company has received written notification from the Rating Agencies that the
acquisition of such investment as an Eligible Investment will not in a
withdrawal or downgrading of the ratings of the Certificates.
"ERISA" means the Employee Retirement Income Security Act of 1974, as
amended.
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"Event of Default" means an event specified in Section 9.01.
----------------
"FDIC" means the Federal Deposit Insurance Corporation.
----
"Final Scheduled Distribution Date" means ______________.
---------------------------------
"Final Scheduled Maturity Date" means __________________.
-----------------------------
"Financed Vehicle" means an automobile, van or light-duty truck,
----------------
together with all accessions thereto, securing an Obligor's indebtedness under
the related Receivable.
"Interest Distribution Amount" means, with respect to any Distribution
----------------------------
Date, the sum of the following amounts in respect of the preceding Collection
Period:(a) that portion of all collections on Receivables (including Payaheads)
allocable to interest, (b) Liquidation Proceeds with respect to the Receivables
to the extent allocable to interest due thereon in accordance with the
Servicer's customary servicing procedures, (c) all Advances made by the Servicer
of Interest due on Receivables, (d) the Purchase Amount of each Receivable that
became a Purchased Receivable during the related Collection Period to the extent
attributable to accrued interest on such Receivable, (e) the Yield Supplement
Amount; and (f) Recoveries; provided, however, that in calculating the Interest
Distribution Amount the following will be excluded: (i) amounts received on
Precomputed Receivables to the extent that the Servicer has previously made an
unreimbursed Precomputed Advance of interest; (ii) Liquidation Proceeds with
respect to a particular Precomputed Receivable to the extent of any unreimbursed
Precomputed Advances of interest; (iii) all payments and proceeds (including
Liquidation Proceeds) of any Purchased Receivables the Purchase Amount of which
has been included in the Interest Distribution Amount in a prior Collection
Period; (iv) the sum for all Simple Interest Receivables of collections
allocable to interest on each such Simple Interest Receivable received during
the preceding Collection Period in excess of the amount of interest that would
be due on the aggregate Principal Balance of the Simple Interest Receivables
during such Collection Period at their respective APR's if a payment were
received on each Simple Interest Receivable during such Collection Period on the
date payment is due under the terms of the related Motor Vehicle Installment
Contract; and (v) Liquidation Proceeds with respect to a Simple Interest
Receivable attributable to accrued and unpaid interest thereon (but not
including interest for the then current Collection Period) but only to the
extent of any unreimbursed Simple Interest Advances.
"Investment Earnings" means, with respect to any Distribution Date,
-------------------
the investment earnings (net of losses and
-10-
investment expenses) on amounts on deposit in the Collection Account, Reserve
Account and Yield Supplement Account, which will be distributed on each
Distribution Date in the manner set forth in Article IV.
"Lien" means a security interest, lien, charge, pledge, equity, or
----
encumbrance of any kind, other than tax liens, mechanics' liens and any liens
that attach to the respective Receivable by operation of law.
"Liquidated Receivable" means any Receivable liquidated by the
---------------------
Servicer through sale of a Financed Vehicle or otherwise.
"Liquidation Proceeds" means, with respect to a Liquidated Receivable,
--------------------
the monies collected in respect thereof, from whatever source, during the
Collection Period in which such Receivable became a Liquidated Receivable, net
of the sum of any amounts expended by the Servicer in connection with such
liquidation, plus any amounts required by law to be remitted to the Obligor.
"Moody's" means Xxxxx'x Investors Service, Inc., or its successor.
-------
"Motor Vehicle Installment Contract" means a motor vehicle installment
----------------------------------
loan agreement originated by a Seller or a motor vehicle retail installment sale
contract acquired by a Seller from a motor vehicle dealer or another financial
institution.
"Obligor" on a Receivable means the purchaser or co-purchasers of the
-------
Financed Vehicle and any other Person who owes payments under the Receivable.
"Officers' Certificate" means a certificate signed by the (a) chairman
---------------------
of the board, the president, the vice chairman of the board, any executive vice
president or any vice president and (b) a cashier, assistant cashier, any
treasurer, assistant treasurer, secretary or assistant secretary of the Company,
a Seller or the Servicer, as appropriate.
"Opinion of Counsel" means one or more written opinions of counsel,
------------------
who may be an employee of or counsel to the Servicer, which counsel shall be
acceptable to the Trustee or Rating Agencies, as applicable.
"Outstanding Precomputed Advances" means on the Precomputed
--------------------------------
Receivables means the sum, as of the close of business on the last day of a
Collection Period, of all Precomputed Advances, reduced as provided by Section
5.03(a).
"Outstanding Simple Interest Advances" on the Simple Interest
------------------------------------
Receivables means the sum, as of the close of business
-11-
on the last day of a Collection Period, of all Precomputed Advances, reduced as
provided by Section 5.03(b).
"Payahead" on a Receivable that is a Precomputed Receivable means the
--------
amount, as of the close of business on the last day of a Collection Period,
computed in accordance with Section 5.02 with respect to such Receivable.
"Payahead Balance" on a Precomputed Receivable means the sum, as of
----------------
the close of business on the last day of a Collection Period, of all Payaheads
made by or on behalf of the Obligor with respect to such Precomputed Receivable,
as reduced by applications of previous Payaheads with respect to such
Precomputed Receivable, pursuant to Sections 5.02 and 5.03.
"Person" means any individual, corporation, estate, partnership, joint
------
venture, association, joint stock company, trust, unincorporated organization,
or government or any agency or political subdivision thereof.
"Physical Property" has the meaning assigned to such term in the
-----------------
definition of "Delivery" above.
"Pool Balance" means, as of the close of business on the last day of a
------------
Collection Period, the aggregate Principal Balance of the Receivables as of such
date (excluding Purchased Receivables and Liquidated Receivables).
"Precomputed Advance" means the amount, as of the close of
-------------------
business on the last day of a Collection Period, which the Servicer is required
to advance on any Precomputed Receivable pursuant to Section 5.03(a).
"Precomputed Receivable" means any Receivable under which the portion
----------------------
of each payment allocable to earned interest (which may be referred to in the
Receivable as an add-on finance charge) and the portion allocable to the Amount
Financed are determined according to the sum of periodic balances or the sum of
monthly balances or any equivalent method, or which is a monthly actuarial
receivable.
"Principal Balance" means (a) with respect to any Precomputed
-----------------
Receivable, the Amount Financed minus the sum, as of the close of business on
the last day of a Collection Period, of (1) that portion of all Scheduled
Payments due on or prior to such day allocable to principal using the actuarial
or constant yield method, (2) any refunded portion of extended warranty
protection plan costs or physical damage, credit life or disability insurance
premiums included in the Amount Financed, (3) the portion of any related
Purchase Amount allocable to principal and (4) any prepayment in full or any
partial prepayments applied to reduce the related Principal Balance; and (b)
with respect to any Simple Interest Receivable, the Amount
-12-
Financed minus the sum, as of the close of business on the last day of a
Collection Period, of (1) the portion of all payments made by or on behalf of
the related Obligor on or prior to such day and allocable to principal using the
Simple Interest Method and (2) the portion of any related Purchase Amount
allocable to principal.
"Principal Distribution Amount" means, for any Distribution Date, the
-----------------------------
sum of the following amounts with respect to the preceding Collection Period:
(a) that portion of all collections on Receivables (including amounts withdrawn
from the Payahead Account but excluding amounts deposited into the Payahead
Account pursuant to Sections 4.01(c) and 5.02) allocable to principal; (b) all
Liquidation Proceeds attributable to the principal amount of Receivables that
became Liquidated Receivables during such Collection Period in accordance with
the Servicer's customary servicing procedures, plus the amount of Realized
Losses with respect to such Liquidated Receivables; (c) all Precomputed Advances
made by the Servicer of principal due on the Precomputed Receivables; (d) to the
extent attributable to principal, the Purchase Amount received with respect to
each Receivable that became a Purchased Receivable during the related Collection
Period; (e) partial prepayments relating to refunds of extended warranty
protection plan costs or of physical damage, credit life or disability insurance
policy premiums, but only if such costs or premiums were financed by the
respective Obligor as of the date of the original Motor Vehicle Installment
Contract; and (f) on the Final Scheduled Distribution Date, any amounts advanced
by the Servicer on such date with respect to principal on the Receivables.
"Purchase Amount" means the amount, as of the close of business on the
---------------
last day of a Collection Period, required to prepay a Receivable in full under
the terms thereof, including interest to the end of the month of purchase.
"Purchased Receivable" means a Receivable purchased as of the
--------------------
close of business on the last day of a Collection Period by the Servicer
pursuant to Section 3.07 or by the Company pursuant to Section 2.04.
"Rating Agency" means Moody's or Standard & Poor's or, if neither such
-------------
organization nor a successor thereto remains in existence, any nationally
recognized statistical rating organization or other comparable Person designated
by the Company, notice of which designation shall be given to the Trustee and
the Servicer.
"Rating Agency Condition" means, with respect to any action, that each
-----------------------
Rating Agency shall have been given 10 days (or such shorter period as shall be
acceptable to each Rating Agency) prior notice thereof and that, within 7 days
of receipt of such notice, none of the Rating Agencies shall have notified the
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Company, the Servicer or the Trustee in writing that such action will result in
a reduction or withdrawal of the then current ratings of the Certificates.
"Realized Losses" means, with respect to any Receivable that becomes a
---------------
Liquidated Receivable, the excess of the Principal Balance of such Liquidated
Receivable over that portion of Liquidation Proceeds allocable to principal.
"Receivable" means any Motor Vehicle Installment Contract listed on
----------
Schedule I (which schedule may be in the form of microfiche).
"Receivable Files" means the documents specified in Section 2.05.
----------------
"Receivables Purchase Agreement" means an agreement, substantially in
------------------------------
the form of Exhibit H hereto, between the Company and a Seller, pursuant to
which such Seller sold Motor Vehicle Installment Contracts to be included in the
Trust to the Company.
"Record Date" with respect to each Distribution Date means the _____
-----------
day of the calendar month in which such Distribution Date occurs.
"Recoveries" means, with respect to any Receivable that becomes a
----------
Liquidated Receivable, monies collected in respect thereof, from whatever
source, during any Collection Period following the Collection Period in which
such Receivable became a Liquidated Receivable, net of the sum of any amounts
expended by the Servicer for the account of the Obligor and any amounts required
by law to be remitted to the Obligor.
"Reserve Account" means the account designated as such, established
---------------
and maintained pursuant t o Section 4.02.
"Reserve Account Initial Deposit" means, with respect to the Closing
-------------------------------
Date, an amount equal to the Specified Reserve Account Balance on the Closing
Date (which is equal to $_________) and, with respect to each Subsequent
Transfer Date, an amount equal to ___% of the Principal Balance of the
Subsequent Receivables transferred to the Trust on such Subsequent Transfer
Date.
"Scheduled Payment" with respect to any Precomputed Receivable means
-----------------
the payment required to be made by the Obligor during each Collection Period
under the related Motor Vehicle Installment Contract sufficient to amortize the
Principle Balance of such Precomputed Receivable, using the actuarial method,
over the term of the Receivable and to provide interest at the APR.
-14-
"Seller" means, with respect to any Receivable, the Person from whom
------
such Receivable was acquired by the Company pursuant to the related Receivables
Purchase Agreement.
"Servicer" means ______________, and each successor Servicer pursuant
to Section 8.03 or 9.02.
"Servicer's Certificate" means the certificate required to be
----------------------
delivered by the Servicer pursuant to Section 3.09.
"Servicing Fee" means the fee payable to the Servicer for services
-------------
rendered during each Collection Period, determined pursuant to Section 3.08.
"Servicing Rate" means ___% per annum.
--------------
"Simple Interest Advance" means the amount of interest, as of the
-----------------------
close of business on the last day of a Collection Period, that the Servicer is
required to advance on the Simple Interest Receivables pursuant to Section
5.03(b).
"Simple Interest Method" means the method of allocating a fixed level
----------------------
payment to principal and interest, pursuant to which the portion of such payment
that is allocated to interest is equal to the product of the fixed rate of
interest multiplied by the unpaid principal balance multiplied by the period of
time elapsed since the preceding payment of interest was made and the remainder
of such payment is allocable to principal.
"Simple Interest Receivable" means any Receivable under which the
--------------------------
portion of a payment allocable to interest and the portion allocable to
principle is determined in accordance with the Simple Interest Method.
"Specified Reserve Account Balance" means [STATE FORMULA].
---------------------------------
"Standard & Poor's" means Standard & Poor's Ratings Group, or its
-----------------
successor.
"Total Distribution Amount" means, for each Distribution Date, the sum
-------------------------
of the Interest Distribution Amount and the Principal Distribution Amount (other
than the portion thereof attributable to Realized Losses).
"Trust" means the trust created by this Agreement.
-----
"Trust Account" means any of the Collection Account, the
-------------
Distribution Account and the Payahead Account, established and maintained
pursuant to Section 4.01.
-15-
"Trustee" means ___________________, a _______________ banking
-------
corporation, its successors in interest and any successor Trustee hereunder.
"Trustee Officer" means any officer within the Corporate Trust Office
---------------
of the Trustee, including the chairman or vice-chairman of the board of
directors, the chairman or vice-chairman of the executive committee of the board
of directors, the president, any vice president, the secretary, any assistant
secretary, the treasurer, any assistant treasurer, or any other officer of the
Trustee customarily performing functions similar to those performed by any of
the above designated officers and also, with respect to a particular corporate
trust matter, any other officer to whom such matter is referred because of such
officer's knowledge of and familiarity with the particular subject.
"UCC" means the Uniform Commercial Code as in effect in the State of
---
New York on the date hereof.
"Weighted Average Pass-Through Rate" means the weighted average
----------------------------------
(calculated on the basis of the outstanding principal amounts) of the Class A
Pass-Through Rate and the Class B Pass-Through Rate.
"Yield Supplement Account" means the account established and
------------------------
maintained pursuant to Section 4.03.
"Yield Supplement Account Agreement" means the agreement dated as of
----------------------------------
____________, among the Company, the Servicer and the Trustee, substantially in
the form of Exhibit J.
"Yield Supplement Amount" means, with respect to any Receivable
-----------------------
(other than a Liquidated Receivable or Purchased Receivable after the Collection
Period in which such Receivable becomes a Liquidated Receivable or Purchased
Receivable) and any Distribution Date, the amount, if positive, equal to the
product of (a) one-twelfth, (b) the sum of (i) the Weighted Average Pass-Through
Rate, plus the Servicing Fee Rate, minus the APR of such Receivable and (c) the
Principal Balance of such Receivable.
"Yield Supplement Initial Deposit" means $____________.
--------------------------------
"Yield Supplement Maximum Amount" means $_____________.
-------------------------------
Section 1.02. Other Definitional Provisions. (a) All terms defined
-----------------------------
in this Agreement shall have the defined meanings when used in any certificate
or other document made or delivered pursuant hereto or thereto unless otherwise
defined therein.
(b) As used herein, and in any certificate or other document made or
delivered pursuant hereto or thereto, accounting terms not defined herein or in
any such certificate or other
-16-
document, and accounting terms partly defined herein or in any such certificate
or other document to the extent not defined, shall have the respective meanings
given to them under United States generally accepted accounting principles. To
the extent that the definitions of accounting terms herein or in any such
certificate or other document are inconsistent with the meanings of such terms
under United States generally accepted accounting principles, the definitions
contained herein or in any such certificate or other document shall control.
(c) The words "hereof," "herein," "hereunder" and word of similar
import when used herein shall refer to this Agreement as a whole and not to any
particular provision hereof; Article, Section, Schedule and Exhibit references
contained herein are references to Articles, Sections, Schedules and Exhibits
herein; and the term "including" shall mean "including without limitation".
(d) The definitions contained in this Agreement are applicable to the
singular as well as the plural forms of such terms and to the masculine as well
as to the feminine and neuter genders of such terms.
(e) Any agreement, instrument or statute defined or referred to herein
or in any instrument or certificate delivered in connection herewith means such
agreement, instrument or statute as from time to time amended, modified or
supplemented and includes (in the case of agreements or instruments) references
to all attachments thereto and instruments incorporated therein; references to a
Person are also to its permitted successors and assigns.
ARTICLE II
Conveyance of Receivables; Original Issuance of Certificates
------------------------------------------------------------
Section 2.01. Conveyance of Receivables. In consideration of the
-------------------------
Trustee's delivery on the Closing Date to or upon the order of the Company of
Class A Certificates in an initial aggregate principal amount of $_____________
and Class B Certificates in an initial aggregate principal amount of
$__________, the Company does hereby sell, transfer, assign, set over and
otherwise convey to the Trustee in trust for the benefit of the
Certificateholders, without recourse (subject to the obligations set forth
herein), all right, title and interest of the Company in and to:
(a) the Receivables and all moneys due thereon on or after the Cutoff
Date, in the case of Precomputed Receivables, or all moneys received thereon on
and after the Cutoff Date, in the case of Simple Interest Receivables;
-17-
(b) the security interests in the Financed Vehicles granted by
Obligors pursuant to the Receivables and any other interest of the Company in
such Financed Vehicles;
(c) any proceeds with respect to the Receivables from claims on any
physical damage, theft, credit life or disability insurance policies covering
Financed Vehicles or Obligors;
(d) any Financed Vehicle that shall have secured any such Initial
Receivable and shall have been acquired by or on behalf of the Company, the
Servicer or the Trust;
(e) all other assets com prising the estate of the Trust; and
(f) the proceeds of any and al l of the foregoing.
Section 2.02. Acceptance by Trustee. The Trustee hereby acknowledges
---------------------
the sale, transfer and assignment of the Receivables and the other assets of the
Trust referred to in Section 2.01 and declares that the Trustee holds and will
hold the Receivables and such other assets in trust, upon the terms herein set
forth, for the use and benefit of all present and future Certificateholders.
Section 2.03. Representations and Warranties of the Company. The
---------------------------------------------
Company makes the following representations and warranties as to the Receivables
conveyed to the Trust, on which the Trustee is deemed to have relied in
accepting the Receivables in trust and executing and authenticating the
Certificates. Such representations and warranties speak as of the execution and
delivery of this Agreement and as of the Closing Date, but shall survive the
sale, transfer and assignment of the Receivables to the Trustee.
(a) Characteristics of Receivables. Each Receivable (1) was
------------------------------
originated by the Seller thereof or acquired from a motor vehicle dealer or
another financial institution by such Seller in the ordinary course of such
Seller's business, (2) has created a valid, subsisting and enforceable first
priority security interest in favor of such Seller in the Financed Vehicle,
which security interest is assignable by such Seller and the Company, (3)
contains customary and enforceable provisions such that the rights and remedies
of the holder thereof shall be adequate for realization against the collateral
of the benefits of the security, (4) provides for level monthly payments
(provided that the payment in the first or last month in the life of the
Receivable may be minimally different from the level payments) that fully
amortize the Amount Financed by maturity and yield interest at the Annual
Percentage Rate, and (5) in the case of a Precomputed Receivable, in the
-18-
event that such contract is prepaid, provides for a prepayment that fully pays
the Principal Balance and includes accrued but unpaid interest through the date
of prepayment at the Annual Percentage Rate.
(b) Schedule of Receivables. The information set forth in Schedule I
-----------------------
to this Agreement is true and correct in all material respects as of the opening
of business on the Cutoff Date, and no selection procedures believed to be
adverse to the Certificateholders were utilized in selecting the Receivables.
The computer tape or other listing regarding the Receivables made available to
the Trustee is true and correct in all material respects as of the Cutoff Date.
(c) Compliance with Law. Each Receivable and the sale of the
-------------------
Financed Vehicle complied in all material respects at the time it was originated
or made and at the execution of this Agreement with all requirements of
applicable federal, state and local laws and regulations thereunder, including,
without limitation, usury laws, the Federal Truth-in-Lending Act, the Equal
Credit Opportunity Act, the Fair Credit Reporting Act, the Fair Debt Collection
Practices Act, the Federal Trade Commission Act, the Xxxxxxxx-Xxxx Warranty Act,
the Federal Reserve Board's Regulations B and Z, and State adaptations of the
National Consumer Act and of the Uniform Consumer Credit Code, and other
consumer credit laws and equal credit opportunity and disclosure laws.
(d) Binding Obligation. Each Receivable represents the genuine,
------------------
legal, valid and binding payment obligation in writing of the Obligor,
enforceable by the holder thereof in accordance with its terms, subject to
applicable bankruptcy, insolvency, reorganization and similar laws now or
hereafter in effect relating to or affecting creditors' rights generally and to
general principles of equity (whether applied in a proceeding at law or in
equity).
(e) No Government Obligor. None of the Receivables is due from the
---------------------
United States of America or any State or from any agency, department or
instrumentality of the United States of America or any State.
(f) Security Interest in Financed Vehicle. Immediately prior to the
-------------------------------------
sale, assignment and transfer thereof to the Trustee, each Receivable shall be
secured by a validly perfected first security interest in the Financed Vehicle
in favor of the Company as secured party or all necessary and appropriate
actions have been commenced that would result in the valid perfection of a first
security interest in the Financed Vehicle in favor of the Company as secured
party.
-19-
(g) Receivables in Force. No Receivable has been satisfied,
--------------------
subordinated or rescinded, nor has any Financed Vehicle been released from the
lien granted by the related Receivable in whole or in part.
(h) No Waiver. No provision of a Receivable has been waived in such a
---------
manner that the Receivable fails to meet any other representation or warranty of
the Company with respect thereto.
(i) No Amendments. No Receivable shall have been amended such that
-------------
the amount of the Obligor's Scheduled Payments shall have been increased except
for increases resulting from the inclusion of any premiums for forced placed
physical damage insurance covering the Financed Vehicle.
(j) No Defenses. No facts are known to the Company that would give
-----------
rise to any right of rescission, setoff, counterclaim or defense, nor shall the
same have been asserted or threatened, with respect to any Receivable.
(k) No Liens. To the best of the Company's knowledge, no liens or
--------
claims have been filed for work, labor or materials relating to a Financed
Vehicle that are prior to, or equal or coordinate with, the security interest in
the Financed Vehicle granted by the Receivable.
(l) No Default. No Receivable has a payment that is more than 90 days
----------
overdue as of the related Cutoff Date and, except as permitted in this
paragraph, no default, breach, violation or event permitting acceleration under
the terms of any Receivable has occurred; no continuing condition that with
notice or the lapse of time would constitute a default, breach, violation or
event permitting acceleration under the terms of any Receivable has arisen; and
the Company has not waived and shall not waive any of the foregoing.
(m) Insurance. The related Seller, in accordance with its customary
---------
procedures, has determined that the Obligor has obtained physical damage
insurance covering the Financed Vehicle and under the terms of the Receivable
the Obligor is required to maintain such insurance.
(n) Title. It is the intention of the Company that the transfer and
-----
assignment herein contemplated constitute a sale of the Receivables from the
Company to the Trust and that the beneficial interest in and title to the
Receivables not be part of the debtor's estate in the event of the filing of a
petition of receivership by or against the Company. No Receivable has been
sold, transferred, assigned or pledged by the Company to any Person other than
the Trustee. Immediately prior to the transfer and assignment
-20-
herein contemplated, the Company had good and marketable title to each
Receivable conveyed by it hereunder to the Trust, free and clear of all Liens
and rights of others and, immediately upon the transfer thereof, the Trustee, in
trust for the benefit of the Certificateholders, shall have good and marketable
title to each such Receivable, free and clear of all Liens and rights of others;
and the transfer of the Receivables to the Trustee for the benefit of the
Certificateholders has been perfected under the UCC.
