UAC SECURITIZATION CORPORATION
Seller
UNION ACCEPTANCE CORPORATION
Servicer
and
--------------------------------,
Owner Trustee
TRUST AND SERVICING AGREEMENT,
Dated as of __________, ____
UACSC ____-__ Owner Trust
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TABLE OF CONTENTS
Page
ARTICLE I Creation of Trust........................................1
SECTION 1.01. Name....................................................1
SECTION 1.02. Office..................................................1
SECTION 1.03. Purposes and Powers....................................1
SECTION 1.04. Appointment of Owner Trustee............................2
SECTION 1.05. Initial Capital Contribution of Trust Estate............2
SECTION 1.06. Declaration of Trust....................................2
SECTION 1.07. Title to Trust Property.................................2
SECTION 1.08. Situs of Trust..........................................3
ARTICLE II Definitions..............................................3
SECTION 2.01. Definitions............................................3
SECTION 2.02. Usage of Terms........................................14
SECTION 2.03. Cutoff Date and Record Date...........................14
SECTION 2.04. Section References....................................14
ARTICLE III Conveyance of Receivables...............................14
ARTICLE IV Acceptance by Trustee...................................15
ARTICLE V Information Delivered to the Rating Agencies............15
ARTICLE VI Agent for Service.......................................16
ARTICLE VII The Receivables.........................................17
SECTION 7.01. Representations and Warranties of Seller..............17
SECTION 7.02. Repurchase Upon Breach................................17
SECTION 7.03. Custody of Receivable Files...........................18
SECTION 7.04. Duties of Servicer as Custodian.......................18
SECTION 7.05. Instructions; Authority to Act........................19
SECTION 7.06. Custodian's Indemnification...........................19
SECTION 7.07. Effective Period and Termination......................19
ARTICLE VIII Administration and Servicing of Receivables.............20
SECTION 8.01. Duties of Servicer....................................20
SECTION 8.02. Collection of Receivable Payments.....................20
SECTION 8.03. Realization Upon Receivables..........................21
SECTION 8.04. Physical Damage Insurance.............................21
SECTION 8.05. Maintenance of Security Interests
in Financed Vehicles............................22
SECTION 8.06. Covenants of Servicer.................................22
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SECTION 8.07. Purchase of Receivables Upon Breach...................22
SECTION 8.08. Servicing Fee.........................................22
SECTION 8.09. Servicer's Certificate................................23
SECTION 8.10. Annual Statement as to Compliance;
Notice of Default...............................23
SECTION 8.11. Annual Independent Certified Public
Accountant's Report.............................24
SECTION 8.12. Access to Certain Documentation and Information
Regarding Receivables...........................24
SECTION 8.13. Servicer Expenses.....................................24
SECTION 8.14. Reports to Noteholders................................25
ARTICLE IX Collections; Distributions to Noteholders and
Certificateholders..............................25
SECTION 9.01. Collection Account....................................25
SECTION 9.02. Collections...........................................25
SECTION 9.03. Purchase Amounts......................................26
SECTION 9.04. Application of Funds..................................26
SECTION 9.05. Advances..............................................27
SECTION 9.06. Net Deposits..........................................28
SECTION 9.07. No Segregation of Moneys; No Interest.................28
SECTION 9.08. Accounting and Reports to the Noteholders,
Certificateholders, the
Internal Revenue Service and Others......28
SECTION 9.09. Payahead Account. ...................................28
ARTICLE X Intentionally Blank.....................................29
ARTICLE XI The Certificates........................................29
SECTION 11.01. The Certificates.....................................29
SECTION 11.02. Authentication of Certificates.......................29
SECTION 11.03. Registration of Transfer and Exchange
of Certificates.................................30
SECTION 11.04. Mutilated, Destroyed, Lost, or Stolen Certificates...30
SECTION 11.05. Agreement Regarding Tax Matters......................31
SECTION 11.06. Signature on Returns; Tax Matters Partner............31
ARTICLE XII The Seller..............................................31
SECTION 12.01. Representations and Undertakings of Seller...........31
SECTION 12.02. Liability of Seller; Indemnities.....................33
SECTION 12.03. Merger or Consolidation of, or Assumption of
the Obligations of Seller.......................34
SECTION 12.04. Limitation on Liability of Seller and Others.........34
ARTICLE XIII The Servicer............................................35
SECTION 13.01. Representations of Servicer..........................35
SECTION 13.02. Indemnities of Servicer..............................36
SECTION 13.03. Merger or Consolidation of, or Assumption of
the Obligations of Servicer.....................37
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SECTION 13.04. Limitation on Liability of Servicer and Others.......38
SECTION 13.05. Servicer Not to Resign...............................38
SECTION 13.06. Delegation of Duties.................................38
ARTICLE XIV Servicer Default........................................39
SECTION 14.01. Events of Servicer Default...........................39
SECTION 14.02. Appointment of Successor.............................40
SECTION 14.03. Notice of Events of Servicer Default.................41
SECTION 14.04. Waiver of Past Defaults..............................41
ARTICLE XV The Owner Trustee.......................................41
SECTION 15.01. Duties of Owner Trustee..............................41
SECTION 15.02. Owner Trustee's Certificate..........................43
SECTION 15.03. Owner Trustee's Assignment of Purchased Receivables..44
SECTION 15.04. Certain Matters Affecting the Owner Trustee..........44
SECTION 15.05. Owner Trustee Not Liable for Certificates
or Receivables..................................45
SECTION 15.06. Owner Trustee May Own Notes..........................46
SECTION 15.07. Owner Trustee's and Indenture Trustee's
Fees and Expenses...............................46
SECTION 15.08. Eligibility Requirements for Owner Trustee...........47
SECTION 15.09. Resignation or Removal of Owner Trustee..............47
SECTION 15.10. Successor Owner Trustee..............................48
SECTION 15.11. Merger or Consolidation of Owner Trustee.............48
SECTION 15.12. Appointment of Co-Trustee or Separate Owner Trustee..48
SECTION 15.13. Representations and Warranties of Owner Trustee......50
ARTICLE XVI Termination.............................................50
SECTION 16.01. Termination of the Trust.............................50
SECTION 16.02. Optional Disposition of All Receivables..............51
ARTICLE XVII Miscellaneous Provisions................................51
SECTION 17.01. Amendment............................................51
SECTION 17.02. Protection of Title to Trust.........................52
SECTION 17.03. Limitation on Rights of Certificateholders...........54
SECTION 17.04. Governing Law........................................55
SECTION 17.05. Notices..............................................55
SECTION 17.06. Severability of Provisions...........................55
SECTION 17.07. Assignment...........................................55
SECTION 17.08. Certificates Nonassessable and Fully Paid............55
SECTION 17.09. Nonpetition Covenant.................................55
SECTION 17.10. Counterparts.........................................56
SECTION 17.11. Third Party Beneficiary. ...........................56
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EXHIBIT 1 - Owner Trustee's Certificate Pursuant to Section 15.02
EXHIBIT 2 - Owner Trustee's Certificate Pursuant to Section 15.02
EXHIBIT 3 - Servicer's Certificate
EXHIBIT A - Form of Certificate of Trust
EXHIBIT B - Form of Certificate
SCHEDULE A - Schedule of Receivables
SCHEDULE B - Location of Receivables
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This TRUST AND SERVICING AGREEMENT, dated as of _________, ____, is
made with respect to the formation of the UACSC ____-__ Owner Trust, among UAC
SECURITIZATION CORPORATION, a Delaware corporation, as depositor (the "Seller"),
UNION ACCEPTANCE CORPORATION, an Indiana corporation, as servicer (the
"Servicer"), and __________________, a Delaware banking corporation, as owner
trustee (the "Owner Trustee").
