1
Exhibit 99.1
CONFORMED COPY
SALE AND SERVICING
AGREEMENT
among
AFG RECEIVABLES TRUST 1997-B
as
Issuer
KEY CONSUMER ACCEPTANCE CORPORATION,
as
Seller
KEY BANK USA, NATIONAL ASSOCIATION,
as Servicer
and
BANKERS TRUST COMPANY
as Indenture Trustee
Dated as of September 23, 1997
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TABLE OF CONTENTS
Page
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ARTICLE I. DEFINITIONS........................................................1
SECTION 1.1. Definitions................................................1
SECTION 1.2. Other Interpretive Provisions..............................1
ARTICLE II. CONVEYANCE OF RECEIVABLES.........................................2
SECTION 2.1. Conveyance of Receivables..................................2
ARTICLE III. THE RECEIVABLES..................................................3
SECTION 3.1. Representations and Warranties as to Each Receivable.......3
SECTION 3.2. Representations and Warranties as to the Receivables in
the Aggregate..............................................6
SECTION 3.3. Repurchase upon Breach.....................................6
SECTION 3.4. Custodian of Receivable Files..............................7
ARTICLE IV. ADMINISTRATION AND SERVICING OF RECEIVABLES......................10
SECTION 4.1. Duties of Servicer........................................10
SECTION 4.2. Collection of Receivable Payments.........................11
SECTION 4.3. Realization upon Receivables..............................11
SECTION 4.4. Physical Damage Insurance.................................12
SECTION 4.5. Maintenance of Security Interests in Financed Vehicles....12
SECTION 4.6. Covenants of Servicer.....................................13
SECTION 4.7. Purchase by Servicer upon Breach..........................13
SECTION 4.8. Servicing Fee.............................................14
SECTION 4.9. Servicer's Report.........................................14
SECTION 4.10. Annual Statement as to Compliance; Notice of Default......14
SECTION 4.11. Annual Independent Certified Public Accountants' Report...15
SECTION 4.12. Access to Certain Documentation and Information
Regarding Receivables.....................................15
SECTION 4.13. Reports to the Commission.................................16
SECTION 4.14. Reports to the Rating Agencies............................16
SECTION 4.15. Servicer Expenses.........................................16
ARTICLE V. DISTRIBUTIONS; RESERVE ACCOUNT;
STATEMENTS TO CERTIFICATEHOLDERS AND
NOTEHOLDERS.......................................................17
SECTION 5.1. Establishment of Trust Accounts...........................17
SECTION 5.2. Collections...............................................18
SECTION 5.3. Transfers by Seller as Certificateholder..................19
SECTION 5.4. Additional Deposits.......................................19
SECTION 5.5. Distributions.............................................19
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SECTION 5.6. Statements to Certificateholders and Noteholders..........21
SECTION 5.7. Net Deposits..............................................22
SECTION 5.8. Reserve Account...........................................22
ARTICLE VI. SELLER...........................................................24
SECTION 6.1. Representations of Seller.................................24
SECTION 6.2. Continued Existence.......................................26
SECTION 6.3. Liability of Seller; Indemnities..........................26
SECTION 6.4. Merger or Consolidation of, or Assumption of the
Obligations of, Seller....................................27
SECTION 6.5. Limitation on Liability of Seller and Others..............28
SECTION 6.6. Seller May Own Certificates or Notes......................28
SECTION 6.7. Indebtedness of Seller....................................28
ARTICLE VII. SERVICER........................................................28
SECTION 7.1. Representations of Servicer...............................28
SECTION 7.2. Indemnities of Servicer...................................30
SECTION 7.3. Merger or Consolidation of, or Assumption of the
Obligations of, Servicer..................................31
SECTION 7.4. Limitation on Liability of Servicer and Others............32
SECTION 7.5. Key Bank USA Not To Resign as Servicer....................32
SECTION 7.6. Existence.................................................32
SECTION 7.7. Servicer May Own Notes or Certificates....................32
ARTICLE VIII. SERVICER TERMINATION EVENTS....................................33
SECTION 8.1. Servicer Termination Event................................33
SECTION 8.2. Appointment of Successor..................................34
SECTION 8.3. Payment of Servicing Fee..................................35
SECTION 8.4. Notification to Noteholders and Certificateholders........35
SECTION 8.5. Waiver of Past Defaults...................................35
ARTICLE IX. TERMINATION......................................................36
SECTION 9.1. Optional Purchase of All Receivables; Termination Notice..36
ARTICLE X. MISCELLANEOUS PROVISIONS..........................................36
SECTION 10.1. Amendment.................................................36
SECTION 10.2. Protection of Title to Trust Property.....................38
SECTION 10.3. Notices...................................................39
SECTION 10.4. Assignment................................................40
SECTION 10.5. Limitations on Rights of Others...........................40
SECTION 10.6. Severability..............................................40
SECTION 10.7. Separate Counterparts.....................................40
SECTION 10.8. Headings..................................................40
SECTION 10.9. Governing Law.............................................41
SALE AND SERVICING AGREEMENT
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SECTION 10.10. Assignment to Indenture Trustee.....................41
SECTION 10.11. Nonpetition Covenant................................41
SECTION 10.12. Limitation of Liability of Owner Trustee and
Indenture Trustee...................................41
SECTION 10.13. Further Assurances..................................41
SECTION 10.14. No Waiver; Cumulative Remedies......................42
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SCHEDULES
Schedule A -- Schedule of Receivables
Schedule B -- Location of Receivables Files
EXHIBITS
Exhibit A -- Form of Monthly Certificateholder Statement
Exhibit B -- Form of Monthly Noteholder Statement
Exhibit C -- Form of Servicer's Report
APPENDIX
Appendix X -- Definitions
SALE AND SERVICING AGREEMENT
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SALE AND SERVICING AGREEMENT dated as of September 23, 1997 (this
"Agreement") among AFG RECEIVABLES TRUST 1997-B, a Delaware business trust
("Issuer"), KEY CONSUMER ACCEPTANCE CORPORATION, a Delaware corporation (in its
capacity as seller, "Seller"), KEY BANK USA, NATIONAL ASSOCIATION, (in its
capacity as servicer, "Servicer") and BANKERS TRUST COMPANY, a New York banking
corporation (in its capacity as indenture trustee, "Indenture Trustee").
WHEREAS, Issuer desires to purchase from Seller a portfolio of receivables
arising in connection with Motor Vehicle Loans purchased or originated by AFG
and sold to Seller under the Purchase Agreement;
WHEREAS, Seller is willing to sell such receivables to Issuer; and
WHEREAS, Servicer is willing to service such receivables.
NOW, THEREFORE, in consideration of the premises and the mutual covenants
herein contained, the parties hereto agree as follows:
ARTICLE I. DEFINITIONS.
SECTION 1.1. Definitions. Capitalized terms are used in this Agreement as
defined in Appendix X to this Agreement.
SECTION 1.2. Other Interpretive Provisions. For purposes of this
Agreement, unless the context otherwise requires: (a) accounting terms not
otherwise defined in this Agreement, and accounting terms partly defined in this
Agreement to the extent not defined, shall have the respective meanings given to
them under generally accepted accounting principles; (b) terms defined in
Article 9 of the UCC as in effect in the relevant jurisdiction and not otherwise
defined in this Agreement are used as defined in that Article; (c) the words
"hereof," "herein" and "hereunder" and words of similar import refer to this
Agreement as a whole and not to any particular provision of this Agreement; (d)
references to any Article, Section, Schedule, Appendix or Exhibit are references
to Articles, Sections, Schedules, Appendices and Exhibits in or to this
Agreement and references to any paragraph, subsection, clause or other
subdivision within any Section or definition refer to such paragraph,
subsection, clause or other subdivision of such Section or definition; (e) the
term "including" means "including without limitation"; (f) except as otherwise
expressly provided herein, references to any law or regulation refer to that law
or regulation as amended from time to time and include any successor law or
regulation; (g) references to any Person include that Person's successors and
assigns; and (h) headings are for purposes of reference only and shall not
otherwise affect the meaning or interpretation of any provision hereof.
SALE AND SERVICING AGREEMENT
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ARTICLE II. CONVEYANCE OF RECEIVABLES.
SECTION 2.1. Conveyance of Receivables. In consideration of Issuer's
delivery to, or upon the order of, Seller of Notes and Certificates, in
aggregate principal amounts equal to the initial principal amounts of the Notes
and the initial Certificate Balance, respectively, Seller does hereby sell,
transfer, assign, set over and otherwise convey to Issuer, without recourse,
subject to the obligations herein (collectively, the "Trust Property"):
(a) all right, title and interest of Seller in and to the Receivables, and
all moneys received thereon after the Cutoff Date;
(b) all right, title and interest of Seller in the security interests in
the Financed Vehicles granted by Obligors pursuant to the Receivables and any
other interest of Seller in the Financed Vehicles and any other property that
shall secure the Receivables;
(c) the interest of Seller in any proceeds with respect to the Receivables
from claims on any Insurance Policies covering Financed Vehicles or the Obligors
or from claims under any lender's single interest insurance policy naming AFG as
an insured;
(d) rebates of premiums relating to Insurance Policies and rebates of
other items such as extended warranties financed under the Receivables, in each
case, to the extent the Servicer would, in accordance with its customary
practices, apply such amounts to the Principal Balance of the related
Receivable;
(e) the interest of Seller in any proceeds from (i) any Receivable
repurchased by a Dealer, pursuant to a Dealer Agreement, as a result of a breach
of representation or warranty in the related Dealer Agreement, (ii) a default by
an Obligor resulting in the repossession of the Financed Vehicle under the
applicable Motor Vehicle Loan or (iii) any Dealer Recourse or other rights
relating to the Receivables under Dealer Agreements;
(f) all right, title and interest in all funds on deposit from time to
time in the Trust Accounts, and in all investments and proceeds thereof (but
excluding all investment income thereon);
(g) all right, title and interest of Seller under the Purchase Agreement,
including the right of Seller to cause AFG to repurchase Receivables from
Seller;
(h) all right, title and interest of Seller in any instrument or document
relating to the
Receivables; and
(i) the proceeds of any and all of the foregoing.
The sale, transfer, assignment, setting over and conveyance made hereunder
shall not constitute and is not intended to result in an assumption by Issuer of
any obligation of AFG to the
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Obligors, the Dealers or any other Person in connection with the Receivables and
the other assets and properties conveyed hereunder or any agreement, document or
instrument related thereto.
ARTICLE III. THE RECEIVABLES.
SECTION 3.1. Representations and Warranties as to Each Receivable. Seller
hereby makes the following representations and warranties as to each Receivable
conveyed by it to Issuer hereunder on which Issuer shall rely in acquiring the
Receivables. Unless otherwise indicated, such representations and warranties
shall speak as of the Closing Date, but shall survive the sale, transfer and
assignment of the Receivables to Issuer and the pledge thereof to Indenture
Trustee pursuant to the Indenture.
(a) Characteristics of Receivables. The Receivable has been fully and
properly executed by the parties thereto and (i) has been originated by a Dealer
in the ordinary course of such Dealer's business and has been purchased by AFG
in the ordinary course of AFG's business and in accordance with AFG's
underwriting standards to finance the retail sale by a Dealer of the related
Financed Vehicle or has otherwise been acquired by AFG, (ii) AFG has
underwriting standards that require physical damage insurance to be maintained
on the related Financed Vehicle, (iii) is secured by a valid, subsisting,
binding and enforceable first priority security interest in favor of AFG in the
Financed Vehicle (subject to administrative delays and clerical errors on the
part of the applicable government agency and to any statutory or other lien
arising by operation of law after the Closing Date which is prior to such
security interest), which security interest is assignable together with such
Receivable, and has been so assigned to Seller, and subsequently assigned by
Seller to Issuer, (iv) contains customary and enforceable provisions such that
the rights and remedies of the holder thereof are adequate for realization
against the collateral of the benefits of the security, (v) provided, at
origination, for level monthly payments (provided, that the amount of the last
payment may be different), which fully amortize the Initial Principal Balance
over the original term, (vi) provides for interest at the Contract Rate
specified in the Schedule of Receivables, (vii) was originated in the United
States and (viii) constitutes "chattel paper" as defined in the UCC.
(b) Individual Characteristics. The Receivables have the following
individual characteristics as of the Cutoff Date; (i) each Receivable is secured
by a Motor Vehicle; (ii) each Receivable has a Contract Rate of at least 13.94%
and not more than 29.34%; (iii) each Receivable had a remaining term, as of the
Cutoff Date, of not less than 16 months and not more than 59 months; (iv) each
Receivable had an Initial Principal Balance of not less than $3,219.50 and not
more than $30,229.05; (v) no Receivable was more than 30 days past due as of the
Cutoff Date; (vi) no Financed Vehicle had been repossessed as of the Cutoff
Date; (vii) no Receivable is subject to a force placed Physical Damage Insurance
Policy on the related Financed Vehicle; and (viii) the Dealer of the Financed
Vehicle has no participation in, or other right to receive, any proceeds of the
Receivable. The Receivables were selected using selection procedures that were
not intended by AFG or Seller to be adverse to the Holders.
(c) Schedule of Receivables. The information with respect to each
Receivable set forth in the Schedule of Receivables, including (without
limitation) the account number of the Obligor,
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the Initial Principal Balance, and the Contract Rate, was true and correct in
all material respects as of the close of business on the Cutoff Date.
(d) Compliance with Law. The Receivable complied at the time it was
originated or made, and will comply as of the Closing Date, in all material
respects with all requirements of applicable federal, state and local laws, and
regulations thereunder, including, to the extent applicable, usury laws, the
Federal Truth in Lending Act, the Equal Credit Opportunity Act, the Fair Credit
Billing Act, the Fair Credit Reporting Act, the Federal Trade Commission Act,
the Xxxxxxxx-Xxxx Warranty Act, the Fair Debt Collection Practices Act, Federal
Reserve Board Regulations B and Z and any other consumer credit, consumer
protection, equal opportunity and disclosure laws.
(e) Binding Obligation. The Receivable constitutes the genuine, legal,
valid and binding payment obligation in writing of the Obligor, enforceable in
all material respects by the holder thereof in accordance with its terms,
subject to the effect of bankruptcy, insolvency, reorganization, or other
similar laws affecting the enforcement of creditors' rights generally, and the
Receivable is not subject to any right of rescission, setoff, counterclaim or
defense, including the defense of usury.
(f) Lien in Force. Neither Seller nor AFG has taken any action which would
have the effect of releasing the related Financed Vehicle from the Lien granted
by the Receivable in whole or in part.
(g) No Amendment or Waiver. No material provision of the Receivable has
been amended, waived, altered or modified in any respect, except such waivers as
would be permitted under this Agreement, and no amendment, waiver, alteration or
modification causes such Receivable not to conform to the other representations
or warranties contained in this Section.
(h) No Liens. Neither Seller nor AFG has received notice of any Liens or
claims, including Liens for work, labor, materials or unpaid state or federal
taxes, relating to the Financed Vehicle securing the Receivable, that are or may
be prior to or equal to the Lien granted by the Receivable.
(i) No Default. Except for payment delinquencies continuing for a period
of not more than 30 days as of the Cutoff Date, to the knowledge of Seller, no
default, breach, violation or event permitting acceleration under the terms of
the Receivable exists and no continuing condition that with notice or lapse of
time, or both, would constitute a default, breach, violation or event permitting
acceleration under the terms of the Receivable has arisen.
(j) Insurance. The Receivable requires the Obligor to insure the Financed
Vehicle under a Physical Damage Insurance Policy, pay the premiums for such
insurance and keep such insurance in full force and effect.
(k) Good Title. It is the intention of Seller that the transfer and
assignment herein contemplated constitute a sale of the Receivables from Seller
to Issuer and that the beneficial interest
SALE AND SERVICING AGREEMENT
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in and title to the Receivables not be part of Seller's estate in the event of
the filing of a bankruptcy petition by or against Seller under any bankruptcy
law. No Receivable has been sold, transferred, assigned, or pledged by Seller to
any Person other than Issuer. Immediately prior to the transfer and assignment
herein contemplated, Seller had good and marketable title to the Receivable free
and clear of any Lien and had full right and power to transfer and assign the
Receivable to Issuer and immediately upon the transfer and assignment of the
Receivable to Issuer, Issuer shall have good and marketable title to the
Receivable, free and clear of any Lien; and Issuer's interest in the Receivable
resulting from the transfer has been perfected under the UCC.
(l) Obligations. AFG has duly fulfilled all material obligations on its
part to be fulfilled under, or in connection with, the Receivable.
(m) Possession. There is only one original executed Receivable, and
immediately prior to the Closing Date, AFG will have possession of such original
executed Receivable.
(n) No Government Obligor. The Obligor on the Receivable is not the United
States of America or any state thereof or any local government, or any agency,
department, political subdivision or instrumentality of the United States of
America or any state thereof or any local government.
(o) Marking Records. By the Closing Date, Seller shall have caused the
portions of Seller's and AFG's electronic master record of Motor Vehicle Loans
relating to the Receivables to be clearly and unambiguously marked to show that
the Receivable is owned by Issuer in accordance with the terms of this
Agreement.
(p) No Assignment. As of the Closing Date, Seller shall not have taken any
action to convey any right to any Person that would result in such Person having
a right to payments received under the Insurance Policies or Dealer Agreements,
or payments due under the Receivable, that is senior to, or equal with, that of
Issuer.
(q) Lawful Assignment. The Receivable has not been originated in, and is
not subject to the laws of, any jurisdiction under which the sale, transfer or
assignment of such Receivable hereunder or pursuant to transfers of the Notes or
Certificates are unlawful, void or voidable. Neither Seller nor AFG has entered
into any agreement with any Obligor that prohibits, restricts or conditions the
assignment of any portion of the Receivables.
(r) Dealer Agreements. A Dealer Agreement for each Receivable is in effect
whereby the Dealer warrants title to the Motor Vehicle and indemnifies AFG that
is a party to said Dealer Agreement against the unenforceability of each
Receivable sold thereunder, and the rights of AFG thereunder, with regard to the
Receivable sold hereunder, have been validly assigned to and are enforceable
against the Dealer by the Seller and then to and by the Issuer, along with any
Dealer Recourse.
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(s) Composition of Receivable. No Receivable has a Principal Balance which
includes capitalized interest or late charges.
(t) Database File. The information included with respect to each
Receivable in the database file delivered pursuant to Section 4.9(b) is accurate
and complete in all material respects.
SECTION 3.2. Representations and Warranties as to the Receivables in the
Aggregate. Seller hereby makes the following representations and warranties as
to the Receivables conveyed by it to Issuer hereunder on which Issuer shall rely
in acquiring the Receivables. Unless otherwise indicated, such representations
and warranties shall speak as of the Closing Date, but shall survive the sale,
transfer and assignment of the Receivables to Issuer and the pledge thereof to
Indenture Trustee pursuant to the Indenture.
(a) Amounts. The Original Pool Balance was $110,004,479.62.
(b) Aggregate Characteristics. The Receivables had the following
characteristics in the aggregate as of the Cutoff Date: (i) approximately 13.15%
of the Original Pool Balance was attributable to loans for purchases of new
Financed Vehicles, and approximately 86.85% of the Original Pool Balance was
attributable to loans for purchases of used Financed Vehicles; (ii)
approximately 22.11% of the Original Pool Balance was attributable to
Receivables the mailing addresses of the Obligors with respect to which are
located in the State of North Carolina and 18.04% of the Original Pool Balance
was attributable to Receivables the mailing addresses of the Obligors with
respect to which are located in the State of California, 6.91% in the State of
Texas, 5.55% in the State of Arizona and 5.37% in the State of Oklahoma, and no
other state accounts for more than 5% of the Original Pool Balance; (iii) the
weighted average Contract Rate of the Receivables was 20.03%; (iv) there are
9,006 Receivables being conveyed by Seller to Issuer; (v) the average Cutoff
Date Principal Balance of the Receivables was $12,214.58 and (vi) the weighted
average original term and weighted average remaining term of the Receivables
were 57.12 months and 54.45 months, respectively.
SECTION 3.3. Repurchase upon Breach. Seller, Servicer, Indenture Trustee
or Owner Trustee, as the case may be, shall inform the other parties to this
Agreement promptly, in writing, upon the discovery (or, with respect to the
Indenture Trustee or Owner Trustee, upon actual knowledge of a Responsible
Officer) of any breach or failure to be true of the representations or
warranties made by Seller in Section 3.1, provided that the failure to give such
notice shall not affect any obligation of Seller. If the breach or failure shall
not have been cured by the last day of the Collection Period which includes the
60th day (or if Seller elects, the 30th day) after the date on which Seller
becomes aware of, or receives written notice from Owner Trustee, Indenture
Trustee or Servicer of, such breach or failure, and such breach or failure
materially and adversely affects the interests of Issuer and the Holders in any
Receivable, Seller shall repurchase each such affected Receivable from Issuer as
of such last day of such Collection Period at a purchase price equal to the
Purchase Amount for such Receivable as of such last day of such Collection
Period. Notwithstanding the foregoing, any such breach or failure with respect
to the representations and warranties contained in Section 3.1 will not be
deemed to have such a material and adverse effect
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with respect to a Receivable if the facts resulting in such breach or failure do
not affect the ability of Issuer to receive and retain payment in full on such
Receivable. In consideration of the repurchase of a Receivable hereunder, Seller
shall remit the Purchase Amount of such Receivable, no later than the close of
business on the next Deposit Date, in the manner specified in Section 5.4. The
sole remedy of Issuer, the Owner Trustee, the Indenture Trustee or the Holders
with respect to a breach or failure to be true of the representations or
warranties made by Seller pursuant to Section 3.1 shall be to require Seller to
repurchase Receivables pursuant to this Section.