(o) Lawful Assignment. No Receivable was originated in, or is subject
-----------------
to the laws of, any jurisdiction under which the sale, transfer and assignment
of such Receivable under this Agreement shall be unlawful, void or voidable.
(p) All Filings Made. All filings (including UCC filings) necessary
----------------
in any jurisdictions to give the Trustee a first perfected ownership interest in
the Receivables shall have been made.
(q) One Original. There shall be only one original executed copy of
------------
each Receivable.
(r) Scheduled Payments. (1) No Receivable has a payment that is more
------------------
than 90 days overdue as of the related Cutoff Date and (2) no Receivable has a
final scheduled payment date that is later than the Final Scheduled Maturity
Date.
(s) Location of Receivable Files. The Receivable Files are kept at one
----------------------------
or more of the locations listed in Schedule II.
(t) No Bankruptcies. No Obligor on any Receivable as of the related
---------------
Cutoff Date was noted in the related Receivable File as having filed for
bankruptcy.
(u) No Repossessions. No Financed Vehicle securing any Receivable is
----------------
in repossession status.
(v) Maturity of Receivables. The weighted average remaining term of
-----------------------
the Initial Receivables as of the Initial Cutoff Date is _______ months.
(w) Financing. Approximately ___% of the aggregate principal balance
---------
of the Receivables, constituting ___% of the number of Receivables as of the
Cutoff Date, represents financing of new vehicles and the remainder of the
Receivables represents financing of used vehicles; and approximately ___% of the
aggregate principal balance of the Receivables as of the Cutoff Date represent
Precomputed Receivables and the remainder of the Receivables represent Simple
Interest Receivables. The aggregate Principal
-21-
Balance of the Receivables as of the Cutoff Date is $_____________.
(x) Chattel Paper. Each Receivable constitutes "chattel paper" under
-------------
the UCC.
(y) Agreement. The representations and warranties of the Company in
---------
this Section and Section 7.01 are true and correct.
(z) APR. The weighted average Annual Percentage Rate of the
---
Receivables as of the Cutoff Date is approximately ___%.
Section 2.04. Repurchase Upon Breach. The Company, the Servicer or
----------------------
the Trustee, as the case may be, shall inform the other parties to this
Agreement promptly in writing, upon the discovery of any breach of the Company's
representations and warranties made pursuant to Section 2.03. Unless any such
breach is cured in all material respects by the last day of the second
Collection Period following the discovery thereof (and notice to the Company) by
the Trustee or receipt by the Trustee of notice thereof from the Company or the
Servicer, the Company shall be obligated to repurchase, as of such last day (or,
at the Company's option, the last day of the first Collection Period following
such discovery or notice), any Receivable conveyed by it to the Trust if the
interest of the Certificateholders in such Receivable is materially and
adversely affected by such breach. In consideration of the repurchase of any
such Receivable, the Company shall remit the Purchase Amount to the Collection
Account, in the manner specified in Section 5.04. The sole remedy of the
Trustee, the Trust or the Certificateholders with respect to a breach of
representations and warranties pursuant to Section 2.03 and the agreement
contained in this Section shall be to require the Company to repurchase
Receivables pursuant to this Section 2.04, subject to the conditions contained
herein.
Section 2.05. Custody of Receivable Files. To assure uniform quality
---------------------------
in servicing the Receivables and to reduce administrative costs, the Trustee
hereby revocably appoints the Servicer, and the Servicer hereby accepts such
appointment, to act as the agent of the Trustee as custodian of the following
documents or instruments, which are hereby constructively delivered to the
Trustee as of the Closing Date with respect to each Receivable:
(a) the fully executed original of the Receivable;
(b) a copy of the original c redit application as executed by the
Obligor;
(c) the original certificate of title or such documents that the
Servicer or the related Seller shall keep
-22-
on file, in accordance with their customary procedures, evidencing the security
interest of such Seller in the Financed Vehicle; and
(d) any and all other documents that the Servicer or related Seller
shall keep on file, in accordance with their customary procedures, relating
to a Receivable, an Obligor or a Financed Vehicle.
Section 2.06. Duties of Servicer as Custodian.
-------------------------------
(a) Safekeeping. The Servicer shall hold the Receivable Files as
-----------
custodian on behalf of the Trustee for the benefit of all present and future
Certificateholders, and shall maintain such accurate and complete accounts,
records and computer systems pertaining to each Receivable File as shall enable
the Trustee to comply with this Agreement. In performing its duties as
custodian, the Servicer shall act with reasonable care, using that degree of
skill and attention that the Servicer exercises with respect to the receivable
files relating to all comparable automotive receivables that the Servicer
services for itself or others. The Servicer shall conduct, or cause to be
conducted, periodic audits of the Receivable Files held by it under this
Agreement, and of the related accounts, records and computer systems, in such a
manner as shall enable the Trustee to verify the accuracy of the Servicer's
record keeping. The Servicer shall promptly report to the Trustee any failure
on its part to hold the Receivable Files and maintain its accounts, records and
computer systems as herein provided and shall promptly take appropriate action
to remedy any such failure. Nothing herein shall be deemed to require an initial
review or any periodic review by the Trustee of the Receivable Files.
(b) Maintenance of and Access to Records. The Servicer shall
------------------------------------
maintain each Receivable File at its offices specified in Schedule II to this
Agreement or at such other office as shall be specified to the Trustee by
written notice not later than 90 days after any change in location. The
Servicer shall make available to the Trustee or its duly authorized
representatives, attorneys or auditors a list of locations of the Receivable
Files and the related accounts, records and computer systems maintained by the
Servicer at such times during normal business hours as the Trustee shall
instruct.
(c) Release of Documents. Upon instruction from the Trustee, the
--------------------
Servicer shall release any Receivable File to the Trustee, the Trustee's agent
or the Trustee's designee, as the case may be, at such place or places as the
Trustee may designate, as soon as practicable, and upon the release and delivery
of any such document in accordance with the instructions of the Trustee, the
Servicer shall be released from any further liability and responsibility under
this Section 2.06 with respect to such documents unless and until such time as
such documents
-23-
shall be returned to the Servicer, and in no event shall the Servicer be
responsible for any loss occasioned by the Trustee's failure to return any
document in a timely manner.
Section 2.07. Instructions; Authority to Act. The Servicer shall be
------------------------------
deemed to have received proper instructions with respect to the Receivable Files
upon its receipt of written instructions signed by a Trustee Officer.
Section 2.08. Custodian's Indemnification. The Servicer as custodian
---------------------------
shall indemnify the Trustee and each of its officers, directors, employees and
agents for any and all liabilities, obligations, losses, compensatory damages,
payments, costs, or expenses of any kind whatsoever that may be imposed on,
incurred by or asserted against the Trustee or any of its officers, directors,
employees or agents as the result of any improper act or omission in any way
relating to the maintenance and custody by the Servicer as custodian of the
Receivable Files; provided, however, that the Servicer shall not be liable to
the Trustee or any such officer, director, employee or agent of the Trustee for
any portion of any such amount resulting from the willful misfeasance, bad faith
or negligence of the Trustee or any such officer, director, employee or agent of
the Trustee.
Section 2.09. Effective Period and Termination. The Servicer's
--------------------------------
appointment as custodian shall become effective as of the Cutoff Date and shall
continue in full force and effect until terminated pursuant to this Section
2.09. If the Servicer shall resign as Servicer in accordance with the
provisions of this Agreement or if all of the rights and obligations of any
Servicer shall have been terminated under Section 9.01, the appointment of such
Servicer as custodian shall be terminated by the Trustee, or by Holders of the
Certificates evidencing not less than 25% of the Certificate Balance, in the
same manner as the Trustee or such Holders may terminate the rights and
obligations of the Servicer under Section 9.01. The Trustee may terminate the
Servicer's appointment as custodian, with cause, at any time upon written
notification to the Servicer, and without cause upon 30 days' prior written
notification. As soon as practicable after any termination if such appointment,
the Servicer shall deliver the Receivable Files to the Trustee or the Trustee's
agent at such place or places as the Trustee may reasonably designate.
Notwithstanding any such termination of the Servicer as custodian, the Trustee
agrees to provide, or to cause its agent to provide, access to the Receivable
Files to the Servicer for the purpose of carrying out its duties and
responsibilities with respect to the servicing of the Receivables hereunder.
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ARTICLE III
Administration and Servicing of Receivables
-------------------------------------------
Section 3.01. Duties of Servicer. The Servicer, as agent for the
---------------------------------
Trustee (to the extent provided herein), shall manage, service, administer and
make collections on the Receivables (other than Purchased Receivables) with
reasonable care, using that degree of skill and attention that the Servicer
exercises with respect to all comparable automotive receivables that it services
for itself or others. The Servicer's duties shall include collection and
posting of all payments, responding to inquiries of Obligors on such
Receivables, investigating delinquencies, sending payment coupons to Obligors,
reporting tax information to Obligors, accounting for collections, furnishing
monthly and annual statements to the Trustee with respect to distributions, and
making Advances pursuant to Section 5.03. Subject to the provisions of Section
3.02, the Servicer shall follow its customary standards, policies and procedures
in performing its duties as Servicer. Without limiting the generality of the
foregoing, the Servicer is authorized and empowered by the Trustee to execute
and deliver, on behalf of itself, the Trust, the Certificateholders, the
Trustee, or any of them, any and all instruments of satisfaction or
cancellation, or partial or full release or discharge, and all other comparable
instruments with respect to such Receivables or to the Financed Vehicles
securing such Receivables. If the Servicer shall commence a legal proceeding to
enforce a Receivable, the Trustee (in the case of any Receivable other than a
Purchased Receivable) shall thereupon be deemed to have automatically assigned,
solely for the purpose of collection, such Receivable to the Servicer. If in any
enforcement suit or legal proceeding it shall be held that the Servicer may not
enforce a Receivable on the ground that it shall not be a real party in interest
or a holder entitled to enforce such Receivable, the Trustee shall, at the
Servicer's expense and direction, take steps to enforce such Receivable,
including bringing suit in its name or the name of the Certificateholders. The
Trustee shall, upon written request of the Servicer, furnish the Servicer with
any powers of attorney and other documents reasonably necessary or appropriate
to enable the Servicer to carry out its servicing and administrative duties
hereunder.
3.02. Collection and Allocation of Receivable Payments. (a) 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 automotive receivables that it services for itself or others.
The Servicer shall allocate collections between principal and interest in
accordance with the customary servicing procedures it follows with respect to
all comparable automotive receivables that it services for itself and others.
The Servicer
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may in its discretion waive any late payment charge or any other fees that may
be collected in the ordinary course of servicing a Receivable.
(b) The Servicer shall not agree to any alteration of the APR on any
Receivable or of the amount of the Scheduled Payments on a Precomputed
Receivable or the originally scheduled payments on Simple Interest Receivables.
The Servicer shall not grant rebates or adjustments on a Receivable that modify
the original due dates or amounts of the Scheduled Payments on a Precomputed
Receivable or the original due dates or amounts of the originally Scheduled
Payments on a Precomputed Receivable or the originally due dates or amounts of
the originally scheduled payments on a Simple Interest Receivable; provided,
however, that the Servicer may grant one extension of one month in any six month
period, provided that (1) either such extensions granted to an Obligor over the
term of a Receivable do not extend the date for final payment by such Obligor
thereunder beyond the Final Scheduled Maturity Date or (2) if such extensions do
result in a final scheduled payment date under a Receivable that occurs after
the Final Scheduled Maturity Date, the Servicer shall [pay to the Trust the
additional interest payable by the related Obligor with respect to such
extensions] [repurchase any Receivable so affected or advance any such deferred
payments to the Trust on the Final Scheduled Distribution Date if and to the
extent any shortfalls in the Class A Distributable Amount or Class B
Distributable Amount occur on such date].
Section 3.03. Realization Upon Receivables. On behalf of the Trust,
----------------------------
the Servicer shall use its best efforts, consistent with its customary servicing
procedures, to repossess or otherwise convert the ownership of the Financed
Vehicle securing any Receivable as to which the Servicer shall have determined
eventual payment in full is unlikely. The Servicer shall follow such customary
and usual practices and procedures as it shall deem necessary or advisable in
its servicing of automotive receivables, which may include selling the Financed
Vehicle at public or private sale. The Servicer shall be entitled to recover
all out-of-pocket expenses incurred by it in the course of converting a Financed
Vehicle into cash proceeds. The foregoing shall be subject to the provision
that, in any case in which the Financed Vehicle shall have suffered damage, the
Servicer shall not expend funds in connection with the repair or the
repossession of such Financed Vehicle unless it shall determine in its
discretion that such repair and/or repossession will increase the Liquidation
Proceeds by an amount greater than the amount of such expenses.
Section 3.04. Physical Damage Insurance. The Servicer, in accordance
-------------------------
with its customary servicing procedures, shall require that each Obligor shall
have obtained physical damage insurance covering the Financed Vehicle as of the
execution of the Receivable.
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Section 3.05. Maintenance of Security Interests in Financed Vehicles.
------------------------------------------------------
The Servicer shall, in accordance with its customary servicing procedures, take
such steps as are necessary to maintain perfection of the security interest
created by each Receivable in the related Financed Vehicle. The Trustee hereby
authorizes the Servicer to take such steps as are necessary to re-perfect such
security interest on behalf of the Trust in the event of the relocation of a
Financed Vehicle or for any other reason.
Section 3.06. Covenants of Servicer. The Servicer shall not release
---------------------
the Financed Vehicle securing any Receivable from the security interest granted
by such Receivable in whole or in part except in the event of payment in full by
the Obligor thereunder or repossession, nor shall the Servicer impair the rights
of the Trust or the Certificateholders in such Receivables, nor shall the
Servicer increase the number of scheduled payments due under a Receivable.
Section 3.07. Purchase of Receivables Upon Breach. The Servicer or
-----------------------------------
the Trustee shall inform the other party and the Company promptly, in writing,
upon the discovery of any breach pursuant to Section 3.02, 3.05 or 3.06 that
materially and adversely affects the Certificateholders' interests in any
Receivable. Unless such breach shall have been cured by the last day of the
second Collection Period following such discovery (or, at the Servicer's
election, the last day of the first following Collection Period), the Servicer
shall purchase, as of such last day, any Receivable that is materially and
adversely affected by such breach. In consideration of the purchase of any such
Receivable pursuant to either of the two preceding sentences, the Servicer shall
remit the Purchase Amount to the Collection Account in the manner specified in
Section 5.04. For purposes of this Section 3.07, the Purchase Amount shall
consist in part of a release by the Servicer of all rights of reimbursement with
respect to Outstanding Precomputed Advances or Outstanding Simple Interest
Advances on the Receivable. The sole remedy of the Trustee, the Trust or the
Certificateholders with respect to a breach pursuant to Section 3.02, 3.05 or
3.06 shall be to require the Servicer to repurchase Receivables pursuant to this
Section 3.07. The Trustee shall have no duty to conduct any affirmative
investigation as to the occurrence of any condition requiring the repurchase of
any Receivable pursuant to this Section.
Section 3.08. Servicing Fee. As compensation for servicing the
-------------
Receivables, the Servicer shall be entitled to receive the Servicing Fee on each
Distribution Date, from the Interest Distribution Amount available on such
Distribution Date, in an amount equal to the product of (a) one twelfth, (b) the
Servicing Rate and (c) the Pool Balance as of the first day of the preceding
Collection Period. The Servicer shall also be entitled to all late fees,
prepayment charges (including, in the case of a Receivable that provides for
payments according to the
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"Rule of 78s" and that is prepaid in full, the difference between the Principal
Balance of such Receivable (plus accrued interest to the date of prepayment) and
the principal balance of such Receivable computed according to the "Rule of
78s") and other administrative fees or similar charges allowed by applicable law
with respect to the Receivables, collected (from whatever source) on the
Receivables, as and when collected, plus any reimbursement pursuant to Section
8.02.
Section 3.09. Servicer's Certificate. Not later than 11:00 a.m. (New
----------------------
York time) on each Determination Date, the Servicer shall deliver to the
Trustee, the Rating Agencies and the Company, a Servicer's Certificate
containing all information necessary to make the distributions on the related
Distribution Date pursuant to Section 5.05 for the related Collection Period.
Receivables to be purchased by the Servicer or to be repurchased by the Company
shall be identified by the Servicer by account number with respect to such
Receivable (as specified in Schedule I).
Section 3.10. Annual Statement as to Compliance; Notice of Default.
----------------------------------------------------
(a) The Servicer shall deliver to the Trustee, on or before _____________ of
each year, an Officers' Certificate, dated as of _____________ of preceding
year, stating that (1) a review of the activities of the Servicer during the
preceding 12-month period (or such shorter period as shall have elapsed since
the Closing Date) and of its performance under this Agreement has been made
under such officers' supervision and (2) to the best of such officers'
knowledge, based on such review, the Servicer has fulfilled all its obligations
under this Agreement throughout such year or, if there has been a default in the
fulfillment of any such obligation, specifying each such default known to such
officers and the nature and status thereof. The Trustee shall send a copy of
such certificate and the report referred to in Section 3.11 to the Rating
Agencies. A copy of such certificate and the report referred to in Section 3.11
may be obtained by any Certificateholder by a request in writing to the Trustee
addressed to the Corporate Trust Office.
(b) The Servicer shall deliver to the Trustee and to the Rating
Agencies, promptly after having obtained knowledge thereof, but in no event
later than 5 Business Days thereafter, written notice in an Officers'
Certificate of any event which with the giving of notice or lapse of time, or
both, would become an Event of Default under Section 9.01(a) or (b).
Section 3.11. Annual Independent Certified Public Accountant's
------------------------------------------------
Report. The Servicer shall deliver to the Trustee, on or before _____________
of each year beginning ______________, 199^, a report of a firm of independent
certified public accountants, addressed to the Board of Directors of the
Servicer to the effect that such firm has examined the financial statements of
the Servicer, and issued its report thereon, and
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that such examination (a) was made in accordance with generally accepted
auditing standards and accordingly included such tests of the accounting records
and such other auditing procedures as such firm considered necessary in the
circumstances; (b) included tests relating to automotive loans serviced for
others in accordance with the requirements of the Uniform Single Audit Program
for Mortgage Bankers (the "Program"), to the extent the procedures in such
Program are applicable to the servicing obligations set forth herein; and (c)
except as described in the report, disclosed no exceptions or errors in the
records relating to automobile, van and light duty truck loans serviced for
others that, in the firm's opinion, paragraph four of such Program requires such
firm to report.
The Report will also indicate that the firm is independent of the
Servicer within the meaning of the Code of Professional Ethics of the American
Institute of Certified Public Accountants.
Section 3.12. Access to Certain Documentation and Information
-----------------------------------------------
Regarding Receivables. The Servicer shall provide to the Certificateholders
---------------------
access to the Receivable Files in such cases where Certificateholders shall be
required by applicable statutes or regulations to review such documentation.
Access shall be afforded without charge, but only upon reasonable request and
during the normal business hours at the offices of the Servicer. Nothing in
this Section shall affect the obligation of the Servicer to observe any
applicable law prohibiting disclosure of information regarding the Obligors, and
the failure of the Servicer to provide access to information as a result of such
obligation shall not constitute a breach of this Section.
Section 3.13. Servicer Expenses. The 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 Servicer and expenses incurred in connection with distributions and reports
to Certificateholders.
Section 3.14. Appointment of Subservicer. The Servicer may at any
--------------------------
time appoint a subservicer to perform all or any portion of its obligations as
Servicer hereunder; provided, further, that the Servicer shall remain obligated
and shall be liable to the Trustee and the Certificateholders for the servicing
and administering of the Receivables in accordance with the provisions hereof
without diminution of such obligation and liability by virtue of the appointment
of such subservicer and to the same extent and under the same terms and
conditions as if the Servicer alone were servicing and administering the
Receivables. The fees and expenses of the subservicer shall be as agreed between
the Servicer and its subservicer from time to time, and
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none of the Trust, the Trustee or the Certificateholders shall have any
responsibility therefor.
ARTICLE IV
Accounts
--------
Section 4.01. Establishment of Trust Accounts. (a) (1) The
-------------------------------
Servicer, for the benefit of the Certificateholders, shall establish and
maintain in the name of the Trustee an Eligible Deposit Account (the "Collection
Account"), bearing a designation clearly indicating that the funds deposited
therein are held for the benefit of the Certificateholders.
(2) The Servicer, for the benefit of the Certificateholders, shall
establish and maintain in the name of the Trustee a non-interest bearing account
(the "Distribution Account"), bearing a designation clearly indicating that the
funds deposited therein are held for the benefit of the Certificateholders.
(b) Funds on deposit in the Collection Account shall be invested by
the Trustee in Eligible Investments selected in writing by the Servicer
(pursuant to standing instructions or otherwise); provided, however, that it is
understood and agreed that the Trustee shall not be liable for any loss arising
from such investment in Eligible Investments. Investment Earnings on Eligible
Investments held in the Collection Account shall be for the benefit of the
Servicer and shall be distributed on each Distribution Date to the Servicer.
Unless otherwise permitted by the Rating Agencies, funds on deposit in the
Collection Account shall be invested in Eligible Investments that will mature
(1) not later than the Business Day immediately preceding the next Distribution
Date or (2) on such next Distribution Date if such investment is held in the
trust department of the institution with which the Collection Account and is
then maintained and is invested in a time deposit that is rated at least A-1
Standard & Poor's and P-1 by Moody's. Funds deposited in the Collection Account
upon the maturity of any Eligible Investments on the day immediately preceding a
Distribution Date are not required to be invested overnight. If at any time the
Collection Account ceases to be an Eligible Deposit Account, the Trustee (or the
Servicer on its behalf) shall, within 10 Business Days (or such longer period,
not to exceed 30 calendar days, to which each Rating Agency shall consent),
establish a new Collection Account as an Eligible Deposit Account and shall
transfer any cash and/or investments to such new account.
(c) (1) The Servicer shall establish and maintain with the Trustee
an Eligible Deposit Account
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(the "Payahead Account"). The Payahead Account shall not be property of
the Trust.
(2) The Servicer shall, on or prior to each Distribution Date (and
prior to deposits to the Distribution Account) transfer from the Collection
Account to the Payahead Account all Payaheads as described in Section 5.02
received by the Servicer during the related Collection Period. Notwithstanding
the foregoing and the first sentence of Section 5.01, for so long as the
Servicer is permitted to make monthly remittances to the Collection Account
pursuant to Section 5.01, Payaheads need not be remitted to and deposited in the
Payahead Account, but instead may be remitted to and held by the Servicer. So
long as such condition is met, the Servicer shall not be required to segregate
or otherwise hold separate any Payaheads remitted to the Servicer as aforesaid,
but shall be required to remit Payaheads to the Collection Account in accordance
with Section 5.05(a).