WITNESSETH THAT: In consideration of the premises and of the mutual
agreements herein contained, the parties hereto agree as follows:
ARTICLE I
Creation of Trust
Upon the execution of this Agreement by the parties hereto and the
prompt filing thereafter of the Certificate of Trust in the State of Delaware,
there is hereby created the UACSC ____-__ Owner Trust.
SECTION 1.01. Name. The Trust created hereby shall be known as "UACSC
____-__ Owner Trust", in which name the Owner Trustee may conduct the business
of the Trust, make and execute contracts and other instruments on behalf of the
Trust and xxx and be sued. The Trust shall constitute a business trust within
the meaning of Section 3801(a) of the Delaware Business Trust Act for which the
Owner Trustee has filed a certificate of trust with the Secretary of State of
the State of Delaware pursuant to Section 3810(a) of the Delaware Business Trust
Act.
SECTION 1.02. Office. The office of the Trust shall be in care of the
Owner Trustee at its Corporate Trust Office or at such other address as the
Owner Trustee may designate by written notice to the Certificateholders, the
Servicer, the Seller, the Insurer and the Indenture Trustee.
SECTION 1.03. Purposes and Powers. The purpose of the Trust is to
engage in the following activities:
(i) to issue the Notes pursuant to the Indenture and the
Certificates pursuant to this Agreement and to sell or transfer the
Notes and the Certificates in one or more transactions;
(ii) with the proceeds of the sale of the Notes and the
Certificates, to fund the Spread Account pursuant to Section 10.02 of
the Indenture and to purchase the Receivables pursuant to this
Agreement;
(iii) to assign, grant, transfer, pledge, mortgage and
convey the Trust estate pursuant to the Indenture and to hold, manage
and distribute to the Certificateholders pursuant to the terms of this
Agreement any portion of the Trust estate released from the Lien of,
and remitted to the Trust pursuant to, the Indenture;
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(iv) to enter into and perform its obligations under the
related documents to which it is to be a party;
(v) to engage in those activities, including entering into
agreements, that are necessary, suitable or convenient to accomplish
the foregoing or are incidental thereto or connected therewith; and
(vi) subject to compliance with the related documents, to
engage in such other activities as may be required in connection with
conservation of the Trust estate and the making of distributions to the
Certificateholders, the Noteholders and the others specified in this
Agreement.
The Trust is hereby authorized to engage in the foregoing activities.
The Trust shall not engage in any activity other than in connection
with the foregoing or other than as required or authorized by the terms
of this Agreement or the other related documents.
SECTION 1.04. Appointment of Owner Trustee. The Seller hereby appoints
the Owner Trustee as trustee of the Trust effective as of the date hereof, to
have all the rights, powers and duties set forth herein.
SECTION 1.05. Initial Capital Contribution of Trust Estate. The Seller
hereby sells, assigns, transfers, conveys and sets over to the Owner Trustee, as
of the date hereof, the Trust estate. The Owner Trustee hereby acknowledges
receipt in trust from the Seller, as of the date hereof, of the foregoing
contribution, which shall constitute the initial Trust estate. The Seller shall
pay the organizational expenses of the Trust as they may arise or shall, upon
the request of the Owner Trustee, promptly reimburse the Owner Trustee for any
such expenses paid by the Owner Trustee.
SECTION 1.06. Declaration of Trust. The Owner Trustee hereby declares
that it will hold the Trust estate in trust upon and subject to the conditions
set forth herein for the use and benefit of the Certificateholders, subject to
the obligations of the Trust under the other related documents. It is the
intention of the parties hereto that the Trust constitute a business trust under
Delaware law and that this Agreement constitute the governing instrument of such
trust. It is the intention of the parties hereto that the Trust will be
disregarded and that the Certificateholders will be treated as the owner of the
Trust estate, and that the Notes will be treated as indebtedness of the
Certificateholders for all federal and state income and franchise tax purposes.
The Owner Trustee and the Certificateholders, by acceptance of the Certificates,
agree to treat the Notes for purposes of federal, state and local income or
franchise taxes as indebtedness.
SECTION 1.07. Title to Trust Property. Legal title to all of the Trust
estate shall be vested at all times in the Trust as a separate legal entity
except where applicable law in any jurisdiction requires title to any part of
the Trust estate to be vested in a trustee or trustees, in which case title
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shall be deemed to be vested in the Owner Trustee, a co-trustee and/or a
separate trustee, as the case may be.
SECTION 1.08. Situs of Trust. The Trust will be located and
administered in the State of Delaware. Any bank accounts maintained by the Owner
Trustee on behalf of the Trust shall be located in the State of Delaware. The
Trust shall not have any employees in any state other than Delaware; provided,
however, that nothing herein shall restrict or prohibit the Owner Trustee from
having employees within or without the State of Delaware. Payments, if any, will
be received by the Trust only in Delaware, and payments, if any, will be made by
the Trust only from Delaware. The only office of the Trust will be at the
Corporate Trust Office in Delaware.
ARTICLE II
Definitions
SECTION 2.01. Definitions. Whenever used in this Agreement, the
following words and phrases, unless the context otherwise requires, shall have
the following meanings:
"Accrued Interest" means all interest accrued on the Receivables prior
to the opening of business on the day following the Cutoff Date.
"Administration Agreement" means the Administration Agreement dated as
of __________, _____ among the Trust, the Owner Trustee and UAC as
administrator.
"Administrator" means the Administrator under the Administration
Agreement, which is initially UAC, and its successors and assigns thereunder.
"Advance" means, with respect to a Receivable and with respect to a
Collection Period, the amount that the Servicer is required to advance pursuant
to Section 9.05.
"Agreement" means this Trust and Servicing Agreement executed by the
Seller, the Servicer and the Owner Trustee, and all amendments and supplements
thereto.
"Amount Financed" means, with respect to a Receivable, the amount
advanced under the Receivable toward the purchase price of the Financed Vehicle
and any related costs.
"Approved Rating" means a rating of P-1 by Moody's or A-l+ by Standard
& Poor's.
"Authorized Newspaper" means a newspaper of general circulation in the
Borough of Manhattan, the City of New York, printed in the English language and
customarily published on each Business Day, whether or not published on
Saturdays, Sundays and holidays.
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"Available Spread Amount" means, on any Payment Date, the amount on
deposit in the Spread Account, including any income or gain from any investment
of funds in the Spread Account, net of any losses from such investment before
giving effect to deposits into or withdrawals from the Spread Account pursuant
to Article IX of the Indenture.