SECTION 3.4. Custodian of Receivable Files. (a) Custody. To assure uniform
quality in servicing the Receivables and to reduce administrative costs, Issuer,
upon the execution and delivery of this Agreement, revocably appoints Custodian,
as agent, and Custodian accepts such appointment, to act as agent on behalf of
Issuer to maintain custody of the following documents or instruments, which are
hereby constructively delivered to Issuer with respect to each Receivable
(collectively, a "Receivable File"):
(i) fully executed original of the Receivable;
(ii) any documents customarily delivered to or held by Seller or
Servicer evidencing the existence of any Physical Damage Insurance
Policies;
(iii) the original credit application, fully executed by the
Obligor;
(iv) the original certificate of title, or such other documents as
AFG keeps on file, in accordance with its customary procedures, evidencing
the security interest of AFG in the Financed Vehicle;
(v) originals or true copies of all documents, instruments or
writings relating to extensions, amendments or waivers of the Receivable;
and
(vi) any and all other documents or electronic records that Seller,
AFG or Servicer, as the case may be, keeps on file, in accordance with its
customary procedures, relating to the Receivable, any Insurance Policies,
the Obligor or the Financed Vehicle.
(b) Safekeeping. Servicer, in its capacity as Custodian, shall hold the
Receivable Files as agent on behalf of Issuer and maintain such accurate and
complete accounts, records and computer systems pertaining to each Receivable as
shall enable Servicer and Issuer to comply with the terms and provisions of this
Agreement applicable to them. In performing its duties as Custodian hereunder,
Custodian shall act with reasonable care, exercising the degree of skill,
attention and care that Custodian exercises with respect to receivable files
relating to other similar motor vehicle loans owned and/or serviced by Custodian
and that is consistent with industry standards. In accordance with its customary
practice with respect to its retail installment sale contracts, Custodian 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, and shall maintain the Receivable Files in such a manner as shall
enable Owner Trustee to verify, if Owner Trustee so
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elects, the accuracy of the record keeping of Custodian. Custodian shall
promptly report to Owner Trustee any failure on its part to hold the Receivable
Files and maintain its accounts, records and computer systems as herein
provided, and promptly take appropriate action to remedy any such failure.
Custodian hereby acknowledges receipt of the Receivable File for each Receivable
listed on the Schedule of Receivables. Nothing herein shall be deemed to require
Issuer, Owner Trustee or Indenture Trustee to verify the accuracy of the record
keeping of the Custodian.
(c) Maintenance of and Access to Records. Custodian shall maintain each
Receivable File at the location specified in Schedule B to this Agreement, or at
such other office of Custodian within the United States (or, in the case of any
successor Custodian, within the State in which its principal place of business
is located) as shall be specified to Issuer by 30 days' prior written notice. At
the reasonable direction of the Owner Trustee or Indenture Trustee, Custodian
shall make available to Owner Trustee, Indenture Trustee and their respective
agents (or, when requested in writing by Owner Trustee or Indenture Trustee,
their respective attorneys or auditors) the Receivable Files and the related
accounts, records and computer systems maintained by Custodian at such times
during the normal business hours of Custodian for purposes of inspecting,
auditing or making copies of abstracts of the same.
(d) Release of Documents. Upon written instructions from Indenture Trustee
(or, if no Notes are then Outstanding, Owner Trustee), Custodian shall release
any document in the Receivable Files to Indenture Trustee or Owner Trustee or
its respective agent or designee, as the case may be, at such place or places as
Indenture Trustee or Owner Trustee may designate, as soon thereafter as is
practicable. Any document so released shall be handled by Indenture Trustee or
Owner Trustee with due care and returned to Custodian for safekeeping as soon as
Indenture Trustee or Owner Trustee or its respective agent or designee, as the
case may be, shall have no further need therefor.
(e) Title to Receivables. Custodian agrees that, in respect of any
Receivable File held by Custodian hereunder, Custodian will not at any time have
or in any way attempt to assert any interest in such Receivable File or the
related Receivable, other than solely for the purpose of collecting or enforcing
the Receivable for the benefit of Issuer and that the entire equitable interest
in such Receivable and the related Receivable File shall at all times be vested
in Issuer.
(f) Instructions; Authority to Act. Custodian shall be deemed to have
received proper instructions with respect to the Receivable Files upon its
receipt of written instructions signed by an Authorized Officer of Indenture
Trustee or Owner Trustee, as applicable. A certified copy of excerpts of certain
resolutions of the Board of Directors of Indenture Trustee or Owner Trustee, as
applicable, shall constitute conclusive evidence of the authority of any such
Authorized Officer to act and shall be considered in full force and effect until
receipt by Custodian of written notice to the contrary given by Indenture
Trustee or Owner Trustee, as applicable.
(g) Custodian's Indemnification. Custodian shall indemnify and hold
harmless Issuer, Owner Trustee and Indenture Trustee, and each of their
respective officers, directors, employees and agents and the Holders from and
against any and all liabilities, obligations, losses, compensatory
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damages, payments, costs or expenses (including legal fees if any) of any kind
whatsoever that may be imposed on, incurred or asserted against Issuer, Owner
Trustee, Indenture Trustee or the Holders as the result of any act or omission
of Custodian relating to the maintenance and custody of the Receivable Files;
provided that Custodian shall not be liable hereunder to the Owner Trustee or
Indenture Trustee to the extent that such liabilities, obligations, losses,
compensatory damages, payments, costs or expenses result from the willful
misfeasance, bad faith or negligence of Owner Trustee or Indenture Trustee, as
the case may be. Indemnification under this subsection (g) shall include
reasonable fees and expenses of counsel and expenses of litigation and shall
survive termination of this Agreement and the resignation or removal of Owner
Trustee or Indenture Trustee, as the case may be. If Custodian shall have made
any indemnity payments to Owner Trustee or Indenture Trustee pursuant to this
Section and Owner Trustee or Indenture Trustee thereafter shall collect any of
such amounts from Persons other than Custodian, Owner Trustee or Indenture
Trustee, as the case may be, shall, as soon as practicable following such
receipt thereof, repay such amounts to Custodian, without interest.
(h) Effective Period and Termination. 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 subsection (h). If Servicer shall
resign as Servicer in accordance with Section 7.5 or if all of the rights and
obligations of Servicer shall have been terminated under Section 8.1, the
appointment of Servicer as Custodian hereunder may be terminated by the Owner
Trustee or Indenture Trustee or by the Holders of Notes evidencing not less than
50% of the aggregate Outstanding Amount of the Notes (or, if no Notes are then
Outstanding, the Holders of Certificates representing not less than 50% of the
Certificate Balance), in each case in the same manner as Owner Trustee or
Indenture Trustee or such Holders may terminate the rights and obligations of
Servicer under Section 8.1. The Indenture Trustee, at the direction of Holders
of Notes evidencing not less than 50% of the aggregate Outstanding Amount of the
Notes, or, if no Notes are then Outstanding, the Owner Trustee at the direction
of Holders of Certificates evidencing not less than 50% of the Certificate
Balance, may terminate Servicer's appointment as Custodian hereunder at any time
with cause, or with 30 days' prior written notice without cause. As soon as
practicable after any termination of such appointment Servicer shall deliver, or
cause to be delivered, the Receivable Files to Indenture Trustee or Owner
Trustee, as applicable, or its respective agent or designee at such place or
places as Indenture Trustee or Owner Trustee, as applicable, may reasonably
designate. Notwithstanding any termination of Servicer as Custodian hereunder
(other than in connection with a termination resulting from the termination of
Servicer, as such, pursuant to Section 8.1), from and after the date of such
termination, and for so long as Servicer is acting as such pursuant to this
Agreement, Indenture Trustee shall provide, or cause the successor Custodian to
provide, access to the Receivable Files to Servicer, at such times as Servicer
shall reasonably request, for the purpose of carrying out its duties and
responsibilities with respect to the servicing of the Receivables hereunder.
(i) Delegation. Custodian may, at any time without notice or consent,
delegate any or all of its duties under the Basic Documents to AFG; provided
that no such delegation shall relieve Custodian of its responsibility with
respect to such duties and Custodian shall remain obligated and liable to Issuer
and the Holders for its duties hereunder as if Custodian alone were performing
such duties.
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ARTICLE IV. ADMINISTRATION AND SERVICING OF RECEIVABLES.
SECTION 4.1. Duties of Servicer. (a) Servicer is hereby authorized to act
as agent for Issuer and in such capacity shall manage, service, administer and
make collections on the Receivables (other than Purchased Receivables), and
perform the other actions required by Servicer under this Agreement, with
reasonable care. Without limiting the standard set forth in the preceding
sentence, Servicer shall use a degree of skill, attention and care that is not
less than Servicer exercises with respect to comparable Motor Vehicle Loans that
it services for itself or others and that is consistent with prudent industry
standards. Servicer's duties shall include the collection and posting of all
payments, responding to inquiries by Obligors on the Receivables, or by federal,
state or local governmental authorities, investigating delinquencies, sending
payment coupons or monthly invoices to Obligors, reporting required tax
information to Obligors, accounting for Collections, monitoring the status of
Physical Damage Insurance Policies with respect to the Financed Vehicles as
provided in Section 4.4(a), furnishing monthly and annual statements to Owner
Trustee and Indenture Trustee with respect to distributions, providing
collection and repossession services in the event of Obligor default and
performing the other duties specified herein.
In accordance with its customary servicing procedures, Servicer shall also
administer and enforce all rights and responsibilities of the holder of the
Receivables provided for in the Physical Damage Insurance Policies as provided
in Section 4.4 and the Dealer Agreements. Without limiting the generality of the
foregoing, Servicer is hereby authorized and empowered by Issuer to execute and
deliver, on behalf of itself, Indenture Trustee, Issuer, Owner Trustee and the
Holders, any and all instruments of satisfaction or cancellation, or of partial
or full release or discharge, and all other comparable instruments, with respect
to the Receivables or to the Financed Vehicles, all in accordance with this
Agreement; provided that notwithstanding the foregoing, Servicer shall not,
except pursuant to an order from a court of competent jurisdiction, release an
Obligor from payment of any unpaid amount under any Receivable or waive the
right to collect the unpaid balance of any Receivable from the Obligor, except
in connection with a de minimis deficiency which Servicer would not attempt to
collect in accordance with its customary procedures. If Servicer shall commence
a legal proceeding to enforce a Receivable, Issuer shall thereupon be deemed to
have automatically assigned such Receivable to Servicer, which assignment shall
be solely for purposes of collection.
(b) Servicer may, at any time without notice (except that Servicer shall
give written notice to each Rating Agency of any delegation outside the ordinary
course of business of the substantial portion of its servicing business) or
consent, delegate (i) any or all duties under this Agreement to any Person more
than 50% of the voting securities of which are owned, directly or indirectly, by
KeyCorp, an Ohio corporation, so long as Key Bank USA acts as Servicer, or (ii)
specific duties to sub-contractors who are in the business of performing such
duties; provided that no such delegation shall relieve Servicer of its
responsibility with respect to such duties and Servicer shall remain obligated
and liable to Issuer and the Holders for servicing and administering the
Receivables in accordance with this Agreement as if Servicer alone were
performing such duties.
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SECTION 4.2. Collection of Receivable Payments. (a) 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
otherwise act with respect to the Receivables, the Physical Damage Insurance
Policies, the Dealer Agreements and related property in such manner as will, in
the reasonable judgment of Servicer, maximize the amount to be received by
Issuer with respect thereto, in accordance with the standard of care required by
Section 4.1. Servicer shall be entitled to amend or modify any Receivable in
accordance with its customary procedures if Servicer believes in good faith that
such amendment or modification is in Issuer's best interests; provided that
Servicer may not, unless ordered by a court of competent jurisdiction or
otherwise required by applicable law, (i) extend a Receivable beyond the Final
Scheduled Maturity Date or (ii) reduce the Principal Balance or Contract Rate of
any Receivable. If Servicer fails to comply with the provisions of the preceding
sentence, Servicer shall be required to purchase the Receivable or Receivables
affected thereby, for the Purchase Amount, in the manner specified in Section
4.7 as of the last day of the Collection Period in which such failure occurs.
Servicer may, in its discretion (in accordance with its customary standards,
policies and procedures), waive any prepayment charge, late payment charge,
extension fee or any other fee that may be collected in the ordinary course of
servicing a Receivable.
(b) If in the course of collecting payments under the Receivables,
Servicer determines to set off any obligation of Servicer to an Obligor against
an amount payable by the Obligor with respect to such Receivable, Servicer shall
deposit the amount so set off in the Collection Account, no later than the close
of business on the Deposit Date for the Collection Period in which the set-off
occurs. All references herein to payments or Liquidation Proceeds collected by
Servicer shall include amounts set-off by Servicer.
SECTION 4.3. Realization upon Receivables. On behalf of Issuer, Servicer
shall charge off a Receivable in no event later than 120 days after such
Receivable shall have become delinquent and shall use reasonable efforts to
repossess and liquidate the Financed Vehicle securing any Defaulted Receivable
as soon as feasible after such Receivable becomes a Defaulted Receivable, in
accordance with the standard of care required by Section 4.1. In taking such
action, Servicer shall follow such customary and usual practices and procedures
as it shall deem necessary or advisable in its servicing of Motor Vehicle Loans,
and as are otherwise consistent with the standard of care required under Section
4.1, which shall include exercising any rights under the Dealer Agreements and
selling the Financed Vehicle at public or private sale. Servicer shall be
entitled to recover all reasonable expenses incurred by it in the course of
repossessing and liquidating a Financed Vehicle into cash proceeds or pursuing
any deficiency claim against the related Obligor, but only out of the cash
proceeds of such Financed Vehicle or any deficiency obtained from the Obligor.
The foregoing shall be subject to the provision that, in any case in which a
Financed Vehicle shall have suffered damage, 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 of the related Receivable by an amount equal
to or greater than the amount of such expenses.
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If Servicer elects to commence a legal proceeding to enforce a Dealer
Agreement, the act of commencement shall be deemed to be an automatic assignment
from Issuer to Servicer of the rights under such Dealer Agreement. If, however,
in any enforcement suit or legal proceeding, it is held that Servicer may not
enforce a Dealer Agreement on the grounds that it is not a real party in
interest or a Person entitled to enforce the Dealer Agreement, Owner Trustee, on
behalf of Issuer, at Servicer's expense, or Seller, at Servicer's expense, shall
take such steps as Servicer deems necessary to enforce the Dealer Agreement,
including bringing suit in Issuer's name or the name of Owner Trustee or
Indenture Trustee.
SECTION 4.4. Physical Damage Insurance. (a) The Receivables require that
each Financed Vehicle be insured under a Physical Damage Insurance Policy.
Servicer shall monitor or cause to be monitored, the status of such physical
damage insurance coverage to the extent consistent with its customary servicing
procedures. If Servicer shall determine that an Obligor has failed to obtain or
maintain a Physical Damage Insurance Policy covering the related Financed
Vehicle, Servicer shall use reasonable efforts in accordance with its customary
servicing procedures to enforce the rights of the holder of the Receivable under
the Receivable to require the Obligor to obtain such physical damage insurance,
provided that Servicer shall not be required to take such actions if there is in
place a lender's single interest policy with respect to the related Financed
Vehicle that complies with Servicer's customary requirements. It is understood
that Servicer will not "force-place" any Physical Damage Insurance Policy on any
Financed Vehicle.
(b) Servicer may xxx to enforce or collect upon the Physical Damage
Insurance Policies, in its own name, if possible, or as agent for Issuer. If
Servicer elects to commence a legal proceeding to enforce a Physical Damage
Insurance Policy, the act of commencement shall be deemed to be an automatic
assignment of the rights of Issuer under such Physical Damage Insurance Policy
to Servicer for purposes of collection only. If, however, in any enforcement
suit or legal proceeding it is held that Servicer may not enforce a Physical
Damage Insurance Policy on the grounds that it is not a real party in interest
or a holder entitled to enforce the Physical Damage Insurance Policy, Owner
Trustee, on behalf of Issuer, at Servicer's expense, or Seller, at Servicer's
expense, shall take such steps as Servicer deems necessary to enforce such
Physical Damage Insurance Policy, including bringing suit in Issuer's name or
the name of Owner Trustee or Indenture Trustee. Servicer shall make all claims
and enforce its rights under any lender's single interest insurance policy (to
the extent such claims or rights relate to Receivables) for the benefit of the
Issuer and shall treat as Collections all related proceeds of such policies.
SECTION 4.5. Maintenance of Security Interests in Financed Vehicles.
Servicer, in accordance with the standard of care required under Section 4.1,
shall take such reasonable steps as are necessary to maintain perfection of the
security interest created by each Receivable in the related Financed Vehicle for
the benefit of Issuer and the Indenture Trustee. Issuer hereby authorizes
Servicer, and Servicer hereby agrees, to take such reasonable steps as are
necessary to re-perfect such security interest on behalf of Issuer in the event
Servicer receives notice of the relocation of a Financed Vehicle. If there has
been a Servicer Termination Event, Seller and Servicer, at their expense, shall
promptly and duly execute and deliver such documents and instruments, and take
such other reasonable actions as may be necessary, as evidenced by an Opinion of
Counsel delivered
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to Issuer, Owner Trustee and Indenture Trustee to perfect Issuer's and Indenture
Trustee's interest in the Trust Property against all other Persons, including
the delivery of the Receivables and the Receivable Files to Indenture Trustee
(or Owner Trustee if no Notes are then Outstanding) its agent or designee, the
endorsement and delivery of the Physical Damage Insurance Policies or the
notification of the insurers thereunder, the execution of transfer instruments,
and the endorsement to Indenture Trustee (or Owner Trustee if no Notes are then
Outstanding) and the delivery of the certificates of title to the Financed
Vehicles to the appropriate department or departments of motor vehicles (or
other appropriate governmental agency).
SECTION 4.6. Covenants of Servicer. Servicer makes the following covenants
on which Issuer relies in acquiring the Receivables:
(a) Security Interest to Remain in Force. Servicer shall not release any
Financed Vehicle from the security interest granted by the related Receivable in
whole or in part, except upon payment in full of the Receivable or as otherwise
contemplated herein.
(b) No Impairment. Servicer shall not impair in any material respect the
rights of the Issuer or the Holders in the Receivables, the Dealer Agreements or
the Physical Damage Insurance Policies or, subject to clause (c), otherwise
amend or alter the terms thereof if, as a result of such amendment or
alteration, the interests of Issuer and the Holders hereunder would be
materially and adversely affected.
(c) Amendments. Servicer shall not amend or otherwise modify any
Receivable (including the grant of any extension thereunder), except in
accordance with Section 4.2.
SECTION 4.7. Purchase by Servicer upon Breach. Seller, Servicer, Indenture
Trustee or Owner Trustee, as the case may be, shall inform the other parties
promptly, in writing, upon the discovery (or, in the case of the Indenture
Trustee or Owner Trustee, upon actual knowledge of a Responsible Officer) of any
breach by Servicer of its covenants under Section 4.5 or 4.6; provided that the
failure to give such notice shall not affect any obligation of Servicer. Unless
the breach shall have been cured by the last day of the Collection Period which
includes the 60th day (or the 30th day, if Servicer so elects) after the date on
which Servicer becomes aware of, or receives written notice of, such breach, and
such breach materially and adversely affects the interests of Issuer and the
Holders in any Receivable, Servicer shall purchase such Receivable from Issuer
as of the last day of the Collection Period at a purchase price equal to the
Purchase Amount for such Receivable as of the last day of such Collection
Period; provided that in the case of a breach of the covenant contained in
Section 4.6(c), Servicer shall be obligated to purchase the affected Receivable
or Receivables on the Deposit Date immediately succeeding the Collection Period
during which Servicer becomes aware of, or receives written notice of, such
breach. In consideration of the purchase of a Receivable hereunder, Servicer
shall remit the Purchase Amount of such Receivable in the manner specified in
Section 5.4. The sole remedy of Issuer, Owner Trustee, Indenture Trustee or the
Holders against Servicer with respect to a breach pursuant to Section 4.5 or 4.6
shall be to require Servicer to repurchase Receivables pursuant to this Section.
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SECTION 4.8. Servicing Fee. The servicing fee for each Distribution Date
shall equal the product of (i) one-twelfth, (ii) the Servicing Fee Rate and
(iii) the Pool Balance as of the opening of business on the first day of the
related Collection Period (the "Servicing Fee"). Servicer shall also be entitled
to retain any late fees, extension fees, prepayment charges (including, in the
case of any Rule of 78's Receivable or Sum of Periodic Balances Receivable that
is prepaid in full, amounts received in excess of the outstanding Principal
Balance of such Receivable and accrued interest thereon calculated as if such
Receivable were an Actuarial Receivable) and certain non-sufficient funds
charges and other administrative fees or similar charges allowed by applicable
law with respect to Receivables collected (from whatever source) on the
Receivables and shall be paid any interest earned on deposits in the Trust
Accounts (the "Supplemental Servicing Fee"). It is understood and agreed that
Available Interest or Available Principal shall not include any amounts retained
by Servicer which constitute Supplemental Servicing Fees. The Servicing Fee in
respect of a Collection Period (together with any portion of the Servicing Fee
that remains unpaid from prior Distribution Dates), if the Rating Agency
Condition is satisfied, may be paid at the beginning of such Collection Period
out of Collections for such Collection Period.