(d) (1) Except as otherwise provided herein, the accounts established and
maintained pursuant to this Article IV shall be under the sole dominion and
control of the Trustee for the benefit of the Certificateholders. With respect
to any Account Property, the Trustee agrees, by its acceptance hereof, that:
(A) Any Account Property that is held in deposit accounts shall be
held solely in Eligible Deposit Accounts (subject to the last sentence of
Section 4.01(b)); and, except as otherwise provided herein, each such
Eligible Deposit Account shall be subject to the exclusive custody and
control of the Trustee, and the Trustee shall have sole signature authority
with respect thereto;
(B) Any Account Property that constitutes Physical Property shall be
delivered to the Trustee in accordance with paragraph (a) of the definition
of "Delivery" and shall be held, pending maturity or disposition, solely by
the Trustee or a financial intermediary (as such term is defined in Section
8-313(4) of the UCC) acting solely for the Trustee;
(C) Any Account Property that is a book-entry security held through
the Federal Reserve System pursuant to federal book-entry regulations shall
be delivered in accordance with paragraph (b) of the definition of
"Delivery" and shall be maintained by the Trustee, pending maturity or
disposition, through continued book-entry registration of such Account
Property as described in such paragraph; and
-31-
(D) Any Account Property that is an "uncertificated security" under
Article 8 of the UCC and that is not governed by clause (C) above shall be
delivered to the Trustee in accordance with paragraph (c) of the definition
of "Delivery" and shall be maintained by the Trustee, pending maturity or
disposition, through continued registration of the Trustee's (or its
custodian's or its nominee's) ownership of such security.
(2) The Servicer shall have the power, revocable by the Trustee, to
instruct the Trustee to make withdrawals and payments from the trust accounts
for the purpose of permitting the Servicer or the Trustee to carry out its
respective duties hereunder.
Section 4.02. Reserve Account. (a) In order to effectuate the
---------------
subordination provided for herein and to assure that sufficient amounts to make
required distributions to Certificateholders will be available, the Servicer
shall establish and maintain an Eligible Deposit Account (the "Reserve
Account"), bearing a designation clearly indicating that the funds deposited
therein are held in trust for the benefit of the Certificateholders. The
Reserve Account will include the money and other property deposited and held
therein pursuant to this Section 4.02, Section 4.04(a) and Section 5.05(e).
On or prior to the Closing Date, the Company shall deposit an amount
equal to the Reserve Account Initial Deposit into the Reserve Account. The
Reserve Account shall not be part of the Trust, but instead will be held for the
benefit of the Certificateholders. The Company hereby acknowledges that all
funds on deposit in the Reserve Account (and any investment earnings thereon)
are owned directly by it, and the Company hereby agrees to treat the same as its
assets (and earnings) for federal income tax and all other purposes.
(b) In order to give effect to the subordination provided for herein
and to assure the availability of the amounts maintained in the Reserve
Account, the Company hereby sells, conveys and transfers to the Trustee, as
collateral agent, and its successors and assigns, the Reserve Account
Initial Deposit and all proceeds thereof and hereby pledges to the Trustee
as collateral agent, and its successors and assigns, all other amounts
deposited in or credited to the Reserve Account from time to time under this
Agreement, all Eligible Investments made with amounts on deposit therein,
all earnings and distributions thereon and proceeds thereof, subject,
however, to the limitations set forth below, and solely for the purpose of
securing and providing for payment of the Class A Distributable Amount and
the Class B Distributable Amount in accordance with
-32-
Section 5.05(b) (all the foregoing, subject to the limitations set forth
below, the "Reserve Account Property"), to have and to hold all the
aforesaid property, rights and privileges unto the Trustee, its successors
and assigns, in trust for the uses and purposes, and subject to the terms
and provisions, set forth in this Section. The Trustee hereby acknowledges
such transfer and accepts the trusts hereunder and shall hold and distribute
the Reserve Account Property in accordance with the terms and provisions of
this Section.
(c) Consistent with the limited purposes for which such trust is
granted, the amounts on deposit in the Reserve Account on each Distribution
Date shall be available for distribution as provided in Section 5.05, in
accordance with and subject to the following: if the amount on deposit in
the Reserve Account (after giving effect to all deposits thereto and
withdrawals therefrom on such Distribution Date) is greater than the
Specified Reserve Account Balance, the Trustee shall release and distribute
all such excess amounts to the Company. Upon any such distribution to the
Company, the Certificateholders will have no further rights in, or claims
to, such amounts.
(d) Funds on deposit in the Reserve Account shall be invested by the
Trustee, as collateral agent, in Eligible Investments selected in writing by
the Company. Unless otherwise permitted by the Rating Agencies, funds on
deposit in the Reserve Account shall be invested in Eligible Investments
that will mature (1) not later than the Business Day immediately preceding
the next Distribution Date or (2) on such next Distribution Date if such
investment is held in the trust department of the institution with which the
Reserve Account is then maintained and is invested in a time deposit that is
rated at least A-1 by Standard & Poor's and P-1 by Moody's. Funds deposited
in the Reserve Account upon the maturity of any Eligible Investments on the
day immediately preceding a Distribution Date are not required to be
invested overnight. If, at any time, the Reserve Account ceases to be an
Eligible Deposit Account, the Trustee as collateral agent (or the Servicer
on its behalf) shall, within 10 Business Days ((or such longer period), not
to exceed 30 calendar days, to which each Rating Agency may consent),
establish a new Reserve Account as an Eligible Deposit Account and shall
transfer any cash and/or any investments to such new account.
(e) With respect to the Reserve Account Property, the Company, on
behalf of itself, its successors and assigns, and the Trustee agree that:
(1) Any Reserve Account Property that is held in deposit accounts
shall be held solely in the name of
-33-
the Trustee, as collateral agent, at an Eligible Institution. Each such
deposit account shall be subject to the exclusive custody and control of
the Trustee, and the Trustee shall have sole signature authority with
respect thereto;
(2) Any Reserve Account Property that constitutes Physical
Property shall be delivered to the Trustee, as collateral agent, in
accordance with paragraph (a) of the definition of "Delivery" and shall
be held, pending maturity or disposition, solely by the Trustee, as
collateral agent, or a financial intermediary (as such term is defined
in Section 8-313(4) of the UCC) acting solely for the Trustee, as
collateral agent;
(3) Any Reserve Account Property that is a book-entry security
held through the Federal Reserve System pursuant to federal book-entry
regulations shall be delivered in accordance with paragraph (b) of the
definition of "Delivery" and shall be maintained by the Trustee, as
collateral agent, pending maturity or disposition, through continued
book-entry registration of such Reserve Account Property as described in
such paragraph; and
(4) Any Reserve Account Property that is an "uncertificated
security" under Article 8 of the UCC and that is not governed by clause
(3) above shall be delivered to the Trustee, as collateral agent, in
accordance with paragraph (c) of the definition of "Delivery" and shall
be maintained by the Trustee, as collateral agent, pending maturity or
disposition, through continued registration of the Trustee's (or its
custodian's or its nominee's) ownership of such security, in its
capacity as collateral agent.
Effective upon Delivery of any Reserve Account Property in the form of
Physical Property, book-entry securities or uncertificated securities, the
Trustee shall be deemed to have purchased such Reserve Account Property for
value, in good faith and without notice of any adverse claim thereto.
(f) The Company and the Servicer agree to take or cause to be taken such
further actions, to execute, deliver and file or cause to be executed,
delivered and filed such further documents and instruments (including,
without limitation, any UCC financing statements or this Agreement) as may
be determined to be necessary in an Opinion of Counsel to the Company
delivered to the Trustee in order to perfect the interests created by this
Section and otherwise fully to effectuate the purposes, terms and conditions
of this Section. The Company shall:
-34-
(1) promptly execute, deliver and file any financing statements,
amendments, continuation statements, assignments, certificates, and
other documents with respect to such interests and perform all such
other acts as may be necessary in order to perfect or maintain the
perfection of the Trustee's security interest; and
(2) file the necessary financing statements or amendments thereto
within five days, and promptly notify the Trustee of any such filing,
after the occurrence of any of the following: (A) any change in its
corporate name or any trade name; (B) any change in the location of its
chief executive office or principal place of business; and (C) any
merger or consolidation or other change in its identity or corporate
structure and promptly notify the Trustee of any such filings.
(g) The Trustee shall not enter into any subordination or
intercreditor agreement with respect to the Reserve Account Property.
(h) Following the payments in full of the Certificate Balance and of
all other amounts owing or to be distributed under this Agreement to
Certificateholders and the termination of the Trust, any amount remaining on
deposit in the Reserve Account shall be distributed to the Sellers.
[Section 4.03. Yield Supplement Account. (a) On or prior to the
------------------------
Closing Date, the Company shall establish an Eligible Deposit Account (the
"Yield Supplement-Account"), bearing a designation clearly indicating that the
funds deposited therein are for the benefit of the Certificateholders. On or
prior to the Closing Date, the Company, the Servicer and the Trustee shall enter
into the Yield Supplement Account Agreement and the Sellers shall deposit an
amount equal to the Yield Supplement Initial Deposit into the Yield Supplement
Account. The Yield Supplement Account shall not be part of the Trust, but
instead will be held for the benefit of the Certificateholders. The Company
hereby acknowledges that the Yield Supplement Initial Deposit and any investment
earnings thereon are owned directly by it, and the Company hereby agrees to
treat the same as its assets (and earnings) for federal income tax and all other
purposes.
(b) The Company hereby sells, conveys and transfers to Trustee, as
collateral agent, and its successors and assigns, the Yield Supplement Initial
Deposit and all proceeds thereof, and hereby pledges to the Trustee as
collateral agent, and its successors and assigns, all other amounts deposited in
or credited to the Trustee as collateral agent, and its successors and assigns,
all other amounts deposited in or credited to the Yield Supplement Account from
time to time under this Agreement, all Eligible
-35-
Investment made with amounts on deposit therein, all earnings and distributions
thereon, subject, however, to the limitations set forth below.
(c) The amounts on deposit in the Yield Supplement Account on each
Distribution Date shall be available for distribution as provided in Section
5.05; provided, however, that if the amount on deposit in the Yield
Supplement Account (after giving effect to all deposits thereto and
withdrawals therefrom on such Distribution Date) is greater than the Yield
Supplement Maximum Amount, the Trustee shall release and distribute such
excess amount to the Company. Upon any such distribution to the Company, the
Certificateholders will have no further rights in, or claims to, such
amounts.
(d) Following the payment in full of the Certificate Balance and of
all other amounts owing or to be distributed to Certificateholders under
this Agreement and the termination of the Trust, any amount remaining on
deposit in the Yield Supplement Account shall be distributed to the
Company.]
ARTICLE V
Payments and Statements to Certificateholders
---------------------------------------------
Section 5.01. Collections. The Servicer shall remit within two
-----------
Business Days of receipt thereof to the Collection Account all payments by or on
behalf of the Obligors with respect to the Receivables (other than Purchased
Receivables) and all Liquidation Proceeds. Notwithstanding the foregoing, for
so long as (a) ________ remains the Servicer, (b) no Event of Default shall have
occurred and be continuing and (c)(1) __________ maintains a short-term rating
of at least A-1 by Standard & Poor's and P-1 by Moody's (and for five Business
Days following a reduction in either such rating) or (2) prior to ceasing daily
remittances, the Rating Agency Condition shall have been satisfied (and any
conditions or limitations imposed by the Rating Agencies in connection therewith
are complied with), the Servicer may remit all such payments and Liquidation
Proceeds with respect to any Collection Period to the Collection Account on a
less frequent basis, but in no event later than the Determination Date
immediately preceding each Distribution Date. For purposes of this Article V,
the phrase "payments by or on behalf of Obligors" shall mean payments made with
respect to the Receivables by Persons other than the Servicer or the Company.
Section 5.02. Application of Collections. All collections for a
--------------------------
Collection Period shall be applied by the Servicer as follows: With respect to
each Receivable (other than a Purchased Receivable), payments by or on behalf of
the Obligor
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shall be applied first, in the case of Precomputed Receivables, to reduce
Outstanding Precomputed Advances as described in Section 5.03(a) and, in the
case of Simple Interest Receivables, to reduce Outstanding Simple Interest
Advances as described in Section 5.03(b). Next, any excess shall be applied, in
the case of Precomputed Receivables, to the Scheduled Payment and, in the case
of Simple Interest Receivables, any remaining excess shall be added to the
Payahead Balance and shall be applied to prepay the Precomputed Receivable only
if the sum of such excess and the previous Payahead Balance shall be sufficient
to prepay the Receivable in full. Otherwise, and such remaining excess payment
shall constitute a Payahead and shall increase the Payahead Balance.
Section 5.03. Advances. (a) As of the close of business on the
--------
last day of each Collection Period, if the payments by or on behalf of an
Obligor on a Precomputed Receivable (other than a Purchased Receivable) shall be
less than the Scheduled Payment, the Payahead Balance, if any, with respect to
such Precomputed Receivable shall be applied by the Servicer to the extent of
the shortfall and such Payahead Balance shall be reduced accordingly. Next, the
Servicer shall advance any remaining shortfall (such amount a "Precomputed
Advance"), to the extent that the Servicer, at its sole discretion, shall
determine that such Precomputed Advance shall be recoverable from the Obligor,
the Purchase Amount or Liquidation Proceeds with respect to such Receivable or
proceeds of any other Precomputed Receivables. Each such Precomputed Advance
shall increase the aggregate amount of Outstanding Precomputed Advances.
Outstanding Precomputed Advances shall be reduced by subsequent payments by or
on behalf of the Obligor, collections of Liquidation Proceeds in respect of
Precomputed Receivables or payments of the Purchase Amount in respect of
Precomputed Receivables.
If the Servicer shall determine that an Outstanding Precomputed
Advance with respect to any Precomputed Receivable shall not be recoverable
as aforesaid, the Servicer shall be reimbursed from any collections made on
other Precomputed Receivables in the Trust, and Outstanding Precomputed
Advances with respect to such Precomputed Receivable shall be reduced
accordingly.
(b) At the close of business on the last day of each Collection
Period, the Servicer shall advance an amount equal to the amount of interest
due on the Simple Interest Receivables at their respective APR's for the
related Collection Period (assuming the Simple Interest Receivables pay on
their respective due dates) minus the amount of interest actually received
on the Simple Interest Receivables during the related Collection Period
(such amount, a "Simple Interest Advance"). Each such Simple Interest
Advance shall increase the aggregate amount of
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Outstanding Simple Interest Advances. If such calculation results in a
negative number, an amount equal to such negative number shall be paid to
the Servicer and the amount of Outstanding Simple Interest Advances shall be
reduced by such amount. In addition, in the event that a Simple Interest
Receivable becomes a Liquidated Receivable, Liquidation Proceeds with
respect to such Simple Interest Receivable attributable to accrued and
unpaid interest thereon (but not including interest for the then current
Collection Period) shall be paid to the Servicer to reduce Outstanding
Simple Interest Advances, but only to the extent of any current Outstanding
Simple Interest Advances. The Servicer shall not make any advance with
respect to principal of a Simple Interest Receivable.
Section 5.04. Additional Deposits. The Servicer shall deposit in
-------------------
the Collection Account the aggregate Advances pursuant to Section 5.03. The
Servicer and the Company shall deposit or cause to be deposited in the
Collection Account the aggregate Purchase Amount with respect to Purchased
Receivables, and the Servicer shall deposit therein all amounts to be paid under
Section 11.02. The Servicer shall deposit the aggregate Purchase Amount with
respect to Purchased Receivables in the Collection Account when such obligations
are due, unless the Servicer shall not be required to make daily deposits
pursuant to Section 5.01.
Section 5.05. Deposits. (a) On each Distribution Date, the Trustee
--------
shall cause the following transfers to be made in immediately available funds in
the amounts set forth in the Servicer's Certificate for such Distribution Date:
(1) from moneys on deposit in the Yield Supplement Account or
otherwise paid by the Company to the Trustee pursuant to the Yield
Supplement Account Agreement to the Distribution Account, an amount equal to
the Yield Supplement Amount for such Distribution Date;
(2) from the Collection Account to the Distribution Account, the
entire amount then on deposit in the Collection Account; provided, however,
that in the event the Servicer is required to make deposits to the
Collection Account on a daily basis pursuant to Section 5.01, the amount of
funds transferred from the Collection Account to the Distribution Account
will include only those funds that were deposited in the Collection Account
for the Collection Period related to such Distribution Date; and
(3) from the Payahead Account, or from the Servicer in the event that
the second and third sentences of Section 4.01(c)(2) are applicable, to the
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Distribution Account, the aggregate amount of previous Payaheads to be
applied to Scheduled Payments on Precomputed Receivables for the
related Collection Period or prepayments for the related Collection
Period, pursuant to Sections 5.02 and 5.03, in the amount set forth in
the Servicer's Certificate delivered on the related Determination
Date. A single, net transfer may be made.
(b) On each Determination Date, the Servicer shall calculate the Total
Distribution Amount, Interest Distribution Amount, Principal Distribution
Amount, Yield Supplement Amount, the Class A Principal Distributable Amount,
Class A Interest Distributable Amount, Class B Principal Distributable Amount
and Class B Interest Distributable Amount and, based on the Total Distribution
Amount and the other amounts to be distributed on such Distribution Date,
determine the amounts distributable to Holders of the Class A Certificates and
the Class B Certificates.
(c) On each Distribution Date, the Trustee (based on the information
contained in the Servicer's Certificate delivered on the related Determination
Date pursuant to Section 3.09) shall distribute amounts on deposit in the
Distribution Account and, if applicable, the Reserve Account, in the manner and
priority set forth below:
(1) to the Servicer, from the Interest Distribution Amount, the
Servicing Fee and all unpaid Servicing Fees from prior Collection
Periods;
(2) to the Class A Certificateholders:
(A) from the Class A Percentage of the Interest
Distribution Amount (after payment of the Servicing Fee and except as
provided in the proviso to subsection (d)(1 ) below), the Class A
Interest Distributable Amount;
(B) from the Class A Percentage of the Principal
Distribution Amount, the Class A Principal Distributable Amount;
(3) To the Class B Certificateholders:
(A) from the Class B Percentage of the Interest
Distribution Amount (after payment of the Servicing Fee), the (Class B
Interest Distributable Amount; and
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(B) from the Class B Percentage of the Principal
Distribution Amount, the Class B Principal Distributable Amount.
(d) The rights of the Class B Certificateholders to receive
distributions in respect of the Class B Certificates shall be and hereby are
subordinated to the rights of the Class A Certificateholders to receive
distributions in respect of the Class A Certificates and the rights of the
Servicer to receive the Servicing Fee (and any accrued and unpaid Servicing Fees
from prior Collection Periods) to the extent provided in this Section. Such
subordination shall be effected as follows, and all payments shall be affected
pursuant to clause (1) below prior to any payments pursuant to clause (2):
(1) If the Class A Percentage of the Interest Distribution
Amount (after such Interest Distribution Amount has been reduced by
Servicing Fee payments) is less than the Class A Interest Distributable
Amount on any Distribution Date, the Class A Certificateholders shall be
entitled to receive distributions in respect of such deficiency first,
from the Class B Percentage of the Interest Distribution Amount; second,
if such amounts are insufficient, from amounts on deposit in the Reserve
Account; and third, if such amounts are insufficient, from the Class B
Percentage of the Principal Distribution Amount; provided, however, that
if the amount of Simple Interest Advances required to be made for the
Collection Period have not been paid by the Servicer or withdrawn from
the Reserve Account, any resultant shortfall shall be allocated pro rata
between the Class A Certificates and the Class B Certificates and any
portion of such shortfall allocable to the Class A Certificates (and any
Class A Interest Carryover Shortfalls attributable thereto) shall be
paid only from amounts that are or become available in the Reserve
Account after giving effect to any deposit thereto on such day.
(2) If the Class A Percentage of the Principal Distribution
Amount is less than the Class A Principal Distributable Amount on any
Distribution Date, the Class A Certificateholders shall be entitled to
receive distribution in respect of such deficiency first, from the Class
B Percentage of the Principal Distribution Amount; second, if such
amounts are insufficient, from amounts on deposit in the Reserve Account
and third, if such amounts are insufficient, from the Class B Percentage
of the Interest Distribution Amount.
(e) On each Distribution Date, the Trustee shall distribute any excess
amounts remaining in the Distribution
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Account after making the distributions described in clauses (c)(1)
through (c)(3) above in the following amounts and in the following order
of priority: (1) to the Reserve Account until the amount on deposit
therein equals the Specified Reserve Account Balance and (2) to the
Company.
(f) Subject to Section 11.01 respecting the final payment upon
retirement of each Certificate, the Servicer shall instruct the Trustee
on each Distribution Date to distribute to each Certificateholder of
record on the preceding Record Date the interest and principal amounts
to be distributed to such Certificateholder on such Distribution Date.
Such distributions by the Trustee shall be made either (1) by wire
transfer in immediately available funds to the account of such Holder at
a bank or other entity having appropriate facilities thereof, provided
that such Holder holds Certificates with a minimum initial aggregate
principal amount of $1,000,000 and such Certificateholder has provided
appropriate instructions to the Servicer prior to such Distribution
Date, or (2) by check mailed to such Certificateholder at the address of
such Holder appearing in the Certificate Register.
Section 5.06. Statements to Certificateholders. On each
--------------------------------
Determination Date, the Servicer shall provide to the Trustee for the Trustee to
forward to each Certificateholder of record as of the most recent Record Date, a
statement setting forth the following information for the related Collection
Period as to each Class of Certificates to the extent applicable:
(a) the amount of such distribution allocable to principal of each
class of Certificates;
(b) the amount of such distribution allocable to interest of each
class of Certificates;
(c) the Pool Balance as of the close of business on the last day of
the related Collection Period after giving effect to payments allocated to
principal reported under (1) above;
(d) the Class A Certificate Balance and the Class B Certificate
Balance as of the close of business on the last day of the related Collection
Period, after giving effect to payments allocated to principal reported under
(1) above;
(e) the amount of the Servicing Fee paid to the Servicer for the
related Collection Period;
(f) the amount, if any, of Class A Principal Carryover Shortfall,
Class A Interest Carryover Shortfall, Class B Principal Carryover Shortfall and
Class B Interest Carryover
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Shortfall, as applicable, on such Distribution Date and any change in
the Class A Principal Carryover Shortfall, Class A Interest Carryover
Shortfall, Class B Principal Carryover Shortfall and Class B Interest
Carryover Shortfall, as applicable, from the preceding Distribution
Date;
(g) the amount of Realized Losses, if any, with respect to the
related Collection Period.
(h) the amount otherwise distributable to Holders of the Class B
Certificates that is distributed to Holders of Class A Certificates on
such Distribu tion Date.
(i) the balance of the Reserve Account on such Distribution
Date, after giving effect to deposits thereto and withdrawals therefrom
made on such Distribution Date;
(j) the Yield Supplement Amount and the amount on deposit in the
Yield Supplement Account after giving effect to distributions on such
date; and
(k) the aggregate Payahead Balance and the change in such
balance from the preceding Distribution Date.
Each amount set forth pursuant to subclauses (a), (b), (d) and (e) above shall
be expressed as a dollar amount per $1,000 of original principal balance of
Class A Certificate or Class B Certificate, as applicable.