"Available Funds" means the amount defined as such in Section
9.04(a)(i).
"Business Day" means, unless otherwise specified, any day other than a
Saturday, a Sunday or a day on which banking institutions in Wilmington,
Delaware, Chicago, Illinois or New York, New York (or, if the Servicer has
provided prior written notice to each of the Owner Trustee and the Insurer that
such day is not a Business Day, in Little Rock, Arkansas or Indianapolis,
Indiana) shall be authorized or obligated by law, executive order, or
governmental decree to be closed.
"Certificate" means a certificate executed on behalf of the Trust and
authenticated by the Owner Trustee substantially in the form attached hereto as
Exhibit B, which represents ownership of a 100% interest in the Trust.
"Certificate of Trust" means the Certificate of Trust of the Trust in
substantially the form of Exhibit A hereto.
"Certificate Register" means the register maintained by the Owner
Trustee pursuant to Section 11.03.
"Certificateholder" or "Holder" means the Person in whose name the
Certificate shall be registered in the Certificate Register.
"Closing Date" means _________________.
"Collection Account" means the account designated as such, established
and maintained pursuant to Section 9.01.
"Collected Interest" on a Receivable, as of the last day of a
Collection Period, means the portion of all payments received by the Servicer
allocable to interest relating to such Collection Period.
"Collected Principal" on a Receivable, as of the last day of a
Collection Period, means the portion of all payments received by the Servicer
allocable to principal relating to such Collection Period.
"Collection Period" means (i) initially, the period from the day after
the Cutoff Date to the end of the calendar month of ________, ____, and (ii)
thereafter, each calendar month, until the Trust shall terminate pursuant to
Article XVI.
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"Consolidated Net Income" means, for any period, the consolidated net
income of UAC and its subsidiaries determined in accordance with GAAP and, with
respect to Consolidated Net Income for any fiscal year, as reported in UAC's
audited consolidated financial statements.
"Consolidated Tangible Net Worth" means the excess, if any, of the
consolidated assets of UAC and its subsidiaries over the consolidated
liabilities of UAC and its subsidiaries less any goodwill, trade names,
trademarks, patents, unamortized debt discount and expense, and other
intangibles, except that dealer premium rebates and excess servicing shall not
be so deducted, determined in accordance with GAAP.
"Contract Rate" means, with respect to a Receivable, the contract rate
of interest on such Receivable, exclusive of prepaid finance charges.
"Corporate Trust Office" means the office of the Owner Trustee at which
its corporate trust business shall, at any particular time, be administered,
which office at the date of the execution of this Agreement is located at
___________________________________________________________; Attention:
__________________________; Telecopy ______________ or at such other address as
the Owner Trustee may designate from time to time by notice to the
Certificateholders, the Seller, the Servicer and the Indenture Trustee.
"Cutoff Date" means __________, ____.
"Dealer" means the seller of a Financed Vehicle, who originated and
assigned the related Receivable to UAC, UAC Finance Corporation, PAC or the
Predecessor under an existing agreement with UAC, UAC Finance Corporation, PAC
or the Predecessor or who arranged for a loan from UAC, PAC or the Predecessor
to the purchaser of a Financed Vehicle under an existing agreement with UAC, PAC
or the Predecessor.
"Defaulted Receivable" means, for any Collection Period, a Receivable
as to which any of the following has occurred: (i) any payment, or part thereof,
in excess of $10.00 was delinquent 120 days or more as of the last day of such
Collection Period, (ii) the Financed Vehicle that secures the Receivable has
been repossessed, or (iii) the Servicer has determined that the Receivable is
uncollectible in accordance with the Servicer's customary practices on or before
the last day of such Collection Period; provided, however, that "Defaulted
Receivable" shall not include any Receivable that is to be repurchased pursuant
to Section 7.02 or purchased pursuant to Section 8.07; provided further, that
any Advances made with respect to a Receivable shall not be considered in the
determination of the delinquency status of such Receivable.
"Determination Date" means, for each Collection Period, the second
Business Day prior to the related Payment Date.
"Dissolution Payment Date" means the Payment Date following the
liquidation of the trust corpus pursuant to Section 16.02.
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"Eligible Bank" means any depository institution with trust powers
(including the Owner Trustee and the Indenture Trustee), organized under the
laws of the United States or any State having a net worth in excess of
$50,000,000, the deposits of which are insured to the full extent permitted by
law by the Federal Deposit Insurance Corporation, which is subject to
supervision and examination by Federal or State authorities and which (i) has a
long-term unsecured debt rating of at least Baa3 from Moody's or (ii) is
approved by each Rating Agency.
"Eligible Investment" means any of the following:
(i) direct obligations of, and obligations the full and
timely payment of principal and interest on which is fully guaranteed
by, the United States of America, the Federal National Mortgage
Association, or any agency or instrumentality of the United States of
America the obligations of which are backed by the full faith and
credit of the United States of America;
(ii) (A) demand and time deposits in, certificates of deposits of,
bankers' acceptances issued by, or federal funds sold by any depository
institution or trust company (including the Owner Trustee, the
Indenture Trustee or any of their agents, acting in their respective
commercial capacities) incorporated under the laws of the United States
of America, any State thereof or the District of Columbia or any
foreign depository institution with a branch or agency licensed under
the laws of the United States of America or any State, in each case
subject to supervision and examination by Federal and/or State banking
authorities and having an Approved Rating at the time of such
investment or contractual commitment providing for such investment or
(B) any other demand or time deposit or certificate of deposit which is
fully insured by the Federal Deposit Insurance Corporation;
(iii) repurchase obligations with respect to (A) any security
described in clause (i) above or (B) any other security issued or
guaranteed by an agency or instrumentality of the United States of
America, in either case entered into with a depository institution or
trust company (acting as principal) described in clause (ii) (A) above;
(iv) short-term securities bearing interest or sold at a
discount issued by any corporation incorporated under the laws of the
United States of America or any State the short-term unsecured
obligations of which have an Approved Rating, or higher, at the time of
such investment; provided, however, that securities issued by any
particular corporation will not be Eligible Investments to the extent
that investment therein will cause the then outstanding principal
amount of securities issued by such corporation and held as part of the
corpus of the Trust to exceed 10% of amounts held in the Collection
Account;
(v) commercial paper having an Approved Rating at the time of
such investment;
(vi) a guaranteed investment contract issued by any insurance
company or other corporation acceptable to the Rating Agency, provided
that the Owner Trustee or the
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Indenture Trustee shall have received written notice from the Rating
Agency to the effect that the investment of funds in such a contract
will not result in the reduction or withdrawal of any rating on the
Notes;
(vii) interests in any money market fund having a rating of
Aaa by Moody's or AAAm by Standard & Poor's; and
(viii) any other investment approved in advance in writing by
the Rating Agencies and the Insurer.
"Event of Servicer Default" means an event specified in Section 14.01.
"Financed Vehicle" means a new or used automobile, light truck or van,
together with all accessions thereto, securing an Obligor's indebtedness under
the respective Receivable.