SECTION 4.9. Servicer's Report. (a) On each Determination Date, Servicer
shall deliver to Owner Trustee, Indenture Trustee, each Paying Agent and Seller,
with a copy to the Rating Agencies, a Servicer's Report substantially in the
form of Exhibit A, containing all information necessary to make the transfers
and distributions pursuant to Sections 5.4, 5.5 and 5.8 for the Collection
Period preceding the date of such Servicer's Report together with all
information necessary for the Indenture Trustee to send copies of statements
received by the Indenture Trustee to Noteholders and Certificateholders pursuant
to the Indenture and Section 5.6 of this Agreement. Receivables to be purchased
by Servicer or to be repurchased by Seller shall be identified by Servicer by
account number with respect to such Receivable (as specified in the Schedule of
Receivables).
(b) Servicer shall provide Indenture Trustee with a database file for the
Receivables at or prior to the Closing Date (but with information as of the
close of business on the Cutoff Date).
SECTION 4.10. Annual Statement as to Compliance; Notice of Default. (a)
Servicer shall deliver to Owner Trustee, Indenture Trustee and each Rating
Agency, on or before October 31 of each year beginning on October 31, 1998, an
Officer's Certificate, dated as of June 30 of the preceding year, stating that
(i) a review of the activities of Servicer during the preceding 12-month period
(or, in the case of the first such report, during the period from the Closing
Date to June 30, 1998) and of its performance under this Agreement has been made
under such officer's supervision and (ii) to the best of such officer's
knowledge, based on such review, Servicer has fulfilled all its obligations in
all material respects under this Agreement throughout such year or, if there
exists any uncured default in the fulfillment of any such obligation, specifying
each such default known to such officer and the nature and status thereof. A
copy of such certificate and the report referred to in Section 4.11 may be
obtained by any Certificateholder by a request in writing to Owner Trustee
addressed to the Corporate Trust Office or by any Noteholder by a request in
writing to Indenture Trustee addressed to the Corporate Trust Office. Upon the
written request of Owner Trustee,
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Indenture Trustee will promptly furnish Owner Trustee a list of Noteholders as
of the date specified by Owner Trustee.
(b) Servicer shall deliver to Owner Trustee, Indenture Trustee and the
Rating Agencies, promptly after having obtained knowledge thereof, but in no
event later than five (5) Business Days thereafter, written notice in an
Officer's Certificate of any event which constitutes, or with the giving of
notice or lapse of time, or both, would become a Servicer Termination Event
under Section 8.1.
SECTION 4.11. Annual Independent Certified Public Accountants' Report. The
Servicer shall cause a firm of independent certified public accountants (who may
also render other services to the Servicer or Seller) to deliver to the Seller,
Owner Trustee, Indenture Trustee and each Rating Agency on or before October 31
of each year beginning on October 31, 1998, a report to the effect that such
firm has examined the Servicer's assertion that it has complied with the minimum
servicing standards set forth in the Mortgage Banker's Association of America's
Uniform Single Attestation Program for Mortgage Bankers ("USAP") for the twelve
months ended June 30 of the preceding year (or, in the case of the first such
certificate, from the Closing Date until June 30, 1998), and that such
examination (1) included tests relating to the servicing or administration of
the Receivables in accordance with the requirements of the USAP, to the extent
the procedures in such program apply to the servicing or administration of the
Receivables and (2) except as described in the report, disclosed no exceptions
or errors in the records relating to the servicing or administration of the
Receivables that, in the firm's opinion, paragraph six of such program requires
such firm to report.
In the event such firm requires the Indenture Trustee or Owner Trustee to
agree to the procedures performed by such firm, Servicer shall direct the
Indenture Trustee or Owner Trustee, as the case may be, in writing to so agree;
it being understood and agreed that the Indenture Trustee or Owner Trustee, as
the case may be, will deliver such letter of agreement in conclusive reliance
upon the direction of Servicer, and the Indenture Trustee or Owner Trustee, as
the case may be, need not make any independent inquiry or investigation as to,
and shall have no obligation or liability in respect of, the sufficiency,
validity or correctness of such procedures.
Such report will also indicate that the firm is independent of Servicer
within the meaning of the Code of Professional Ethics of the American Institute
of Certified Public Accountants.
SECTION 4.12. Access to Certain Documentation and Information Regarding
Receivables. Servicer shall provide to the Certificateholders, Noteholders, Bank
Regulatory Authorities, and the supervisory agents and examiners of Bank
Regulatory Authorities access to the Receivable Files in such cases where the
Certificateholders, Noteholders or Bank Regulatory Authorities shall be required
by applicable statutes or regulations to review such documentation as
demonstrated by evidence satisfactory to Servicer in its reasonable judgment.
Access shall be afforded without charge, but only upon reasonable request and
during the normal business hours at the respective offices of Servicer. Nothing
in this Section shall affect the obligation of Servicer to observe any
applicable law prohibiting disclosure of information regarding the Obligors and
the failure of Servicer to provide access to information as a result of such
obligation shall not constitute a breach of this Section. Any Holder, by its
acceptance of a Certificate or Note, as applicable, shall be
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deemed to have agreed to keep any information obtained by it pursuant to this
Section confidential and not to use such information for any other purpose,
except as required by applicable law.
SECTION 4.13. Reports to the Commission. Servicer shall, on behalf of the
Issuer, cause to be filed with the Commission any periodic reports required to
be filed under the provisions of the Exchange Act, and the rules and regulations
of the Commission thereunder. Seller shall, at its expense, cooperate in any
reasonable request made by Servicer in connection with such filings.
SECTION 4.14. Reports to the Rating Agencies. Servicer shall deliver to
each Rating Agency a copy of all reports or notices furnished or delivered
pursuant to this Article and a copy of any amendments, supplements or
modifications to this Agreement and any other information reasonably requested
by such Rating Agency to monitor this transaction.
SECTION 4.15. Servicer Expenses. Servicer shall be required to pay all
expenses incurred by it in connection with its activities hereunder, including
fees and disbursements of the Owner Trustee, Indenture Trustee, independent
accountants, taxes imposed on Servicer and expenses incurred in connection with
distributions and reports to Certificateholders and Noteholders.
ARTICLE V. DISTRIBUTIONS; RESERVE ACCOUNT;
STATEMENTS TO CERTIFICATEHOLDERS AND
NOTEHOLDERS.
SECTION 5.1. Establishment of Trust Accounts. (a) Servicer shall cause to
be established:
(i) For the benefit of the Noteholders and the Certificateholders,
in the name of Indenture 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 Noteholders and
the Certificateholders.
(ii) For the benefit of the Noteholders, in the name of Indenture
Trustee, an Eligible Deposit Account (the "Note Distribution Account"),
bearing a designation clearly indicating that the funds deposited therein
are held for the benefit of the Noteholders.
(iii) For the benefit of the Noteholders and the Certificateholders,
in the name of Indenture Trustee, an Eligible Deposit Account (the
"Payahead Account"), bearing a designation clearly indicating that the
funds therein are held for the benefit of the Noteholders and the
Certificateholders.
(b) Funds on deposit in the Collection Account, the Note Distribution
Account, the Payahead Account and the Reserve Account (collectively the "Trust
Accounts") shall be invested by Indenture Trustee (or any custodian with respect
to funds on deposit in any such account) in Eligible Investments selected in
writing by Servicer (pursuant to standing instructions or otherwise); provided
that it is understood and agreed that neither Servicer, Indenture Trustee nor
Owner Trustee shall be liable for any loss arising from such investment in
Eligible Investments. All such Eligible
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Investments shall be held by or on behalf of Indenture Trustee for the benefit
of the Noteholders and the Certificateholders; provided that on each
Distribution Date all interest and other investment income (net of losses and
investment expenses) on funds on deposit in the Trust Accounts shall be
distributed to Seller and shall not be available to pay the distributions
provided for in Section 5.5 and shall not otherwise be subject to any claims or
rights of Holders. Other than as permitted in writing by the Rating Agencies,
funds on deposit in the Trust Accounts shall be invested in Eligible Investments
that will mature so that such funds will be available at the close of business
on the Deposit Date preceding the next Distribution Date. No Eligible Investment
shall be sold or otherwise disposed of prior to its scheduled maturity unless a
default occurs with respect to such Eligible Investment and Servicer directs
Indenture Trustee in writing to dispose of such Eligible Investment. Funds
deposited in a Trust Account on a Deposit Date which immediately precedes a
Distribution Date upon the maturity of any Eligible Investments are not required
to be (but are permitted to be) invested overnight.
(c) Indenture Trustee shall possess all right, title and interest in all
funds on deposit from time to time in the Trust Accounts and in all proceeds
thereof (excluding investment income thereon) and all such funds, investments
and proceeds shall be part of the Owner Trust Estate. Except as otherwise
provided herein, the Trust Accounts shall be under the sole dominion and control
of Indenture Trustee for the benefit of the Noteholders and the
Certificateholders; provided, however, the Indenture Trustee shall not be
charged with any obligation for the benefit of the Certificateholders except as
provided by the terms of this Agreement. If, at any time, any of the Trust
Accounts ceases to be an Eligible Deposit Account, Indenture Trustee (or
Servicer on its behalf) shall within 10 Business Days (or such longer period as
to which each Rating Agency may consent) establish a new Trust Account as an
Eligible Deposit Account and shall transfer any cash and/or any investments to
such new Trust Account. In connection with the foregoing, Servicer agrees that,
in the event that any of the Trust Accounts are not accounts with Indenture
Trustee, Servicer shall notify Indenture Trustee in writing promptly upon any of
such Trust Accounts ceasing to be an Eligible Deposit Account.
(d) With respect to the Trust Account Property, Indenture Trustee agrees,
by its acceptance hereof, that:
(i) any Trust Account Property that is held in deposit accounts
shall be held solely in the Eligible Deposit Accounts and, except as
otherwise provided herein, each such Eligible Deposit Account shall be
subject to the exclusive custody and control of Indenture Trustee with
respect to the Trust Accounts, and, except as otherwise provided in the
Basic Documents, Indenture Trustee shall have sole signature authority
with respect thereto;
(ii) any Trust Account Property that constitutes Physical Property
shall be delivered to Indenture Trustee, in accordance with paragraph (a)
of the definition of "Delivery" and shall be held, pending maturity or
disposition, solely by Indenture Trustee, or a financial intermediary (as
such term is defined in Section 8-313(4) of the UCC) acting solely for
Indenture Trustee;
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(iii) any Trust 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 Indenture Trustee
pending maturity or disposition, through continued book-entry registration
of such Trust Account Property as described in such paragraph; and
(iv) any Trust Account Property that is an "uncertificated security"
under Article 8 of the UCC and that is not governed by clause (iii) above
shall be delivered to Indenture Trustee in accordance with paragraph (c)
of the definition of "Delivery" and shall be maintained by Indenture
Trustee pending maturity or disposition, through continued registration of
Indenture Trustee's (or its nominee's) ownership of such security.
Effective upon Delivery of any Trust Account Property, Indenture Trustee shall
be deemed to have represented that it has purchased such Trust Account Property
for value, in good faith and without notice of any adverse claim thereto.
SECTION 5.2. Collections. (a) 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 any amounts
constituting Supplemental Servicing Fees) and all Liquidation Proceeds, both as
collected during the Collection Period. Notwithstanding the foregoing, if Key
Bank USA is the Servicer and (i) shall have the Required Rating or (ii)
Indenture Trustee otherwise shall have received written notice from each of the
Rating Agencies that the then outstanding rating on the Notes would not be
lowered or withdrawn as a result, Servicer may deposit all amounts referred to
above for any Collection Period into the Collection Account not later than the
close of business on the Deposit Date with respect to such Collection Period;
provided that (i) if a Servicer Termination Event has occurred and is
continuing, (ii) Servicer has been terminated as such pursuant to Section 8.1 or
(iii) Servicer ceases to have the Required Rating, Servicer shall deposit such
amounts (including any amounts then being held by Servicer) into the Collection
Account as provided in the preceding sentence. 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 Servicer, Seller or AFG.
(b) With respect to each Receivable (other than a Purchased Receivable or
a Precomputed Receivable), collections and payments by or on behalf of the
Obligor (other than any amounts constituting Supplemental Servicing Fees) for
each Collection Period shall be applied to interest and principal in accordance
with the Simple Interest Method, as applied by Servicer. Any excess shall be
applied to prepay the Receivable. All Liquidation Proceeds shall be treated as
Interest Collections.
(c) With respect to each Precomputed Receivable, collections and payments
by or on behalf of an Obligor (other than any amounts constituting Supplemental
Servicing Fees) for each Collection Period shall be applied to the scheduled
payments due on such Precomputed Receivable for such Collection Period. To the
extent such collections and payments on a Precomputed Receivable during a
Collection Period exceed the scheduled payment on such Precomputed
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Receivable and are insufficient to prepay the Precomputed Receivable in full,
collections shall be treated as Payaheads until such later Collection Period as
such Payaheads may be transferred to the Collection Account and applied either
to the scheduled payments due or to prepay the Precomputed Receivable in full in
accordance with Section 5.5.
SECTION 5.3. Transfers by Seller as Certificateholder. As a condition
precedent to the transfer by the Seller of the Certificates or any of its rights
therein, Seller shall cause each of the Basic Documents to be amended or
otherwise modified and shall take all other actions necessary and appropriate to
give effect to such transfer, to provide for distributions to the transferee of
the Seller and to otherwise provide for the treatment of such transferee as a
Certificateholder hereunder and under the other Basic Documents.
SECTION 5.4. Additional Deposits. Servicer and Seller shall deposit or
cause to be deposited in the Collection Account the aggregate Purchase Amounts
with respect to Purchased Receivables and Seller or Servicer shall deposit
therein all amounts, if any, to be paid under Section 9.1. All such deposits
shall be made not later than the Deposit Date following the end of the related
Collection Period.
SECTION 5.5. Distributions. (a) On each Determination Date, Servicer shall
calculate all amounts required to determine the amounts to be deposited on the
related Distribution Date from the Reserve Account and the Payahead Account into
the Collection Account and from the Collection Account into the Note
Distribution Account and the Payahead Account.
(b) On or before each Distribution Date, Servicer shall instruct Indenture
Trustee in writing (based on the information contained in the Servicer's Report
delivered on the related Determination Date pursuant to Section 4.9) to, and the
Indenture Trustee shall:
(i) withdraw from the Payahead Account and deposit in the Collection
Account, in immediately available funds, (x) with respect to each
Precomputed Receivable for which the payments made by or on behalf of the
Obligor for the related Collection Period are less than the scheduled
payment for the related Collection Period, the amount of Payaheads, if
any, made with respect to such Receivable which, when added to the amount
of such payments, is equal to the amount of such scheduled payment, (y)
with respect to each Precomputed Receivable for which prepayments
insufficient to prepay the Receivable in full have been made by or on
behalf of the Obligor for the related Collection Period, the amount of
Payaheads, if any, made with respect to such Receivable which, when added
to the amount of such prepayments, is equal to an amount sufficient to
prepay such Receivable in full, and (z) the amount of all Payaheads, if
any, made with respect to any Purchased Receivable;
(ii) withdraw from the Collection Account and deposit in the
Payahead Account (or receive from the Servicer, which will remit to the
Indenture Trustee for deposit in the Payahead Account, as the case may
be), in immediately available funds, the aggregate
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amount of Collections on Precomputed Receivables treated as Payaheads
pursuant to Section 5.2 for the Collection Period related to such
Distribution Date; and
(iii) withdraw from the Reserve Account and deposit in the
Collection Account the Reserve Account Transfer Amount for such
Distribution Date.
(c) Subject to the last paragraph of this Section 5.5(c), on each
Distribution Date, Servicer shall instruct Indenture Trustee in writing (based
on the information contained in the Servicer's Report delivered on the related
Determination Date pursuant to Section 4.9) to make, and Indenture Trustee shall
make, the following deposits and distributions from the Collection Account for
deposit in the applicable account by 11:00 a.m. (New York time), to the extent
of the Total Distribution Amount, in the following order of priority:
(i) to Servicer, from the Total Distribution Amount, the Servicing
Fee for the related Collection Period and all accrued and unpaid Servicing
Fees for prior Collection Periods, provided, that (for so long as AFG is
the subservicer), payment of the Servicing Fee on each of the first nine
Distribution Dates following the Closing Date and payment thereafter of
all unpaid Servicing Fees for such Distribution Dates, will be subordinate
in priority of payment to both payment of interest and principal on the
Notes for each such Distribution Date and the funding of the Specified
Reserve Account Balance in the Reserve Account;
(ii) to the Note Distribution Account, from the Total Distribution
Amount remaining after the application of clause (i), the Noteholders'
Interest Distributable Amount;
(iii) to the Note Distribution Account, from the Total Distribution
Amount remaining after the application of clauses (i) and (ii), the
Noteholders' Principal Distributable Amount;
(iv) from the Total Distribution Amount remaining after the
application of clauses (i) through (iii), to the Reserve Account, until
the amount on deposit in the Reserve Account equals the Specified Reserve
Account Balance;
(v) from the Total Distribution Amount remaining after the
application of clauses (i) through (iv), to the Servicer (if AFG is the
Subservicer), all accrued and unpaid Servicing Fees for any of the first
nine Distribution Dates following the Closing Date;
(vi) from the Total Distribution Amount remaining after the
application of clauses (i) through (v), to the Seller, the
Certificateholders' Distributable Amount; and
(vii) to the Seller, any amounts remaining.
Notwithstanding the foregoing, following the occurrence and during the
continuation of an Event of Default which has resulted in an acceleration of the
Notes, the Total Distribution Amount
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remaining after the application of clause (i) and (ii) above will be deposited
in the Note Distribution Account to the extent necessary to reduce the principal
amount of the Notes to zero in accordance with and in the priority set forth in
Section 5.4 of the Indenture, and the Certificateholders will not receive any
distributions until the principal amount and accrued interest on the Notes have
been paid in full. In the event that the Collection Account is maintained with
an institution other than Indenture Trustee, Indenture Trustee shall instruct
and cause such institution to make all deposits and distributions pursuant to
this Section 5.5(c) on the related Deposit Date.
(d) Indenture Trustee shall continue to perform its duties under this
Agreement after the Outstanding Amount of the Notes has been reduced to zero and
the Indenture has been discharged in accordance with its terms. The protections,
immunities and standard of care afforded the Indenture Trustee under the
Indenture shall apply to the performance of its duties hereunder. The initial
Paying Agent shall be the Indenture Trustee.
SECTION 5.6. Statements to Certificateholders and Noteholders. On each
Determination Date, Servicer shall provide to Indenture Trustee (with a copy to
each Rating Agency) written instructions for Indenture Trustee to forward to
each Noteholder of record, to each Paying Agent, if any, and to each
Certificateholder of record, a statement substantially in the form of Exhibit A
setting forth at least the following information as to the Notes and the
Certificates to the extent applicable:
(a) the amount of such distribution allocable to principal of each class
of Notes and to the Certificate Balance of the Certificates;
(b) the amount of such distribution allocable to interest on or with
respect to each class of Notes;
(c) the Pool Balance as of the close of business on the last day of the
preceding Collection Period;
(d) the aggregate outstanding principal balance of each class of the
Notes, the Note Pool Factor for each such class, the Certificate Balance and the
Certificate Pool Factor after giving effect to payments allocated to principal
reported under clause (a) above;
(e) the amount of the Servicing Fee paid to Servicer with respect to the
related Collection Period and with respect to previously accrued and unpaid
Servicing Fees;
(f) the amount of the aggregate Realized Losses, if any, for such
Collection Period;
(g) the Reserve Account Transfer Amount, if any, for such Distribution
Date, the Specified Reserve Account Balance for such Distribution Date, the
amount distributed to Seller from the Reserve Account on such Distribution Date,
and the balance of the Reserve Account (if any) on such Distribution Date, after
giving effect to changes therein on such Distribution Date;
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(h) the Noteholders' Interest Carryover Shortfall, and the Noteholders'
Principal Carryover Shortfall, if any, in each case as applicable to each class
of Securities, and the change in such amounts from the preceding statement;
(i) the aggregate Purchase Amounts paid by Seller or Servicer with respect
to the related Collection Period; and
(j) the number, and aggregate Principal Balance outstanding, of
Receivables past due 30-59, 60-89 and 90 and over 90 days.
Each amount set forth pursuant to paragraph (a), (b), (e) or (h) above shall be
expressed as a dollar amount per $1,000 of the initial principal balance of the
Notes (or class thereof) or the initial Certificate Balance, as applicable.