Section 5.07. Accounting and Tax Returns. The Trustee shall (a)
--------------------------
maintain (or cause to be maintained) the books of the Trust on a calendar year
basis and the accrual method of accounting and (b) deliver to each
Certificateholder such information as may be required by the Code and applicable
Treasury Regulations (including Form 1099) to enable each Holder to prepare its
federal and state income tax returns.
Section 5.08. Net Deposits. As an administrative convenience,
------------
unless the Servicer is required to remit collections daily, the Servicer will be
permitted to make the deposit of collections on the Receivables, aggregate
Advances and Purchase Amounts for or with respect to each Collection Period net
of distributions to be made to the Servicer with respect to such Collection
Period. The Servicer, however, will account to the Trustee and to the
Certificateholders as if all deposits, distributions and transfers were made
individually.
ARTICLE VI
The Certificates
----------------
Section 6.01. The Certificates. The Certificates shall be issued
----------------
in fully registered form in minimum denominations
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of $1,000 and integral multiples of $1 in excess thereof. The Certificates
shall be executed on behalf of the Trust by manual or facsimile signature of an
authorized officer of the Trustee. Certificates bearing the manual or facsimile
signatures of signatures of individuals who were, at the time when such
signatures were affixed, authorized to sign on behalf of the Trust, shall be
validly issued and entitled to the benefit of this Agreement, notwithstanding
the fact that such individuals or any of them have ceased to be so authorized
prior to the authentication and delivery of such Certificates or did not hold
such offices at the date of authentication and delivery of such Certificates.
A transferee of a Certificate shall become a Certificateholder and shall be
entitled to the rights and subject to the obligations of a Certificateholder
hereunder upon such transferee's acceptance of a Certificate duly registered in
such transferee's name pursuant to Section 6.03.
Section 6.02. Authentication of Certificates. Concurrently with
------------------------------
the conveyance of the Receivables to the Trust, the Trustee shall cause the
Certificates to be executed on behalf of the Trust, authenticated and delivered
to or upon the written order of the Company, signed by an authorized Trust
Officer, without further corporate action by the Company, in authorized
denominations. No Certificate shall entitle its Holder to any benefit under
this Agreement or be valid for any purpose unless there shall appear on such
Certificate a certificate of authentication, executed by the Trustee by manual
signature. Such authentication shall constitute conclusive evidence that such
Certificate shall have been duly authenticated and delivered hereunder. All
Certificates shall be dated the date of their authentication.
Section 6.03. Registration of Transfer and Exchange of
----------------------------------------
Certificates. The Certificate Registrar shall keep or cause to be kept, at the
office or agency maintained pursuant to Section 6.07, a Certificate Register in
which, subject to such reasonable regulations as it may prescribe, the Trustee
shall provide for the registration of Certificates and of transfers and
exchanges of Certificates as herein provided. Unless otherwise specified in
this Agreement, the Trustee shall be the initial Certificate Registrar.
Upon surrender for registration of transfer of any Certificate at the
Corporate Trust Office, the Trustee shall execute, authenticate and deliver, in
the name of the designated transferee or transferees, one or more new
Certificates in authorized denominations of a like aggregate amount dated the
date of authentication by the Trustee. At the option of a Holder, Certificates
may be exchanged for other Certificates of authorized denominations of a like
aggregate amount upon
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surrender at the Corporate Trust Office of the Certificates to be exchanged.
Every Certificate presented or surrendered for registration of
transfer or exchange shall be accompanied by a written instrument of transfer in
form satisfactory to the Trustee and the Certificate Registrar duly executed by
the Holder or such Holder's attorney duly authorized in writing. Each
Certificate surrendered for registration of transfer and exchange shall be
canceled and subsequently disposed of by the Trustee.
No service charge shall be made for any registration of transfer or
exchange of Certificates, but the Trustee may require payment of a sum
sufficient to cover any tax or governmental charge that may be imposed in
connection with any transfer or exchange of Certificates.
Section 6.04. Mutilated, Destroyed, Lost or Stolen Certificates. If
-------------------------------------------------
(a) any mutilated Certificate shall be surrendered to the Certificate Registrar,
or if the Certificate Registrar shall receive evidence to its satisfaction of
the destruction, loss or theft of any Certificate and (b) there shall be
delivered to the Certificate Registrar and the Trustee such security or
indemnity as may be required by them to save each of them harmless, then in the
absence of notice that such Certificate has been acquired by a bona fide
purchaser, the Trustee on behalf of the Trust shall execute, and the Trustee
shall authenticate and deliver, in exchange for or in lieu of any such
mutilated, destroyed, lost or stolen Certificate, a new Certificate of like
tenor and denomination. In connection with the issuance of any new Certificate
under this Section, the Trustee and the Certificate Registrar may require the
payment of a sum sufficient to cover any tax or other governmental charge that
may be imposed in connection therewith. Any duplicate Certificate issued
pursuant to this Section shall constitute conclusive evidence of ownership of a
beneficial interest in the Trust, as if originally issued, whether or not the
lost, stolen or destroyed Certificate shall be found at any time.
Section 6.05. Persons Deemed Owners. Prior to due presentation of a
---------------------
Certificate for registration of transfer, the Trustee or the Certificate
Registrar may treat the Person in whose name any Certificate shall be registered
as the owner of such Certificate for the purpose of receiving distributions
pursuant to Section 5.05 and for all other purposes whatsoever, and neither the
Trustee nor the Certificate Registrar shall be bound by any notice to the
contrary.
Section 6.06. Access to List of Certificateholders' Names and
-----------------------------------------------
Addresses. The Trustee shall furnish or cause to be furnished to the Servicer,
---------
within 15 days after receipt by the Trustee of a request therefor from the
Servicer in writing, a list, in such form as the Servicer may reasonably
require, of the
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names and addresses of the Certificateholders as of the most recent Record Date.
If three or more Certificateholders, or one or more Holders of Certificates
evidencing no less than 25% of the Certificate Balance apply in writing to the
Trustee, and such application states that the applicants desire to communicate
with other Certificateholders with respect to their rights under this Agreement
or under the Certificates and such application is accompanied by a copy of the
communication that such applicants propose to transmit, then the Trustee shall,
within five Business Days after the receipt of such application, afford such
applicants access during normal business hours to the current list of
Certificateholders. Each Holder, by receiving and holding a Certificate, shall
be deemed to have agreed to hold neither the Servicer nor the Trustee
accountable by reason of the disclosure of its name and address, regardless of
the source from which such information was derived.
Section 6.07. Maintenance of Office or Agency. The Trustee shall
-------------------------------
maintain in the Borough of Manhattan, The City of New York, an office or
offices or agency where Certificates may be surrendered for registration of
transfer or exchange and where notices and demands to or upon the Trustee in
respect of the Certificates and this Agreement may be served. The Trustee
initially designates ___________________ as its office for such purposes. The
Trustee shall give prompt written notice to the Servicer and to
Certificateholders of any change in the location of the Certificate Register or
any such office or agency.
Section 6.08. Book-Entry Certificates. The Class A Certificates,
-----------------------
upon original issuance, will be issued in the form of one or more typewritten
Certificates representing Book-Entry Certificates, to be delivered to the
Depository Trust Company, the initial Clearing Agency by or on behalf of the
Trust. The Class A Certificates shall be registered initially on the
Certificate Register in the name of Cede & Co. the nominee of the initial
Clearing Agency, and no Certificate Owner will receive a definitive certificate
representing such Certificate Owner's interest in the Certificates, except as
provided in Section 6.10. Unless and until definitive, fully registered
Certificates (the "Definitive Certificates") have been issued to such
Certificate Owners pursuant to Section 6.10
(a) the provisions of this Section shall be in full force and effect;
(b) the Company, the Servicer, the Certificate Registrar and the
Trustee may deal with the Clearing Agency for all purposes (including the
making of distributions on the Class A Certificates) as the sole Holder of
such Certificates and shall have no obligation to the related Certificate
Owners;
-45-
(c) to the extent that the provisions of this Section conflict with
any other provisions of this Agreement, the provisions of this Section shall
control;
(d) the rights of such Certificate Owners shall be exercised only
through the Clearing Agency and shall be limited to those established by law
and agreements between such Certificate Owners and the Clearing Agency
and/or the Clearing Agency Participants pursuant to the Depository
Agreement. Unless and until Definitive Certificates are issued pursuant to
Section 6.10, the initial Clearing Agency will make book-entry transfers
among the Clearing Agency Participants and receive and transmit
distributions of principal and interest on the Class A Certificates to such
Clearing Agency Participants; and
(e) whenever this Agreement requires or permits actions to be taken
based upon instructions or directions of Holders of Class A Certificates
evidencing a specified percentage of the Class A Certificate Balance, the
Clearing Agency shall be deemed to represent such percentage only to the
extent that it has received instructions to such effect from Certificate
Owners and/or Clearing Agency Participants owning or representing,
respectively, such required percentage of the beneficial interest in the
Class A Certificates and has delivered such instructions to the Trustee.
Section 6.09. Notices to Clearing Agency. Whenever a notice or
--------------------------
other communication to Holders of the Class A Certificates is required under
this Agreement, unless and until Definitive Certificates have been issued to
such Certificate Owners pursuant to Section 6.10, the Trustee and the Servicer
shall give all such notices and communications specified herein to be given to
Holders of Class A Certificates to the Clearing Agency.
Section 6.10. Definitive Certificates. If (a) the Sellers advise
-----------------------
the Trustee in writing that the Clearing Agency is no longer willing or able to
properly discharge its responsibilities under the Depository Agreement and the
Company or the Trustee are unable to locate a qualified successor, (b) the
Company at its option advises the Trustee in writing that it elects to terminate
the book-entry system through the Clearing Agency or (c) after the occurrence of
an Event of Default, Certificate Owners representing beneficial interests
aggregating not less than a majority of the aggregate outstanding principal
amount of the Book-Entry Certificates advise the Trustee and the Clearing Agency
in writing that the continuation of a book-entry system through the Clearing
Agency is no longer in the best interests of the Certificate Owners, then the
Clearing Agency shall notify all Certificate Owners and the Trustee of the
occurrence of such event and of the availability of Definitive
-46-
Certificates evidencing the same. Upon surrender to the Trustee of the
typewritten Certificates representing the Book-Entry Certificates by the
Clearing Agency, accompanied by registration instructions, the Trustee shall
execute and authenticate the Definitive Certificates in accordance with the
instructions of the Clearing Agency. None of the Company, the Certificate
Registrar or the Trustee shall be liable for any delay in delivery of such
instructions and may conclusively rely on, and shall be protected in relying on,
such instructions. Upon the issuance of Definitive Certificates, the Trustee
shall recognize the Holders of the Definitive Certificates as Certificateholders
hereunder. The Definitive Certificates may be printed, lithographed or engraved
or produced in any other manner that is reasonably acceptable to the Trustee, as
evidenced by its execution thereof.
[Section 6.11. Limitations on Transfer of the Class B Certificates.
---------------------------------------------------
(a) The Class B Certificates have not been and will not be registered under the
Securities Act will not be listed on any exchange. No transfer of a Class B
Certificate shall be made unless such transfer is made pursuant to an effective
registration statement under the Securities Act and any applicable state
securities laws or is exempt from the registration requirements under said Act
and such state securities laws. In the event that a transfer is to be made in
reliance upon an exemption from the Securities Act and state securities laws, in
order to assure compliance with the Securities Act and such laws, the Holder
desiring to effect such transfer and such Holder's prospective transferee shall
each certify to the Trustee in writing the facts surrounding the transfer in
substantially the forms set forth in Exhibit E (the "Transferor Certificate")
and either Exhibit F (the "Investment Letter") or Exhibit G (the "Rule 144A
Letter"). Except in the case of a transfer as to which the proposed transferee
has provided a Rule 144A Letter, there shall also be delivered to the Trustee an
Opinion of Counsel that such transfer may be made pursuant to an exemption from
the Securities Act and state securities laws, which Opinion of Counsel shall not
be an expense of the Trust or Trustee; provided that such Opinion of Counsel in
respect of the applicable state securities laws may be a memorandum of law
rather than an opinion if such counsel is not licensed in the applicable
jurisdiction. The Company shall provide to any Holder of a Class B Certificate
and any prospective transferee designated by any such Holder, information
regarding the Class B Certificates and the Receivables and such other
information as shall be necessary to satisfy the condition to eligibility set
forth in Rule 144A(d)(4) under the Securities Act for transfer of any such Class
B Certificate without registration thereof under the Securities Act pursuant to
the registration exemption provided by Rule 144A. Each Holder of a Class B
Certificate desiring to effect such a transfer shall, and does hereby agree to,
indemnify the Trust, the Trustees and the Company against any liability that may
result if the transfer is
-47-
not so exempt or is not made in accordance with federal and state securities
laws.
(b) No transfer of a Class B Certificate shall be made unless the Trustee
shall have received a representation from the transferee of such Class B
Certificate, acceptable to and in form and substance satisfactory to the
Trustee, to the effect that such transferee is not an employee benefit plan,
trust or account (each a "Benefit Plan") subject to the fiduciary responsibility
provisions of ERISA or Section 4975 of the Code or a Person acting on behalf of
any such Benefit Plan or using assets of a Benefit Plan to acquire Class B
Certificates. For purposes of the preceding sentence, such representation shall
be deemed to have been made to the Trustee by the transferee's (including an
initial acquiror's) acceptance of a Class B Certificate. Notwithstanding
anything else to the contrary herein, any proposed transfer of a Class B
Certificate to or on behalf of a Benefit Plan subject to ERISA or the Code
without the delivery to the Trustee of an Opinion of Counsel satisfactory to the
Trustee shall be void and of no effect. The Trustee shall be under no liability
to any Person for any registration of transfer of any Class B Certificate that
is in fact not permitted by this Section 6.11 or for making any payments due on
such Class B Certificate to the Holder thereof or taking any other action with
respect to such Holder under the provisions of this Agreement so long as the
transfer was registered by the Trustee in accordance with the foregoing
requirements. The Trustee shall be entitled, but not obligated, to recover from
any Holder of a Class B Certificate that was in fact a Benefit Plan subject to
Section 406 of ERISA or Section 4975 of the Code, or a Person acting on behalf
of any such Benefit Plan at the time it became a Holder or which subsequently
became such a Benefit Plan or Person acting on behalf of such a Benefit Plan,
all payments made on such Class B Certificate at and after either such time.
Any payments so recovered by the Trustee shall be paid and delivered by the
Trustee to the last preceding Holder of such Certificate that is not, and was
not at the time it held such Certificate, a Benefit Plan or Person acting on
behalf of a Benefit Plan.
(c) The Trustee shall cause each Class B Certificate to contain a legend
stating that transfer of the Class B Certificates is subject to certain
restrictions and referring prospective purchasers of the Class B Certificates to
this Section 6.10 with respect to such restrictions.
(d) Unless otherwise set forth in this Agreement, no transfer of a Class B
Certificate or any interest therein shall be made unless prior to such transfer
the Holder of such Class B Certificate delivers to the Sellers and the Trustee
either a ruling of the Internal Revenue Service or
-48-
an Opinion of Counsel to the effect that the proposed transfer will not
result in the arrangement contemplated by this Agreement being treated as an
association taxable as a corporation under either the Code or the tax laws
of the State of New York.]
ARTICLE VII
The Company
-----------
Section 7.01. The Company's Representations. The Company makes the
-----------------------------
following representations with respect to itself on which the Trustee is deemed
to have relied in accepting the Receivables in trust and executing and
authenticating the Certificates. The representations speak as of the execution
and delivery of this Agreement and as of the Closing Date and shall survive the
sale of the Receivables to the Trustee.
(a) Organization and Good Standing. The Company is duly organized and
------------------------------
validly existing as a corporation in good standing under the laws of the
jurisdiction of its incorporation, with power and authority to own its
properties and to conduct its business as such properties are currently
owned and such business is presently conducted, and had at all relevant
times, and has, the corporate power, authority and legal right to acquire,
own and sell the Receivables.
(b) Due Qualification. The Company is duly qualified to do business as
-----------------
a foreign corporation in good standing, and has obtained all necessary
licenses and approvals, in all jurisdictions in which the ownership or lease
of property or the conduct of its business shall require such
qualifications.
(c) Power and Authority. The Company has the corporate power and
authority to execute and deliver this Agreement and to carry out its terms;
the Company has full power and authority to sell and assign the property to
be sold and assigned to and deposited with the Trustee by it as part of the
Trust, and the Company shall have duly authorized such sale and assignment
to the Trustee by all necessary corporate action; and the execution,
delivery and performance of this Agreement shall have been duly
authorized by the Company by all necessary corporate action.
(d) Binding Obligation. This Agreement when executed and delivered by
------------------
the Company, shall constitute a legal, valid and binding obligation of the
Company enforceable in accordance with its terms, subject to applicable
bankruptcy,
-49-
insolvency, reorganization and similar laws now or hereafter in effect
relating to or affecting creditors' rights generally and to general
principles of equity (whether applied in a proceeding at law or in
equity).
(e) No Violation. The consummation of the transactions contemplated
by------------this Agreement and the fulfillment of the terms hereof do
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) a
default under, the articles of incorporation or bylaws of the Company,
or any material term of any indenture, agreement or other instrument to
which the Company is a party or by which it is bound; or result in the
creation or imposition of any Lien upon any of its properties pursuant
to the terms of any such indenture, agreement or other instrument (other
than pursuant to this Agreement); or violate any law or, to the best of
the Company's knowledge, any order, rule or regulation applicable to the
Company of any court or of any federal or state regulatory body,
administrative agency or other governmental instrumentality having
jurisdiction over the Company or its properties.
(f) No Proceeding. There are no proceedings or investigations
-------------
pending or, to the Company's best knowledge, threatened, before any
court, regulatory body, administrative agency or other governmental
instrumentality having jurisdiction over the Company or its properties:
(1) asserting the invalidity of this Agreement or the Certificates; (2)
seeking to prevent the issuance of the Certificates or the consummation
of any of the transactions contemplated by this Agreement; (3) seeking
any determination or ruling that might materially and adversely affect
the performance by the Company of its obligations under, or the validity
or enforceability of, this Agreement or the Certificates; or (4)
relating to the Company and that might materially and adversely affect
the federal income tax attributes of the Certificates.
Section 7.02. Corporate Existence. During the term of this
-------------------
Agreement, the Company will keep in full force and effect its existence, rights
and franchises as a corporation under the laws of the jurisdiction of its
incorporation and will obtain and preserve its qualification to do business in
each jurisdiction in which such qualification is or shall be necessary or
appropriate to the proper administration of this Agreement and the transactions
contemplated hereby.
Section 7.03. Liabilities of the Company. The Company shall be
--------------------------
liable in accordance herewith only to the extent of the obligations specifically
undertaken and the representations and warranties made by the Company under this
Agreement.
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Section 7.04. Merger or Consolidation of, or Assumption of the
------------------------------------------------
Obligations of, the Company. Any Person (a) into which the Company may be
---------------------------
merged or consolidated, (b) which may result from any merger or consolidation to
which the Company shall be a party or (c) which may succeed to substantially all
of the properties and assets of the Company, which Person in any of the
foregoing cases executes an agreement of assumption to perform every obligation
of the Company under this Agreement, shall be the successor to the Company
hereunder without the execution or filing of any document or any further act by
any of the parties to this Agreement; provided, however, that (i) immediately
after giving effect to such transaction, no representation or warranty made
pursuant to Section 2.03 shall have been breached and no Event of Default, and
no event which, after notice or lapse of time, or both, would become an Event of
Default shall have happened and be continuing, (ii) the Company shall have
delivered to the Trustee an Officers' Certificate and an Opinion of Counsel each
stating that such consideration, merger or succession and such agreement of
assumption comply with this Section and that all conditions precedent, if any,
provided for in this Agreement relating to such transaction have been complied
with, (iii) the Rating Agency Requirement shall have been satisfied with respect
to such transaction and (iv) the Company shall have delivered to the Trustee an
Opinion of Counsel stating that, in the Opinion of such Counsel, either (A) all
financing statements and continuation statements and amendments thereto have
been executed and filed that are necessary fully to preserve and protect the
interest of the Trustee in the Receivables and reciting the details of such
filings or (B) no such action is necessary to preserve and protect such
interest. Notwithstanding anything herein to the contrary, the execution of the
foregoing agreement of assumption and compliance with clauses (i), (ii), (iii)
and (iv) above shall be conditions to the consummation of the transactions
referred to in clauses (a), (b) or (c) above.
Section 7.05. Limitation on Liability of the Company and Others. The
-------------------------------------------------
Company and any director, officer, employee or agent of the Company may rely in
good faith on the advice of counsel or on any document of any kind, prima facie
properly executed and submitted by any Person respecting any matters arising
hereunder. The Company shall be under no obligation to appear in, prosecute or
defend any legal action that shall not be related to its obligations under this
Agreement and that in its opinion may involve it in any expense or liability.
Section 7.06. The Company May Own Certificates. The Company and any
--------------------------------
Affiliate thereof may in its individual or any other capacity become the owner
or pledgee of Certificates with the same rights as it would have if it were not
the Company or an Affiliate thereof, except as otherwise provided herein.
-51-
ARTICLE VIII
The Servicer
------------
Section 8.01. Representations of Servicer. The Servicer makes the
---------------------------
following representations on which the Trustee is deemed to have relied in
accepting the Receivables in trust and executing and authenticating the
Certificates. The representations speak as of the execution and delivery of
this Agreement and as of the Closing Date and shall survive the sale of the
Receivables to the Trustee.
(a) Organization and Good Standing. The Servicer is duly organized and
------------------------------
validly existing as a banking corporation in good standing under the laws of the
state of its incorporation, with power and authority to own its properties and
to conduct its business as such properties are currently owned and such business
is presently conducted, and had at all relevant times, and has, the corporate
power, authority and legal right to acquire, own, sell and service the
Receivables and to hold the Receivable Files as custodian on behalf of the
Trustee.
(b) Due Qualification. The Servicer is duly qualified to do business as a
-----------------
foreign corporation in good standing, and has obtained all necessary licenses
and approvals, in all jurisdictions in which the ownership or lease of property
or the conduct of its business (including the servicing of the Receivables as
required by this Agreement) shall require such qualifications.
(c) Power and Authority. The Servicer has the power and authority to
-------------------
execute and deliver this Agreement and to carry out its terms; and the
execution, delivery and performance of this Agreement have been duly authorized
by the Servicer by all necessary corporate action.
(d) Binding Obligation. This Agreement constitutes a legal, valid and
------------------
binding obligation of the Servicer enforceable in accordance with its terms,
subject to applicable bankruptcy, insolvency, reorganization and similar laws
nor or hereafter in effect relating to or affecting creditors' rights generally
and to general principles of equity (whether applied in a proceeding at law or
in equity).
(e) No Violation. The consummation of the transactions contemplated by
------------
this Agreement and the fulfillment of the terms hereof does 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) a default under, the articles of
incorporation or bylaws of
-52-
the Servicer, or any material term of any indenture, agreement or other
instrument to which the Servicer is a party or by which it is bound; or
result in the creation or imposition of any Lien upon any of its properties
pursuant to the terms of any such indenture, agreement or other instrument
(other than this Agreement); or violate any law or, to the best of the
Servicer's knowledge, any order, rule or regulation applicable to the
Servicer of any court or of any federal or state regulatory body,
administrative agency or other governmental instrumentality having
jurisdiction over the Servicer or its properties.