"GAAP" means generally accepted accounting principles set forth in the
opinions and pronouncements of the Accounting Principles Board of the American
Institute of Certified Public Accountants and statements and pronouncements of
the Financial Accounting Standards Board, or in such other statements that are
described in Statement on Auditing Standards No. 69 "The Meaning of Present
Fairly in Conformity With Generally Accepted Accounting Principles in the
Independent Auditor's Report" that are applicable to the circumstances as of the
date of determination, applied on a consistent basis.
"Holder" -- see "Certificateholder."
"Indenture" means the Indenture dated as of __________________ among
the Owner Trustee as issuer (on behalf of the Trust) and ____________________ as
Indenture Trustee, which provides for the issuance of the Notes.
"Indenture Trustee" means _____________________ in its role as
Indenture Trustee under the Indenture and its permitted successors and assigns.
"Indenture Trustee Office" means the office of the Indenture Trustee at
which its business as Indenture Trustee under the Indenture shall be
administered, which office is presently located at
______________________________________; telecopy _______________ or at such
other address as the Indenture Trustee may designate from time to time by notice
to the Owner Trustee, the Servicer and the Noteholders.
"Insolvency Event" with respect to a party means (i) the entry of a
decree or order by a court or agency or supervisory authority having
jurisdiction in the premises for the appointment of a trustee-in-bankruptcy or
similar official for such party in any insolvency, readjustment of debt,
marshalling of assets and liabilities, or similar proceedings, or for the
winding up or liquidation of their respective affairs, and the continuance of
any such decree or order unstayed and in effect for a
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period of 60 consecutive days; or (ii) the consent by such party to the
appointment of a trustee-in- bankruptcy or similar official in any insolvency,
readjustment of debt, marshalling of assets and liabilities, or similar
proceedings of or relating to such party or of or relating to substantially all
of its property; or (iii) such party shall admit in writing its inability to pay
its debts generally as they become due, file a petition to take advantage of any
applicable insolvency or reorganization statute, make an assignment for the
benefit of its creditors, or voluntarily suspend payment of its obligations.
"Insolvency Proceeding" means the commencement, after the date hereof,
of any bankruptcy, insolvency, readjustment of debt, reorganization, marshaling
of assets and liabilities or similar proceedings by or against UAC, UAFC or the
Seller, the commencement, after the date hereof, of any proceedings by or
against UAC, UAFC or the Seller for the winding up or liquidation of its affairs
or the consent, after the date hereof, to the appointment of a trustee,
conservator, receiver, or liquidator in any bankruptcy, insolvency, readjustment
of debt, reorganization, marshaling of assets and liabilities or similar
proceedings of or relating to UAC, UAFC or the Seller.
"Insurance Agreement" means the Insurance and Reimbursement Agreement,
dated as of the Closing Date, among the Trust, the Seller, UAC individually and
as Servicer, UAFC and the Insurer pursuant to which the Insurer issued the
Policy.
"Insurer" means __________________________, a ________ domiciled
insurance company.
"Interest Advance Amount" with respect to a simple interest Receivable
as to which an Advance is required to be made on the last day of a Collection
Period, shall mean an amount equal to 30 days of interest upon the Principal
Balance of such Receivable as of such date; and, with respect to a Precomputed
Receivable as to which an Advance is required to be made on the last day of a
Collection Period, shall mean an amount equal to that portion of the earliest
delinquent Scheduled Payment allocable to interest (using the actuarial or
constant yield method).
"Interest Shortfall" means, as to any simple interest Receivable as of
the last day of any Collection Period, the amount, if any, by which (a) interest
due on such Receivable exceeds (b) the Collected Interest on such Receivable.
"Interest Shortfall" with respect to a Precomputed Receivable as of the last day
of any Collection Period means the amount, if any, by which the portion of the
Scheduled Payment due during such Collection Period allocable to interest (using
the actuarial or constant yield method) exceeds the Collected Interest on such
Receivable (computed using the same method except that the amount of Collected
Interest in respect of Precomputed Receivables shall be increased by giving
effect to the withdrawal for the related Payment Date of any previously received
Scheduled Payments in respect of such Receivable from the Payahead Account in
accordance with Sections 8.02(b) and 9.09 hereof).
"Lien" means a security interest, lien, charge, pledge, equity, or
encumbrance of any kind other than tax liens, mechanics' liens, and any liens
which attach to the respective Receivable or related Financed Vehicle by
operation of law.
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"Liquidation Proceeds" means the monies collected from whatever source,
including insurance proceeds, on Defaulted Receivables, net of the sum of any
amounts expended by the Servicer for the account of the Obligor plus any amounts
required by law to be remitted to the Obligor. "Liquidation Proceeds" with
respect to a Payment Date means such monies collected during the preceding
Collection Period. In no event shall Liquidation Proceeds be less than zero.
"Monthly Interest" means the amount of interest which is payable to the
Noteholders on any Payment Date pursuant to the terms of the Indenture.
"Monthly Principal" means the amount of principal which is payable to
the Noteholders on any Payment Date pursuant to the terms of the Indenture.
"Monthly Servicing Fee" means, (i) for the first Payment Date, the
product of the following: the (a) monthly Servicing Rate (b) the number of days
remaining in the month of the Closing Date from and including the Closing Date,
assuming a 30-day month, divided by 30 and (c) the Original Pool Balance and
(ii) for any subsequent Payment Date, the product of (a) the Pool Balance as of
the beginning of the related Collection Period and (b) the monthly Servicing
Rate.
"Moody's" means Xxxxx'x Investors Service, Inc.
"Notes" mean the Notes issued by the Trust pursuant to the Indenture.
"Noteholders" mean the holders of the Notes issued pursuant to the
Indenture.
"Obligor" on a Receivable means the purchaser or the co-purchasers of
the Financed Vehicle or any other Person who owes payments under the Receivable.
The phrase "payment made on behalf of an Obligor" shall mean all payments made
with respect to a Receivable except payments made by UAC, the Seller or the
Servicer.
"Officers' Certificate" means a certificate signed by any two of the
chairman of the board, the president, any vice chairman of the board, any vice
president, the treasurer, or the controller of UAC, the Seller or the Servicer,
as the case may be; provided that no individual shall sign in a dual capacity.
"Opinion of Counsel" means a written opinion of counsel, who may be
counsel to the Seller and/or Servicer, which counsel shall be acceptable to the
Owner Trustee.
"Optional Disposition Price" means the amount specified as such in
Section 16.02.
"Original Pool Balance" means $______________.
"Outstanding Advances" as of any date, with respect to a Receivable,
means the total amount of Advances made on such Receivable for which the
Servicer has not been reimbursed.
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"Owner Trustee" means ________________________, a banking corporation
organized under the laws of the State of Delaware and its successors or any
corporation resulting from or surviving any merger or consolidation to which it
or its successors may be a party or any successor trustee at the time serving as
successor trustee hereunder.
"Owner Trustee's Certificate" means a certificate completed and
executed by the Owner Trustee by a Responsible Officer pursuant to Section
15.02, substantially in the form of, in the case of an assignment to UAC,
Exhibit 1, and in the case of an assignment to the Servicer, Exhibit 2.