SECTION 5.7. Net Deposits. As an administrative convenience, unless
Servicer is required to remit Collections within two Business Days of receipt
thereof, Servicer will be permitted to make the deposit of Collections and
Purchase Amounts for or with respect to the Collection Period net of
distributions to be made to Servicer with respect to the Collection Period.
Servicer, however, will account to Owner Trustee, Indenture Trustee, the
Noteholders and the Certificateholders as if all deposits, distributions and
transfers were made individually.
SECTION 5.8. Reserve Account. (a) Seller shall establish and maintain in
the name of the Indenture Trustee, as agent for the Issuer and the Noteholders,
an Eligible Deposit Account (the "Reserve Account"). The Reserve Account shall
be initially established and maintained with the Indenture Trustee (the
"Securities Intermediary"). On the Closing Date, Seller shall deposit or cause
to be deposited in the Reserve Account an amount equal to the Reserve Account
Deposit.
(b) Indenture Trustee shall, at the written direction of Servicer, direct
the Securities Intermediary to invest funds on deposit in the Reserve Account in
Eligible Investments selected by Servicer and confirmed in writing by Servicer
to Indenture Trustee; provided that it is understood and agreed that none of
Indenture Trustee, Securities Intermediary, Servicer or Issuer shall be liable
for any loss arising from such investment in Eligible Investments (except to the
extent such Person is the obligor on such Eligible Investment). Funds on deposit
in the Reserve Account shall be invested in Eligible Investments that will
mature so that all such funds will be available at the close of business on each
Deposit Date; provided that to the extent permitted by the Rating Agencies
following written request by Servicer, funds on deposit in the Reserve Account
may be invested in Eligible Investments that mature later than the next Deposit
Date. Funds deposited in the Reserve Account on a Deposit Date upon the maturity
of any Eligible Investments are not required to be (but may be) invested
overnight.
(c) The Securities Intermediary hereby expressly agrees with the Indenture
Trustee that: (i) the Securities Intermediary will treat the Indenture Trustee
as entitled to exercise the rights comprising the investments or financial
assets credited to the Reserve Account; (ii) the investments or financial assets
credited to the Reserve Account shall not be registered in the name of, payable
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to the order of, or specially indorsed to the Indenture Trustee; and (iii) the
Securities Intermediary will not agree to comply with entitlement orders
originated by any Person with respect to the investments or financial assets
held in the Reserve Account other than the Indenture Trustee.
(d) The Reserve Account shall be under the sole custody and control of
Indenture Trustee. If, at any time, the Reserve Account ceases to be an Eligible
Deposit Account, Indenture Trustee shall within 10 Business Days (or such longer
period, not to exceed 30 calendar days, as to which each Rating Agency may
consent) establish a new Reserve Account as an Eligible Deposit Account and
shall transfer or cause to be transferred any cash and/or any investments that
are in the existing account which is no longer an Eligible Deposit Account to
such new Reserve Account.
(e) Amounts on deposit in the Reserve Account will be released to the
Seller on each Distribution Date to the extent the amount credited to the
Reserve Account (after giving effect to distributions to be made on such
Distribution Date) would exceed the Specified Reserve Account Balance. Upon any
distribution to Seller of amounts from the Reserve Account, the Holders will not
have any rights in, or claims to, such amounts. Amounts distributed to Seller
from the Reserve Account in accordance with this Section shall not be available
under any circumstances to Issuer, Owner Trustee, Indenture Trustee or the
Holders and Seller shall in no event thereafter be required to refund any such
distributed amounts.
(f) With respect to the Reserve Account Property, Seller, Issuer and the
Indenture Trustee agree that the Reserve Account Deposit and all other funds and
Reserve Account Property shall be delivered to Indenture Trustee for credit to
the Reserve Account. In addition:
(i) any Reserve Account Property that constitutes Physical Property
shall be delivered to Indenture Trustee in accordance with paragraph (a)
of the definition of "Delivery" and shall be held, pending maturity or
disposition, solely by Indenture Trustee or a financial intermediary (as
such term is defined in Section 8-313(4) of the UCC) acting solely for
Indenture Trustee;
(ii) 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 Indenture Trustee
pending maturity or disposition, through continued book entry registration
of such Reserve Account Property as described in such paragraph; and
(iii) any Reserve Account Property that is an "uncertificated
security" under Article 8 of the UCC and that is not governed by clause
(ii) above shall be delivered to Indenture Trustee in accordance with
paragraph (c) of the definition of "Delivery" and shall be maintained by
Indenture Trustee pending maturity or disposition, through continued
registration of Indenture Trustee's (or its nominee's) ownership of such
security.
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Effective upon the crediting of any Reserve Account Property to the Reserve
Account, Indenture Trustee shall be deemed to have represented that it has
purchased such Reserve Account Property for value, in good faith and without
notice of any adverse claim thereto.
(g) Issuer and 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 any UCC financing
statements or this Agreement) as may be determined to be necessary, in an
Opinion of Counsel to Issuer delivered to Owner Trustee and Indenture Trustee,
in order to perfect the interests created by this Section 5.8 and otherwise
fully to effectuate the purposes, terms and conditions of this Section 5.8.
Issuer and Servicer shall:
(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 to maintain the perfection of
Indenture Trustee's security interest; and
(2) make the necessary filings of financing statements or amendments
thereto within five days after the occurrence of any of the following: (1)
any change in their respective names or any trade names, (2) any change in
the location of their respective chief executive offices or principal
places of business and (3) any merger or consolidation or other change in
their respective identities or corporate structures; and shall promptly
notify Owner Trustee and Indenture Trustee of any such filings.
(h) Investment earnings attributable to the Reserve Account Property and
proceeds therefrom shall be held by Indenture Trustee for the benefit of Seller.
Investment earnings attributable to the Reserve Account Property shall not be
available to pay the distributions provided for in Section 5.5 and shall not
otherwise be subject to any claims or rights of the Holders or Servicer.
Indenture Trustee shall cause all investment earnings attributable to the
Reserve Account to be distributed on each Distribution Date to Seller.
(i) Seller may at any time, without consent of Holders, sell, transfer,
convey or assign in any manner its rights to and interests in distributions from
the Reserve Account provided that (i) the Rating Agencies confirm in writing
that such action will not result in a reduction or withdrawal of the rating of
any class of Notes, (ii) Seller provides to Owner Trustee and Indenture Trustee
an Opinion of Counsel from independent counsel that such action will not cause
Issuer to be classified as an association (or publicly traded partnership)
taxable as a corporation for federal income tax purposes and (iii) such
transferee or assignee agrees in writing to take positions for federal income
tax purposes consistent with the federal income tax positions agreed to be taken
by Seller.
ARTICLE VI. SELLER.
SECTION 6.1. Representations of Seller. Seller makes the following
representations on which Issuer is deemed to have relied in acquiring the
Receivables and the other properties and rights included in the Owner Trust
Estate. The representations speak as of the execution and delivery
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of this Agreement and shall survive the sale of the Receivables to Issuer and
the pledge thereof to Indenture Trustee pursuant to the Indenture.
(a) Organization and Good Standing. Seller has been duly organized and is
validly existing as a Delaware corporation in good standing under the laws of
the State of Delaware, with the power and authority to own its properties and to
conduct its business as such properties are presently owned and such business is
presently conducted and had at all relevant times, and has, full power,
authority and legal right to acquire, own and sell the Receivables and the other
properties and rights included in the Owner Trust Estate assigned to Issuer
pursuant to Article II.
(b) Power and Authority. Seller has the power, authority and legal right
to execute and deliver this Agreement and the Basic Documents to which it is a
party and to carry out their respective terms and to sell and assign the
property to be sold and assigned to and deposited with Issuer as the Owner Trust
Estate; and the execution, delivery and performance of this Agreement and the
Basic Documents to which it is a party have been duly authorized by Seller by
all necessary corporate action.
(c) No Consent Required. No approval, authorization, consent, license or
other order or action of, or filing or registration with, any governmental
authority, bureau or agency is required in connection with the execution,
delivery or performance of this Agreement or the Basic Documents to which it is
a party or the consummation of the transactions contemplated hereby or thereby,
other than (i) as may be required under the blue sky or securities laws of any
State or the Securities Act of 1933, as amended, and (ii) the filing of UCC
financing statements.
(d) Valid Sale; Binding Obligation. Seller intends this Agreement to
effect a valid sale, transfer, and assignment of the Receivables and the other
properties and rights included in the Owner Trust Estate conveyed by Seller to
Issuer hereunder, enforceable against creditors of and purchasers from Seller;
and each of this Agreement and the Basic Documents to which it is a party
constitutes a legal, valid and binding obligation of Seller, enforceable against
Seller in accordance with its respective terms, subject, as to enforceability,
to applicable bankruptcy, insolvency, reorganization, conservatorship,
receivership, liquidation and other similar laws affecting enforcement of the
rights of creditors generally and to equitable limitations on the availability
of specific remedies.
(e) No Violation. The execution, delivery and performance by Seller of
this Agreement and the Basic Documents to which it is a party and the
consummation of the transactions contemplated hereby and thereby will not
conflict with, result in any material breach of any of the terms and provisions
of, constitute (with or without notice or lapse of time) a material default
under or result in the creation or imposition of any Lien upon any of its
material properties pursuant to the terms of, (i) the certificate of
incorporation or bylaws of Seller, (ii) any material indenture, contract, lease,
mortgage, deed of trust or other instrument or agreement to which Seller is a
party or by which Seller is bound, or (iii) any law, order, rule or regulation
applicable to Seller of any federal or state regulatory body, any court,
administrative agency, or other governmental instrumentality having jurisdiction
over Seller.
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(f) No Proceedings. There are no proceedings or investigations pending,
or, to the knowledge of Seller, threatened, before any court, regulatory body,
administrative agency, or other tribunal or governmental instrumentality having
jurisdiction over Seller or its properties: (i) asserting the invalidity of this
Agreement, any other Basic Document, the Notes or the Certificates, (ii) seeking
to prevent the issuance of the Notes or Certificates or the consummation of any
of the transactions contemplated by this Agreement or any other Basic Document,
(iii) seeking any determination or ruling that might materially and adversely
affect the performance by Seller of its obligations under, or the validity or
enforceability of, this Agreement, any other Basic Document, the Notes or the
Certificates, to the extent applicable, or (iv) that may materially and
adversely affect the federal or state income, excise, franchise or similar tax
attributes of the Notes or the Certificates.
(g) Chief Executive Office. The chief executive office of Seller is Key
Tower, 000 Xxxxxx Xxxxxx, Xxxxxxxxx, Xxxx 00000-0000.
SECTION 6.2. Continued Existence. During the term of this Agreement,
subject to Section 6.4, Seller will keep in full force and effect its existence,
rights and franchises as a corporation organized under the laws of the State of
Delaware and will obtain and preserve its qualification to do business in each
jurisdiction in which such qualification is or shall be necessary to protect the
validity and enforceability of this Agreement, the Basic Documents and each
other instrument or agreement necessary or appropriate to the proper
administration of this Agreement and the transactions contemplated hereby.
SECTION 6.3. Liability of Seller; Indemnities. Seller shall be liable in
accordance herewith only to the extent of the obligations specifically
undertaken by Seller under this Agreement.
(a) Seller shall indemnify, defend and hold harmless Issuer, Owner Trustee
and Indenture Trustee and their respective officers, directors, employees and
agents from and against any taxes that may at any time be asserted against any
such Person with respect to, and on the date of, the sale of the Receivables to
Issuer or the issuance and original sale of the Notes and Certificates,
including any sales, gross receipts, general corporation, tangible personal
property, privilege or license taxes (but, in the case of all indemnified
Persons other than Issuer, not including any taxes asserted with respect to
Federal or other income taxes arising out of transactions contemplated by this
Agreement and the other Basic Documents) and costs and expenses in defending
against the same.
(b) Seller shall indemnify, defend and hold harmless Issuer, Owner
Trustee, Indenture Trustee, the Certificateholders and the Noteholders and the
respective officers, directors, employees and agents of Issuer, Owner Trustee
and Indenture Trustee from and against any and all costs, expenses, losses,
claims, damages and liabilities to the extent arising out of, or imposed upon
such Person through or as a result of (i) Seller's willful misfeasance, bad
faith or gross negligence (other than errors in judgment) in the performance of
its duties under this Agreement, or by reason of reckless disregard of its
obligations and duties under this Agreement, (ii) Seller's violation of Federal
or state securities laws in connection with the offering and sale of the Notes
and the Certificates or in connection with any application relating to the Notes
or Certificates under any state securities
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laws and (iii) the failure of any Receivable conveyed by it to Issuer hereunder,
or the sale of the related Financed Vehicle, to comply with all requirements of
applicable law.
(c) Seller shall be liable as primary obligor for, and shall indemnify,
defend and hold harmless Owner Trustee, Indenture Trustee and their respective
officers, directors, employees and agents from and against any and all costs,
expenses, losses, claims, damages and liabilities arising out of, or incurred in
connection with, the acceptance or performance of the trusts and duties set
forth herein and in the Trust Agreement, in the case of Owner Trustee, and
herein and in the Indenture, in the case of Indenture Trustee, except to the
extent that such cost, expense, loss, claim, damage or liability: (i) in the
case of Owner Trustee, shall be due to the willful misfeasance, bad faith or
negligence (except for errors in judgment) of Owner Trustee, or, in the case of
Indenture Trustee, shall be due to the willful misfeasance, bad faith or
negligence of Indenture Trustee; (ii) in the case of Owner Trustee, shall arise
from the breach by Owner Trustee of any of its representations or warranties set
forth in the Trust Agreement or any other Basic Document; or (iii) in the case
of Indenture Trustee, shall arise from the breach by Indenture Trustee of any of
its representations and warranties or covenants set forth in the Indenture. Such
liability shall survive the termination of Issuer, the discharge of the Notes
and Certificates and removal or resignation of such Indenture Trustee or Owner
Trustee.
(d) Seller shall pay any and all taxes levied or assessed upon the Issuer
or upon all or any part of the Owner Trust Estate.
Indemnification under this Section shall survive the resignation or removal of
Owner Trustee or Indenture Trustee and the termination of this Agreement or the
Indenture or the Trust Agreement, as applicable, and shall include reasonable
fees and expenses of counsel and other expenses of litigation. If Seller shall
have made any indemnity payments pursuant to this Section and the Person to or
on behalf of whom such payments are made thereafter shall collect any of such
amounts from others, such Person shall promptly repay such amounts to Seller,
without interest.
SECTION 6.4. Merger or Consolidation of, or Assumption of the Obligations
of, Seller. Any Person (a) into which Seller may be merged or consolidated, (b)
which may result from any merger or consolidation to which Seller shall be a
party or (c) which may succeed to the properties and assets of Seller
substantially as a whole, shall be the successor to Seller without the execution
or filing of any document or any further act by any of the parties to this
Agreement; provided that Seller hereby covenants that it will not consummate any
of the foregoing transactions except upon satisfaction of the following: (i) the
surviving Seller if other than Key Consumer Acceptance Corporation, executes an
agreement of assumption to perform every obligation of Seller under this
Agreement, (ii) immediately after giving effect to such transaction, no
representation or warranty made pursuant to Section 3.1 or 6.1 shall have been
breached, (iii) Seller shall have delivered to Owner Trustee and Indenture
Trustee an Officer's 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, if any, provided for in
this Agreement relating to such transaction have been complied with, and that
the Rating Agency Condition shall have been satisfied with respect to such
transaction, (iv) the surviving Seller shall have a consolidated net worth at
least
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equal to that of the predecessor Seller, (v) such transaction will not result in
a material adverse federal or state tax consequence to Issuer, the Noteholders
or the Certificateholders and (vi) unless Key Consumer Acceptance Corporation is
the surviving entity, Seller shall have delivered to Owner Trustee and Indenture
Trustee an Opinion of Counsel either (A) stating that, in the opinion of such
counsel, 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 Owner Trustee and Indenture Trustee, respectively, in
the Receivables and reciting the details of such filings, or (B) stating that,
in the opinion of such counsel, no such action shall be necessary to preserve
and protect such interests.
SECTION 6.5. Limitation on Liability of Seller and Others. Seller and any
director or officer or employee or agent of Seller 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 under any Basic
Document (provided that such reliance shall not limit in any way Seller's
obligations under Section 3.2 or 6.3). Seller shall not be under any obligation
to appear in, prosecute or defend any legal action that shall not be incidental
to its obligations under this Agreement, and that in its opinion may involve it
in any expense or liability.
SECTION 6.6. Seller May Own Certificates or Notes. Seller and any
Affiliate thereof may in its individual or any other capacity become the owner
or pledgee of Certificates or Notes with the same rights as it would have if it
were not Seller or an Affiliate thereof, except as expressly provided herein or
in any Basic Document. Except as set forth herein or in the other Basic
Documents, Notes and Certificates so owned by or pledged to Seller or any such
Affiliate shall have an equal and proportionate benefit under the provisions of
this Agreement and the other Basic Documents, without preference, priority, or
distinction as among all of the Notes and Certificates.
SECTION 6.7 Indebtedness of Seller. Seller shall provide written notice to
the Rating Agencies at least thirty (30) days prior to the date it incurs any
material indebtedness or assumes or guarantees any material indebtedness of any
other entity in connection with the acquisition or transfer of receivables
(other than the Receivables) or the issuance and sale of securities (other than
the Notes and Certificates) secured by or evidencing beneficial ownership
interests in such receivables, or any other activity set forth in paragraph 3 of
its certificate of incorporation or incurs any material, non-incidental
indebtedness in connection with the accomplishment of any of the foregoing.
ARTICLE VII. SERVICER.
SECTION 7.1. Representations of Servicer. Servicer makes the following
representations on which Issuer is deemed to have relied in acquiring the
Receivables and the other properties and rights included in the Owner Trust
Estate. The representations speak as of the execution and delivery of the
Agreement and shall survive the sale, transfer and assignment of the Receivables
to Issuer and the pledge thereof to Indenture Trustee pursuant to the Indenture.
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(a) Organization and Good Standing. Servicer has been duly organized and
is validly existing as a national banking association in good standing under the
laws of the United States, with the power and authority to own its properties
and to conduct its business as such properties are presently owned and such
business is presently conducted, and had at all relevant times, and shall have,
the power, authority and legal right to service the Receivables and the other
properties and rights included in the Owner Trust Estate.
(b) Due Qualification. Servicer shall be duly qualified to do business as
a foreign corporation in good standing, and shall have 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. Servicer has the power, authority and legal right
to execute and deliver this Agreement and the Basic Documents to which it is a
party and to carry out their respective terms; and the execution, delivery and
performance of this Agreement and the Basic Documents to which it is a party
have been duly authorized by Servicer by all necessary corporate action.
(d) No Consent Required. No approval, authorization, consent, license or
other order or action of, or filing or registration with, any governmental
authority, bureau or agency is required in connection with the execution,
delivery or performance of this Agreement, the Basic Documents to which it is a
party or the consummation of the transactions contemplated hereby or thereby,
other than (i) as may be required under the blue sky or securities laws of any
State or the Securities Act of 1933, as amended, and (ii) the filing of UCC
financing statements.
(e) Binding Obligation. Each of this Agreement and the Basic Documents to
which it is a party constitutes a legal, valid and binding obligation of
Servicer, enforceable against Servicer in accordance with its respective terms,
subject, as to enforceability, to applicable bankruptcy, insolvency,
reorganization, conservatorship, receivership, liquidation and other similar
laws affecting enforcement of the rights of creditors of banks generally and to
equitable limitations on the availability of specific remedies.
(f) No Violation. The execution, delivery and performance by Servicer of
this Agreement and the Basic Documents to which it is a party and the
consummation of the transactions contemplated hereby and thereby will not
conflict with, result in any material breach of any of the terms and provisions
of, constitute (with or without notice or lapse of time) a material default
under, or result in the creation or disposition of any Lien upon any of its
material properties pursuant to the terms of, (i) the articles of association or
bylaws of Servicer, (ii) any material indenture, contract, lease, mortgage, deed
of trust or other instrument or agreement to which Servicer is a party or by
which Servicer is bound, or (iii) any law, order, rule or regulation applicable
to Servicer of any federal or state regulatory body, any court, administrative
agency, or other governmental instrumentality having jurisdiction over Servicer.
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(g) No Proceedings. There are no proceedings or investigations pending,
or, to Servicer's knowledge, threatened, before any court, regulatory body,
administrative agency, or tribunal or other governmental instrumentality having
jurisdiction over Servicer or its properties: (i) asserting the invalidity of
this Agreement, any other Basic Document, the Notes or the Certificates, (ii)
seeking to prevent the issuance of the Certificates or the Notes or the
consummation of any of the transactions contemplated by this Agreement or any
other Basic Document, (iii) seeking any determination or ruling that might
materially and adversely affect the performance by Servicer of its obligations
under, or the validity or enforceability of, this Agreement, any other Basic
Document, the Notes or the Certificates, to the extent applicable, or (iv) that
may materially and adversely affect the federal or state income, excise,
franchise or similar tax attributes of the Certificates.
SECTION 7.2. Indemnities of Servicer. (a) Servicer shall be liable in
accordance herewith only to the extent of the obligations specifically
undertaken by Servicer under this Agreement.