(f) No Proceedings. There are no proceedings or investigations pending
or,--------------to the Servicer's best knowledge, threatened, before
any court, regulatory body, administrative agency or other governmental
instrumentality having jurisdiction over the Servicer or its
properties: (1) asserting the invalidity of this Agreement or the
Certificates; (2) seeking to prevent the issuance of the Certificates
or the consummation of any of the transactions contemplated by this
Agreement; (3) seeking any determination or ruling that might
materially and adversely affect the performance by the Servicer of its
obligations under, or the validity of enforceability of, this Agreement
or the Certificates; or (4) relating to the Servicer and which might
materially and adversely affect the federal income tax attributes of
the Certificates.
Section 8.02. Indemnities of Servicer. The Servicer shall be liable
-----------------------
in accordance herewith only to the extent of the obligations specifically
undertaken by the Servicer under this Agreement.
The Servicer shall defend, indemnify and hold harmless the Trustee,
the Trust and the Certificateholders from and against any and all costs,
expenses, losses, damages, claims, and liabilities, arising out of or resulting
from the use, ownership or operation by the Servicer or any Affiliate thereof of
a Financed Vehicle.
The Servicer shall indemnify, defend and hold harmless the Trustee,
the Trust and the Certificateholders from and against any and all costs,
expenses, losses, damages, claims, and liabilities to the extent that such cost,
expense, loss, claim, damage, or liability arose out of, or was imposed upon any
such Person through, the negligence, willful misfeasance or bad faith 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.
For purposes of this Section, in the event of the termination of the
rights and obligations of _________ (or any successor thereto pursuant to
Section 8.03) as Servicer pursuant
-53-
to Section 9.01, or a resignation by such Servicer pursuant to this Agreement,
such Servicer shall be deemed to be the Servicer pending appointment of a
successor Servicer (other than the Trustee) pursuant to Section 9.02.
Indemnification under this Section shall survive the resignation or
removal of the Trustee or the termination of this Agreement and shall include
reasonable fees and expenses of counsel and expenses of litigation. If the
Servicer shall have made any indemnity payments pursuant to this Section and the
recipient thereafter collects any of such amounts from others, such Person shall
promptly repay such amounts to the Servicer, without interest.
Section 8.03. Merger or Consolidation of, or Assumption of the
------------------------------------------------
Obligations of, Servicer. Any Person (a) into which the Servicer may be merged
------------------------
or consolidated, (b) which may result from any merger or consolidation to which
the Servicer shall be a party, or (c) which may succeed to substantially all of
the properties and assets of the Servicer, which Person in any of the foregoing
cases executes an agreement of assumption to perform every obligation of the
Servicer hereunder, shall be the successor to the Servicer under this Agreement
without further act on the part of any of the parties to this Agreement;
provided, however, that (i) immediately after giving effect to such transaction,
no Event of Default, and no event which, after notice or lapse of time, or both,
would become an Event of Default shall have happened and be continuing, (ii) the
Servicer shall have delivered to the Trustee an Officers' Certificate and an
Opinion of Counsel each stating that such consolidation, merger or succession
and such agreement of assumption comply with this Section and that all
conditions precedent provided for in this Agreement relating to such transaction
have been complied with, (iii) the Rating Agency Condition shall have been
satisfied with respect to such transaction and (iv) the Servicer shall have
delivered to the Trustee an Opinion of Counsel stating that, in the Opinion of
such Counsel, either (A) all financing statements and continuation statements
and amendments thereto have been executed and filed that are necessary fully to
preserve and protect the interest of the Trustee in the Receivables and reciting
the details of such filings or (B) no such action is necessary to preserve and
protect such interest. Notwithstanding anything herein to the contrary, the
execution of the foregoing agreement of assumption and compliance with clauses
(i), (ii), (iii) and (iv) above shall be conditions to the consummation of the
transactions referred to in clauses (a), (b) or (c) above.
Section 8.04. Limitation on Liability of Servicer and Others.
----------------------------------------------
Neither the Servicer nor any of its directors, officers, employees or agents
shall be under any liability to the Trustee, the Trust or the
Certificateholders, except as provided under this Agreement, for any action
taken or for refraining from the
-54-
taking of any action pursuant to this Agreement or for errors in judgment;
provided, however, that this provision shall not protect the Servicer or any
such Person against any liability that would otherwise be imposed by reason of
willful misfeasance, bad faith or negligence in the performance of duties or by
reason of reckless disregard of obligations and duties under this Agreement.
The Servicer and any director, officer, employee or agent of the Servicer may
rely in good faith on any document of any kind prima facie properly executed and
submitted by any Person respecting any matters arising under this Agreement.
Except as provided in this Agreement, the Servicer shall not be under
any obligation to appear in, prosecute or defend any legal action that shall not
be related to its duties as Servicer hereunder and that in its opinion may
involve it in any expense or liability; provided, however, that the Servicer may
undertake any reasonable action that it deems necessary or desirable with
respect to this Agreement and the rights and duties of the parties to this
Agreement and the interests of the Certificateholders under this Agreement.
ARTICLE IX
Default
-------
Section 9.01. Events of Default. The occurrence and continuation of
-----------------
any of the following events shall constitute an "Event of Default" for purposes
of this Agreement:
(a) Any failure by the Servicer to deliver to the Trustee any proceeds
or payment required to be so delivered under the terms of the Certificates
and this Agreement that shall continue unremedied for a period of three
Business Days after discovery of such failure by an officer of the Servicer
or after written notice of such failure is received by the Servicer from the
Trustee or Holders of Certificates evidencing not less than 25% of the
Certificate Balance; or
(b) Failure by the Servicer or the Company, as the case may be, duly
to observe or to perform in any material respect any other covenants or
agreements of the Servicer or the Company (as the case may be) set forth in
the Certificates or in this Agreement, which failure shall (1) materially
and adversely affect the rights of Certificateholders and (2) continue
unremedied for a period of 60 days after the date on which written notice of
such failure, requiring the same to be remedied, shall have been given (A)
to the Servicer or the Company (as the case may be) by the Trustee or (B) to
the Servicer or the Company (as the case may be) and to the Trustee by the
Holders of
-55-
Certificates evidencing not less than 25% of the Certificate Balance; or
(c) The entry of a decree or order by court or agency or supervisory
authority having jurisdiction in the premises for the appointment of a
conservator, receiver or liquidator for the Servicer in any insolvency,
readjustment of debt, marshaling of assets and liabilities or similar
proceedings, or for the winding up or liquidation of its affairs, and the
continuance of any such decree or order unstayed and in effect for a period
of 60 consecutive days; or
(d) The consent by the Servicer to the appointment of a conservator,
receiver or liquidator in any insolvency, readjustment of debt, marshaling
of assets and liabilities or similar proceedings of or relating to the
Servicer or of or relating to substantially all of its property; or the
admission by the Servicer in writing of its inability to pay its debts
generally as they become due, the filing by the Servicer of a petition to
take advantage of any applicable insolvency or reorganization statute, the
making by the servicer of an assignment for the benefit of its creditors, or
the voluntary suspension by the Servicer of payment of its obligations;
If an Event of Default shall have occurred and for as long as such Event of
Default continues unremedied, either the Trustee or the Holders of Certificates
evidencing not less than a majority of the Certificate Balance, by notice given
in writing to the Servicer (and to the Trustee if given by Certificateholders)
may terminate all of the rights and obligations (other than the obligations set
forth in Section 8.02) of the Servicer under this Agreement. On or after the
receipt by the Servicer of such written notice, all authority and power of the
Servicer under this Agreement, whether with respect to the Certificates or the
Receivables or otherwise, shall, without further action, pass to and be vested
in the Trustee or such successor Servicer as may be appointed under Section
9.02; and, without limitation, the Trustee is hereby authorized and empowered to
execute and deliver, on behalf of the predecessor Servicer, as attorney-in-fact
or otherwise, any and all documents and other instruments, and to do or
accomplish all other acts or things necessary or appropriate to effect the
purposes of such notice of termination, whether to complete the transfer and
endorsement of the Receivables and related documents, or otherwise. The
predecessor Servicer shall cooperate with the successor Servicer and the Trustee
in effecting the termination of the responsibilities and rights of the
predecessor Servicer under this Agreement, including the transfer to the
successor Servicer for administration by it of all cash amounts that shall at
the time be held by the predecessor Servicer for deposit, or shall thereafter be
received with respect to any Receivable. All
-56-
reasonable costs and expenses (including attorneys' fees) incurred in connection
with transferring the Receivable Files to the successor Servicer and amending
this Agreement to reflect the succession of such successor Servicer pursuant to
this Section shall be paid by the predecessor Servicer upon presentation of
reasonable documentation of such costs and expenses. Upon receipt of notice of
the occurrence of an Event of Default, the Trustee shall give notice thereof to
the Rating Agencies.
Section 9.02. Appointment of Successor. (a) Upon the Servicer's
------------------------
receipt of notice of termination pursuant to Section 9.01 or the Servicer's
resignation in accordance with the terms of this Agreement, the predecessor
Servicer shall continue to perform its functions as Servicer under this
Agreement, in the case of termination, only until the date specified in such
termination notice or, if no such date is specified in a notice of termination,
until receipt of such notice and, in the case of resignation, until the earlier
of (1) the date that is 45 days after the date of delivery to the Trustee of
written notice of such resignation (or written confirmation of such notice) in
accordance with the terms of this Agreement and (2) the date upon which the
predecessor Servicer shall become unable to act as Servicer, as specified in the
notice of resignation and accompanying Opinion of Counsel. In the event of the
Servicer's termination hereunder, the Trustee shall appoint a successor
Servicer, and the successor Servicer shall accept its appointment by a written
assumption in form acceptable to the Trustee. In the event that a successor
Servicer has not been appointed at the time when the predecessor Servicer has
ceased to act as Servicer in accordance with this Section, the Trustee, without
any further action, shall automatically be appointed the successor Servicer and
shall be entitled to the Servicing Fee. Notwithstanding the above, the Trustee
shall, if it is legally unable so to act, appoint, or petition a court of
competent jurisdiction to appoint, any established institution having a net
worth of not less than $100,000,000 and whose regular business includes the
servicing of automotive receivables as the successor to the Servicer under this
Agreement.
(b) Upon appointment, the successor Servicer (including the Trustee
acting as successor Servicer) shall be the successor in all respects to the
predecessor Servicer and shall be subject to all the responsibilities,
duties and liabilities arising thereafter relating thereto placed on the
predecessor Servicer and shall be entitled to the Servicing Fee and all of
the rights granted to the predecessor Servicer by the terms and provisions
of this Agreement.
Section 9.03. Repayment of Advances. The Servicer, if it resigns or
---------------------
is removed pursuant to the terms of this Agreement, shall be entitled to receive
reimbursement for Outstanding
-57-
Precomputed Advances and Outstanding Simple Interest Advances made by it
pursuant to Sections 5.03 and 5.04.
Section 9.04. Notification of Certificateholders. Upon any
----------------------------------
termination of, or appointment of a successor to, the Servicer pursuant to this
Article IX, the Trustee shall give prompt written notice thereof to the
Certificateholders and to the Rating Agencies.
Section 9.05. Waiver of Past Defaults. The Holders of Certificates
-----------------------
evidencing not less than a majority of the Certificate Balance may, on behalf of
all Certificateholders, waive any default by the Servicer in the performance of
its obligations hereunder and its consequences, except a default in making any
required deposits to or payments from the trust accounts in accordance with this
Agreement. Upon any such waiver of a past default, such default shall cease to
exist, and any Event of Default arising therefrom shall be deemed to have been
remedied for every purpose of this Agreement. No such waiver shall extend to
any subsequent or other default or impair any right consequent thereon.
ARTICLE X
The Trustee
-----------
Section 10.01. Duties of Trustee. (a) The Trustee, both prior to
-----------------
and after the occurrence of an Event of Default, shall undertake to perform such
duties as are specifically set forth herein. If an Event of Default has
occurred and is continuing, the Trustee shall exercise the rights and powers
vested in it by this Agreement and use the same degree of care and skill in
their exercise as a prudent person would exercise or use under the circumstances
in the conduct of such person's own affairs; provided, however, that if the
Trustee shall assume the duties of the Servicer pursuant to Section 9.02, the
Trustee in performing such duties shall use the degree of skill and attention
customarily exercised by a servicer with respect to automobile receivables that
it services for itself or others.
(b) In the absence of bad faith on its part, the Trustee may
conclusively rely, as to the truth of the statements and the correctness of
the opinions expressed therein, upon certificates or opinions furnished to
the Trustee and conforming to the requirements of this Agreement; provided,
however, that the Trustee shall examine such certificates and opinions to
determine whether or not they conform to the requirements of this Agreement.
(c) The Trustee shall take and maintain custody of the Schedule of
Receivables included as an exhibit to this Agreement and shall retain all
Servicer's Certificates
-58-
identifying Receivables that become Purchased Receivables or Liquidated
Receivables.
(d) The Trustee shall not be liable for any action taken, suffered or
omitted to be taken in good faith in accordance with this Agreement or at the
direction of the Holders of Certificates evidencing not less than 25% of the
Certificate Balance relating to the time, method and place of conducting any
proceeding for any remedy available to the Trustee, or exercising any trust or
power conferred upon the Trustee under this Agreement.
(e) No provision of this Agreement shall be construed to relieve the
Trustee from liability for its own negligent actions, its own negligent failure
to act or its own bad faith or willful misconduct; provided, however, that:
(1) this paragraph does not limit the effect of clause (d) of this
Section; and
(2) the Trustee shall not be liable for any error of judgment made in
good faith by a Trustee Officer unless it is proved that the Trustee was
negligent in ascertaining the pertinent facts.
(f) No provision of this Agreement shall require the Trustee to expend or
risk its own funds or otherwise incur financial liability in the performance of
any of its duties hereunder or in the exercise of any of its rights or powers,
if it shall have reasonable grounds to believe that repayment of such funds or
adequate indemnity against such risk or liability is not reasonably assured to
it.
(g) Except for actions expressly authorized by this Agreement, the Trustee
shall take no action reasonably likely to impair the security interests created
or existing under any Receivable or to impair the value of any Receivable.
Section 10.02. Certain Matters Affecting Trustee. Except as otherwise
---------------------------------
provided in Section 10.01:
(a) The Trustee may rely on any document believed by it to be genuine and
to have been signed or presented by the proper Person. The Trustee need not
investigate any fact or matter stated in any such document.
(b) The Trustee may consult with counsel, and the advice or opinion of
counsel with respect to legal matters or relating to this Agreement or the
Certificates shall be full and complete authorization and protection from
liability in respect of any action taken, suffered or
-59-
omitted by it under this Agreement in good faith and in accordance with such
advice or opinion of such counsel.
(c) The Trustee shall be under no obligation to exercise any of the
rights or powers vested in it by this Agreement, or to institute, conduct or
defend any litigation under this Agreement at the request, order or
direction of any of the Certificateholders pursuant to the provisions of
this Agreement, unless such Certificateholders shall have offered to the
Trustee reasonable security or indemnity against the costs, expenses and
liabilities that may be incurred therein or thereby; however, nothing
contained in this Agreement shall relieve the Trustee of its obligation,
upon the occurrence of an Event of Default (that shall not have been cured
or waived), to exercise such of the rights and powers vested in it by this
Agreement, and to use the same degree of care and skill in their exercise as
a prudent person would exercise or use under the circumstances in the
conduct of that person's own affairs.
(d) The Trustee shall not be liable for any action taken, suffered or
omitted by it in good faith which it believes to be authorized or within its
rights or powers conferred upon it by this Agreement; provided, that such
conduct does not constitute willful misconduct, bad faith or negligence on
the part of the Trustee.
(e) The Trustee may execute any of the trusts or powers or perform any
duties hereunder either directly or by or through agents or attorneys or a
custodian.
Section 10.03. Trustee Not Liable for Certificates or Receivables.
--------------------------------------------------
The recitals contained herein and in the Certificates (other than the
certificate of authentication on the Certificates) shall be taken as the
statements of the Company or the Servicer, as the case may be, and the Trustee
assumes no responsibility for the correctness thereof. The Trustee makes no
representations as to the validity or sufficiency of this Agreement or of the
Certificates (other than the certificate of authentication on the Certificates),
or of any Receivable or related document. The Trustee shall at no time have any
responsibility or liability for or with respect to the legality, validity and
enforceability of any Receivable, or the perfection and priority of any security
interest created by any Receivable in any Financed Vehicle or the maintenance of
any such perfection and priority, or for or with respect to the efficacy of the
Trust or its ability to generate the payments to be distributed to
Certificateholders under this Agreement, including, without limitation: the
existence, condition and ownership of any Financed Vehicle; the existence and
enforceability of any insurance thereon; the existence and contents of any
Receivable or any computer or other record thereof; the validity of the
assignment of any Receivable to the Trust or of any intervening
-60-
assignment; the completeness of any Receivable; the performance or enforcement
of any Receivable; the compliance by the Company or the Servicer with any
warranty or representation made under this Agreement or in any related document
or the accuracy of any such warranty or representation before receipt of notice
or other discovery of any breach thereof; or any action of the Servicer taken in
the name of the Trustee.
Section 10.04. Trustee May Own Certificates. The Trustee in its
----------------------------
individual or any other capacity may become the owner or pledgee of Certificates
and may deal with the Company and the Servicer in banking transactions with the
same rights that it would have if it were not Trustee.
Section 10.05. Trustee's Fees and Expenses. The Company shall pay to
---------------------------
the Trustee, and the Trustee shall be entitled to receive as compensation for
its services hereunder, such fees as have been separately agreed upon before the
date hereof between the Company and the Trustee, and the Trustee shall be
entitled to reimbursement by the Company for its reasonable expenses under this
Agreement, including the reasonable compensation, expenses and disbursements of
such agents, representatives, experts and counsel as the Trustee may employ in
connection with the exercise and performance of its rights and duties under this
Agreement, except any such expenses and fees that may arise from the Trustee's
negligence, willful misfeasance or bad faith or that is the responsibility of
Certificateholders under this Agreement.
Section 10.06. Eligibility Requirements for Trustee. The Trustee
------------------------------------
shall at all times be a corporation having an office in the same state as the
location of the Corporate Trust Office; organized and doing business under the
laws of such state or the United States of America; authorized under such laws
to exercise corporate trust powers; having a combined capital and surplus of at
least $50,000,000 and subject to supervision or examination by federal or state
authorities; and having (or having a parent that has) a rating of at least Baa3
by Moody's. If such corporation shall publish reports of condition at least
annually pursuant to law or to the requirements of the aforesaid supervising or
examining authority, then for the purpose of this Section, the combined capital
and surplus of such corporation shall be deemed to be its combined capital and
surplus as set forth in its most recent report of condition so published. If at
any time the Trustee shall cease to be eligible in accordance with the
provisions of this Section, the Trustee shall resign immediately in the manner
and with the effect specified in Section 10.07.
Section 10.07. Resignation or Removal of Trustee. The Trustee may
---------------------------------
resign at any time and be discharged from the trusts hereby created by giving
written notice thereof to the Servicer. Upon receiving such notice of
resignation, the Servicer shall promptly appoint a successor Trustee by written
instrument, in
-61-
duplicate, one copy of which instrument shall be delivered to the resigning
Trustee and one copy to the successor Trustee. If no successor Trustee shall
have been so appointed and have accepted appointment within 30 days after the
giving of such notice of resignation, the resigning Trustee may petition any
court of competent jurisdiction for the appointment of a successor Trustee.
If at any time the Trustee shall cease to be eligible in accordance
with the provisions of Section 10.06 and shall fail to resign after written
request therefor by the Servicer, or if at any time the Trustee shall be legally
unable to act, or shall be adjudged bankrupt or insolvent, or a receiver of the
Trustee or of its property shall be appointed, or any public officer shall take
charge or control of the Trustee or of its property or affairs for the purpose
of rehabilitation, conservation or liquidation, then the Servicer may remove the
Trustee. If the Servicer shall remove the Trustee under the authority of the
immediately preceding sentence, the Servicer shall promptly appoint a successor
Trustee by written instrument, in duplicate, one copy of which instrument shall
be delivered to the outgoing Trustee so removed and one copy to the successor
Trustee, and shall pay all fees owed to the outgoing Trustee.
Any resignation or removal of the Trustee and appointment of a
successor Trustee pursuant to any of the provisions of this Section shall not
become effective until acceptance of appointment by the successor Trustee
pursuant to Section 10.08. The Servicer shall provide notice of any resignation
or removal of the Trustee to each of the Rating Agencies.
Section 10.08. Successor Trustee. Any successor Trustee appointed
-----------------
pursuant to Section 10.07 shall execute, acknowledge and deliver to the Servicer
and to its predecessor Trustee an instrument accepting its appointment as
successor Trustee under this Agreement, and thereupon the resignation or removal
of the predecessor Trustee shall become effective and such successor Trustee,
without any further act, deed or conveyance, shall become fully vested with all
the rights, powers, duties and obligations of its predecessor under this
Agreement, with like effect as if originally named as Trustee. The predecessor
Trustee shall deliver to the successor Trustee all documents and statements and
monies held by it under this Agreement; and the Servicer and the predecessor
Trustee shall execute and deliver such instruments and do such other things as
may reasonably be required for fully and certainly vesting and confirming in the
successor Trustee all such rights, powers, duties and obligations.
No successor Trustee shall accept appointment as provided in this
Section unless at the time of such acceptance
-62-
such successor Trustee shall be eligible pursuant to Section 10.06.
Upon acceptance of appointment by a successor Trustee pursuant to this
Section, the Servicer shall mail notice thereof to all Certificateholders and to
the Rating Agencies. If the Servicer shall fail to mail such notice within 10
days after acceptance of appointment by the successor Trustee, the successor
Trustee shall cause such notice to be mailed at the expense of the Servicer.
Section 10.09. Merger or Consolidation of Trustee. Any corporation
----------------------------------
into which the Trustee may be merged or converted or with which it may be
consolidated, or any corporation resulting from any merger, conversion or
consolidation to which the Trustee shall be a party, or any corporation
succeeding to all or substantially all of the corporate trust business of the
Trustee, shall be the successor of the Trustee hereunder, provided, that such
corporation is eligible to serve as Trustee pursuant to Section 10.06, without
the execution or filing of any instrument or any further act on the part of any
of the parties hereto, anything herein to the contrary notwithstanding. The
Trustee shall mail notice of any such merger or consolidation to the Rating
Agencies.
Section 10.10. Appointment of Co-Trustee or Separate Trustee.
---------------------------------------------
Notwithstanding any other provisions of this Agreement, at any time, for the
purpose of meeting any legal requirements of any jurisdiction in which any part
of the Trust or any Financed Vehicle may at the time be located, the Servicer
and the Trustee acting jointly shall have the power and shall execute and
deliver all instruments to appoint one or more Persons approved by the Trustee
to act as co-trustee, jointly with the Trustee, or separate trustee or separate
trustees, of all or any part of the Trust, and to vest in such Person, in such
capacity and for the benefit of the Certificateholders, such title to the Trust
or any part thereof and, subject to the other provisions of this Section, such
powers, duties, obligations, rights and trusts as the Servicer and the Trustee
may consider necessary or desirable. If the Servicer shall not have joined in
any such appointment within 15 days after the receipt by it of a request to do
so, the Trustee alone shall have the power to make such appointment. No co-
trustee or separate trustee under this Agreement shall be required to meet the
terms of eligibility as a successor Trustee pursuant to Section 10.06 and no
notice of the appointment of any co-trustee or separate trustee shall be
required pursuant to Section 10.08.