"PAC" means Performance Acceptance Corporation, a subsidiary of UAC
which was merged into UAC, and/or UAC doing business as Performance Acceptance
Corporation.
"Payahead" on a Precomputed Receivable means the amount, as of the
close of business on the last day of a Collection Period, computed in accordance
with Section 8.02(b) with respect to such Receivable.
"Payahead Account" means the account designated as such, established
and maintained pursuant to Section 9.09.
"Payahead Balance" on a Precomputed Receivable means the sum, as of the
close of business on the last day of a Collection Period, of all Payaheads made
by or on behalf of the Obligor with respect to such Precomputed Receivable, as
reduced by applications of previous Payaheads with respect to such Precomputed
Receivable, pursuant to Sections 8.02(b) and 9.09.
"Payment Date" means, for each Collection Period, the eighth calendar
day of the month or, if such day is not a Business Day, the first Business Day
thereafter. The first Payment Date shall be ----------, ----.
"Person" means any individual, corporation, estate, partnership, joint
venture, association, joint stock company, trust, unincorporated organization,
or government or any agency or political subdivision thereof.
"Policy" means the irrevocable Financial Guaranty Insurance Policy
dated as of the Closing Date issued by the Insurer to the Indenture Trustee for
the benefit of the Noteholders as required under the Indenture.
"Pool Balance" as of any date means the aggregate Principal Balance of
the Receivables as of such date; provided, however, that for purposes of
determining Monthly Principal, the Principal Balance of a Defaulted Receivable
or a Purchased Receivable (if actually purchased by the Servicer or repurchased
by UAC) shall be deemed to be zero on and after the close of business on the
last day of the Collection Period in which the Receivable becomes a Defaulted
Receivable or a Purchased Receivable that is actually purchased or repurchased.
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"Precomputed Receivable" means any Receivable under which the portion
of a payment allocable to earned interest (which may be referred to in the
related contract as an add-on finance charge) and the portion allocable to the
Amount Financed is determined according to the sum of periodic balances, the sum
of monthly balances, the rule of 78's or any equivalent method.
"Predecessor" means Union Federal Savings Bank of Indianapolis, a
federally chartered stock savings bank.
"Prepayment Charges," as used in the Agreement, shall be interpreted to
include, without limitation, in the case of a Precomputed Receivable that is
prepaid in full, the difference between the Principal Balance of such Receivable
(plus accrued interest to the date of prepayment) and the Principal Balance of
such Receivable computed in accordance with the method provided for in the
contract governing such Receivable, such as the rule of 78's.
"Principal Balance" of a simple interest Receivable, as of the close of
business on the last day of a Collection Period, means the Amount Financed minus
that portion of all payments received on or before the close of business on such
last day allocable to principal of such Receivable. "Principal Balance" with
respect to a Precomputed Receivable, as of the close of business on the Cutoff
Date, means the gross principal balance of such Receivable on the records of the
Servicer, net of unearned or accrued interest reflected therein, and as of the
close of business on the last day of a Collection Period, means the Principal
Balance as of the Cutoff Date minus that portion of all Scheduled Payments
received with respect to such Receivable in respect of such Collection Period
and all prior Collection Periods allocable to principal of such Receivable using
the actuarial or constant yield method.
"Purchase Agreement" means the Purchase Agreement dated as of the date
hereof by and between the Seller, UAC and UAFC, as amended, supplemented or
modified from time to time pursuant to which the Seller purchases Receivables
which have been or shall be transferred to the Trust.
"Purchase Amount" of any Receivable, as of the close of business on the
last day of any Collection Period, means the amount equal to the sum of the
Principal Balance of such Receivable plus any unpaid interest accrued and due
during or prior to such Collection Period on such Receivable.
"Purchased Receivable" means a Receivable purchased by the Servicer
pursuant to Section 8.07 or repurchased by UAC pursuant to Section 7.02 not
later than the respective dates required thereby.
"Rating Agency" means each of Moody's and Standard & Poor's and their
successors and assigns.
"Rating Agency Condition" has the meaning specified in the Indenture.
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"Receivable" means any simple interest or pre-computed (add-on)
interest installment sales contract or installment loan and security agreement
which shall appear on Schedule A to the Agreement.
"Receivable Files" means the documents specified in Section 7.03.
"Receivables" or "Receivables Pool" means those Receivables conveyed to
the Trust by the Seller listed as of the Cutoff Date in Schedule A.
"Record Date" has the meaning specified in the Indenture.
"Recoveries of Advances" means, for any Collection Period, all payments
received by the Servicer by or on behalf of Obligors (other than Obligors with
respect to Defaulted Receivables and excluding reimbursements of Outstanding
Advances on Defaulted Receivables pursuant to Sections 9.04(a)(i) and 9.05)
during such Collection Period representing recoveries of Interest Shortfalls for
which Advances were made for prior Collection Periods.
"Responsible Officer" means, when used with respect to the Owner
Trustee, any officer within the Corporate Trust Office (or any successor group
of the Owner Trustee) including any managing director, vice president, assistant
vice president, assistant treasurer, assistant secretary or any other officer of
the Owner Trustee customarily performing functions similar to those performed by
the persons who at the time shall be such officers, respectively, or to whom any
corporate trust matter is referred because of his knowledge of and familiarity
with the particular subject.
"Scheduled Payment" on a Receivable means that portion of the payment
required to be made by the Obligor during the respective Collection Period
sufficient to amortize the Principal Balance and to provide interest at the
Contract Rate.
"Secured Parties" means each of the Indenture Trustee, the Noteholders
and the Insurer pursuant to the Indenture.
"Seller" means UAC Securitization Corporation, a Delaware corporation,
in its capacity as the seller of the Receivables under this Agreement, and each
successor to UAC Securitization Corporation (in the same capacity) pursuant to
Section 12.03.
"Servicer" means Union Acceptance Corporation, an Indiana corporation,
in its capacity as the servicer of the Receivables and each successor to Union
Acceptance Corporation (in the same capacity) pursuant to Section 13.03 or
14.02.
"Servicer's Certificate" means a certificate completed and executed by
an officer of the Servicer pursuant to Section 8.09.
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"Servicing Rate" means 1.00% per annum, payable monthly at one-twelfth
of the annual rate, subject to adjustment with respect to a successor Servicer
pursuant to Section 14.02.
"Spread Account" means the account designated as such, established and
maintained pursuant to the Indenture.
"Spread Account Surplus" means, on any Payment Date, the excess, if
any, of the Available Spread Amount on such Payment Date, after giving effect to
deposits into and withdrawals from the Spread Account pursuant to Article IX of
the Indenture on such Payment Date, over the Required Spread Amount on such
Payment Date (after giving effect to any payments of Monthly Principal and
Monthly Interest and all amounts owing to the Insurer on such Payment Date
pursuant to the Indenture).
"Standard & Poor's" means Standard & Poor's Ratings Services, a
division of The XxXxxx- Xxxx Companies, Inc.