(b) Servicer shall indemnify, defend and hold harmless Issuer, Owner
Trustee, Indenture Trustee, Seller, the Certificateholders and the Noteholders
and any of the respective officers, directors, employees and agents of Issuer,
Owner Trustee, Indenture Trustee or Seller from any and all costs, expenses,
losses, claims, damages and liabilities (including reasonable attorneys' fees
and expenses) to the extent arising out of, or imposed upon any such Person
through, the gross negligence, willful misfeasance or bad faith (other than
errors in judgment) of Servicer in the performance of its obligations and duties
under this Agreement or in the performance of the obligations and duties of any
subservicer under any subservicing agreement.
(c) Servicer shall indemnify, defend and hold harmless Issuer, Owner
Trustee, and Indenture Trustee and their respective officers, directors,
employees and agents from and against any taxes that may at any time be asserted
against any such Person with respect to the transactions contemplated in this
Agreement or in the other Basic Documents, including any sales, gross receipts,
general corporation, tangible or intangible personal property, franchise,
privilege, or license taxes, or any taxes of any kind which may be asserted
(but, in the case of all indemnified Persons other than Issuer, not including
any Federal or other income taxes arising out of transactions contemplated by
this Agreement and the other Basic Documents) against the Issuer, and costs and
expenses in defending against the same.
(d) Servicer shall indemnify, defend and hold harmless Issuer, Owner
Trustee, Indenture Trustee, Seller, Certificateholders and the Noteholders or
any of the respective officers, directors, employees and agents of Issuer, Owner
Trustee, Indenture Trustee or Seller from any and all costs, expenses, losses,
claims, damages and liabilities (including reasonable attorneys' fees and
expenses) to the extent arising out of or imposed upon any such Person as a
result of any compensation payable to any subcustodian or subservicer (including
any fees payable in connection with the release of any Receivable File from the
custody of such subservicer or in connection with the termination of the
servicing activities of such subservicer with respect to any Receivable) whether
pursuant to the terms of any subservicing agreement or otherwise.
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(e) Servicer shall indemnify, defend and hold harmless Issuer, Owner
Trustee, Indenture Trustee, Seller, the Certificateholders and the Noteholders
or any of the respective directors, officers, employees and agents of Issuer,
Owner Trustee, Indenture Trustee and Seller from and against any and all costs,
expenses, losses, damages, claims and liabilities, including reasonable fees and
expenses of counsel and expenses of litigation, arising out of or resulting from
the use, ownership, or operation of any Financed Vehicle.
(f) Servicer shall indemnify, defend and hold harmless Indenture Trustee
and Owner Trustee or any of their respective officers, directors, employees and
agents from any and all costs, expenses, losses, claims, damages and liabilities
(including reasonable attorneys' fees and expenses) to the extent arising out of
the transactions contemplated by the Indenture, the Sale and Servicing Agreement
and the Administration Agreement unless such costs, expenses, losses, claims,
damages and liabilities are due to the negligence, willful misfeasance or bad
faith of the Indenture Trustee or Owner Trustee, respectively.
Indemnification under this Section shall survive the resignation or removal of
Owner Trustee or Indenture Trustee and the termination of this Agreement or the
Indenture or the Trust Agreement, as applicable, and shall include reasonable
fees and expenses of counsel and other expenses of litigation. If Servicer shall
have made any indemnity payments pursuant to this Section and the Person to or
on behalf of whom such payments are made thereafter shall collect any of such
amounts from others, such Person shall promptly repay such amounts to Servicer,
without interest.
SECTION 7.3. Merger or Consolidation of, or Assumption of the Obligations
of, Servicer. Any Person (a) into which Servicer may be merged or consolidated,
(b) which may result from any merger or consolidation to which Servicer shall be
a party, (c) which may succeed to the properties and assets of Servicer,
substantially as a whole, or (d) 50% of the voting stock of which is owned
directly or indirectly by KeyCorp, may become the successor to Servicer;
provided that, unless Key Bank USA is the surviving party to such transaction,
Servicer hereby covenants that it will not consummate any of the foregoing
transactions except upon satisfaction of the following: (i) the surviving
Servicer if other than Key Bank USA, executes an agreement of assumption to
perform every obligation of Servicer under this Agreement, (ii) immediately
after giving effect to such transaction, no representation or warranty made
pursuant to Section 7.1 shall have been breached and no Servicer Termination
Event, and no event that, after notice or lapse of time, or both, would become a
Servicer Termination Event shall have occurred and be continuing, (iii) Servicer
shall have delivered to Owner Trustee and Indenture Trustee an Officer's
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, if any, provided for in this Agreement
relating to such transaction have been complied with, and that the Rating Agency
Condition shall have been satisfied with respect to such transaction, (iv) the
surviving Servicer shall have a consolidated net worth at least equal to that of
the predecessor Servicer, and (v) such transaction will not result in a material
adverse Federal or state tax consequence to Issuer, the Noteholders or the
Certificateholders.
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SECTION 7.4. Limitation on Liability of Servicer and Others. Neither
Servicer nor any of its directors, officers, employees or agents shall be under
any liability to Issuer, the Noteholders or the Certificateholders, except as
provided under this Agreement, for any action taken or for refraining from the
taking of any action by Servicer or any subservicer pursuant to this Agreement
or for errors in judgment; provided that this provision shall not protect
Servicer or any such person against any liability that would otherwise be
imposed by reason of willful misfeasance, bad faith or gross negligence in the
performance of duties (except for errors in judgment) or by reason of reckless
disregard of obligations and duties under this Agreement. Servicer or any
subservicer and any of their respective directors, officers, employees or agents
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, Servicer shall not be under any
obligation to appear in, prosecute or defend any legal action that shall be
incidental to its duties to service the Receivables in accordance with this
Agreement, and that in its opinion may involve it in any expense or liability;
provided that Servicer, may (but shall not be required to) undertake any
reasonable action that it may deem necessary or desirable in respect of the
Basic Documents to protect the interests of the Certificateholders under this
Agreement and the Noteholders under the Indenture. In such event, the legal
expense and costs of such action and any liability resulting therefrom shall be
expenses, costs and liabilities of the Servicer.
SECTION 7.5. Key Bank USA Not To Resign as Servicer. Subject to the
provisions of Section 7.3, Key Bank USA hereby agrees not to resign from the
obligations and duties hereby imposed on it as Servicer under this Agreement
except upon determination that the performance of its duties hereunder shall no
longer be permissible under applicable law or if such resignation is required by
regulatory authorities. Notice of any such determination permitting the
resignation of Key Bank USA as Servicer shall be communicated to Owner Trustee
and Indenture Trustee at the earliest practicable time (and, if such
communication is not in writing, shall be confirmed in writing at the earliest
practicable time) and any such determination shall be evidenced by an Opinion of
Counsel to such effect delivered to Owner Trustee and Indenture Trustee
concurrently with or promptly after such notice. No such resignation shall
become effective until the earlier of Indenture Trustee or a Successor Servicer
having assumed the responsibilities and obligations of the resigning Servicer in
accordance with Section 8.2 or the date upon which any regulatory authority
requires such resignation.
SECTION 7.6. Existence. Subject to the provisions of Section 7.3, during
the term of this Agreement, Key Bank USA will keep in full force and effect its
existence, rights and franchises as a national banking association under the
laws of the jurisdiction of its organization.
SECTION 7.7. Servicer May Own Notes or Certificates. The Servicer, and any
Affiliate of the Servicer, may, in its individual or any other capacity, become
the owner or pledgee of Notes or Certificates with the same rights as it would
have if it were not the Servicer or an Affiliate thereof, except as expressly
provided herein or in any Basic Document. Except as set forth herein or in the
other Basic Documents, Notes and Certificates so owned by or pledged to Servicer
or any such
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Affiliate shall have an equal and proportionate benefit under the provisions of
this Agreement and the other Basic Documents, without preference, priority, or
distinction as among all of the Notes and Certificates.
ARTICLE VIII. SERVICER TERMINATION EVENTS.
SECTION 8.1. Servicer Termination Event. If any one of the following
events (a "Servicer Termination Event") shall occur and be continuing:
(a) any failure by Servicer to deliver to Indenture Trustee and Owner
Trustee the Servicer's Report in accordance with Section 4.9, or any failure by
Servicer or Seller to deliver to Indenture Trustee for deposit in any of the
Trust Accounts any required payment or to direct Indenture Trustee to make any
required distributions therefrom that shall continue unremedied for a period of
five Business Days after written notice of such failure is received by Servicer
from Indenture Trustee or after discovery of such failure by an Authorized
Officer of Servicer; or
(b) failure on the part of Servicer or Seller duly to observe or to
perform in any material respect any other covenants or agreements of Servicer or
Seller, as applicable, set forth in this Agreement or any other Basic Document
to which it is a party, which failure shall (i) materially and adversely affect
the rights of either the Certificateholders or Noteholders and (ii) 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
Servicer by Owner Trustee or Indenture Trustee or (B) to Servicer and to Owner
Trustee and Indenture Trustee by the Holders of Notes evidencing not less than
25% of the Outstanding Amount of the Notes or Holders of Certificates evidencing
not less than 25% of the outstanding Certificate Balance, as applicable (or for
such longer period, not in excess of 120 days, as may be reasonably necessary to
remedy such default; provided that such default is capable of remedy within 120
days and Servicer delivers an Officer's Certificate to Owner Trustee and
Indenture Trustee to such effect and to the effect that Servicer or Seller, as
applicable, has commenced or will promptly commence, and will diligently pursue,
all reasonable efforts to remedy such default); or
(c) an Insolvency Event occurs with respect to Servicer, Seller, AFG or
any of their respective successors;
then, and in each and every case, so long as any Servicer Termination Event
shall not have been remedied, either Indenture Trustee, or the Holders of Notes
evidencing greater than 50% of the Outstanding Amount of the Notes (or, if no
Notes are then Outstanding, either the Owner Trustee or the Holders of
Certificates evidencing greater than 50% of the Certificate Balance), by notice
then given in writing to Servicer (and to Owner Trustee or Indenture Trustee, as
applicable, if given by the Holders) may terminate all the rights and
obligations (other than the obligations set forth in Section 7.2) of Servicer
under this Agreement. On or after the receipt by Servicer of such written
notice, all authority and power of Servicer under this Agreement, whether with
respect to the Notes, the Certificates or the Receivables or otherwise, shall,
without further action, pass to and be vested in Indenture Trustee or such
Successor Servicer as may be appointed under Section 8.2; and, without
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limitation, Indenture Trustee and Owner Trustee are 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, Indenture
Trustee and Owner 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 by it with respect to a Receivable. Servicer shall
promptly transfer its electronic records relating to the Receivables to the
Successor Servicer in such electronic form as the Successor Servicer may
reasonably request and shall promptly transfer to the Successor Servicer all
other records, correspondence and documents necessary for the continued
servicing of the Receivables in the manner and at such times as the Successor
Servicer shall reasonably request. All 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 such succession
as 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 a Servicer Termination Event, Indenture
Trustee shall give notice thereof to the Rating Agencies.
SECTION 8.2. Appointment of Successor. (a) Upon Servicer's receipt of
notice of termination, pursuant to Section 8.1 or Servicer's resignation (if and
to the extent permitted 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 (i) the date 45 days from the delivery to Owner Trustee and
Indenture Trustee of written notice of such resignation (or written confirmation
of such notice) in accordance with the terms of this Agreement and (ii) 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 Servicer's termination or resignation hereunder, Indenture Trustee
shall appoint a Successor Servicer, and the Successor Servicer shall accept its
appointment by a written assumption in form acceptable to Owner Trustee and
Indenture 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, Indenture Trustee without further action shall
automatically be appointed the Successor Servicer and Indenture Trustee shall be
entitled to the Servicing Fee. Notwithstanding the above, Indenture Trustee
shall, if it shall be unwilling or 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 $50,000,000 and whose regular business shall include the
servicing of motor vehicle receivables, as the successor to Servicer under this
Agreement; provided, that the appointment of any such Successor Servicer will
not result in the withdrawal or reduction of the outstanding rating assigned to
the Notes by any Rating Agency.
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(b) Upon appointment, the Successor Servicer (including Indenture 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 the rights granted
to the predecessor Servicer by the terms and provisions of this Agreement. No
Successor Servicer shall be liable for any acts or omissions of any predecessor
Servicer.
(c) A transfer of servicing hereunder shall not affect the rights and
duties of the parties hereunder (including the obligations and indemnities of
Seller pursuant to Sections 3.3, 4.3, 6.1 and 6.3 or, with respect to
obligations and indemnities arising prior to, or concurrently with, a transfer
of servicing hereunder, the predecessor Servicer pursuant to Section 4.7, 7.1 or
7.2) other than those relating to the management, administration, servicing,
custody or collection of the Receivables and the other rights and properties
included in the Owner Trust Estate. The Successor Servicer shall, upon its
appointment pursuant to Section 8.2 and as part of its duties and
responsibilities under this Agreement, promptly take all action it deems
necessary or appropriate so that the predecessor Servicer (in whatever capacity)
is paid or reimbursed all amounts it is entitled to receive under this Agreement
on each Distribution Date subsequent to the date on which it is terminated as
Servicer hereunder. Without limiting the generality of the foregoing, the
predecessor Servicer will be entitled to receive all accrued and unpaid
Servicing Fees through and including the effective date of the termination of
the predecessor Servicer.
SECTION 8.3. Payment of Servicing Fee. If Servicer shall be replaced, the
predecessor Servicer shall be entitled to receive any accrued and unpaid
Servicing Fees through the date of the Successor Servicer's acceptance hereunder
and any Supplemental Servicing Fees accrued and unpaid or received prior to such
date, in each case, in accordance with Section 4.8.
SECTION 8.4. Notification to Noteholders and Certificateholders. Upon any
termination of, or appointment of a successor to, Servicer pursuant to this
Article VIII, Owner Trustee shall give prompt written notice thereof to
Certificateholders and Indenture Trustee shall give prompt written notice
thereof to Noteholders subject to the Rating Agency Condition.
SECTION 8.5. Waiver of Past Defaults. The Holders of Notes evidencing not
less than a majority of the Outstanding Amount of the Notes (or the Holders of
Certificates evidencing not less than a majority of the outstanding Certificate
Balance, as applicable, in the case of any default which does not adversely
affect Indenture Trustee or the Noteholders) may, on behalf of all Noteholders
and Certificateholders, waive in writing any default by Servicer in the
performance of its obligations hereunder and its consequences, except a default
in making any required deposits to any of the Trust Accounts in accordance with
this Agreement. Upon any such waiver of a past default, such default shall cease
to exist, and any Servicer Termination Event 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
thereto. Servicer shall provide Standard & Poor's with written notice of any
waiver of a Servicer Termination Event arising under Section 8.1(c).
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ARTICLE IX. TERMINATION.
SECTION 9.1. Optional Purchase of All Receivables; Termination Notice. (a)
On the last day of any Collection Period immediately preceding a Determination
Date as of which the then outstanding Pool Balance is 5% or less of the Original
Pool Balance, Seller shall have the option to purchase the Owner Trust Estate,
other than the Trust Accounts and any funds or investments therein. To exercise
such option, Seller shall deposit pursuant to Section 5.4 in the Collection
Account an amount which, when added to the amounts on deposit in the Collection
Account for such Distribution Date, equals the sum of (a) the unpaid principal
amount of the then outstanding Notes, plus accrued and unpaid interest thereon,
plus (b) the Certificate Balance plus accrued and unpaid interest thereon. The
Notes and the Certificates will be redeemed concurrently therewith.
(b) Following the satisfaction and discharge of the Indenture and the
payment in full of the principal of and interest on the Notes, the
Certificateholders will succeed to the rights of the Noteholders hereunder.
(c) Notice of any termination of Issuer shall be given by Servicer to
Owner Trustee, Indenture Trustee and the Rating Agencies as soon as practicable
after Servicer has received notice thereof.
ARTICLE X. MISCELLANEOUS PROVISIONS.
SECTION 10.1. Amendment. (a) This Agreement may be amended by Seller,
Servicer, Issuer and Indenture Trustee (which consent may not be unreasonably
withheld), but without the consent of any of the Noteholders or the
Certificateholders:
(i) to cure any ambiguity or defect, 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 of the provisions in this
Agreement or of modifying in any manner the rights of the Noteholders or
the Certificateholders; provided that such action shall not, as evidenced
by an Opinion of Counsel delivered to Owner Trustee and Indenture Trustee,
adversely affect in any material respect the interests of any Noteholder
or Certificateholder;
(ii) (A) to add, modify or eliminate such provisions as may be
necessary or advisable in order to enable all or a portion of Issuer to
qualify as, and to permit an election to be made to cause all or a portion
of Issuer to be treated as, a "financial asset securitization investment
trust" as described in the provisions of the "Small Business Job
Protection Act of 1996," or to enable all or a portion of the Issuer to
qualify and an election to be made for similar treatment under such
comparable subsequent federal income tax provisions as may ultimately be
enacted into law, and (B) in connection with any such election, to modify
or eliminate existing provisions set forth in this Agreement relating to
the intended federal income tax treatment of the Notes or Certificates and
Issuer in the absence of the election; it being a condition to any such
amendment that each Rating Agency will have notified the Seller, the
Servicer, the Indenture Trustee and the Owner Trustee in writing that the
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amendment will not result in a reduction or withdrawal of the rating of
any outstanding Notes with respect to which it is a Rating Agency; and
(iii) to add, modify or eliminate such provisions as may be
necessary or advisable in order to enable (a) the transfer to Issuer of
all or any portion of the Receivables to be derecognized under generally
accepted accounting principles ("GAAP") by Seller to Issuer, (b) Issuer to
avoid becoming a member of Seller's consolidated group under GAAP or (c)
the Seller, AFG or any of their Affiliates to otherwise comply with or
obtain more favorable treatment under any law or regulation or any
accounting rule or principle; it being a condition to any such amendment
that each Rating Agency will have notified the Seller, the Servicer, the
Indenture Trustee and the Owner Trustee in writing that the amendment will
not result in a reduction or withdrawal of the rating of any outstanding
Notes with respect to which it is a Rating Agency.
(b) This Agreement may also be amended from time to time by Seller,
Servicer, Owner Trustee and Indenture Trustee, with the consent of the Holders
of Notes evidencing not less than a majority of the Outstanding Amount of the
Notes and 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 Noteholders or the
Certificateholders; provided that no such amendment shall (i) increase or reduce
in any manner the amount of, or accelerate or delay the timing of, collections
of payments on Receivables or distributions that shall be required to be made
for the benefit of the Noteholders or the Certificateholders or (ii) reduce the
aforesaid percentage of the Outstanding Amount of the Notes and the Certificate
Balance, the Holders of which are required to consent to any such amendment,
without the consent of the Holders of all the outstanding Notes and the Holders
of all the outstanding Certificates affected thereby.
(c) Prior to the execution of any such amendment or consent, Servicer
shall furnish written notification of the substance of such amendment or consent
to each Rating Agency. Promptly after the execution of any such amendment or
consent, Servicer shall furnish written notification of the substance of such
amendment or consent to each Noteholder and Certificateholder.
(d) It shall not be necessary for the consent of Certificateholders or
Noteholders 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.
(e) Prior to the execution of any amendment to this Agreement, Owner
Trustee and Indenture Trustee shall be entitled to receive and conclusively rely
upon an Opinion of Counsel stating that the execution of such amendment is
authorized or permitted by this Agreement and that all conditions precedent to
the execution and delivery of such amendment have been satisfied and the Opinion
of Counsel referred to in Section 10.2(i)(1) has been delivered. Owner Trustee
and Indenture Trustee may, but shall not be obligated to, enter into any such
amendment which affects Owner Trustee's or Indenture Trustee's, as applicable,
own rights, duties or immunities under this Agreement or otherwise.
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SECTION 10.2. Protection of Title to Trust Property. (a) Seller 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 Issuer
and the interests of Indenture Trustee in the Receivables and the proceeds
thereof. Seller shall deliver (or cause to be delivered) to Owner Trustee and
Indenture Trustee file-stamped copies of, or filing receipts for, any document
filed as provided above, as soon as available following such filing.
(b) Neither Seller nor 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 Section 9-402(7) of the UCC, unless
it shall have given Owner Trustee and Indenture Trustee at least five days'
prior written notice thereof and shall have promptly filed appropriate
amendments to all previously filed financing statements or continuation
statements.
(c) Each of Seller and Servicer shall have an obligation to give Owner
Trustee and Indenture 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. Servicer shall at all times maintain each office from which it shall
service Receivables, and its principal executive office, within the United
States of America.
(d) Servicer shall maintain accounts and records as to each Receivable
accurately and in sufficient detail to permit (i) 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 (ii) reconciliation between
payments or recoveries on (or with respect to) each Receivable and the amounts
from time to time deposited in the Collection Account in respect of such
Receivable.
(e) Servicer shall maintain its computer systems so that, from and after
the time of sale under this Agreement of the Receivables, Servicer's master
computer records (including any backup archives) that refer to a Receivable
shall indicate clearly the interest of Issuer and Indenture Trustee in such
Receivable and that such Receivable is owned by Issuer and has been pledged to
Indenture Trustee pursuant to the Indenture. Indication of Issuer's and
Indenture Trustee's interest in a Receivable shall be deleted from or modified
on Servicer's computer systems when, and only when, the related Receivable shall
have been paid in full or repurchased by Seller or purchased by Servicer.