Each separate trustee and co-trustee shall, to the extent permitted by
law, be appointed and act subject to the following provisions and conditions:
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(a) All rights, powers, duties and obligations conferred or imposed
upon any such separate trustee or co-trustee shall be conferred upon and
exercised or performed by the Trustee and such separate trustee or co-trustee
jointly (it being understood that such separate trustee or co-trustee is not
authorized to act separately without the Trustee joining in such act), except
to the extent that under any law of any jurisdiction in which any particular
act or acts are to be performed, the Trustee shall be incompetent or
unqualified to perform such act or acts, in which event such rights, powers,
duties and obligations (including the holding of title to the Trust or any
portion thereof in any such jurisdiction) shall be exercised and performed
singly by such separate trustee or co-trustee, but solely at the direction of
the Trustee;
(b) No trustee under this Agreement shall be personally liable by
reason of any act or omission of any other trustee under this Agreement; and
(c) The Servicer and the Trustee acting jointly may at any time accept
the resignation of or remove any separate trustee or co-trustee;
(d) The execution, delivery and performance by the Trustee of this
Agreement (i) shall not violate any provision of any law governing the
banking and trust powers of the Trustee or, to the best of the Trustee's
knowledge, any order, writ, judgment or decree of any court, arbitrator or
governmental authority applicable to the Trustee or any of its assets, (ii)
shall not violate any provision of the corporate charter or bylaws of the
Trustee and (iii) shall not violate any provision of, or constitute, with or
without notice or lapse of time, a default under, or result in the creation
or imposition of any Lien on any properties included in the Trust pursuant to
the provisions of, any mortgage, indenture, contract, agreement or other
undertaking to which it is a party, which violation, default or Lien could
reasonably be expected to materially and adversely affect the Trustee's
performance or ability to perform its duties under this Agreement or the
transactions contemplated in this Agreement.
(e) The execution, delivery and performance by the Trustee of this
Agreement shall not require the authorization, consent, approval of, the
giving of notice to, the filing or registration with, or the taking of any
other action in respect of, any governmental authority or agency regulating
the banking and corporate trust activities of the Trustee.
Any notice, request or other writing given to the Trustee shall be deemed
to have been given to each of the then separate
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trustees and co-trustees, as effectively as if given to each of them. Every
instrument appointing any separate trustee or co-trustee shall refer to this
Agreement and the conditions of this Article. Each separate trustee and co-
trustee, upon its acceptance of the trusts conferred, shall be vested with the
estates or property specified in its instrument of appointment, either jointly
with the Trustee or separately, as may be provided therein, subject to all the
provisions of this Agreement, specifically including every provision of this
Agreement relating to the conduct of, affecting the liability of, or affording
protection to, the Trustee. Each such instrument shall be filed with the
Trustee and a copy thereof given to the Servicer.
Any separate trustee or co-trustee may at any time appoint the Trustee its
agent or attorney-in-fact with full power and authority, to the extent not
prohibited by law, to do any lawful act under or in respect of this Agreement on
its behalf and in its name. If any separate trustee or co-trustee shall die,
become incapable of acting, resign or be removed, all of its estates,
properties, rights, remedies and trusts shall vest in and be exercised by the
Trustee, to the extent permitted by law, without the appointment of a new or
successor co-trustee or separate trustee.
Section 10.11. Representations and Warranties of Trustee. The Trustee
-----------------------------------------
shall make the following representations and warranties, on which the Company
and Certificateholders shall be deemed to rely:
(a) The Trustee is a banking corporation duly organized, validly existing
and in good standing under the laws of its place of incorporation.
(b) The Trustee has full corporate power, authority and legal right to
execute and deliver, and to perform its obligations under, this Agreement, and
shall have taken all necessary action to authorize the execution and delivery
of, and the performance of its obligations under, this Agreement.
(c) This Agreement has been duly executed and delivered by the Trustee and
shall constitute the legal, valid and binding obligation of the Trustee, subject
to applicable bankruptcy, insolvency, reorganization and similar laws now or
hereafter in effect relating to or affecting creditors' rights generally and to
general principles of equity (whether applied in a proceeding at law or in
equity).
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ARTICLE XI
Termination
-----------
Section 11.01. Termination of the Trust. (a) The respective
------------------------
obligations and responsibilities of the Company, the Servicer and the Trustee
hereunder and the Trust created hereby shall terminate upon the earlier to occur
of (1) the payment to Certificateholders of all amounts required to be paid to
them pursuant to this Agreement and the disposition of all property held as part
of the Trust and (2) the time provided in Section 11.02; provided, however, that
in no event shall the trust created by this Agreement continue beyond the
expiration of 21 years from the death of the last survivor of the descendants of
Xxxxxx X. Xxxxxxx, the late ambassador of the United States to the Court of St.
Xxxxx, living on the date of this Agreement. The Servicer shall promptly notify
the Trustee of any prospective termination pursuant to this Section.
(b) Except as provided in Section 11.01(a), neither the Company nor
any Certificate Owner shall be entitled to revoke or terminate the Trust.
(c) Notice of any termination of the Trust, specifying the
Distribution Date upon which Certificateholders shall surrender their
Certificates to the Trustee for payment of the final distribution and
cancellation of the Certificates, shall be given by the Trustee by letter to
Certificateholders mailed not earlier than the 15th day and not later than the
25th day of the calendar month immediately preceding the calendar month in which
such final Distribution Date shall occur, stating (1) the Distribution Date upon
which final payment of the Certificates will be made upon presentation and
surrender of the Certificates at the office of the Trustee therein designated,
(2) the amount of such final payment and (3) that the Record Date otherwise
applicable to such Distribution Date is not applicable, payments being made only
upon presentation and surrender of the Certificates at the office of the Trustee
therein specified. The Trustee shall give such notice to the Certificate
Registrar (if other than the Trustee) at the time such notice is given to
Certificateholders. Upon presentation and surrender of the Certificates, the
Trustee shall cause to be distributed to Certificateholders amounts
distributable on such Distribution Date pursuant to Section 5.05.
In the event that all of the Certificateholders shall not have
surrendered their Certificates for cancellation within six months after the date
specified in the above mentioned written notice, the Trustee shall give a second
written notice to the remaining Certificateholders requesting that such
Certificateholders surrender their Certificates for cancellation and receive the
final distribution with respect thereto. If within one year after such second
notice all of the Certificates shall not have been surrendered for cancellation,
the Trustee may
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take appropriate steps, or may appoint an agent to take appropriate steps, to
contact the remaining Certificateholders concerning surrender of their
Certificates, and the cost thereof shall be paid out of the funds and other
assets that shall remain subject to this Agreement. Any funds remaining in the
Trust after exhaustion of such remedies shall be distributed by the Trustee to
the Company.
Section 11.02. Optional Purchase of All Receivables. On the last day
------------------------------------
of any Collection Period as of which the Pool Balance shall be less than or
equal to 10% of the Cutoff Date Pool Balance, the Servicer shall have the option
to purchase the corpus of the Trust; provided, however, that the Servicer may
not effect any such purchase if at such time the rating of the Servicer's long-
term debt obligations is less than Baa3 by Moody's, unless the Trustee shall
have received an Opinion of Counsel to the effect that such purchase would not
constitute a fraudulent conveyance. To exercise such option, the Servicer shall
deposit an amount into the Collection Account pursuant to Section 5.04 equal to
the aggregate Purchase Amount for the Receivables (including defaulted
Receivables), plus the appraised value of any other property held by the Trust,
such value to be determined by an appraiser mutually agreed upon by the Servicer
and the Trustee. The Servicer thereafter shall succeed to all interests in and
to the Trust.
ARTICLE XII
Miscellaneous Provisions
------------------------
Section 12.01. Amendment. This Agreement may be amended by the
---------
Company, the Servicer and the Trustee, without the consent of the
Certificateholders, to cure any ambiguity, to correct or supplement any
provisions in this Agreement or for the purpose of adding any provisions to, or
changing in any manner or eliminating any provision in, this Agreement or of
modifying in any manner the rights of the Certificateholders; provided, however,
that such action shall not, as evidenced by an Opinion of Counsel delivered to
the Trustee, adversely affect in any material respect the interests of any
Certificateholder.
This Agreement may also be amended from time to time by the Company,
the Servicer and the Trustee with the consent of the Holders of Certificates
evidencing not less than a majority of the Certificate Balance, for the purpose
of adding any provisions to or changing in any manner or eliminating any of the
provisions of this Agreement, or of modifying in any manner the rights of the
Certificateholders; provided, however, that no such amendment shall (a) except
as otherwise provided in the first paragraph of this Section, increase or reduce
in any manner the amount of, or accelerate or delay the timing of, collections
of payments on the
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Receivables or distributions that are required to be made on any Certificate or
(b) reduce the aforesaid percentage of the Certificate Balance required to
consent to any such amendment without the consent of the Holders of all
Certificates then outstanding.
Promptly after the execution of any such amendment or consent, the
Trustee shall furnish written notification of the substance of such amendment or
consent to each Certificateholder and the Rating Agencies.
It shall not be necessary for the consent of Certificateholders
pursuant to this Section to approve the particular form of any proposed
amendment or consent, but it shall be sufficient if such consent shall approve
the substance thereof. The manner of obtaining such consents (and any other
consents of Certificateholders provided for in this Agreement) and of evidencing
the authorization of any action by Certificateholders shall be subject to such
reasonable requirements as the Trustee may prescribe.
Prior to the execution of any amendment to this Agreement, the Trustee
shall be entitled to receive and rely upon an Opinion of Counsel stating that
the execution of such amendment is authorized or permitted by this Agreement and
the Opinion of Counsel referred to in Section 12.02(i). The Trustee may, but
shall not be obligated to, enter into any such amendment that affects the
Trustee's own rights, duties or immunities under this Agreement or otherwise.
Section 12.02. Protection of Title to Trust. (a) The Company and the
----------------------------
Servicer shall execute and file such financing statements and cause to be
executed and filed such continuation statements, all in such manner and in such
places as may be required by law fully to preserve, maintain and protect the
interest of the Certificateholders and the Trustee in the Receivables and in the
proceeds thereof. The Company and the Servicer shall deliver (or cause to be
delivered) to the Trustee file-stamped copies of, or filing receipts for, any
document filed as provided above, as soon as available following such filing.
(b) Neither the Company nor the Servicer shall change its name,
identity or corporate structure in any manner that would, could or might make
any financing statement or continuation statement filed in accordance with
paragraph (a) above seriously misleading within the meaning of (S) 9-402(7) of
the UCC, unless the Company or the Servicer shall have given the Trustee at
least five days' prior written notice of such change and shall have promptly
filed appropriate amendments to all previously filed financing statements or
continuation statements.
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(c) The Company and the Servicer shall have an obligation to give the
Trustee at least 60 days' prior written notice of any relocation of its
principal executive office if, as a result of such relocation, the applicable
provisions of the UCC would require the filing of any amendment of any
previously filed financing or continuation statement or of any new financing
statement, and shall promptly file any such amendment or new financing
statement. The Servicer shall at all times maintain its principal executive
office and each office from which it shall service Receivables within the United
States of America.
(d) The Servicer shall maintain accounts and records as to each
Receivable accurately and in sufficient detail to permit (1) the reader thereof
to know at any time the status of such Receivable, including payments and
recoveries made and payments owing (and the nature of each) and (2)
reconciliation between payments or recoveries on (or with respect to) each
Receivable and the amounts from time to time deposited in the Distribution
Account and Payahead Account in respect of such Receivable.
(e) The Servicer shall maintain its computer systems so that, from and
after the time of sale under this Agreement of the Receivables, the Servicer's
master computer records (including any back-up archives) that refer to a
Receivable shall indicate clearly the interest of the Trust in such Receivable
and that such Receivable is owned by the Trustee. Indication of the Trustee's
ownership of a Receivable shall be deleted from or modified on the Servicer's
computer systems when, and only when, such Receivable shall have been paid in
full or repurchased.
(f) If at any time a Seller or the Servicer shall propose to sell,
grant a security interest in, or otherwise transfer any interest in automotive
receivables to, any prospective purchaser, lender or other transferee, the
Servicer shall give to such prospective purchaser, lender or other transferee
computer tapes, records or print-outs (including any restored from back-up
archives) that, if they shall refer in any manner whatsoever to any Receivable,
shall indicate clearly that such Receivable has been sold and is owned by the
Trustee.
(g) The Servicer shall permit the Trustee and its agents to inspect,
audit and make copies of and abstracts from the Servicer's records regarding any
Receivable at any time during normal business hours upon reasonable notice.
(h) Upon request, the Servicer shall furnish to the Trustee, within
five Business Days, a list of all Receivables (by contract number and name of
Obligor) then held as part of the Trust, together with a reconciliation of such
list to the Schedule of Receivables and to each of the Servicer's Certificates
furnished before such request indicating removal of Receivables from the Trust.
-69-
(i) The Servicer shall deliver to the Trustee, promptly after the
execution and delivery of this Agreement and, if required pursuant to Section
12.01, of each amendment hereto, an Opinion of Counsel stating that, in the
opinion of such Counsel, either (A) all financing statements and continuation
statements have been executed and filed that are necessary fully to preserve and
protect the interest of the Trustee in the Receivables, and reciting the details
of such filings or referring to prior Opinions of Counsel in which such details
are given, or (B) no such action is necessary to preserve and protect such
interest.
(j) The Company shall, to the extent required by applicable law, cause
the Certificates to be registered with the Securities and Exchange Commission
pursuant to Section 12(b) or Section 12(g) of the Securities Exchange Act of
1934 within the time periods specified in such sections.
Section 12.03. Separate Counterparts. This Agreement may be executed
---------------------
by the parties hereto in separate counterparts, each of which when so executed
and delivered shall be an original, but all such counterparts shall together
constitute but one and the same instrument.
Section 12.04. Limitation on Rights of Certificateholders. (a) The
------------------------------------------
death or incapacity of any Certificateholder shall not operate to terminate this
Agreement or the Trust, nor entitle such Certificateholder's legal
representatives or heirs to claim an accounting or to take any action or
commence any proceeding in any court for a partition or winding up of the Trust,
nor otherwise affect the rights, obligations and liabilities of the parties to
this Agreement or any of them.
(b) No Certificateholder shall have any right to vote (except as
provided in Section 9.05 or 12.01) or in any manner otherwise control the
operation and management of the Trust or the obligations of the parties to this
Agreement; nor shall any provision in this Agreement or contained in the
Certificates be construed so as to constitute the Certificateholders from time
to time as partners or members of an association; nor shall any
Certificateholder be under any liability to any third person by reason of any
action taken pursuant to any provision of this Agreement.
(c) No Certificateholder shall have any right to institute any suit,
action or proceeding in equity or at law upon or under or with respect to this
Agreement, unless: (1) such Holder previously shall have given to the Trustee
written notice of a continuing Event of Default; (2) the Holders of Certificates
evidencing not less than 25% of the Certificate Balance shall have made written
request upon the Trustee to institute such action, suit or proceeding in its own
name as Trustee under this Agreement and shall have offered the Trustee such
reasonable
-70-
indemnity as it may require against the costs, expenses and liabilities to be
incurred therein or thereby; (3) the Trustee, for 60 days after its receipt of
such notice, request and offer of indemnity shall have neglected or refused to
institute any such action, suit or proceeding; (4) during such 60-day period no
request or waiver inconsistent with such written request shall have been given
to the Trustee by Holders representing a majority of the Certificate Balance.
It is understood and intended that no one or more Certificateholders shall have
any right in any manner whatever by virtue of, or by availing of, any provisions
of this Agreement to affect, disturb or prejudice the rights of any other
Certificateholders, or to obtain or seek to obtain priority over or preference
to any other such Holder, or to enforce any right under this Agreement, except
in the manner provided in this Agreement.
SECTION 12.05. GOVERNING LAW. THIS AGREEMENT SHALL BE CONSTRUED IN
-------------
ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK, WITHOUT REFERENCE TO ITS
CONFLICT OF LAW PROVISIONS, AND THE OBLIGATIONS, RIGHTS AND REMEDIES OF THE
PARTIES UNDER THIS AGREEMENT SHALL DETERMINED IN ACCORDANCE WITH SUCH LAWS.
Section 12.06. Notices. All demands, notices and communications upon
-------
or to the Company, the Servicer, the Trustee or the Rating Agencies under this
Agreement shall be in writing, personally delivered or mailed by certified mail,
return receipt requested, and shall be deemed to have been duly given upon
receipt (a) in the case of the Company, to
__________________________________________, Attention: ____________; (b) in the
case of the Servicer, to ________________________, Attention: ____________; (c)
in the case of the Trustee, at the Corporate Trust Office; (d) in the case of
Moody's, to Xxxxx'x Investors Service, Inc., ABS Monitoring Department, 00
Xxxxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000, and (e) in the case of Standard &
Poor's, to Standard & Poor's Ratings Group, 00 Xxxxxxxx - 00xx Xxxxx, Xxx Xxxx,
Xxx Xxxx 00000, Attention: Asset Backed Surveillance Department. Any notice
required or permitted to be mailed to a Certificateholder shall be given by
first class mail, postage prepaid, at the address of such Holder as shown in the
Certificate Register. Any notice so mailed within the time prescribed in this
Agreement shall be conclusively presumed to have been duly given, whether or not
the Certificateholder shall receive such notice.
Section 12.07. Severability of Provisions. Any provision of this
--------------------------
Agreement that is 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 of this
Agreement, and any such prohibition or unenforceability in any jurisdiction
shall not invalidate or render unenforceable such provision in any other
jurisdiction.
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Section 12.08. Assignment. Notwithstanding anything to the contrary
----------
contained herein, except as provided in Sections 7.04 and 8.03 and as provided
in the provisions of this Agreement concerning the resignation of the Servicer,
this Agreement may not be assigned by the Company or the Servicer without the
prior written consent of the Trustee and the Holders of Certificates evidencing
not less than 66% of the Certificate Balance.
Section 12.09. Certificates Nonassessable and Fully Paid.
-----------------------------------------
Certificateholders shall not be personally liable for obligations of the Trust.
The interests represented by the Certificates shall be nonassessable for any
losses or expenses of the Trust or for any reason whatsoever.
Section 12.10. Limitations on Rights of Others. The provisions of
-------------------------------
this Agreement are solely for the benefit of the Company, the Servicer, the
Trustee and the Certificateholders, and nothing in this Agreement, whether
express or implied, shall be construed to give any other Person any legal or
equitable right, remedy or claim in respect of the Trust or under or in respect
of this Agreement or any covenants, conditions or provisions contained herein.
Section 12.11. Headings. The headings of the various Articles and
--------
Sections herein are for convenience of reference only and shall not define or
limit any of the terms or provisions hereof.
-72-
IN WITNESS WHEREOF, the Company, the Servicer and the Trustee have
caused this Pooling and Servicing Agreement to be duly executed by their
respective officers as of the day and year first above written.
ASSET BACKED SECURITIES CORPORATION,
as Company
By: ____________________________________
Name:
Title:
-----------------------------------------,
as Servicer
By: ____________________________________
Name:
Title:
-----------------------------------------,
as Trustee
By: ____________________________________
Name:
Title:
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SCHEDULE I
Schedule of Receivables
-----------------------
[to be delivered on the Closing Date]
I-1
SCHEDULE II
Location of Receivables Files
-----------------------------
[To be provided at the Closing Date]
II-1
EXHIBIT A
Form Of Class A Certificate
---------------------------
UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE
DEPOSITORY TRUST COMPANY, A NEW YORK CORPORATION ("DTC"), TO THE ISSUER OR ITS
AGENT FOR REGISTRATION OF TRANSFER, EXCHANGE OR PAYMENT, AND ANY CERTIFICATE
ISSUED IS REGISTERED IN THE NAME OF CEDE & CO. OR IN SUCH OTHER NAME AS IS
REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC (AND ANY PAYMENT IS MADE TO
CEDE & CO. OR TO SUCH OTHER ENTITY AS IS REQUESTED BY AN AUTHORIZED
REPRESENTATIVE OF DTC), ANY TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR
OTHERWISE BY OR TO ANY PERSON IS WRONGFUL INASMUCH AS THE REGISTERED OWNER
HEREOF, CEDE & CO., HAS AN INTEREST HEREIN.
DISTRIBUTIONS IN REDUCTION OF THE PRINCIPAL BALANCE OF THIS CLASS A CERTIFICATE
WILL BE MADE IN INSTALLMENTS AS SET FORTH HEREIN. ACCORDINGLY, THE OUTSTANDING
PRINCIPAL AMOUNT OF THIS CLASS A CERTIFICATE AT ANY TIME MAY BE LESS THAN THE
AMOUNT SHOWN ON THE FACE HEREOF.
NUMBER $
R- CUSIP NO.
CS FIRST BOSTON AUTO RECEIVABLES TRUST 199_-_
___% ASSET BACKED CERTIFICATE, CLASS A
evidencing a fractional undivided interest in the Trust (as defined below), the
property of which includes a pool of motor vehicle installment loan contracts
and motor vehicle retail installment sale contracts (collectively, the "Motor
Vehicle Installment Contracts") secured by new and used automobiles, vans and
light duty trucks.
(This Class A Certificate does not represent an interest in, or obligation of,
Asset Backed Securities Corporation or any of its affiliates, except to the
extent described below).
THIS CERTIFIES THAT ________________________ is the registered owner
of ____________ DOLLARS nonassessable, fully-paid, fractional undivided interest
in CS First Boston Auto Receivables Trust 199_-_ (the "Trust") formed pursuant
to the Pooling and Servicing Agreement dated as of ____________, (the
"Agreement"), among Asset Backed Securities Corporation (the "Company"),
___________, as servicer (in such capacity, the "Servicer") and ____________, a
____________ banking association, as trustee (the "Trustee"), a summary of
certain of the pertinent provisions of which is set forth below. To the extent
not
A-1
otherwise defined herein, the capitalized terms used herein have the meanings
assigned to them in the Agreement.
This certificate is one of a duly authorized series of Certificates,
designated as the __% Asset Backed Certificates, Class A (herein called the
"Class A Certificates"), all issued under the Agreement, to which Agreement
reference is hereby made for a statement of the respective rights and
obligations thereunder of the Company, the Servicer, the Trustee and Holders of
the Certificates. The Class A Certificates are subject to all the terms of the
Agreement.
The property of the Trust includes a pool of Motor Vehicle Installment
Contracts secured by new and used automobiles, vans and light duty trucks
(collectively, the "Receivables"), all monies due under such Receivables on or
after the related Cutoff Date, in the case of Precomputed Receivables, or
received on or after the related Cutoff Date, in the case of Simple Interest
Receivables, security interests in the vehicles financed thereby, certain bank
accounts and the proceeds thereof, proceeds from claims on certain insurance
policies and all proceeds of the foregoing.