"State" means (i) any state of the United States of America or (ii) the
District of Columbia.
"Stated Final Payment Date" means ____________________.
"Trigger Event" means any of the events identified as such in Section
6.01 of the Insurance Agreement.
"Trust" means the Delaware business trust created by the Agreement, the
estate of which shall generally comprise the Receivables (other than Purchased
Receivables) and all monies paid thereon, and all monies due thereon, including
Accrued Interest, as of and after the Cutoff Date (but excluding Accrued
Interest paid on or prior to the Closing Date); security interests in the
Financed Vehicles; funds deposited in the Collection Account; all documents
contained in the Receivable Files; any property that shall have secured a
Receivable and that shall have been acquired by or on behalf of the Trust; any
Liquidation Proceeds and any rights of the Seller in proceeds from claims or
refunds of premiums on any physical damage, lender's single interest, credit
life, disability, and hospitalization insurance policies covering Financed
Vehicles or Obligors; the interest of the Seller in recourse to Dealers relating
to certain of the Receivables; the proceeds of the foregoing; amounts on deposit
from time to time in the Spread Account; and certain rights of the Seller under
the Purchase Agreement, including, without limitation, Section 3.04 thereof.
"UAC" means Union Acceptance Corporation, an Indiana corporation, and
its successors and assigns, other than in its capacity as Servicer.
"UAC Finance Corporation" means UAC Finance Corporation, an Indiana
corporation, and its successors and assigns.
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"UAFC" means Union Acceptance Funding Corporation, a Delaware
corporation, and its successors and assigns.
"UCC" means the Uniform Commercial Code as in effect in the respective
jurisdiction.
SECTION 2.02. Usage of Terms. With respect to all terms in this
Agreement, the singular includes the plural and the plural the singular; words
importing any gender include the other genders; references to "writing" include
printing, typing, lithography and other means of reproducing words in a visible
form; references to agreements and other contractual instruments include all
subsequent amendments thereto or changes therein entered into in accordance with
their respective terms and not prohibited by this Agreement; references to
Persons include their permitted successors and assigns; and the term "including"
means "including without limitation."
SECTION 2.03. Cutoff Date and Record Date. All references to the Record
Date prior to the first Record Date in the life of the Trust shall be to the
Closing Date.
SECTION 2.04. Section References. All section references in this
Agreement shall be to Sections in this Agreement unless otherwise specified.
ARTICLE III
Conveyance of Receivables
In consideration of the Owner Trustee's delivery to the Seller of the
Certificates and the proceeds to be realized by the Trust from the issuance of
the Notes pursuant to the Indenture, the Seller does hereby sell, transfer,
assign, and otherwise convey to the Owner Trustee, in trust without recourse
(subject to the obligations herein):
(i) all right, title, and interest of the Seller in and to the
Receivables listed in Schedule A hereto;
(ii) the security interests in the Financed Vehicles granted
by Obligors pursuant to the Receivables;
(iii) any Liquidation Proceeds and any proceeds from claims or
refunds of premiums on any physical damage, lender's single interest,
credit life, disability and hospitalization insurance policies covering
Financed Vehicles or Obligors;
(iv) funds deposited in the Collection Account;
(v) the interest of the Seller in any proceeds from recourse
to Dealers relating to the Receivables;
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(vi) all documents contained in the Receivable Files;
(vii) all monies paid and all monies due, including Accrued
Interest, as of and after the Cutoff Date, with respect to the
Receivables held by the Servicer or Seller (but excluding Accrued
Interest paid on or prior to the Closing Date);
(viii) the rights of the Seller pursuant to the Purchase
Agreement to require UAC to repurchase any Receivables as to which
there has been a breach of the representations and warranties contained
therein;
(ix) the benefits of the Policy; and
(x) all proceeds of the foregoing.
The Seller does hereby further assign, convey, pledge and grant a
security interest in (i) any and all other right, title and interest, including
any beneficial interest the Seller may have in the Collection Account, the
Spread Account and the funds deposited therein, and (ii) any proceeds of any of
the foregoing, to the Owner Trustee and for the benefit of the Noteholders to
secure amounts payable to Noteholders as provided under this Agreement. The
Seller acknowledges that all of the foregoing shall constitute the "Pledged
Assets" pursuant to the terms of the Indenture and the Seller hereby consents to
the pledge of all of such assets to the Indenture Trustee for the benefit of the
Secured Parties pursuant to the Indenture.
The Seller does not convey to the Owner Trustee any interest in any
contracts with Dealers related to any "dealer reserve" or any rights to the
recapture of any dealer reserve.
ARTICLE IV
Acceptance by Trustee
The Owner Trustee does hereby accept all consideration conveyed by the
Seller pursuant to Article III, and declares that the Owner Trustee shall hold
such consideration upon the trusts herein set forth for the benefit of all
present and future Certificateholders, subject to the terms and provisions of
this Agreement.
ARTICLE V
Information Delivered to the Rating Agencies
(a) The Servicer hereby expresses its intention to deliver
promptly to each Rating Agency (i) a copy of each Servicer's Certificate that it
delivers to the Owner Trustee, the Indenture Trustee and the Insurer pursuant to
Section 8.09, (ii) a copy of each annual Officers' Certificate as to compliance
and any notice of default that it delivers to the Indenture Trustee or the Owner
Trustee
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pursuant to Section 8.10, (iii) delinquency and loss information for the
Receivables, the amount of any draws on the Policy, written notice of any
merger, consolidation, or other succession of the Servicer, pursuant to Section
13.03, or the Seller, pursuant to Section 12.03, (iv) a copy of each amendment
to this Agreement and (v) any Opinion of Counsel delivered to the Owner Trustee
pursuant to Section 17.02(i).
(b) The Owner Trustee hereby expresses its intention to
deliver promptly to each Rating Agency (i) a copy of each annual certified
public accountant's report received by the Owner Trustee pursuant to Section
8.11, (ii) a copy of each amendment to this Agreement and (iii) a copy of the
notice of termination of the Trust provided to Certificateholders pursuant to
Section 16.01.
(c) For purposes of delivery pursuant to paragraphs (a) and
(b) of this Article V, the addresses for the Rating Agencies are:
Structured Finance/Asset Backed Surveillance Group
Standard & Poor's Ratings Services, a division of The
XxXxxx-Xxxx Companies, Inc.
00 Xxxxxxxx, 00xx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Xxxxx'x Investors Service, Inc.
Attention: ABS Monitoring Department
4th Floor
00 Xxxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
(d) The provisions of this Article V are included herein for
convenience of reference only and shall not be construed to be contractual
undertakings or obligations. The failure of the Servicer or the Owner Trustee to
comply with any or all of the provisions of this Article V shall not constitute
an Event of Default or a default of any kind under this Agreement or make any
remedy available to any Person.
ARTICLE VI
Agent for Service
The agent for service for the Seller shall be Xxxxxxx Xxxxxxxx, Vice
President of the Seller. Any and all service on the agent for service of the
Seller shall be sent to UAC Securitization Corporation, 0000 Xxxxxx Xxxxx Xxxx,
Xxxxx 0000-X, Xxxxxx Xxxxxxx, Xxxxxxx 00000 or such other address as the Seller
shall provide notice thereof pursuant to Sections 17.02(c) or 17.05.