(f) If at any xxxx Xxxxxx or 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, Servicer
shall give to such prospective purchaser, lender or other transferee computer
tapes, records or printouts (including any restored from backup 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 Issuer and has been
pledged to Indenture Trustee.
SALE AND SERVICING AGREEMENT
38
43
(g) Servicer shall permit Indenture Trustee, Owner Trustee and their
respective agents at any time during normal business hours to inspect, audit and
make copies of and abstracts from Servicer's records regarding any Receivable.
(h) Upon request at any time Owner Trustee or Indenture Trustee shall have
reasonable grounds to believe that such request is necessary in connection with
the performance of its duties under this Agreement or any of the Basic
Documents, Servicer shall furnish to Owner Trustee or to Indenture Trustee,
within thirty Business Days, a list of all Receivables (by contract number and
name of Obligor) then owned by Issuer, together with a reconciliation of such
list to the Schedule of Receivables and to each of Servicer's Reports furnished
before such request indicating removal of Receivables from Issuer.
(i) Servicer shall deliver to Owner Trustee and Indenture Trustee:
(1) promptly after the execution and delivery of this Agreement and
of each amendment thereto, an Opinion of Counsel either (A) stating that,
in the opinion of such counsel, all financing statements and continuation
statements have been executed and filed that are necessary fully to
preserve and protect the interest of Issuer and Indenture 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) stating
that, in the opinion of such counsel, no such action shall be necessary to
preserve and protect such interest; and
(2) within 120 days after the beginning of each calendar year
beginning with the first calendar year beginning more than three months
after the Cutoff Date, an Opinion of Counsel, dated as of a date during
such 120-day period, either (A) stating that, in the opinion of such
counsel, all financing statements and continuation statements have been
executed and filed that are necessary fully to preserve and protect the
interest of Issuer and Indenture 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) stating that, in the opinion of such
counsel, no such action shall be necessary to preserve and protect such
interest.
Each Opinion of Counsel referred to in clause (1) or (2) above shall
specify any action necessary (as of the date of such opinion) to be taken in the
following year to preserve and protect such interest.
(j) Seller shall, to the extent required by applicable law, cause the
Notes to be registered with the Commission pursuant to Section 12(b) or Section
12(g) of the Exchange Act within the time periods specified in such sections.
SECTION 10.3. Notices. All demands, notices and communications upon or to
Seller, Servicer, Owner Trustee, Indenture Trustee or the Rating Agencies under
this Agreement shall be in writing, personally delivered, sent by overnight
courier or mailed by certified mail, return receipt requested, and shall be
deemed to have been duly given upon receipt (a) in the case of Seller, to Key
Consumer Acceptance Corporation, Xxx Xxxxx, 000 Xxxxxx Xxxxxx, Xxxxxxxxx, Xxxx
00000-0000,
SALE AND SERVICING AGREEMENT
39
44
Attention: President (b) in the case of Servicer, to Key Bank USA, Xxx Xxxxx,
000 Xxxxxx Xxxxxx, Xxxxxxxxx, Xxxx 00000-0000, Attention: Chief Financial
Officer, with a copy to AutoFinance Group, Inc. 000 Xxxxxxx Xxxx, Xxxxxxxx,
Xxxxxxxx 00000-0000, Attention: Chief Accounting Officer, (c) in the case of
Issuer or Owner Trustee, at the Corporate Trust Office, (d) in the case of
Indenture Trustee, at the Corporate Trust Office, (e) in the case of Moody's, to
Xxxxx'x Investors Service, Inc., to 00 Xxxxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000,
Attention of Asset Backed Securities Group, (f) in the case of Standard &
Poor's, to Standard & Poor's Ratings Services, a division of The XxXxxx-Xxxx
Companies, Inc., 00 Xxxxxxxx (00xx Xxxxx), Xxx Xxxx, Xxx Xxxx 00000, Attention
of Asset Backed Surveillance Department, and (g) in the case of Fitch, to Fitch
Information Services, Inc., 0000 Xxxx 0xx Xxxxxx, Xxxxxx, Xxxxxxx 00000. Any
notice required or permitted to be mailed to a Noteholder or Certificateholder
shall be given by first class mail, postage prepaid, at the address of such
Person as shown in the Note Register or the Certificate Register, as applicable.
Any notice so mailed within the time prescribed in this Agreement shall be
conclusively presumed to have been duly given, whether or not the Noteholder or
Certificateholder shall receive such notice.
SECTION 10.4. Assignment. Notwithstanding anything to the contrary
contained herein, except as provided in Sections 3.4, 4.1, 6.4 and 7.3 and as
provided in the provisions of this Agreement concerning the resignation of
Servicer, this Agreement may not be assigned by Seller or Servicer without the
prior written consent of the Owner Trustee, Indenture Trustee, the Noteholders
evidencing not less than 66 2/3% of the Outstanding Amount of the Notes and the
Certificateholders evidencing not less than 66 2/3% of the outstanding
Certificate Balance.
SECTION 10.5. Limitations on Rights of Others. The provisions of this
Agreement are solely for the benefit of Seller, Servicer, Issuer, Owner Trustee
and for the benefit of the Certificateholders and the Noteholders, as
third-party beneficiaries, and nothing in this Agreement, whether express or
implied, shall be construed to give to any other Person any legal or equitable
right, remedy or claim in the Owner Trust Estate or under or in respect of this
Agreement or any covenants, conditions or provisions contained herein.
SECTION 10.6. Severability. 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 hereof, and any such prohibition or
unenforceability in any jurisdiction shall not create or render unenforceable
such provision in any other jurisdiction.
SECTION 10.7. 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 10.8. 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.
SALE AND SERVICING AGREEMENT
40
45
SECTION 10.9. 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 HEREUNDER SHALL BE DETERMINED IN ACCORDANCE WITH SUCH LAWS.
SECTION 10.10. Assignment to Indenture Trustee. Seller hereby acknowledges
and consents to any mortgage, pledge, assignment and grant of a security
interest by Issuer to Indenture Trustee pursuant to the Indenture for the
benefit of the Noteholders of all right, title and interest of Issuer in, to and
under the Receivables and/or the assignment of any or all of Issuer's rights and
obligations hereunder to Indenture Trustee.
SECTION 10.11. Nonpetition Covenant. Notwithstanding any prior termination
of this Agreement, Servicer and Seller shall not, prior to the date which is one
year and one day after the termination of this Agreement with respect to Issuer,
acquiesce, petition or otherwise invoke or cause Issuer to invoke the process of
any court or government authority for the purpose of commencing or sustaining a
case against Issuer under any Federal or state bankruptcy, insolvency or similar
law or appointing a receiver, liquidator, assignee, trustee, custodian,
sequestrator or other similar official of Issuer or any substantial part of its
property, or ordering the winding up or liquidation of the affairs of Issuer.
SECTION 10.12. Limitation of Liability of Owner Trustee and Indenture
Trustee. (a) Notwithstanding anything contained herein to the contrary, this
Agreement has been countersigned by Chase Manhattan Bank Delaware not in its
individual capacity but solely in its capacity as Owner Trustee of Issuer and in
no event shall Chase Manhattan Bank Delaware in its individual capacity or,
except as expressly provided in the Trust Agreement, as Owner Trustee have any
liability for the representations, warranties, covenants, agreements or other
obligations of Issuer hereunder or in any of the certificates, notices or
agreements delivered pursuant hereto, as to all of which recourse shall be had
solely to the assets of Issuer. For all purposes of this Agreement, in the
performance of its duties or obligations hereunder or in the performance of any
duties or obligations of Issuer hereunder, Owner Trustee shall be subject to,
and entitled to the benefits of, the terms and provisions of Articles VI, VII
and VIII of the Trust Agreement.
(b) Notwithstanding anything contained herein to the contrary, this
Agreement has been accepted by Bankers Trust Company not in its individual
capacity but solely as Indenture Trustee and in no event shall Bankers Trust
Company have any liability for the representations, warranties, covenants,
agreements or other obligations of Issuer hereunder or in any of the
certificates, notices or agreements delivered pursuant hereto, as to all of
which recourse shall be had solely to the assets of Issuer.
SECTION 10.13. Further Assurances. Seller and the Servicer 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 Owner Trustee or Indenture
Trustee more fully to effect the purposes of this Agreement, including, without
limitation, the execution of any financing statements or continuation
SALE AND SERVICING AGREEMENT
41
46
statements relating to the Receivables for filing under the provisions of the
UCC of any applicable jurisdiction.
SECTION 10.14. No Waiver; Cumulative Remedies. No failure to exercise and
no delay in exercising, on the part of the Owner Trustee, Indenture Trustee, the
Noteholders or the Certificateholders, any right, remedy, power or privilege
hereunder, shall operate as a waiver thereof; nor shall any single or partial
exercise of any right, remedy, power or privilege hereunder preclude any other
or further exercise thereof or the exercise of any other right, remedy, power or
privilege. The rights, remedies, powers and privileges therein provided are
cumulative and not exhaustive of any rights, remedies, powers and privileges
provided by law.
SALE AND SERVICING AGREEMENT
42
47
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed and delivered by their respective duly authorized officers as of
the day and year first above written.
AFG RECEIVABLES TRUST 1997-B
By: CHASE MANHATTAN BANK
DELAWARE, a Delaware banking
corporation, not in its individual
capacity, but solely as Owner Trustee
By: /s/ Xxxxx Xxxxx
--------------------------------------------
Name: Xxxxx Xxxxx
Title: Trust Officer
KEY CONSUMER ACCEPTANCE
CORPORATION, Seller
By: /s/ Xxxxx X. Xxxxx
--------------------------------------------
Name: Xxxxx X. Xxxxx
Title: President and Chief Executive Officer
KEY BANK USA, NATIONAL
ASSOCIATION, Servicer,
By: /s/ Xxxxxx X. Xxxxxxx
--------------------------------------------
Name: Xxxxxx X. Xxxxxxx
Title: Vice President and Controller
SALE AND SERVICING AGREEMENT
S-1
48
BANKERS TRUST COMPANY, a New
York banking corporation, not in its
individual capacity but solely as Indenture
Trustee,
By: /s/ Xxxxxxx X. Xxxxx
--------------------------------------------
Name: Xxxxxxx X. Xxxxx
Title: Assistant Vice President
SALE AND SERVICING AGREEMENT
S-2
49
SCHEDULE A
Schedule of Receivables
(Delivered on Disk to Trustee and Owner Trustee)
SALE AND SERVICING AGREEMENT
Schedule A-1
50
SCHEDULE B
Location of Receivables Files
The Receivables sold by AFG to Seller and sold by Seller to Issuer are located
as follows:
AutoFinance Group, Inc.
000 Xxxxxxx Xxxx
Xxxxx 000
Xxxxxxxx, Xxxxxxxx 00000-0000
SALE AND SERVICING AGREEMENT
Schedule B-1
51
EXHIBIT C
Form of Servicer's Report
(See attached)
SALE AND SERVICING AGREEMENT
Exhibit C-1
52
APPENDIX X
DEFINITIONS
"Act" is defined in Section 11.3(a) of the Indenture.
"Actuarial Receivable" means a Receivable that provides for (i)
amortization of the loan over a series of fixed level payment monthly
installments and (ii) each monthly installment, including the monthly
installment representing the final payment on the Receivable, to consist of an
amount of interest equal to 1/12 of the Contract Rate of the loan multiplied by
the unpaid principal balance of the loan, and an amount of principal equal to
the remainder of the monthly installment.
"Administration Agreement" means the Administration Agreement among Key
Bank USA, National Association, as Administrator, AFG Receivables Trust 1997-B,
as Issuer, and Bankers Trust Company, as Indenture Trustee, as the same may be
amended and supplemented from time to time.
"Administration Fee" is defined in Section 4 of the Administration
Agreement.
"Administrator" means Key Bank USA, National Association and each
successor Administrator.
"Affiliate" means, with respect to any specified Person, any other Person
controlling, controlled by or under common control with such specified Person.
For the purposes of this definition, "control" when used with respect to any
specified 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. A Person shall not be
deemed to be an Affiliate of any specified Person solely because such other
Person has the contractual right or obligation to manage such specified Person
or act as servicer with respect to the financial assets of such specified Person
unless such other Person controls the specified Person through equity ownership
or otherwise.
"AFG" means AutoFinance Group, Inc., an Ohio corporation.
"Aggregate Net Losses" means, for any Collection Period, the aggregate
amount allocable to principal of all Receivables newly designated during such
Collection Period as Defaulted Receivables minus all Liquidation Proceeds
collected
Appendix X, Page 1
53
during such Collection Period with respect to all Defaulted Receivables (whether
or not newly designated as such).
"Authenticating Agent" is defined in Section 2.13 of the Indenture.
"Authorized Officer" means, with respect to Administrator and Servicer,
any officer of Administrator or Servicer, as applicable, and, with respect to
Issuer, any officer of Owner Trustee or Administrator, in such case, who is
authorized to act for such Person, as applicable, in matters relating to Issuer
and who is identified on the list of Authorized Officers delivered by each of
Owner Trustee, Administrator and Servicer to Indenture Trustee and Owner Trustee
on the Closing Date (as such list may be modified or supplemented from time to
time thereafter).
"Available Interest" means, for any Distribution Date, the sum of the
following amounts for the related Collection Period: (a) that portion of the
Collections on the Receivables received during such Collection Period that is
allocable to interest (including without duplication, amounts allocable to
interest withdrawn from the Payahead Account, but excluding such amounts
deposited in the Payahead Account) in accordance with Servicer's customary
servicing procedures, (b) all Liquidation Proceeds received during the related
Collection Period and (c) the Purchase Amounts, to the extent allocable to
accrued interest, of all Receivables that are purchased by Seller or Servicer as
of the last day of the related Collection Period. "Available Interest" for any
Distribution Date shall exclude all payments and proceeds of any Receivables the
Purchase Amount of which has been distributed on a prior Distribution Date.
"Available Principal" means, for any Distribution Date, the sum of the
following amounts with respect to the related Collection Period: (a) that
portion of all Collections on the Receivables received during such Collection
Period that is allocable to principal (including without duplication, amounts
allocable to principal withdrawn from the Payahead Account, but excluding such
amounts deposited in the Payahead Account) in accordance with Servicer's
customary servicing procedures; and (b) the Purchase Amounts, to the extent
attributable to principal, of all Receivables purchased by Seller or Servicer as
of the last day of the related Collection Period. "Available Principal" on any
Distribution Date shall exclude all payments and proceeds of any Receivables the
Purchase Amount of which has been distributed on a prior Distribution Date.
"Average Delinquency Ratio" means, as of any Distribution Date, the
average of the Delinquency Ratios for the preceding three Collection Periods.
"Bank Regulatory Authorities" means the Federal Reserve Board, the Federal
Deposit Insurance Corporation and Office of the Comptroller of Currency.
Appendix X, Page 2
54
"Basic Documents" means the Certificate of Trust, the Purchase Agreement,
the Indenture, the Note Depository Agreement, the Sale and Servicing Agreement,
the Trust Agreement, the Administration Agreement, the Notes, the Certificates
and other documents and certificates delivered in connection therewith.
"Benefit Plan" is defined in Section 11.12 of the Trust Agreement.
"Book Entry Note" means a beneficial interest in the Notes, ownership and
transfers of which shall be made through book entries by a Clearing Agency as
described in Section 2.10 of the Indenture.
"Business Day" means a day that is not a Saturday or a Sunday and that in
the States of New York, Illinois, Ohio and the State in which the Corporate
Trust Office is located is neither a legal holiday nor a day on which banking
institutions are authorized by law, regulation or executive order to be closed;
provided that, on the Closing Date (with respect to the remainder of calendar
year 1997) and thereafter, within 15 days prior to the end of each calendar year
while the Basic Documents remain in effect (with respect to the succeeding
calendar years), the Servicer shall deliver to the Owner Trustee an Officers'
Certificate specifying the days on which banking institutions in the States of
Illinois and Ohio are authorized by law, regulation or executive order to be
closed.
"Business Trust Statute" means Chapter 38 of Title 12 of the Delaware
Code, 12 Del. Code Section 3801 et seq.
"Certificate" means a certificate evidencing the beneficial interest of a
Certificateholder in the Trust, substantially in the form of Exhibit A to the
Trust Agreement.
"Certificate Balance" equals, initially, $6,601,479.62 and, thereafter, at
any time, equals the initial Certificate Balance, reduced by all amounts
allocable to principal previously distributed to Certificateholders.
"Certificate of Trust" means the Certificate of Trust in the form of
Exhibit B to the Trust Agreement filed for Issuer pursuant to the Business Trust
Statute.
"Certificate Pool Factor" as of the close of business on a Distribution
Date means a seven-digit decimal figure equal to the Certificate Balance (after
giving effect to distributions made on such date) divided by the initial
Certificate Balance. The Certificate Pool Factor will be 1.0000000 as of the
Cutoff Date; thereafter, the Certificate Pool Factor will decline to reflect
reductions in the Certificate Balance.
Appendix X, Page 3
55
"Certificate Register" and "Certificate Registrar" means the register
mentioned in and the registrar appointed pursuant to Section 3.4 of the Trust
Agreement.
"Certificateholder" means the Person in whose name a Certificate is
registered on the Certificate Register.
"Certificateholders' Distributable Amount" means, for any Distribution
Date, the Certificateholders' Percentage of the Principal Distribution Amount;
provided that the Certificateholders' Distributable Amount will not exceed the
Certificate Balance.
"Certificateholders' Percentage" means 100% minus the Noteholders'
Percentage.
"Class A Interest Rate" means 6.20% per annum.
"Class A Noteholders' Interest Carryover Shortfall" means, for any
Distribution Date, the excess of the Class A Noteholders' Monthly Interest
Distributable Amount for the preceding Distribution Date and any outstanding
Class A Noteholders' Interest Carryover Shortfall on such preceding Distribution
Date, over the amount in respect of interest on the Class A Notes that was
actually paid to holders of the Class A Notes on the preceding Distribution
Date, plus interest on the amount of interest due but not paid to Holders of the
Class A Notes on the preceding Distribution Date, to the extent permitted by
law, in an amount equal to the product of (i) the quotient of the number of days
elapsed in the related Interest Period divided by 360 multiplied by (ii) the
Class A Interest Rate multiplied by (iii) the amount of such interest due but
not paid in respect of the Class A Notes.
"Class A Noteholders' Interest Distributable Amount" means, for any
Distribution Date, the sum of (a) the Class A Noteholders' Monthly Interest
Distributable Amount and (b) the Class A Noteholders' Interest Carryover
Shortfall, in each case for such Distribution Date.
"Class A Noteholders' Monthly Interest Distributable Amount" means, for
any Distribution Date, the product of one-twelfth (or, in the case of the first
Distribution Date the actual number of days elapsed from and including the
Closing Date to but excluding October 15, 1997 divided by 360) multiplied by the
Class A Interest Rate multiplied by the Outstanding Amount of the Class A Notes
on the immediately preceding Distribution Date after giving effect to all
payments of principal to the Holders of the Class A Notes on or prior to such
immediately preceding Distribution Date (or, in the case of the first
Distribution Date, the Outstanding Amount of the Class A Notes on the Closing
Date).
Appendix X, Page 4
56
"Class A Noteholders' Monthly Principal Distributable Amount" means, for
any Distribution Date, the Class A Noteholders' Percentage of the Noteholders'
Monthly Principal Distributable Amount.
"Class A Noteholders' Percentage" means the quotient (expressed as a
percentage) of (a) the aggregate initial principal amount of the Class A Notes
divided by (b) the aggregate initial principal amount of the Notes.
"Class A Noteholders' Principal Carryover Shortfall" means, as of the
close of any Distribution Date, the excess of the Class A Noteholders' Monthly
Principal Distributable Amount and any outstanding Class A Noteholders'
Principal Carryover Shortfall from the preceding Distribution Date over the
amount in respect of principal that is actually paid to the holders of the Class
A Notes on such Distribution Date.
"Class A Noteholders' Principal Distributable Amount" means, for any
Distribution Date, the sum of (a) the Class A Noteholders' Monthly Principal
Distributable Amount for such Distribution Date and (b) the Class A Noteholders'
Principal Carryover Shortfall as of the close of the preceding Distribution
Date; provided that the Class A Noteholders' Principal Distributable Amount
shall not exceed the outstanding principal balance of the Class A Notes.
"Class A Notes" means the Class A 6.20% Asset Backed Notes, substantially
in the form of Exhibit D to the Indenture.
"Class B Interest Rate" means 6.40% per annum.
"Class B Noteholders' Interest Carryover Shortfall" means, for any
Distribution Date, the excess of the Class B Noteholders' Monthly Interest
Distributable Amount for the preceding Distribution Date and any outstanding
Class B Noteholders' Interest Carryover Shortfall on such preceding Distribution
Date, over the amount in respect of interest on the Class B Notes that was
actually paid to holders of the Class B Notes on the preceding Distribution
Date, plus interest on the amount of interest due but not paid to Holders of the
Class B Notes on the preceding Distribution Date, to the extent permitted by
law, in an amount equal to the product of one-twelfth multiplied by the Class B
Interest Rate multiplied by the amount of such interest due but not paid in
respect of the Class B Notes.