Under the Agreement, there will be distributed on the ___ day of each
month or, if such ___ day is not a Business Day, the next succeeding Business
Day (each, a "Distribution Date"), commencing on ________, to the Person in
whose name this Class A Certificate is registered at the close of business on
the ______ day of the month in which such Distribution Date occurs (the "Record
Date"), such Certificateholder's fractional undivided interest in the amount to
be distributed to Class A Certificateholders on such Distribution Date.
It is the intent of the Company, the Trustee and the
Certificateholders that, for purposes of federal income, state and local income
and single business tax and any other income taxes, the Trust to be treated as a
grantor trust and the Certificates be treated as interests in a grantor trust.
The Company, the Servicer, the Trustee and each Certificateholder or Certificate
Owner, by its acceptance of a Certificate or of a beneficial interest in a
Certificate, respectively, agree to treat, and to take no action inconsistent
with the treatment of, the Certificates for such tax purposes as interests in a
grantor trust.
Distributions on this Class A Certificate will be made as provided in
the Agreement by the Trustee by wire transfer or check mailed to the Person
identified as the Holder of record thereof in the Certificate Register, without
the presentation or surrender of this Class A Certificate or the making of any
notation hereon, except that with respect to Class A Certificates registered on
the Record Date in the name of the nominee of the Clearing Agency (initially,
such nominee to be Cede & Co.),
A-2
payments will be made by wire transfer in immediately available funds to the
account designated by such nominee. Except as otherwise provided in the
Agreement and notwithstanding the above, the final distribution on this Class A
Certificate will be made after due notice by the Trustee of the pendency of such
distribution and only upon presentation and surrender of this Class A
Certificate at the office or agency maintained for that purpose by the Trustee
in the Borough of Manhattan, The City of New York.
Reference is hereby made to the further provisions of this Class A
Certificate set forth on the reverse hereof, which further provisions shall for
all purposes have the same effect as if set forth at this place.
Unless the certificate of authentication hereon shall have been
executed by an authorized officer of the Trustee, by manual signature, this
Class A Certificate shall not entitle the Holder hereof to any benefit under the
Agreement or be valid for any purpose.
THIS TRUST CERTIFICATE SHALL BE CONSTRUED IN ACCORDANCE WITH THE LAWS
OF THE STATE OF NEW YORK, WITHOUT REFERENCE TO ITS CONFLICT OF LAW PROVISIONS,
AND THE OBLIGATIONS, RIGHTS AND REMEDIES OF THE PARTIES HEREUNDER SHALL BE
DETERMINED IN ACCORDANCE WITH SUCH LAWS.
A-3
IN WITNESS WHEREOF, the Trustee, on behalf of the Trust and not in its
individual capacity, has caused this Class A Certificate to be duly executed.
Date: CS FIRST BOSTON AUTO RECEIVABLES
TRUST 199_-_
By:______________________, not in its
individual capacity but solely
as Trustee
By:
---------------------------------
Authorized Signatory
CERTIFICATE OF AUTHENTICATION
This is one of the Class A Certificates referred to in the
within-mentioned Agreement.
Date:
------------------------------
as Trustee
By:
------------------------------
Authorized Signatory
A-4
[REVERSE OF CLASS A CERTIFICATE]
The Class A Certificates do not represent an obligation of, or an
interest in, the Company, the Servicer, the Trustee or any of their respective
affiliates, and no recourse may be had against such parties or their assets
except as expressly set forth or contemplated herein or in the Agreement. In
addition, this Class A Certificate is not guaranteed by any governmental agency
or instrumentality and is limited in right of payment to certain collections and
recoveries with respect to the Receivables (and certain other amounts), all as
more specifically set forth herein and in the Agreement. A copy of the
Agreement may be examined by any Certificateholder upon written request during
normal business hours at the principal office of the Company and at such other
places, if any, designated by the Company.
The Agreement permits, with certain exceptions therein provided, the
amendment thereof and the modification of the rights and obligations of the
Company, the Servicer and the Trustee and the rights of the Certificateholders
at any time by the Company, the Servicer and the Trustee with the consent of the
Holders of Certificates evidencing not less than a majority of the Certificate
Balance. Any such consent by the Holder of this Class A Certificate shall be
conclusive and binding on such Holder and on all future Holders of this
Certificate and of any Class A Certificate issued upon the transfer hereof or in
exchange here for in lieu hereof, whether or not notation of such consent is
made upon this Class A Certificate. The Agreement also permits the amendment
thereof, in certain limited circumstances, without the consent of the Holders of
any of the Certificates.
As provided in the Agreement and subject to certain limitations
therein set forth, the transfer of this Class A Certificate is registerable in
the Certificate Register upon surrender of this Class A Certificate for
registration of transfer at the offices or agencies of the Certificate Registrar
maintained by the Trustee in the Borough of Manhattan, The City of New York,
accompanied by a written instrument of transfer in form satisfactory to the
Trustee and the Certificate Registrar duly executed by the Holder hereof or such
Holder's attorney duly authorized in writing, and thereupon one or more new
Class A Certificates of authorized denominations evidencing the same aggregate
interest in the Trust will be issued to the designated transferee. The initial
Certificate Registrar appointed under the Agreement is ________________________.
Except as provided in the Agreement, the Class A Certificates are
issuable only as registered certificates without coupons in a minimum
denomination of $1,000 and integral
A-5
multiples of $1 in excess thereof. As provided in the Agreement and subject to
certain limitations therein set forth, the Class A Certificates are exchangeable
for new Class A Certificates of authorized denominations evidencing the same
aggregate denomination, as requested by the Holder surrendering the same. No
service charge will be made for any such registration of transfer or exchange,
but the Trustee or the Certificate Registrar may require payment of a sum
sufficient to cover any tax or governmental charge payable in connection
therewith.
The Trustee, the Certificate Registrar and any agent of the Trustee or
the Certificate Registrar may treat the Person in whose name this Class A
Certificate is registered as the owner hereof for all purposes, and none of the
Trustee, the Certificate Registrar or any such agent shall be affected by any
notice to the contrary.
The obligations and responsibilities created by the Agreement and the
Trust created thereby shall terminate upon the payment to Certificateholders of
all amounts required to be paid to them pursuant to the Agreement and the
disposition of all property held by the Trust. The Servicer of the Receivables
may at its option purchase the Trust property at a price specified in the
Agreement, and such purchase of the Receivables and other property of the Trust
will effect early retirement of the Certificates; provided, however, that such
-------- -------
right of purchase is exercisable only as of the last day of any Collection
Period as of which the Pool Balance is less than or equal to 10% of the Cutoff
Date Pool Balance.
A-6
ASSIGNMENT
FOR VALUE RECEIVED the undersigned hereby sells, assigns and
transfers unto
PLEASE INSERT SOCIAL SECURITY OR
OTHER IDENTIFYING NUMBER OF ASSIGNEE
--------------------------------------------------------------------------------
(Please print or type name and address,
including postal zip code, of assignee)
the within Class A Certificate, and all rights thereunder, hereby irrevocably
constituting and appointing ________________________ to transfer said Class A
Certificate on the books of the Certificate Registrar, with full power of
substitution in the premises.
Dated:
____________________________*/
Signature Guaranteed:
____________________________*/
-------------
*/ NOTICE: The signature to this assignment must correspond with the name as it
-
appears upon the face of the within Class A Certificate in every particular,
without alteration, enlargement or any change whatever. Such signature must be
guaranteed by a member firm of the New York Stock Exchange or a commercial bank
or trust company.
A-7
EXHIBIT B
Form of Class B Certificate
---------------------------
THIS CLASS B CERTIFICATE HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF
1933, AS AMENDED (THE "SECURITIES ACT"), OR ANY STATE SECURITIES LAWS, AND MAY
NOT BE OFFERED, SOLD, PLEDGED OR OTHERWISE TRANSFERRED IN THE ABSENCE OF SUCH
REGISTRATION OR AN EXEMPTION THEREFROM. THE TRANSFER OF THIS CLASS B
CERTIFICATE IS SUBJECT TO CERTAIN RESTRICTIONS AND CONDITIONS SET FORTH IN THE
AGREEMENT UNDER WHICH THIS CLASS B CERTIFICATE IS ISSUED (A COPY OF WHICH IS
AVAILABLE FROM THE TRUSTEE UPON REQUEST), INCLUDING RECEIPT BY THE TRUSTEE OF AN
INVESTMENT LETTER IN WHICH THE TRANSFEREE SHALL MAKE CERTAIN REPRESENTATIONS.
THIS CERTIFICATE MAY NOT BE PURCHASED BY OR TRANSFERRED TO ANY PERSON THAT IS AN
EMPLOYEE BENEFIT PLAN SUBJECT TO THE FIDUCIARY RESPONSIBILITY PROVISIONS OF THE
EMPLOYEE RETIREMENT INCOME SECURITY ACT OF 1974, AS AMENDED ("ERISA"), OR
SECTION 4975 OF THE INTERNAL REVENUE CODE OF 1986, AS AMENDED (THE "CODE"), OR
ANY GOVERNMENTAL PLAN, AS DEFINED IN SECTION 3(32) OF ERISA, SUBJECT TO ANY
FEDERAL, STATE OR LOCAL LAW THAT IS, TO A MATERIAL EXTENT, SIMILAR TO THE
FOREGOING PROVISIONS OF ERISA OR THE CODE (COLLECTIVELY, A "PLAN") OR ANY PERSON
INVESTING THE ASSETS OF A PLAN, EXCEPT AS PROVIDED IN THE AGREEMENT REFERRED TO
HEREIN.
DISTRIBUTIONS IN REDUCTION OF THE PRINCIPAL BALANCE OF THIS CLASS B CERTIFICATE
WILL BE MADE IN INSTALLMENTS AS SET FORTH HEREIN. ACCORDINGLY, THE OUTSTANDING
PRINCIPAL AMOUNT OF THIS CLASS B CERTIFICATE AT ANY TIME MAY BE LESS THAN THE
AMOUNT SHOWN ON THE FACE HEREOF.
NUMBER $
R- CUSIP NO.
CS FIRST BOSTON AUTO RECEIVABLES TRUST 199_-__
____% ASSET BACKED CERTIFICATE, CLASS B
evidencing a fractional undivided interest in the Trust (as defined below), the
property of which includes a pool of motor vehicle installment loan agreements
and motor vehicle retail installment sale contracts (collectively, the "Motor
Vehicle Installment Contracts") secured by new and used automobiles, vans and
light duty trucks.
(This Class B Certificate does not represent an interest in, or obligation of,
Asset Backed Securities Corporation or any of its affiliates, except to the
extent described below.)
THIS CERTIFIES THAT ______________________________ is the registered
owner of ___________________ DOLLARS nonassessable, fully-paid fractional
undivided interest in CS
B-1
First Boston Auto Receivables Trust 199_-(the "Trust") form pursuant to a
Pooling and Servicing Agreement dated as of _________ (the "Agreement"), among
Asset Backed Securities Corporation (the "Company"), _______, as servicer (in
such capacity, the "Servicer") and _______, a _______ banking association, as
trustee (the "Trustee"), a summary of certain of the pertinent provisions of
which is set forth below. To the extent not otherwise defined herein, the
capitalized terms used herein have the meanings assigned to them in the
Agreement.
This Certificate is one of a dully authorized series of Certificates,
designated as the ___% Asset Backed Certificates, Class B herein called the
"Class B Certificates"), all issued under the Agreement, to which Agreement
reference is hereby made for a statement of the respective rights and
obligations thereunder of the Company, the Servicer, the Trustee and Holders of
the Certificates. The Class B Certificates are subject to all the terms of the
Agreement.
The property of the Trust includes a pool of Motor Vehicle Installment
Contracts secured by new and used automobiles, vans and light duty trucks
(collectively, the "Receivables"), all monies due under such Receivables on or
after _____, in the case of Precomputed Receivables, or received on or after
______, in the case of Simple Interest Receivables, security interests in the
vehicles financed thereby, certain bank accounts and the proceeds thereof,
proceeds from claims on certain insurance policies and all proceeds of the
foregoing.
Under the Agreement, there will be distributed on the ______ day of
each month or, if such ______ day is not a Business Day, the next succeeding
Business Day (each, a "Distribution Date"), commencing on _____________, to the
Person in whose name this Class B Certificate is registered at the close of
business on the ____ day of the month in which such Distribution Date occurs
(the "Record Date"), such Certificateholder's fractional undivided interest in
the amount to be distributed to Class B Certificateholders on such Distribution
Date.
The Holder of this Class B Certificate acknowledges and agrees that
its right to receive distributions in respect of this Certificate are
subordinated to the rights of Holders of the Class A Certificates, to the extent
and in the manner set forth in the Agreement.
It is the intent of the Company, the Servicer, the Trustee and the
Certificateholders that, for purposes of federal income, state and local income
and single business tax and any other income taxes, the Trust be treated as a
grantor trust and the Certificates be treated as interests in a grantor trust.
The Company, the Servicer, the Trustee and each Certificateholder or Certificate
Owner, by its acceptance of a Certificate or of a beneficial interest in a
Certificate, agree to treat, and to take
B-2
no action inconsistent with the treatment of, the Certificates for such tax
purposes as interests in a grantor trust.
Distributions on this Class B Certificate will be made as provided in
the Agreement by the Trustee by wire transfer or check mailed to the Person
identified as the Holder of Record hereof in the Certificate Register, without
the presentation or surrender of this Class B Certificate or the making of any
notation hereon, except that with respect to Class B Certificates registered on
the Record Date in the name of the nominee of the Clearing Agency (initially
such nominee to be Cede & Co.), payments will be made by wire transfer in
immediately available funds to the account designated by such nominee. Except
as otherwise provided in the Agreement and notwithstanding the above, the final
distribution on this Class B Certificate will be made after due notice by the
Trustee of the pendency of such distribution and only upon presentation and
surrender of this Class B Certificate at the office or agency maintained for
that purpose by the Trustee in the Borough of Manhattan, The City of New York.
Reference is hereby made to the further provisions of this Class B
Certificate set forth on the reverse hereof, which further provisions shall for
all purposes have the same effect as if set forth at this place.
Unless the certificate of authentication hereon shall have been
executed by an authorized officer of the Trustee, by manual signature, this
Class B Certificate shall not entitle the Holder hereof to any benefit under the
Agreement or be valid for any purpose.
THIS CLASS B CERTIFICATE SHALL BE CONSTRUED IN ACCORDANCE WITH THE
LAWS OF THE STATE OF NEW YORK, WITHOUT REFERENCE TO ITS CONFLICT OF LAW
PROVISIONS, AND THE OBLIGATIONS, RIGHTS AND REMEDIES OF THE PARTIES HEREUNDER
SHALL BE DETERMINED IN ACCORDANCE WITH SUCH LAWS.
B-3
IN WITNESS WHEREOF, the Trustee, on behalf of the Trust and not in its
individual capacity, has caused this Class B Certificate to be duly executed.
CS FIRST BOSTON AUTO RECEIVABLES
TRUST 199_-__
By:
_________________________________
not in its individual capacity
but solely as Trustee
Date: By:
______________________________
Authorized Signatory
CERTIFICATE OF AUTHENTICATION
This is one of the Class B Certificates referred to in the within-
mentioned Trust Agreement.
Date: By:
______________________________
Authorized Signatory
B-4
[REVERSE OF CLASS B CERTIFICATE]
The Class B Certificates do not represent an obligation of, or an
interest in, the Company, the Servicer, the Trustee or any of their respective
affiliates, and no recourse may be had against such parties or their assets
except as expressly set forth or contemplated herein or in the Agreement. In
addition, this Class B Certificate is not guaranteed by any governmental agency
or instrumentality and is limited in right of payment to certain collections and
recoveries with respect to the Receivables (and certain other amounts), all as
more specifically set forth herein and in the Agreement. A copy of the
Agreement may be examined by any Certificateholder upon written request during
normal business hours at the principal office of the Company and at such other
places, if any, designated by the Company.
The Agreement permits, with certain exceptions therein provided, the
amendment thereof and the modification of the rights and obligations of the
Company, the Servicer and the Trustee and the rights of the Certificateholders
under the Agreement at any time by the Company, the Servicer and the Trustee
with the consent of the Holders of Certificates evidencing not less than a
majority of the Certificate Balance. Any such consent by the Holder of this
Class B Certificate shall be conclusive and binding on such Holder and on all
future Holders of this Class B Certificate and of any Class B Certificate issued
upon the transfer hereof or in exchange here for or in lieu hereof, whether or
not notation of such consent is made upon this Class B Certificate. The
Agreement also permits the amendment thereof, in certain limited circumstances,
without the consent of the Holders of any of the Certificates.
No transfer of this Class B Certificate will be made unless such
transfer is exempt from the registration requirements of the Securities Act and
any applicable state securities laws or is made in accordance with the
Securities Act and such state securities laws. In the event that the Holder
hereof desires to make such a transfer, the Holder and such Holder's transferee
will be required to comply with certain procedures set forth in the Agreement,
including the delivery of certain certificates and investment letters. The
Holder or Owner hereof, by acceptance of this Certificate or of a beneficial
interest in this Certificate, does hereby agree to indemnify the Trustee, the
Company, the Servicer and the Certificate Registrar against any liability that
may result if any such transfer is not so exempt or is not made in accordance
with federal and state laws. In connection with any such transfer, the Trustee
will also require (i) a representation letter, in the form described in the
Agreement, stating that transferee is not a Plan and is not acting on behalf of
a Plan or using the assets of a Plan to effect such purchase
B-5
or (ii) if such transferee is a Plan, an opinion of counsel acceptable to and in
form and substance satisfactory to the Trustee with respect to certain matters
described in the Agreement.
Except as provided in the Agreement, the Class B Certificates are
issuable only as registered certificates without coupons in a minimum
denomination of $1,000 and integral multiples of $1 in excess thereof. As
provided in the Agreement and subject to certain limitations therein set forth,
Class B Certificates are exchangeable for new Class B Certificates of authorized
denominations evidencing the same aggregate denomination, as requested by the
Holder surrendering the same. No service charge will be made for any such
registration to transfer or exchange, but the Trustee or the Certificate
Registrar may require payment of a sum sufficient to cover any tax or
governmental charge payable in connection therewith.
The Trustee, the Certificate Registrar and any agent of the Trustee or
the Certificate Registrar may treat the Person in whose name this Class B
Certificate is registered as the owner hereof for all purposes, and none of the
Trustee, the Certificate Registrar or any such agent shall be affected by any
notice to the contrary.
The obligations and responsibilities created by the Agreement and the
Trust created thereby shall terminate upon the payment to Certificateholders of
all amounts required to be paid to them pursuant to the Agreement and the
disposition of all property held by the Trust. The Servicer of the Receivables
may at its option purchase the Trust property at a price specified in the
Agreement, and such purchase of the Receivables may at its option purchase the
Trust property at a price specified in the Agreement, and such purchase of the
Receivables and other property of the Trust will effect early retirement of the
Class B Certificates; provided, however, that such right of purchase is
exercisable only as of the last day of any Collection Period as of which the
Pool Balance is less than or equal to 10% of the Cutoff Date Pool Balance.
B-6
ASSIGNMENT
FOR VALUE RECEIVED the undersigned hereby sells, assigns and transfers
unto
PLEASE INSERT SOCIAL SECURITY OR
OTHER IDENTIFYING NUMBER OF ASSIGNEE
-------------------------------------------------------------------------------
(Please print or type name and address, including
postal zip code, of assignee)
the within Class B Certificate, and all rights thereunder, hereby irrevocably
constituting and appointing _____________________________________________ to
transfer said Class B Certificate on the books of the Certificate Registrar,
with full power of substitution in the premises.
Dated:
-------------------------------
*/
Signature
Guaranteed:
--------------------------------
*/
------------------
*/ NOTICE: The signature to this assignment must correspond with the name as it
appears upon the face of the within Class B Certificate in every particular,
without alteration, enlargement or any change whatever. Such signature must be
guaranteed by a member firm of the New York Stock Exchange or a commercial bank
or trust company.
B-7
EXHIBIT C
Form of Depository Agreement
LETTER OF REPRESENTATIONS
(To be Completed by Issuer and Trustee)
----------------------
(Name of Issuer)
----------------------
(Name of Trustee)
----------------
(Date)
Attention: General Counsel's Office
THE DEPOSITORY TRUST COMPANY
00 Xxxxx Xxxxxx: 00xx Xxxxx
Xxx Xxxx, XX 00000-0000
RE: ___________________________________________________________________
___________________________________________________________________
___________________________________________________________________
(Issue Description)
Ladies and Gentlemen:
This letter sets forth our understanding with respect to certain
matters relating to the above-referenced issue (the "Securities"). Trustee will
act as trustee with respect to the Securities pursuant to a trust indenture
dated ________, 199_ (the "Document"). ______________ (the "Underwriter") is
distributing the Securities through The Depository Trust Company ("DTC").
To induce DTC to accept the Securities as eligible for deposit at DTC,
and to act in accordance with its Rules with respect to the Securities, Issuer
and Trustee make the following representations to DTC:
1. Prior to closing on the Securities on _____________, 199_, there
shall be deposited with DTC one Security certificate registered in the name of
DTC's nominee,
C-1
Cede & Co., for each stated maturity of the Securities in the face amounts set
forth on Schedule I hereto, the total of which represents 100% of the principal
amount of such Securities. If, however, the aggregate principal amount of any
maturity exceeds $150 million, one certificate will be issued with respect to
each $150 million of principal amount and an additional certificate will be
issued with respect to any remaining principal amount. Each $150 million
certificate shall bear the following legend:
Unless this certificate is presented by an authorized representative
of The Depository Trust Company, a New York corporation ("DTC"), to Issuer or
its agent for registration of transfer, exchange, or payment and any certificate
issued is registered in the name of Cede & Co., or in such other name as is
requested by an authorized representative of DTC (and any payment is made to
Cede & Co., or to such other entity as is requested by an authorized
representative of DTC). ANY TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR
OTHERWISE BY OR TO ANY PERSON IS WRONGFUL inasmuch as the registered owner
hereof, Cede & Co., has an interest herein.
2. In the event of any solicitation of consents from or voting by
holders of the Securities, Issuer or Trustee shall establish a record date for
such purposes (with no provision for revocation of consents or votes by
subsequent holders) and shall, to the extent possible, send notice of such
record date to DTC not less than 15 calendar days in advance of such record
date. Notices to DTC pursuant to this Paragraph by telecopy shall be sent to
DTC's Reorganization Department at (000) 000-0000 or (000) 000-0000, and receipt
of such notices shall be confirmed by telephoning (000) 000-0000. Notices to
DTC pursuant to this Paragraph by mail or by any other means shall be sent to
DTC's Reorganization Department as indicated in Paragraph 4.
3. In the event of a full or partial redemption, Issuer or Trustee
shall send a notice to DTC specifying: (a) the amount of the redemption or
refunding; (b) in the case of a refunding, the maturity date(s) established
under the refunding; and (c) the date such notice is to be mailed to Security
holders or published (the "Publication Date"). Such notice shall be sent to DTC
by a secure means (e.g., legible telecopy, registered or certified mail,
overnight delivery) in a timely manner designed to assure that such notice is in
DTC's possession no later than the close of business on the business day before
or, if possible, two business days before the Publication Date. Issuer or
Trustee shall forward such notice either in a separated secure transmission for
each CUSIP number or in a secure transmission for multiple CUSIP numbers (if
applicable) which includes a manifest or list of each CUSIP number submitted in
that transmission. (The party sending such notice shall have a method to verify
subsequently the use of such means and the timeliness of such notice.) The
Publication Date shall be not less than 30 days nor more than 60 days prior to
the redemption date or, in
C-2
the case of an advance refunding, the date that the proceeds are deposited in
escrow. Notices to DTC pursuant to this Paragraph by telecopy shall be sent to
DTC's Call Notification Department at (000) 000-0000 or (516_ 227-4190. If the
party sending the notice does not receive a telecopy receipt from DTC confirming
that the notice has been received, said party shall telephone (516_ 000-0000.