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The agent for service for the Servicer shall be Xxxxxxx X. Xxxx, Vice
President of the Servicer. Any and all service on the agent for service of the
Servicer shall be sent to Union Acceptance Corporation, 000 Xxxxx Xxxxxxxxx
Xxxxxx, Xxxxxxxxxxxx, Xxxxxxx 00000.
ARTICLE VII
The Receivables
SECTION 7.01. Representations and Warranties of Seller. Pursuant to
Article III, the Seller has assigned to the Trust the benefit of, and its rights
respecting, the representations and warranties made to the Seller in the
Purchase Agreement as to the Receivables on which the Owner Trustee relies in
accepting the Receivables in trust and executing and authenticating the
Certificates and executing and delivering the Indenture. The Seller agrees that
the representations shall also be for the benefit of the Secured Parties. Such
representations and warranties speak as of the execution and delivery of the
Purchase Agreement but shall survive the sale, transfer, and assignment of the
Receivables to the Owner Trustee.
(a) The Seller hereby represents and warrants to the Owner Trustee that
it has entered into the Purchase Agreement with UAC and UAFC, that UAC and UAFC
have made the representations and warranties set forth therein, that such
representations and warranties run to and are for the benefit of the Seller, and
that pursuant to Article III of this Agreement the Seller has transferred and
assigned to the Owner Trustee all rights of the Seller to cause UAC under the
Purchase Agreement to repurchase Receivables in the event of a breach of such
representations and warranties.
(b) It is the intention of the Seller that the transfer and assignment
herein contemplated, taken as a whole, constitute a sale of the Receivables from
the Seller to the Trust and that the beneficial interest in and title to the
Receivables not be part of the receivership estate in the event of the
appointment of a receiver for the Seller. No Receivable has been sold,
transferred, assigned, or pledged by the Seller to any Person other than the
Owner Trustee. Immediately prior to the transfer and assignment herein
contemplated, the Seller had good and marketable title to each Receivable free
and clear of all liens, and, immediately upon the transfer thereof, the Owner
Trustee (for the benefit of the Certificateholders and the Secured Parties
pursuant to the Indenture) shall have good and marketable title to each
Receivable, free and clear of all liens and rights of others, except for the
rights of the Certificateholders and the Insurer; and the transfer has been
perfected under the UCC. On or prior to the Closing Date, all filings
(including, without limitation, UCC filings) necessary in any jurisdiction to
give the Owner Trustee a first perfected ownership interest in the Receivables
shall have been made.
SECTION 7.02. Repurchase Upon Breach. The Seller, UAC, the Servicer, or
the Owner Trustee, as the case may be, shall inform the Indenture Trustee, the
Insurer and the other parties promptly, in writing, upon the discovery of any
breach of the representations and warranties contained in the Purchase
Agreement. This obligation shall not constitute an obligation on the part
17
of the Owner Trustee to actively seek to discover any such breaches. Unless the
breach shall have been cured by the second Record Date following the discovery,
UAC, pursuant to its obligations under the Purchase Agreement, shall repurchase
any Receivable materially and adversely affected by the breach as of such Record
Date (or, at UAC's option, the first Record Date following the discovery). In
consideration of the purchase of the Receivable, UAC shall remit the Purchase
Amount, in the manner specified in Section 9.03. The sole remedy of the Owner
Trustee, the Trust, or the Indenture Trustee with respect to a breach of the
representations and warranties referred to in Section 7.01 shall be to require
UAC to repurchase Receivables pursuant to the Purchase Agreement and this
Section 7.02.
SECTION 7.03. Custody of Receivable Files. To assure uniform quality in
servicing the Receivables and to reduce administrative costs, the Owner Trustee,
upon the execution and delivery of the Agreement, hereby revocably appoints the
Servicer, and the Servicer hereby accepts such appointment, for the benefit of
the Trust and the Indenture Trustee, to act as the agent of the Owner Trustee as
custodian of the following documents or instruments which are hereby
constructively delivered to the Owner Trustee with respect to each Receivable:
(i) The original of the Receivable.
(ii) The original credit application fully executed by the
Obligor.
(iii) The original certificate of title or such documents that
the Seller or Servicer shall keep on file, in accordance with its
customary procedures, evidencing the security interest of the Seller in
the Financed Vehicle.
(iv) Any and all other documents that the Servicer or the
Seller shall keep on file, in accordance with its customary procedures,
relating to a Receivable, an Obligor, or a Financed Vehicle.
SECTION 7.04. Duties of Servicer as Custodian.
(a) Safekeeping. The Servicer, in its capacity as custodian, shall hold
the Receivable Files on behalf of the Owner Trustee for the use and benefit of
all present and future Owner Trustees, and maintain such accurate and complete
accounts, records, and computer systems pertaining to each Receivable File as
shall enable the Owner Trustee to comply with this Agreement. In performing its
duties as custodian the Servicer shall act with reasonable care, using that
degree of skill and attention that the Servicer exercises with respect to the
receivable files relating to all comparable automotive receivables that the
Servicer services for itself. The Servicer shall conduct, or cause to be
conducted, periodic audits of the Receivable Files held by it under this
Agreement, and of the related accounts, records, and computer systems, in such a
manner as shall enable the Owner Trustee to verify the accuracy of the
Servicer's record keeping. The Servicer shall promptly report to the Owner
Trustee and the Indenture 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
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to remedy any such failure; provided, however, notwithstanding anything to the
contrary in Section 7.03 or this Section 7.04, the Servicer shall not be
required to possess the original of Receivables representing less than 2% of the
Original Pool Balance until 30 days following the Closing Date.
(b) Maintenance of and Access to Records. The Servicer shall maintain
each Receivable File at one of its offices specified in Schedule B to this
Agreement, or at such other office as shall be specified to the Owner Trustee
and the Indenture Trustee by prior written notice. The Servicer shall make
available to the Owner Trustee and the Indenture Trustee and their duly
authorized representatives, attorneys, or auditors a list of locations of the
Receivable Files, the Receivable Files, and the related accounts, records, and
computer systems maintained by the Servicer at such times as the Owner Trustee
shall instruct.
(c) Release of Documents. Upon instruction from the Owner Trustee, the
Servicer shall release any document in a Receivable File to the Owner Trustee,
the Owner Trustee's agent, or the Owner Trustee's designee, as the case may be,
at such place or places as the Owner Trustee may designate, as soon as
practicable.
SECTION 7.05. Instructions; Authority to Act. The Servicer shall be
deemed to have received proper instructions with respect to the Receivable Files
upon its receipt of written instructions signed by a Responsible Officer of the
Owner Trustee.