"Class B Noteholders' Interest Distributable Amount" means, for any
Distribution Date, the sum of (a) the Class B Noteholders' Monthly Interest
Distributable Amount and (b) the Class B Noteholders' Interest Carryover
Shortfall, in each case for such Distribution Date.
Appendix X, Page 5
57
"Class B Noteholders' Monthly Interest Distributable Amount" means, for
any Distribution Date, the product of one-twelfth (or, in the case of the first
Distribution Date the actual number of days elapsed from and including the
Closing Date to but excluding October 15, 1997 divided by 360) multiplied by the
Class B Interest Rate multiplied by the Outstanding Amount of the Class B Notes
on the immediately preceding Distribution Date after giving effect to all
payments of principal to the Holders of the Class B Notes on or prior to such
immediately preceding Distribution Date (or, in the case of the first
Distribution Date, the Outstanding Amount of the Class B Notes on the Closing
Date).
"Class B Noteholders' Monthly Principal Distributable Amount" means, for
any Distribution Date, the Class B Noteholders' Percentage of the Noteholders'
Monthly Principal Distributable Amount.
"Class B Noteholders' Percentage" means the quotient (expressed as a
percentage) of (a) the aggregate initial principal amount of the Class B Notes
divided by (b) the aggregate initial principal amount of the Notes.
"Class B Noteholders' Principal Carryover Shortfall" means, as of the
close of any Distribution Date, the excess of the Class B Noteholders' Monthly
Principal Distributable Amount and any outstanding Class B Noteholders'
Principal Carryover Shortfall from the preceding Distribution Date over the
amount in respect of principal that is actually paid to the holders of the Class
B Notes on such Distribution Date.
"Class B Noteholders' Principal Distributable Amount" means, for any
Distribution Date, the sum of (a) the Class B Noteholders' Monthly Principal
Distributable Amount for such Distribution Date and (b) the Class B Noteholders'
Principal Carryover Shortfall as of the close of the preceding Distribution
Date; provided that the Class B Noteholders' Principal Distributable Amount
shall not exceed the outstanding principal balance of the Class B Notes.
"Class B Notes" means the Class B 6.40% Asset Backed Notes, substantially
in the form of Exhibit E to the Indenture.
"Class C Interest Rate" means 7.00% per annum.
"Class C Noteholders' Interest Carryover Shortfall" means, for any
Distribution Date, the excess of the Class C Noteholders' Monthly Interest
Distributable Amount for the preceding Distribution Date and any outstanding
Class C Noteholders' Interest Carryover Shortfall on such preceding Distribution
Date, over the amount in respect of interest on the Class C Notes that was
actually paid to holders of the Class C Notes on the preceding Distribution
Date, plus interest on the amount of interest due but not paid to Holders of the
Class C Notes on the
Appendix X, Page 6
58
preceding Distribution Date, to the extent permitted by law, in an amount equal
to the product of one-twelfth multiplied by the Class C Interest Rate multiplied
by the amount of such interest due but not paid in respect of the Class C Notes.
"Class C Noteholders' Interest Distributable Amount" means, for any
Distribution Date, the sum of (a) the Class C Noteholders' Monthly Interest
Distributable Amount and (b) the Class C Noteholders' Interest Carryover
Shortfall, in each case for such Distribution Date.
"Class C Noteholders' Monthly Interest Distributable Amount" means, for
any Distribution Date, the product of one-twelfth (or, in the case of the first
Distribution Date the actual number of days elapsed from and including the
Closing Date to but excluding October 15, 1997 divided by 360) multiplied by the
Class C Interest Rate multiplied by the Outstanding Amount of the Class C Notes
on the immediately preceding Distribution Date after giving effect to all
payments of principal to the Holders of the Class C Notes on or prior to such
immediately preceding Distribution Date (or, in the case of the first
Distribution Date, the Outstanding Amount of the Class C Notes on the Closing
Date).
"Class C Noteholders' Monthly Principal Distributable Amount" means, for
any Distribution Date, the Class C Noteholders' Percentage of the Noteholders'
Monthly Principal Distributable Amount.
"Class C Noteholders' Percentage" means the quotient (expressed as a
percentage) of (a) the aggregate initial principal amount of the Class C Notes
divided by (b) the aggregate initial principal amount of the Notes.
"Class C Noteholders' Principal Carryover Shortfall" means, as of the
close of any Distribution Date, the excess of the Class C Noteholders' Monthly
Principal Distributable Amount and any outstanding Class C Noteholders'
Principal Carryover Shortfall from the preceding Distribution Date over the
amount in respect of principal that is actually paid to the holders of the Class
C Notes on such Distribution Date.
"Class C Noteholders' Principal Distributable Amount" means, for any
Distribution Date, the sum of (a) the Class C Noteholders' Monthly Principal
Distributable Amount for such Distribution Date and (b) the Class C Noteholders'
Principal Carryover Shortfall as of the close of the preceding Distribution
Date; provided that the Class C Noteholders' Principal Distributable Amount
shall not exceed the outstanding principal balance of the Class C Notes.
"Class C Notes" means the Class C 7.00% Asset Backed Notes, substantially
in the form of Exhibit F to the Indenture.
Appendix X, Page 7
59
"Clearing Agency" means an organization registered as a "clearing agency"
pursuant to Section 17A of the Exchange Act.
"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.
"Closing Date" means September 23, 1997.
"Code" means the Internal Revenue Code of 1986, as amended from time to
time and Treasury Regulations promulgated thereunder.
"Collateral" is defined in the Granting Clause of the Indenture.
"Collection Account" means the account designated as such, established and
maintained pursuant to Section 5.1 of the Sale and Servicing Agreement.
"Collection Period" means, (a) in the case of the initial Collection
Period, the period from but not including the Cutoff Date to and including
September 30, 1997 and (b) thereafter, each calendar month during the term of
the Sale and Servicing Agreement. With respect to any Determination Date,
Deposit Date or Distribution Date, the "related Collection Period" means the
Collection Period preceding the month in which such Determination Date, Deposit
Date or Distribution Date occurs.
"Collections" means all collections on the Receivables and any proceeds
from Insurance Policies and lender's single interest insurance policies.
"Commission" means the Securities and Exchange Commission.
"Contract Rate" means, with respect to a Receivable, the rate per annum of
interest charged on the outstanding principal balance of such Receivable.
"Corporate Trust Office" means:
(a) as used in the Indenture, or otherwise with respect to Indenture
Trustee, the office of the Indenture Trustee at the date of the execution
of the Indenture which is located at Four Xxxxxx Xxxxxx, Xxx Xxxx, Xxx
Xxxx 00000, Attention: Corporate Trust and Agency Group -- Structured
Finance Team; Facsimile: (000) 000-0000 or at such other address as
Indenture Trustee may designate from time to time by notice to the
Noteholders, Servicer and Issuer, or the principal corporate trust office
of any successor Indenture Trustee (the address of which the successor
Indenture Trustee will notify the Noteholders and Issuer); and
Appendix X, Page 8
60
(b) as used in the Trust Agreement, or otherwise with respect to
Owner Trustee, the principal corporate trust office of Owner Trustee
located at 0000 Xxxxxx Xxxxxx, Xxxxxxxxxx, Xxxxxxxx 00000; or at such
other address as Owner Trustee may designate by notice to the
Certificateholders and Depositor, or the principal corporate trust office
of any successor Owner Trustee (the address of which the successor owner
trustee will notify the Certificateholders and Depositor).
"Cumulative Net Loss Ratio" means, for any Distribution Date, a fraction,
expressed as a percentage, the numerator of which is the aggregate amount of net
losses on the Receivables incurred during the period from the Cutoff Date to and
including the last day of the related Collection Period and the denominator of
which is the Original Pool Balance.
"Custodian" means Servicer in its capacity as agent of Issuer, as
custodian of the Receivable Files and AFG acting as agent for Servicer for the
purpose of maintaining custody of the Receivables Files.
"customary," "customary servicing practices", "customary servicing
procedures", and like phrases, mean, when used with respect to any Receivables
serviced by AFG as subservicer or the Receivables Files of which are held by AFG
as subcustodian, shall refer to those of AFG as servicer of assets such as the
Receivables serviced by it.
"Cutoff Date" means the close of business on August 31, 1997.
"Cutoff Date Principal Balance" means, with respect to any Receivable, the
Initial Principal Balance of such Receivable minus the sum of the portion of all
payments received under such Receivable from or on behalf of the related Obligor
on or prior to the Cutoff Date and allocable to principal in accordance with the
terms of the Receivable.
"Dealer" means, with respect to any Receivable, the seller of the related
Financed Vehicle.
"Dealer Agreement" means an agreement between AFG and a Dealer pursuant to
which AFG acquires Motor Vehicle Loans from the Dealer.
"Dealer Recourse" means, with respect to any Dealer, any rights and
remedies against such Dealer under the related Dealer Agreement (other than with
respect to any breach of representation or warranty thereunder) with respect to
credit losses on a Receivable secured by a Financed Vehicle sold by such Dealer.
Appendix X, Page 9
61
"Default" means any occurrence that is, or with notice or the lapse of
time or both would become, an Event of Default.
"Defaulted Receivable" means, with respect to any Collection Period, a
Receivable (other than a Purchased Receivable) that is more than 120 days past
due as of the last day of such Collection Period; provided, however, that any
Receivable which the Seller or Servicer is obligated to repurchase or purchase
shall be deemed to have become a Defaulted Receivable during a Collection Period
if the Seller or Servicer fails to deposit the Purchase Amount on the related
Deposit Date when due.
"Definitive Notes" is defined in Section 2.10 of the Indenture.
"Definitive Certificates" means Certificates issued in certificated, fully
registered form as provided in the Trust Agreement.
"Delaware Trustee" is defined in Section 10.1 of the Trust Agreement.
"Delinquency Ratio" means, for any Collection Period, a fraction,
expressed as a percentage, the numerator of which is the sum of (x) the
aggregate Principal Balances of Receivables delinquent over 60 days, (y) the
aggregate Principal Balances of Receivables with respect to which the related
Financed Vehicles have been repossessed, but such Receivables have not been
charged off and (z) the aggregate Principal Balance of all Receivables the term
of which has been extended, as of the last day of such Collection Period, and
the denominator of which is the Pool Balance as of the close of business on the
last day of such Collection Period.
"Delivery" when used with respect to Trust 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(l)(i) of the UCC and are
susceptible of physical delivery, transfer thereof to Indenture Trustee or
its nominee or custodian by physical delivery to Indenture Trustee or its
nominee or custodian endorsed to, or registered in the name of, Indenture
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
endorsed to, or registered in the name of, Indenture 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 Indenture Trustee or its nominee
or custodian and the sending by such financial intermediary of a
confirmation of the purchase of such certificated security by Indenture
Trustee or its nominee or custodian, or (ii) by delivery thereof
Appendix X, Page 10
62
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 corporation's exclusive control, the sending of a
confirmation by the financial intermediary of the purchase by Indenture
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 Indenture 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 Indenture 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 Trust Account
Property to Indenture 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 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 Trust Account Property to an appropriate book-entry
account maintained with a Federal Reserve Bank by a financial intermediary
which is also a "depository" pursuant to applicable Federal regulations
and issuance by such financial intermediary of a deposit advice or other
written confirmation of such book-entry registration to Indenture Trustee
or its nominee or custodian of the purchase by Indenture 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 securities held through the Federal Reserve System
pursuant to Federal book-entry regulations as belonging to Indenture
Trustee or its nominee or custodian and indicating that such custodian
holds such Trust Account Property solely as agent for Indenture Trustee or
its nominee or custodian; and such additional or alternative procedures as
may hereafter become appropriate to effect complete transfer of ownership
of any such Trust Account Property to Indenture Trustee or its nominee or
custodian, consistent with changes in applicable law or regulations or the
interpretation thereof; and
Appendix X, Page 11
63
(c) with respect to any item of Trust 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 Indenture
Trustee or its nominee or custodian of such uncertificated security, the
making by such financial intermediary of entries on its books and records
identifying such uncertificated certificates as belonging to Indenture
Trustee or its nominee or custodian.
"Deposit Date" means, with respect to any Collection Period, the Business
Day preceding the related Distribution Date.
"Depositor" means Seller in its capacity as Depositor under the Trust
Agreement.
"Determination Date" with respect to any Collection Period, means the
tenth day of the calendar month following such Collection Period (or, if the
tenth day is not a Business Day, the next succeeding Business Day).
"Distribution Date" means the 15th day of each month (or, if the 15th day
is not a Business Day, the next succeeding Business Day), commencing October 15,
1997.
"Dollar" and the sign "$" mean lawful money of the United States.
"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 of 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 the long-term
unsecured debt of such depository institution shall have a credit rating from
each Rating Agency in one of its generic rating categories which signifies
investment grade. Any such accounts (other than the Reserve Account) may be
maintained with Key Bank USA, National Association, or any of its Affiliates, if
such accounts meet the requirements described in clause (a) of the preceding
sentence.
"Eligible Institution" means a depository institution (which may be
Servicer (or any Affiliate of Servicer), Owner Trustee (or any Affiliate of
Owner Trustee) or Indenture Trustee) 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), (a) which has (i) either a long-term
senior unsecured debt rating of AAA or a short-term senior unsecured debt or
certificate of deposit rating of A-1+
Appendix X, Page 12
64
or better by Standard & Poor's and (ii)(A) a short-term senior unsecured debt
rating of A-l+ or better by Standard & Poor's and (B) a short-term senior
unsecured debt rating of 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 (b) whose deposits are insured by the Federal Deposit Insurance Corporation.
If so qualified, Servicer, any Affiliate of Servicer, Owner Trustee, any
Affiliate of Owner Trustee or Indenture Trustee may be considered an Eligible
Institution.
"Eligible Investments" shall mean any one or more of the following types
of investments:
(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 (including any Affiliate of Seller, Indenture
Trustee, Owner Trustee or any Affiliate of Indenture Trustee or Owner
Trustee) or trust company incorporated under the laws of the United States
of America or any state thereof or the District of Columbia (or any
domestic branch of a foreign bank) and subject to supervision and
examination by Federal or state banking or depository institution
authorities (including depository receipts issued by any such institution
or trust company as custodian with respect to any obligation referred to
in clause (a) above or a portion of such obligation for the benefit of the
holders of such depository receipts); provided that at the time of the
investment or contractual commitment to invest therein (which shall be
deemed to be made again each time funds are reinvested following each
Distribution Date), the commercial paper or other short-term senior
unsecured debt obligations (other than such obligations the rating of
which is based on the credit of a Person other than such depository
institution or trust company) of such depository institution or trust
company shall have a credit rating from Standard & Poor's of A-1+ and from
Moody's of P-1;
(c) commercial paper (including commercial paper of any Affiliate of
Seller) having, at the time of the investment or contractual commitment to
invest therein, a rating from Standard & Poor's of A-1+ and from Moody's
of P-1;
(d) investments in money market funds (including funds for which
Indenture Trustee or Owner Trustee or any of their respective Affiliates
or any of Seller's Affiliates is investment manager or advisor) having a
rating from Standard & Poor's of AAA-m or AAAm-G and from Moody's of Aaa;
Appendix X, Page 13
65
(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) referred to in clause (b) above; and
(g) any other investment with respect to which each Rating Agency
has provided written notice that such investment would not cause such
Rating Agency to downgrade or withdraw its then current rating of any
class of Notes.
"ERISA" is defined in Section 11.12 of the Trust Agreement.
"Event of Default" is defined in Section 5.1 of the Indenture.
"Exchange Act" means the Securities Exchange Act of 1934, as amended.
"Executive Officer" means, with respect to any corporation, the Chief
Executive Officer, Chief Operating Officer, Chief Financial Officer, Chief
Accounting Officer, President, Executive Vice President, any Vice President, the
Secretary or the Treasurer of such corporation; and with respect to any
partnership, any general partner thereof.
"Expenses" is defined in Section 8.2 of the Trust Agreement.
"Final Scheduled Distribution Date" means (a) for the Notes, the February
15, 2003 Distribution Date, and (b) for the Certificates, the February 15, 2003
Distribution Date.
"Final Scheduled Maturity Date" means the July 31, 2002 Distribution Date.
"Financed Vehicle" means a new or used automobile or light duty truck,
together with all accessions thereto, securing an Obligor's indebtedness under
the respective Receivable.
"Fitch" means Fitch Investors Service, L.P., or its successor.
"GAAP" is defined in Section 10.1 of the Sale and Servicing Agreement.
Appendix X, Page 14
66
"Grant" means mortgage, pledge, bargain, sell, warrant, alienate, remise,
release, convey, assign, transfer, create, xxxxx x xxxx upon and a security
interest in and right of set-off against, deposit, set over and confirm pursuant
to the Indenture. A Grant of the Collateral or of any other agreement or
instrument shall include all rights, powers and options (but none of the
obligations) of the Granting party thereunder, including the immediate and
continuing right to claim for, collect, receive and give receipt for principal
and interest payments in respect of the Collateral and all other moneys payable
thereunder, to give and receive notices and other communications, to make
waivers or other agreements, to exercise all rights and options, to bring
proceedings in the name of the Granting party or otherwise and generally to do
and receive anything that the Granting party is or may be entitled to do or
receive thereunder or with respect thereto. Other forms of the verb "to Grant"
shall have correlative meanings.
"Holder" means, as the context may require, a Certificateholder or a
Noteholder or both.
"Indemnified Parties" is defined in Section 8.2 of the Trust Agreement.
"Indenture" means the Indenture dated as of the Closing Date, between
Issuer and Indenture Trustee, as the same may be amended and supplemented from
time to time.
"Indenture Trustee" means Bankers Trust Company, a New York banking
corporation, not in its individual capacity but as indenture trustee under the
Indenture, or any successor Indenture Trustee under the Indenture.
"Independent" means, when used with respect to any specified Person, that
the person (a) is in fact independent of Issuer, any other obligor upon the
Notes, Seller and any Affiliate of any of the foregoing persons, (b) does not
have any direct financial interest or any material indirect financial interest
(other than less than 5% of the outstanding amount of any publicly traded
security) in Issuer, any such other obligor, Seller or any Affiliate of any of
the foregoing Persons and (c) is not connected with Issuer, any such other
obligor, Seller or any Affiliate of any of the foregoing Persons as an officer,
employee, promoter, underwriter, trustee, partner, director or Person performing
similar functions.
"Independent Certificate" means a certificate or opinion to be delivered
to Indenture Trustee under the circumstances described in, and otherwise
complying with, the applicable requirements of Section 11.1 of the Indenture,
made by an Independent appraiser or other expert appointed by an Issuer Order
and approved by Indenture Trustee in the exercise of reasonable care, and such
opinion or certificate shall state that the signer has read the definition of
"Independent" in the Indenture and that the signer is Independent within the
meaning thereof.
Appendix X, Page 15
67
"Initial Principal Balance" means, in respect of a Receivable, the amount
advanced under the Receivable toward the purchase price of the Financed Vehicle
and related costs, including accessories, service and warranty contracts,
insurance premiums, other items customarily financed as part of retail
installment sales contracts and other fees charged by AFG or the applicable
Dealer and included in the amount to be financed, the total of which is shown as
the initial principal balance in the retail installment sale contract evidencing
and securing such Receivable.
"Insolvency Event" means, for a specified Person, (a) the filing of a
decree or order for relief by a court having jurisdiction in the premises in
respect of such Person or any substantial part of its property in an involuntary
case under any applicable Federal or state bankruptcy, insolvency or other
similar law now or hereafter in effect, or appointing a receiver (including any
receiver appointed under the Financial Institutions Reform, Recovery and
Enforcement Act of 1989, as amended), liquidator, assignee, custodian, trustee,
sequestrator or similar official for such Person or for any substantial part of
its property, or ordering the winding-up or liquidation of such Person's
affairs, and such decree or order shall remain unstayed and in effect for a
period of 60 consecutive days; or (b) the commencement by such Person of a
voluntary case under any applicable Federal or state bankruptcy, insolvency or
other similar law now or hereafter in effect, or the consent by such Person to
the entry of an order for relief in an involuntary case under any such law, or
the consent by such Person to the appointment of or taking possession by a
receiver, liquidator, assignee, custodian, trustee, sequestrator or similar
official for such Person or for any substantial part of its property, or the
making by such Person of any general assignment for the benefit of creditors, or
the failure by such Person generally to pay its debts as such debts become due,
or the taking of action by such Person in furtherance of any of the foregoing.
"Insurance Policies" means, all credit life and disability insurance
policies maintained by the Obligors and all Physical Damage Insurance Policies.
"Interest Period" means, with respect to any specified Distribution Date,
the period from and including the Closing Date (in the case of the first
Distribution Date) and thereafter from and including the preceding Distribution
Date to but excluding such specified Distribution Date.
"Interest Rate" means, with respect to the (a) Class A Notes, the Class A
Interest Rate, (b) Class B Notes, the Class B Interest Rate, and (c) Class C
Notes, the Class C Interest Rate.
"Issuer" means AFG Receivables Trust 1997-B.
Appendix X, Page 16
68
"Issuer Order" and "Issuer Request" means a written order or request,
respectively signed in the name of Issuer by any one of its Authorized Officers
and delivered to Indenture Trustee.
"Key Bank USA" means, Key Bank USA, National Association, a national
banking association.