Notices to DTC pursuant to this Paragraph by mail or by any other means shall be
sent to:
Manager: Call
Notification Department
The Depository Trust Company
000 Xxxxxxx Xxxxxx
Xxxxxx Xxxx, XX 00000-0000
4. In the event of an invitation to tender the Securities, notice by
Issuer or Trustee to Security holders specifying the terms of the tender and the
Publication Date of such notice shall e sent to DTC by a secure means in the
manner set forth in the preceding Paragraph. Notices to DTC pursuant to this
Paragraph and notices of other corporate actions (including mandatory tenders,
exchanges, and capital changes) by telecopy shall be sent to DTC's
Reorganization Department at (000) 000-0000 or (000) 000-0000, and receipt of
such notices shall be confirmed by telephoning (000) 000-0000. Notices to DTC
pursuant to the above by mail or by any other means shall be sent to:
Manager: Reorganization Department
Reorganization Window
The Depository Trust Company
0 Xxxxxxx Xxxxxx; 00xx Xxxxx
Xxx Xxxx, XX 00000-0000
5. All notices and payment advices sent to DTC shall contain the CUSIP
number of the Securities.
6. Trustee shall send DTC written notice with respect to the dollar
amount per $1,000 original face value (or other minimum authorized denomination
if less than $1,000 face value) payable on each payment date allocated as to the
interest and principal portions thereof preferably 5, but not less than 2,
business days prior to such payment date. Such notices, which shall also
contain the current pool factor and Trustee contact's name and telephone number,
shall be sent by telecopy to DTC's Dividend Department at (000) 000-0000, or if
by mail or by any other means to:
Manager: Announcements
Dividend Department
The Depository Trust Company
0 Xxxxxxx Xxxxxx; 00xx Xxxxx
Xxx Xxxx, XX 00000-0000
C-3
7. [Note: Issuer must represent one of the following, and cross out
---- ----- ---
the other:] [The interest accrual period is record date to record date.] [The
interest accrual period is payment date to payment date.]
8. Interest payments and principal payments that are part of periodic
principal-and-interest payments shall be received by Cede & Co., as nominee of
DTC, or its registered assigns in same-day funds on each payment date (or the
equivalent in accordance with existing arrangements between Issuer or Trustee
and DTC). Such payments shall be made payable to the order of Cede & Co.
Absent any other existing arrangements, such payments shall be addressed as
follows:
Manager: Cash Receipts
Dividend Department
The Depository Trust Company
0 Xxxxxxx Xxxxxx; 00xx Xxxxx
Xxx Xxxx, XX 00000-0000
9. [Note: Issuer must represent one of the following, and cross out
---- -----
the other.]
Securities Eligible for DTC's Same-Day Funds Settlement ("SDFS")
----------------------------------------------------------------
System. Other principal payments (redemption payments) shall be made in same-
-------
day funds by Trustee in the manner set forth in the SDFS Paying Agent Operating
Procedures, a copy of which previously has been furnished to Trustee.
Securities Eligible for DTC's Next-Day Funds Settlement ("NDFS")
----------------------------------------------------------------
System. Other principal payments (redemption payments) shall be made in next-
-------
day funds by Trustee to Cede & Co., as nominee of DTC, or its registered
assigns, on each payment date. Such payments shall be made payable to the order
of Cede & Co., and shall be addressed as follows:
NDFS Redemptions Manager
Reorganization/Redemptions Department
The Depository Trust Company
0 Xxxxxxx Xxxxxx; 00xx Xxxxx
Xxx Xxxx, XX 00000-0000
10. DTC may direct Issuer or Trustee to use any other number or
address as the number or address to which notices or payments of interest or
principal may be sent.
11. In the event of a redemption, acceleration, or any other similar
transaction (e.g., tender made and accepted in response to Issuer's or Trustee's
invitation) necessitating a reduction in the aggregate principal amount of
Securities outstanding or an advance refunding of part of the Securities
outstanding, DTC, in its discretion: (a) may request Issuer or Trustee to issue
and authenticate a new Security certificate; or (b) may make an appropriate
notation on the Security certificate
C-4
indicating the date and amount of such reduction in principal except in the case
of final maturity, in which case the certificate will be presented to Issuer or
Trustee prior to payment, if required.
12. In the event that Issuer determines that beneficial owners of
Securities shall be able to obtain certificated Securities, Issuer or Trustee
shall notify DTC of the availability of certificates. In such event, Issuer or
Trustee shall issue, transfer, and exchange certificates in appropriate amounts,
as required by DTC and others.
13. DTC may discontinue providing its services as securities
depository with respect to the Securities at any time by giving reasonable
notice to Issuer or Trustee (at which time DTC will confirm with Issuer or
Trustee the aggregate principal amount of Securities outstanding). Under such
circumstances, at DTC's request Issuer and Trustee shall cooperate fully with
DTC by taking appropriate action to make available one or more separate
certificates evidencing Securities to any DTC Participant having Securities
credited to its DTC accounts.
14. Issuer: (a) understands that DTC has no obligation to, and will
not, communicate to its Participants or to any person having an interest in the
Securities any information contained in the Security certificate(s); and (b)
acknowledges that neither DTC's Participants nor any person having an interest
in the Securities shall be deemed to have notice of the provisions of the
Security certificates by virtue of submission of such certificate(s) to DTC.
15. Nothing herein shall be deemed to require Trustee to advance funds
on behalf of Issuer.
Notes: Very truly yours,
-----
A. If there is a Trustee (as ______________________________________
defined in this Letter of (Issuer)
Representations), Trustee as By:___________________________________
well as Issuer must sign this
Letter. If there is no
Trustee, in signing this (Authorized Officer's
Letter, Issuer itself Signature)
undertakes to perform all of
the obligations set forth
herein.
-------------------------------------------------------------------------------
C-5
B. Schedule B contains
statements that DTC believes _________________________________
accurately describe DTC, the
method of effecting book-entry (Trustee)
transfers of securities
distributed through DTC, and
certain related matters. By:_______________________________
(Authorized Officer's
Signature)
Received and Accepted:
THE DEPOSITORY TRUST COMPANY
By:_________________________
cc: Underwriter
Underwriter's Counsel
C-6
SCHEDULE A
----------
to Exhibit C
------------
(Describe Issue)
CUSIP Principal Amount Maturity Date Interest
----- ---------------- ------------- --------
Rate
-----
C-7
SCHEDULE B
----------
SAMPLE COVERING DOCUMENT LANGUAGE
DESCRIBING BOOK-ENTRY-ONLY ISSUANCE
-----------------------------------
(Prepared by DTC-bracketed material may
be applicable only to certain issues)
1. The Depositary Trust Company ("DTC"), New York, NY, will act as
securities depository for the securities (the "Securities"). The Securities
will be issued as fully-registered securities registered pin the name of Cede &
Co. (DTC's partnership nominee). One fully-registered Security certificate will
be issued for [each issue of the Securities, [each] in the aggregate principal
amount of such issue, and will be deposited with DTC. [If, however, the
aggregate principal amount of [any] issue exceeds $150 million, one certificate
will be issued with respect to each $150 million of principal amount and an
additional certificate will be issued with respect to any remaining principal
amount of such issue.]
2. DTC is a limited-purpose trust company organized under the New York
Banking Law, a "banking organization" within the meaning of the New York Banking
Law, a member of the Federal Reserve System, a "clearing corporation" within the
meaning of the New York Uniform Commercial Code, and a "clearing agency"
registered pursuant to the provisions of Section 17A of the Securities Exchange
Act of 1934. DTC holds securities that its participants ("Participants")
deposit with DTC. DTC also facilitates the settlement among Participants of
securities transactions, such as transfers and pledges, in deposited securities
through electronic computerized book-entry changes in Participants' accounts,
thereby eliminating the need for physical movement of securities certificates.
Direct Participants include securities brokers and dealers, banks, trust
companies, clearing corporations, and certain other organizations. DTC is owned
by a number of its Direct Participants and by the New York Stock Exchange, Inc.,
the American Stock Exchange, Inc., and the National Association of Securities
dealers, Inc. Access to the DTC system is also available to others such as
securities brokers and dealers, banks, and trust companies that clear through or
maintain a custodial relationship with a Direct Participant, either directly or
indirectly ("Indirect Participants"). The Rules applicable to DTC and its
Participants are on file with the Securities and Exchange Commission.
3. Purchases of Securities under the DTC system must be made by or through
Direct Participants, which will receive a credit for the Securities on DTC's
records. The ownership interest of each actual purchaser of each Security
("Beneficial Owner") is in turn to be recorded on the Direct and Indirect
Participants' records. Beneficial Owners will not receive written confirmation
from DTC of their purchase, but Beneficial Owners are expected to receive
written confirmations providing
C-8
details of the transaction, as well as periodic statements of their holdings,
from the Direct or Indirect Participant through which the Beneficial Owner
entered into the transaction. Transfers of ownership interests in the Securities
are to be accomplished by entries made on the books of Participants acting on
behalf of Beneficial Owners. Beneficial Owners will not receive certificates
representing their ownership interests in Securities, except in the event that
use of the book-entry system for the Securities is discontinued.
4. To facilitate subsequent transfers, all Securities deposited by
Participants with DTC are registered in the name of DTC's partnership nominee,
Cede & Co. The deposit of Securities with DTC and their registration in the
name of Cede & Co. effect no change in beneficial ownership. DTC has no
knowledge of the actual Beneficial Owners of the Securities; DTC's records
reflect only the identity of the Direct Participants to whose accounts such
Securities are credited, which may or may not be the Beneficial Owners. The
Participants will remain responsible for keeping account of their holdings on
behalf of their customers.
5. Conveyance of notices and other communications by DTC to Direct
Participants, by Direct Participants to Indirect Participants, and by Direct
Participants and Indirect Participants to Beneficial Owners will be governed by
arrangements among them, subject to any statutory or regulatory requirements as
may be in effect from time to time.
[6. Redemption notices shall be sent to Cede & Co. If less than all of
the Securities within an issue are being redeemed, DTC's practice is to
determine by lot the amount of the interest of each Direct Participant in such
issue to be redeemed.]
7. Neither DTC nor Cede & co. will consent or vote with respect to
Securities. Under its usual procedures, DTC mails an Omnibus Proxy to the
Issuer as soon as possible after the record date. The Omnibus Proxy assigns
Cede & Co.'s consenting or voting rights to those Direct Participants to whose
accounts the Securities are credited on the record date (identified in a listing
attached to the Omnibus Proxy).
8. Principal and interest payments on the Securities will be made to DTC.
DTC's practice is to credit Direct Participants' accounts on payable date in
accordance with their respective holdings shown on DTC's records unless DTC has
reason to believe that it will not receive payment on payable date. Payments by
Participants to Beneficial Owners will be governed by standing instructions and
customary practices, as is the case with securities held for the accounts of
customers in bearer form or registered in "street name," and will be the
responsibility of such Participant and not of DTC, the Agent, or the Issuer,
subject to any statutory or regulatory requirements as may be in effect from
time to time. Payment of principal and interest to
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DTC is the responsibility of the Issuer of the Agent, disbursement of such
payments to Direct Participants shall be the responsibility of DTC, and
disbursement of such payments to the Beneficial Owners shall be the
responsibility of Direct and Indirect Participants.
[9. A Beneficial Owner shall give notice to elect to have its Securities
purchased or tendered, through its Participant, to the [Tender/Remarketing]
Agent, and shall effect delivery of such Securities by causing the Direct
Participant to transfer the Participant's interest in the Securities, on DTC's
records, to the [Tender/Remarketing] Agent. The requirement for physical
delivery of Securities in connection with a demand for purchase or a mandatory
purchase will be deemed satisfied when the ownership rights in the Securities
are transferred by Direct Participants on DTC's records.]
10. DTC may discontinue providing its services as securities depository
with respect to the Securities at any time by giving reasonable notice to the
Issuer or the Agent. Under such circumstances, in the event that a successor
securities depository is not obtained, Security certificates are required to be
printed and delivered.
11. The Issuer may decide to discontinue use of the system of book-entry
transfers through DTC (or a successor securities depository). In that event,
Security certificates will be printed and delivered.
12. The information in this section concerning DTC and DTC's book-entry
system has been obtained from sources that the Issuer believes to be reliable,
but the Issuer takes no responsibility for the accuracy thereof.
C-10
EXHIBIT D
---------
[Form Of Accountants' Letter]
D-1
EXHIBIT E
Form of Transferor Certificate
[DATE]
[Company]
[Company Address]
[Trustee]
[Trustee Address]
Re: CS First Boston Auto Receivables Trust 199__-__
Asset Backed Certificates, Class B
-------------------------------------------------
Ladies and Gentlemen:
In connection with our disposition of the above-referenced ___% Asset
Backed Certificates, Class B (the "Certificates") we certify that (a) we
understand that the Certificates, have not been registered under the Securities
Act of 1933, as amended (the "Act"), and are being transferred by us in a
transaction that is exempt from the registration requirements of the Act and (b)
we have not offered or sold any Certificates to, or solicited offers to buy any
Certificates from, any person, or otherwise approached or negotiated with any
person with respect thereto, in a manner that would be deemed, or taken any
other action which would result in, a violation of Section 5 of the Act.
Very truly yours,
[NAME OF TRANSFEROR]
By:_____________________________
Authorized Officer
E-1
EXHIBIT F
Form of Investment Letter
[DATE]
[Company]
[Company Address]
[Trustee]
[Trustee Address]
Re: CS First Boston Auto Receivables Trust 199__-__
Asset Backed Certificates, Class B
-------------------------------------------------
Ladies and Gentlemen:
In connection with our acquisition of the above-referenced Asset
Backed Certificates, Class B (the "Certificates"), we certify that (a) we
understand that the Certificates are not being registered under the Securities
Act of 1933, as amended (the "Act"), or any state securities laws and are being
transferred to us in a transaction that is exempt from the registration
requirements of the Act and any such laws, (b) we are an "accredited investor,"
as defined in Regulation D under the Act, and have such knowledge and experience
in financial and business matters that we are capable of evaluating the merits
and risks of investments in the Certificates, (c) we have had the opportunity
to ask questions of and receive answers from the Company concerning the purchase
of the Certificates and all matters relating thereto or any additional
information deemed necessary to our decision to purchase the Certificates, (d)
we are not an employee benefit plan or trust account that is subject to the
Employee Retirement Income Security Act of 1974, as amended, or section 4975 of
the Internal Revenue Code of 1986, as amended, nor are we acting on behalf of
any such Plan or using the assets of any such Plan to acquire Class B
Certificates, (e) we are acquiring the Certificates for investment for our own
account and not with a view to any distribution of such Certificates (but
without prejudice to our right at all times to sell or otherwise dispose of the
Certificates in accordance with clause (g) below), (f) we have not offered or
sold any Certificates to, or solicited offers to buy any Certificates from, any
person, or otherwise approached or negotiated with any person with respect
thereto, or taken any other action that would result in a violation of Section 5
of the Act or any state
F-1
securities laws and (g) we will not sell, transfer or otherwise dispose of any
Certificates unless (1) such sale, transfer or other disposition is made
pursuant to an effective registration statement under the Act and in compliance
with any relevant state securities laws or is exempt from such registration
requirements and, if requested, we will at our expense provide an opinion of
counsel satisfactory to the addresses of this certificate that such sale,
transfer or other disposition may be made pursuant to an exemption from the Act,
(2) the purchaser or transferee of such Note has executed and delivered to you a
certificate to substantially the same effect as this certificate and (3) the
purchaser or transferee has otherwise complied with any conditions for transfer
set forth in the Pooling and Servicing Agreement dated as of _____________,
among Asset Backed Securities Corporation, as Company, ______________ as
Servicer, and ____________, as Trustee.
Very truly yours,
[NAME OF TRANSFEREE]
By:_____________________________
Authorized Officer
F-2
EXHIBIT G
Form of Rule 144A Letter
[DATE]
[Company]
[Company Address]
[Trustee]
[Trustee Address]
Re: CS First Boston Auto Receivables Trust 199__-__
Asset Backed Certificates, Class B
-------------------------------------------------
Ladies and Gentlemen:
In connection with our acquisition of the above-referenced ___% Asset
Backed Certificates, Class B (the "Certificates") we certify that (a) we
understand that the Certificates are not being registered under the Securities
Act of 1933, as amended (the "Act"), or any state securities laws and are being
transferred to us in a transaction that is exempt from the registration
requirements of the Act and any such laws, (b) we have such knowledge and
experience in financial and business matters that we are capable of evaluating
the merits and risks of investments in the Certificates, (c) we have had the
opportunity to ask questions of and receive answers from the Company concerning
the purchase of the Certificates and all matters relating thereto or any
additional information deemed necessary to our decision to purchase the
Certificates, (d) we are not an employee benefit plan, trust or account that is
subject to the Employee Retirement Income Security Act of 1974, as amended, or
section 4975 of the Internal Revenue Code of 1986, as amended, nor are we acting
on behalf of any such Plan or using the assets of any such Plan to acquire
Class B Certificates, (e) we have not, nor has anyone acting on our behalf,
offered, transferred, pledged, sold or otherwise disposed of the Certificates,
any interest in the Certificates or any other similar security to, or solicited
any offer to buy or accept a transfer, pledge or other disposition of the
Certificates, any interest in the Certificates or any other similar security
from or otherwise approached or negotiated with respect to the Certificates, any
interest in the Certificates or any other similar security with, any person in
any manner, or made any general solicitation by means of general advertising or
in any other manner, or taken any
G-1
other action that would constitute a distribution of the Certificates under the
Act or that would constitute a distribution of the Certificates under the Act or
that would render the disposition of the Certificates a violation of Section 5
of the act or any state securities laws or require registration pursuant
thereto, and we will not act, or authorize any person to act, in such manner
with respect to the Certificates, and (f) we are a "qualified institutional
buyer" as that term is defined in Rule 144A under the Act. We are aware that
the sale to us is being made in reliance on Rule 144A. We are acquiring the
Certificates for our own account or for resale pursuant to Rule 144A and
understand that such Certificates may be resold, pledged or transferred only (i)
to a person reasonably believed to be a qualified institutional buyer that
purchases for its own account or for the account of a qualified institutional
buyer to whom notice is given that the resale, pledge or transfer is being made
in reliance on Rule 144A or (ii) pursuant to another exemption from registration
under the Act.
Very truly yours,
[NAME OF TRANSFEREE]
By:______________________________
Authorized Officer
G-2
EXHIBIT H
Form of Receivables Purchase Agreement
[to be supplied]
H-1
EXHIBIT J
YIELD SUPPLEMENT AGREEMENT
[Date]
-----------------------------
-----------------------------
-----------------------------
-----------------------------
Ladies and Gentlemen:
Asset Backed Securities Corporation (the "Company") hereby confirm
arrangements made as of the date hereof with you to be effective upon receipt by
us of the enclosed copy of this letter agreement (the "Yield Supplement
Agreement"), executed by you. Capitalized terms used and not otherwise defined
herein shall have the meanings assigned thereto in the Pooling and Servicing
Agreement dated as of ________, ___ (the "Agreement"), among the Company,
_________, as servicer (the "Servicer"), and ________, as trustee (the
"Trustee").
1. On or prior to each Determination Date, by delivery of a
Servicer's Certificate pursuant to Section 3.09 of the Agreement, the Servicer
shall notify the Trustee of the Yield Supplement Amount for the related
Distribution Date.
2. To the extent that the amount on deposit in the Yield Supplement
Account is less than the Yield Supplement Deposit Amount for the related
Distribution Date, we agree to make a payment to the Trustee of additional
amounts until the amount on deposit therein equals the Maximum Yield Supplement
Amount by wire transfer of same day funds, to such account as the Trustee may
designate in writing to us no later than 12:00 P.M., New York City time, on the
Business Day immediately preceding such Distribution Date.
3. Our agreement set forth in this Yield Supplement Agreement is
our primary obligation and such obligation is irrevocable, absolute and
unconditional, shall not be subject to any counterclaim, setoff or defense
(other than full and strict compliance by us with our obligations hereunder) and
shall remain in full force and effect without regard to, and shall not be
released, discharged or in any way affected by, any circumstances or condition
whatsoever.
J-1
4. The Trustee's interest in this Yield Supplement Agreement shall
be transferable to any Trustee or successor Trustee under the Agreement.
5. This Yield Supplement Agreement will be governed by and
construed in accordance with the internal laws of [New York].
6. Except as otherwise provided int he Agreement, this Yield
Supplement Agreement shall terminate on the earlier to occur of (a) termination
of the Agreement pursuant to Section 10.01 and (b) the Final Scheduled
Distribution Date.
7. Except as otherwise provided herein, all notices pursuant to
this Yield Supplement Agreement shall be in writing and shall be effective upon
receipt thereof. All notices shall be directed as set forth below, or to such
other address or to the attention of such other person as the relevant party
shall have designated for such purpose in a written notice.
Asset Backed Securities Corporation
______________________________
______________________________
______________________________
Attention:______________________
The Trustee:
______________________________
______________________________
______________________________
Attention:______________________
8. This Yield Supplement Agreement may be executed in one or more
counterparts and by the different parties hereto on separate counterparts, all
of which shall be deemed to be one and the same document.
9. In consideration for all future payments, if any, of Yield
Supplement Amounts to the Trustee pursuant to Paragraph 2 hereof, the Trustee
shall pay to the Company on the Closing Date under the Agreement such amount as
the Company and the Trustee shall separately agree.
10. This Agreement may not be assigned by the Company except as
contemplated by this Section and the Agreement; provided, however, that
-------- -------
simultaneously with the execution and delivery of this Agreement, the Company
shall assign all of their right, title and interest herein to the Trustee for
the benefit of the Certificateholders as provided in Section 4.03 of the
Agreement, to which the Servicer hereby expressly consents. The Servicer agrees
to perform its obligations hereunder for the benefit of the Trust and that the
Trustee may enforce the provisions of this Agreement, exercise the rights of the
Company and enforce the obligations of the Servicer hereunder without the
consent of the Company.
J-2
11. The Servicer and the Company agree to do and perform, from time
to time, any and all acts and to execute any and all further instruments
required or reasonably requested by the other party hereto or by the Trustee
more fully to effect the purposes of this Agreement.
If the foregoing satisfactory set forth the terms and conditions of
our agreement, please indicate your acceptance thereof by signing in the space
provided below and returning to us the enclosed duplicate original of this
letter.
Very truly yours,
_____________________________,
as Servicer
By:_______________________
Name:
Title:
Agreed and Accepted as of ____________, 19__
________________________________________,
as Trustee
By______________________________________
Name:
Title:
ASSET BACKED SECURITIES CORPORATION
By______________________________________
Name:
Title:
J-3