"Lien" means a security interest, lien, charge, pledge, preference,
participation interest or encumbrance of any kind, other than liens for taxes
not yet due and payable, mechanics' or materialmen's liens and other liens for
work, labor or materials, and any other liens that may attach by operation of
law.
"Liquidation Proceeds" means, with respect to any Receivable that has
become a Defaulted Receivable, (a) insurance proceeds received by the Servicer,
with respect to Insurance Policies relating to the Financed Vehicles or the
Obligors, (b) amounts received by the Servicer in connection with such Defaulted
Receivable pursuant to the exercise of rights under the related Motor Vehicle
Loan, and (c) the monies collected by the Servicer (from whatever source,
including, but not limited to, proceeds of a sale of a Financed Vehicle, or
deficiency balance recovered after the charge-off of the related Receivable) on
such Defaulted Receivable, net of any expenses incurred by the Servicer in
connection therewith and any payments required by law to be remitted to the
Obligor.
"Maximum Specified Reserve Balance" means, for any Distribution Date:
(a) 5% of the Original Pool Balance until the balance of the Reserve
Account is $ 5,500,223.98, or
(b) Thereafter, the lesser of (A) $ 5,500,223.98 and (B) the amount by
which (1) 45% of the Pool Balance as of the last day of the
preceding Collection Period exceeds (2) the Overcollateralization
Amount; or
(c) If a Reserve Account Increase Condition is in effect, the greater
of:
(i) The amount calculated pursuant to the foregoing clauses (a)
or (b), whichever is applicable, and
(ii) 15% of the Pool Balance as of the last day of the preceding
Collection Period.
"Minimum Specified Reserve Balance" with respect to any Distribution Date
means the lesser of (i) $ 2,200,089.59 and (ii) the aggregate outstanding
principal balance of the Notes on such Distribution Date (after giving effect to
all payments of principal on the Notes on such Distribution Date).
Appendix X, Page 17
69
"Moody's" means Xxxxx'x Investors Service, Inc., or its successor.
"Motor Vehicle" means a new or used automobile or light duty truck.
"Motor Vehicle Loan" means a retail installment sales contract secured by
a Motor Vehicle originated by AFG or a financial institution.
"Note" means a Class A Note, a Class B Note, or a Class C Note.
"Note Depository Agreement" means the agreement among Issuer, Servicer and
The Depository Trust Company, as the initial Clearing Agency, dated as of the
Closing Date, relating to the Notes, as the same may be amended or supplemented
from time to time.
"Note Distribution Account" means the account designated as such,
established and maintained pursuant to Section 5.1 of the Sale and Servicing
Agreement.
"Noteholder" means the Person in whose name a Note is registered on the
Note Register.
"Note Owner" means, with respect to a Book-Entry Note, the Person who is
the owner of such Book-Entry Note, 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).
"Note Pool Factor" for each class of Notes as of the close of business on
a Distribution Date means a seven-digit decimal figure equal to the outstanding
principal balance of such class of Notes divided by the original outstanding
principal balance of such class of Notes. The Note Pool Factor for each class of
Notes will be 1.0000000 as of the Cutoff Date; thereafter, the Note Pool Factor
for each class of Notes will decline to reflect reductions in the outstanding
principal balance of such class of Notes.
"Noteholders' Distributable Amount" means, with respect to any
Distribution Date, the sum of the Noteholders' Principal Distributable Amount
and the Noteholders' Interest Distributable Amount.
"Noteholders' Interest Distributable Amount" means, for any Distribution
Date, the sum of (a) the Class A Noteholders' Interest Distributable Amount, (b)
the Class B Noteholders' Interest Distributable Amount and (c) the Class C
Noteholders' Interest Distributable Amount, in each case, for such Distribution
Date.
Appendix X, Page 18
70
"Noteholders' Monthly Principal Distributable Amount" means, for any
Distribution Date, the Noteholders' Percentage of the Principal Distribution
Amount.
"Noteholders' Percentage" means, (a) 100% for any Distribution Date to the
extent the outstanding principal balance of the Notes has not been reduced to
90% of the principal balance of the Notes as of the Closing Date and (b) 94% in
all other cases.
"Noteholders' Principal Carryover Shortfall" means, as of the close of any
Distribution Date, the excess of the Noteholders' Monthly Principal
Distributable Amount and any outstanding Noteholders' Principal Carryover
Shortfall from the preceding Distribution Date over the amount in respect of
principal that is actually deposited in the Note Distribution Account.
"Noteholders' Principal Distributable Amount" means, for any Distribution
Date, the sum of (a) the Class A Noteholders' Principal Distributable Amount,
(b) the Class B Noteholders' Principal Distributable Amount and (c) the Class C
Noteholders' Principal Distributable Amount. In addition, on the Final Scheduled
Distribution Date, the principal required to be deposited in the Note
Distribution Account will include the amount necessary (after giving effect to
the other amounts to be deposited in the Note Distribution Account on such
Distribution Date and allocable to principal) to reduce the outstanding amount
of each class of Notes to zero.
"Note Register" and "Note Registrar" are defined in Section 2.4 of the
Indenture.
"Obligor" means, with respect to a Receivable, the borrower or
co-borrowers under the related Receivable and any co-signer of the Receivable or
other Person who owes or may be primarily or secondarily liable for payments
under such Receivable.
"Officer's Certificate" means: (a) for purposes of the Indenture, a
certificate signed by any Authorized Officer of Issuer, under the circumstances
described in, and otherwise complying with, the applicable requirements of
Section 11.1 and TIA Section 314, and delivered to Indenture Trustee; and (b)
otherwise, a certificate signed by the chairman, the president, any vice
president or the treasurer of Seller or Servicer, as the case may be, and
delivered to Indenture Trustee. Unless otherwise specified, any reference in the
Indenture to an Officer's Certificate shall be to an Officer's Certificate of
any Authorized Officer of Issuer.
"Opinion of Counsel" means one or more written opinions of counsel who
may, except as otherwise expressly provided in the Indenture, be employees of or
counsel to Issuer and who shall be satisfactory to Issuer and which opinion or
Appendix X, Page 19
71
opinions shall be addressed to Issuer, Owner Trustee, or Indenture Trustee, as
applicable and shall be in form and substance satisfactory to the Issuer.
"Original Pool Balance" means the Pool Balance as of the Cutoff Date,
which is $ 110,004,479.62.
"Outstanding" means, as of the date of determination, all Notes
theretofore authenticated and delivered under the Indenture except:
(a) Notes theretofore canceled by Note Registrar or delivered to the
Note Registrar for cancellation;
(b) Notes or portions thereof the payment for which money in the
necessary amount has been theretofore deposited with Indenture Trustee or
any Paying Agent in trust for the Holders of such Notes (provided that if
such Notes are to be redeemed, notice of such redemption has been duly
given pursuant to the Indenture or provision therefor, satisfactory to
Indenture Trustee); and
(c) Notes in exchange for or in lieu of other Notes which have been
authenticated and delivered pursuant to the Indenture unless proof
satisfactory to Indenture Trustee is presented that any such Notes are
held by a bona fide purchaser;
provided that in determining whether the Holders of the requisite Outstanding
Amount of the Notes have given any request, demand, authorization, direction,
notice, consent or waiver hereunder or under any Basic Document, Notes owned by
Issuer, any other obligor upon the Notes, Seller or any Affiliate of any of the
foregoing Persons shall be disregarded and deemed not to be Outstanding, except
that, in determining whether Indenture Trustee shall be fully protected in
relying upon any such request, demand, authorization, direction, notice, consent
or waiver, only Notes that a Responsible Officer of Indenture Trustee either
actually knows to be so owned or has received written notice thereof shall be so
disregarded. Notes so owned that have been pledged in good faith may be regarded
as Outstanding if the pledgee establishes to the satisfaction of Indenture
Trustee the pledgee's right so to act with respect to such Notes and that the
pledgee is not Issuer, any other obligor upon the Notes, Seller or any Affiliate
of any of the foregoing Persons.
"Outstanding Amount" means the aggregate principal amount of all Notes, or
class of Notes, as applicable, Outstanding at the date of determination.
"Overcollateralization Amount" means, for any Distribution Date, the
excess of the Pool Balance as of the last day of the Collection Period preceding
such Distribution Date over the outstanding principal balance of the Class A
Notes on
Appendix X, Page 20
72
such Distribution Date (after giving effect to any distributions on such
Distribution Date).
"Owner Trust Estate" means all right, title and interest of Issuer in and
to the property and rights assigned to Issuer pursuant to Article II of the Sale
and Servicing Agreement, all funds on deposit from time to time in the Trust
Accounts and all other property of Issuer from time to time, including any
rights of Owner Trustee and Issuer pursuant to the Sale and Servicing Agreement.
"Owner Trustee" means Chase Manhattan Bank Delaware, a Delaware banking
corporation, not in its individual capacity but solely as owner trustee under
the Trust Agreement, and any successor Owner Trustee thereunder.
"Payaheads" means early payments by or on behalf of Obligors on
Precomputed Receivables which, in accordance with the Servicer's customary
practices, do not constitute scheduled payments or full prepayments and are
applied to principal and interest in a subsequent period.
"Payahead Account" means the account designated as such, established and
maintained pursuant to Section 5.1 of the Sale and Servicing Agreement.
"Paying Agent" means (a) when used in the Indenture or otherwise with
respect to the Notes, Indenture Trustee or any other Person that meets the
eligibility standards for Indenture Trustee specified in Section 6.11 of the
Indenture and is authorized by Issuer to make the payments to and distributions
from the Collection Account and the Note Distribution Account, including payment
of principal of or interest on the Notes on behalf of Issuer; and (b) when used
in the Trust Agreement or otherwise with respect to the Certificates, Indenture
Trustee or any other paying agent or co-paying agent appointed pursuant to
Section 3.9 of the Trust Agreement.
"Person" means a legal person, including any individual, corporation,
estate, partnership, limited liability company, joint venture, association,
joint stock company, trust, unincorporated organization, or government or any
agency or political subdivision thereof, or any other entity of whatever nature.
"Physical Damage Insurance Policy" means a theft and physical damage
insurance policy maintained by the Obligor under a Receivable, providing
coverage against loss or damage to or theft of the related Financed Vehicle.
"Physical Property" is defined in the definition of "Delivery" above.
"Pool Balance" means, at any time, the aggregate Principal Balance of the
Receivables (excluding Purchased Receivables and Defaulted Receivables) at such
time.
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"Precomputed Receivable" means (i) an Actuarial Receivable, (ii) a Rule of
78's Receivable or (iii) a Sum of Periodic Balances Receivable.
"Predecessor Note" means, with respect to any particular Note, every
previous Note evidencing all or a portion of the same debt as that evidenced by
such particular Note; and, for the purpose of this definition, any Note
authenticated and delivered under Section 2.5 of the Indenture in lieu of a
mutilated, lost, destroyed or stolen Note shall be deemed to evidence the same
debt as the mutilated, lost, destroyed or stolen Note.
"Principal Balance" means, as of any time, for any Receivable, the
principal balance of such Receivable under the terms of the Receivable
determined in accordance with the Servicer's customary practices.
"Principal Distribution Amount" means, for any Distribution Date, the sum
of (a) the Available Principal for such Distribution Date, and (b) the aggregate
amount of Realized Losses for the related Collection Period.
"Proceeding" means any suit in equity, action at law or other judicial or
administrative proceeding.
"Purchase Agreement" means the agreement dated as of the Closing Date
between AFG and Seller under which AFG sells Receivables to Seller.
"Purchase Amount" of any Receivable means, with respect to any Deposit
Date and the last day of the related Collection Period, an amount equal to the
sum of (a) the outstanding Principal Balance of such Receivable as of the last
day of such Collection Period and (b) the amount of accrued and unpaid interest
on such Principal Balance at the related Contract Rate from the date a payment
was last made by or on behalf of the Obligor through and including the last day
of such Collection Period, in each case after giving effect to the receipt of
monies collected on such Receivable in such Collection Period.
"Purchased Receivable" means a Receivable purchased as of the close of
business on the last day of a Collection Period by Servicer pursuant to Section
4.7 of the Sale and Servicing Agreement or repurchased by Seller pursuant to
Section 3.3 of the Sale and Servicing Agreement.
"Rating Agencies" means Xxxxx'x, Standard & Poor's and Fitch.
"Rating Agency Condition" means, with respect to any action, that each
Rating Agency shall have been given 10 days' prior notice thereof (or such
shorter period as shall be acceptable to the Rating Agencies) and that none of
the Rating Agencies shall have notified Seller, Servicer, Owner Trustee or
Indenture Trustee in
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writing that such action will, in and of itself, result in a reduction or
withdrawal of the then current rating of any class of Notes.
"Realized Losses" means, for any Collection Period, the aggregate
Principal Balances of any Receivables that became Defaulted Receivables during
such Collection Period.
"Receivable" means each Motor Vehicle Loan described in the Schedule of
Receivables, but excluding (i) Defaulted Receivables to the extent the Principal
Balances thereof have been deposited in the Collection Account and (ii) any
Purchased Receivables.
"Receivable Files" is defined in Section 3.4 of the Sale and Servicing
Agreement.
"Record Date" means, with respect to any Distribution Date or Redemption
Date, the close of business on the day immediately preceding such Distribution
Date or Redemption Date; or, if Definitive Notes or Definitive Certificates have
been issued, the last day of the month preceding such Distribution Date.
"Redemption Date" means in the case of a redemption of the Notes pursuant
to Section 10.1(a) of the Indenture or a payment to Noteholders pursuant to
Section 10.1(b) of the Indenture, the Distribution Date specified by Servicer or
Issuer pursuant to such Section 10.1(a) or (b).
"Redemption Price" means (a) in the case of a redemption of the Notes
pursuant to Section 10.1(a) of the Indenture, an amount equal to the unpaid
principal amount of the then outstanding Notes plus accrued and unpaid interest
thereon to but excluding the Redemption Date, or (b) in the case of a payment
made to Noteholders pursuant to Section 10.1(b) of the Indenture, the amount on
deposit in the Note Distribution Account, but not in excess of the amount
specified in clause (a).
"Required Rating" means a rating with respect to short term deposit
obligations of at least P-1 by Moody's and at least A-1 by Standard & Poor's.
"Reserve Account" means the account designated as such, established and
maintained pursuant to Section 5.8 of the Sale and Servicing Agreement.
"Reserve Account Deposit" means an amount equal to $1,650,067.19 deposited
in the Reserve Account on the Closing Date.
"Reserve Account Increase Condition" shall be in effect for any
Distribution Date as of which (a) the Average Delinquency Ratio exceeds 2.50%
through and including the third consecutive Distribution Date as of which such
ratio does not
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75
exceed and has not exceeded such percentage or (b) the Cumulative Net Loss Ratio
exceeds (i) 5.5% for any such Distribution Date occurring on or before Xxxxx 00,
0000, (xx) 11.00% for any such Distribution Date occurring after March 15, 1998
and on or before September 15, 1998, (iii) 15.00% for any such Distribution Date
occurring after September 15, 1998 and on or before March 15, 1999, (iv) 15.75%
for any such Distribution Date occurring after March 15, 1999 and on or before
September 15, 2000 and (v) 16.00% for any such Distribution Date occurring after
September 15, 2000.
"Reserve Account Property" means the Reserve Account, the Reserve Account
Deposit and all proceeds of the Reserve Account and the Reserve Account Deposit,
including all securities, investments, general intangibles, financial assets and
investment property from time to time credited to and any security entitlement
to the Reserve Account.
"Reserve Account Transfer Amount" means, on any Distribution Date, an
amount equal to the lesser of (a) the amount of cash or other immediately
available funds on deposit in the Reserve Account on such Distribution Date
(exclusive of any investment earnings and before giving effect to any
withdrawals therefrom relating to such Distribution Date) and (b) the amount, if
any, by which (i) the sum of the Servicing Fee for the related Collection Period
and all accrued and unpaid Servicing Fees for prior Collection Periods, the
Noteholders' Interest Distributable Amount and the Noteholders' Principal
Distributable Amount for such Distribution Date exceeds (ii) the sum of the
Available Interest and the Available Principal for such Distribution Date.
"Responsible Officer" means, with respect to Indenture Trustee, any
officer within the Corporate Trust Office of Indenture Trustee, including any
Vice President, Assistant Vice President, Assistant Treasurer, Managing
Director, Assistant Secretary, or any other officer of Indenture Trustee
customarily performing functions similar to those performed by any of the above
designated officers and, with respect to the Owner Trustee, any officer within
the Corporate Trust Office of the Owner Trustee with direct responsibility for
the administration under the Trust Agreement and also, in either case, with
respect to a particular matter, any other officer to whom such matter is
referred because of such officer's knowledge of and familiarity with the
particular subject.
"Rule of 78's Receivable" means a Receivable that provides for the payment
by the Obligor of a specified total amount of payments, payable in equal monthly
installments on each due date, which total represents the principal amount
financed and add-on interest in an amount calculated at the stated Contract Rate
for the term of the Receivable and allocated to each monthly payment based upon
a fraction, the numerator of which is the number of payments scheduled to have
been made prior to the due date for such monthly payment on such Receivable and
the denominator
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of which is the sum of all such numbers of payments to be made until the
maturity of such Receivable.
"Sale and Servicing Agreement" means the Sale and Servicing Agreement
among Issuer, Indenture Trustee, Key Bank USA, as Servicer, and Key Consumer
Acceptance Corporation, as Seller, dated as of the Closing Date, as the same may
be amended and supplemented from time to time.
"Schedule of Receivables" means, with respect to the Motor Vehicle Loans
to be conveyed to Seller by AFG and to Issuer by Seller, the list identifying
such Motor Vehicle Loans delivered to Indenture Trustee at the Closing.
"Secretary of State" means the Secretary of State of the State of
Delaware.
"Securities Intermediary" is defined in Section 5.8 of the Sale and
Servicing Agreement.
"Seller" means Key Consumer Acceptance Corporation, a Delaware
corporation, and any successor pursuant to Section 6.4 of the Sale and Servicing
Agreement.
"Servicer" means Key Bank USA and each Successor Servicer.
"Servicer Termination Event" means an event specified in Section 8.1 of
the Sale and Servicing Agreement.
"Servicer's Report" means a report of Servicer delivered pursuant to
Section 4.9 of the Sale and Servicing Agreement, substantially in the form of
Exhibit C to that agreement.
"Servicing Fee" is defined in Section 4.8 of the Sale and Servicing
Agreement.
"Servicing Fee Rate" means 3.50% per annum.
"Simple Interest Method" means the method of allocating fixed level
payment monthly installments between principal and interest, pursuant to which
such payment is allocated first to accrued and unpaid interest at the Contract
Rate on the unpaid principal balance 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 principal is
determined in accordance with the Simple Interest Method.
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77
"Specified Reserve Account Balance" means, for any Distribution Date, the
greater of (a) the Maximum Specified Reserve Balance and (b) the Minimum
Specified Reserve Balance as of such Distribution Date.
"Standard & Poor's" means Standard & Poor's Ratings Services, a division
of The XxXxxx-Xxxx Companies, Inc., or its successor.
"State" means any one of the 50 states of the United States of America or
the District of Columbia.
"Successor Servicer" is defined in Section 3.7(e) of the Indenture.
"Sum of Periodic Balances Receivable" means a Receivable that provides for
the payment by the Obligor of a specified total amount of payments, payable in
equal monthly installments on each due date, which total represents the
principal amount financed and add-on interest in an amount calculated at the
stated Contract Rate for the term of the Receivable and allocated to each
monthly payment based upon a fraction, the numerator of which is the principal
balance of such Receivable immediately prior to the due date for such monthly
payment and the denominator of which is the sum of all principal balances for
each monthly payment to be made until the maturity of such Receivable.
"Supplemental Servicing Fee" is defined in Section 4.8 of the Sale and
Servicing Agreement.
"Total Distribution Amount" means, for each Distribution Date, the sum of
(a) the Available Interest, (b) the Available Principal and (c) the Reserve
Account Transfer Amount, in each case in respect of such Distribution Date.
"Treasury Regulations" means regulations, including proposed or temporary
regulations, promulgated under the Code.
"Trust Account Property" means the Trust Accounts, all amounts and
investments held from time to time in any Trust Account (whether in the form of
deposit accounts, Physical Property, book-entry securities, uncertificated
securities or otherwise), and all proceeds of the foregoing.
"Trust Accounts" is defined in Section 5.1 of the Sale and Servicing
Agreement.
"Trust Agreement" means the Trust Agreement dated as of the Closing Date,
between Seller and Owner Trustee, as the same may be amended and supplemented
from time to time.
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"Trust Estate" means all money, instruments, rights and other property
that are subject or intended to be subject to the lien and security interest of
the Indenture for the benefit of the Noteholders (including all property and
interests Granted to Indenture Trustee), including all proceeds thereof.
"Trust Indenture Act" or "TIA" means the Trust Indenture Act of 1939 as in
force on the date hereof, unless otherwise specifically provided.
"Trust Property" shall have the meaning set forth in Section 2.1 of the
Sale and Servicing Agreement.
"UCC" means the Uniform Commercial Code, as in effect in the relevant
jurisdiction.
"USAP" is defined in Section 4.11 of the Sale and Servicing Agreement.
Appendix X, Page 27