SECTION 7.06. Custodian's Indemnification. The Servicer, shall
indemnify the Trust, the Owner Trustee and the Indenture Trustee (which shall
include, for purposes of this Section 7.06, their directors, officers, employees
and agents) for any and all liabilities, obligations, losses, compensatory
damages, payments, costs, or expenses of any kind whatsoever that may be imposed
on, incurred, or asserted against the Trust, the Owner Trustee or the Indenture
Trustee as the result of any improper act or omission in any way relating to the
maintenance and custody by the Servicer of the Receivable Files; provided,
however, that the Servicer shall not be liable for any portion of any such
amount resulting from the willful misfeasance, bad faith, or negligence of the
Owner Trustee or the Indenture Trustee. This indemnity shall survive the
termination of this Agreement and the resignation or removal of the Owner
Trustee or the Indenture Trustee.
SECTION 7.07. Effective Period and Termination. The Servicer's
appointment as custodian shall become effective as of the Cutoff Date and shall
continue in full force and effect until terminated pursuant to this Section
7.07. If the Servicer shall resign in accordance with the provisions of this
Agreement or if all of the rights and obligations of the Servicer shall have
been terminated under Section 14.01, the appointment of the Servicer as
custodian may be terminated by the Owner Trustee with the consent of the
Indenture Trustee and the Insurer (so long as the Insurer is not in default of
its obligations under the Policy). In addition, the Owner Trustee may terminate
the Servicer's appointment as custodian with cause at any time upon written
notification to the Servicer and the Indenture Trustee. As soon as practicable
after any termination of such appointment, the Servicer shall deliver the
Receivable Files to the Owner Trustee or the Owner Trustee's agent at such place
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or places as the Owner Trustee, with the consent of the Insurer and the
Indenture Trustee, may reasonably designate.
ARTICLE VIII
Administration and Servicing of Receivables
SECTION 8.01. Duties of Servicer. The Servicer, for the benefit of the
Trust and the Secured Parties, shall manage, service, administer, and make
collections on the Receivables with reasonable care, using that degree of skill
and attention that the Servicer exercises with respect to all comparable
automotive receivables that it services for itself. The Servicer's duties shall
include collection and posting of all payments, making Advances (in the
Servicer's sole discretion), responding to inquiries of Obligors or of federal,
state or local governmental authorities with respect to the Receivables,
investigating delinquencies, sending payment coupons to Obligors, accounting for
collections, and furnishing monthly and annual statements to the Owner Trustee
and the Indenture Trustee with respect to distributions. The Servicer shall
follow its customary standards, policies, and procedures in performing its
duties as Servicer. Without limiting the generality of the foregoing, the
Servicer is authorized and empowered by the Owner Trustee to execute and
deliver, on behalf of itself, the Trust, the Owner Trustee, the Indenture
Trustee or any of them, any and all instruments of satisfaction or cancellation,
or partial or full release or discharge, and all other comparable instruments,
with respect to such Receivables or to the Financed Vehicles securing such
Receivables. If the Servicer shall commence a legal proceeding to enforce a
Receivable or a Defaulted Receivable, the Owner Trustee and the Indenture
Trustee shall thereupon be deemed to have automatically assigned, solely for the
purpose of collection, such Receivable to the Servicer. The Owner Trustee and
the Indenture Trustee shall execute any documents prepared by the Servicer and
delivered to the Owner Trustee for execution that are necessary or appropriate
to enable the Servicer to carry out its servicing and administrative duties
hereunder.
SECTION 8.02. Collection of Receivable Payments (a) The Servicer shall
make reasonable efforts to collect all payments called for under the terms and
provisions of such Receivables as and when the same shall become due and shall
follow such collection procedures as it follows with respect to all comparable
automotive receivables that it services for itself. If payments are extended in
the ordinary course of the Servicer's collection procedures, and, as a result,
any Receivable would be outstanding at the Stated Final Payment Date, then the
Servicer shall be obligated to purchase such Receivable pursuant to Section 8.07
(unless such Receivable is otherwise being purchased pursuant to Section 16.02)
as of the last day of the Collection Period immediately preceding the Stated
Final Payment Date. The Servicer may in its discretion waive any late payment
charge or any other fees that it is entitled to retain under Section 8.08, or
other fee (to the extent consistent with its credit and collection policy on the
Closing Date) that may be collected in the ordinary course of servicing a
Receivable.
(b) All allocations of payments with respect to a simple-interest
Receivable to principal and interest and determinations of periodic charges and
the like shall be made using the simple interest
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method, based on either the actual number of days elapsed and the actual number
of days in the calendar year or on the basis of a thirty-day month and a 360-day
calendar year, as specified in the related installment sales contract or
installment loan and security agreement. Each payment on a simple interest
Receivable shall be applied first to the amount of interest accrued on such
Receivable to the date of receipt; second, to principal due on such Receivable;
third, to late charges, if any, accrued on such Receivable; and last, to reduce
the remaining principal amount outstanding on such Receivable. Payments made by
or on behalf of an Obligor including any Payaheads previously made and added to
the Payahead Balance with respect to a Precomputed Receivable shall be applied
first to overdue Scheduled Payments (including reduction of Outstanding Advances
as provided in Section 9.04). Next, any excess shall be applied to the Scheduled
Payment and any remaining excess shall be added to the Payahead Balance, and
shall be applied to prepay the Precomputed Receivable, but only if such Payahead
Balance shall be sufficient to prepay the Receivable in full. Otherwise, any
such remaining excess payments shall constitute a Payahead and shall increase
the Payahead Balance.
SECTION 8.03. Realization Upon Receivables. (a) On behalf of the Trust
and the Secured Parties the Servicer shall use its best efforts, consistent with
its customary servicing procedures, to repossess or otherwise convert the
ownership of the Financed Vehicle securing any Receivable as to which the
Servicer shall have determined that eventual payment in full is unlikely. The
Servicer shall follow such customary and usual practices and procedures as it
shall deem necessary or advisable in its servicing of automotive receivables,
which may include reasonable efforts to realize upon any recourse to Dealers and
selling the Financed Vehicle at public or private sale. The foregoing shall be
subject to the provision that, in any case in which the Financed Vehicle shall
have suffered damage, the Servicer shall not expend funds in connection with the
repair or the repossession of such Financed Vehicle unless it shall determine in
its discretion that such repair and/or repossession will increase the
Liquidation Proceeds. After appropriate disposition of the Financed Vehicle, the
Servicer shall also take such measures as it deems reasonable and appropriate to
realize value in respect of any deficiency balance of the Receivable including
pursuit of action on behalf of the Trust and/or the Secured Parties against the
Obligor or public or private sale of the remaining interest of the Trust and/or
the Secured Parties in such Receivable.
(b) Unless otherwise stated in this Agreement, the Servicer shall
either purchase or liquidate each Financed Vehicle that has not previously been
liquidated and that secures, or previously secured, a Defaulted Receivable
either (i) by the end of the Collection Period preceding the final scheduled
Payment Date during the life of the Trust or (ii) if earlier, by the end of the
ninth Collection Period following the Collection Period during which such
Receivable became a Defaulted Receivable. Any purchase of a Financed Vehicle by
the Servicer shall be made at a price equal to the fair market value of the
Financed Vehicle as determined by the Servicer in accordance with the Servicer's
normal servicing standards.
SECTION 8.04. Physical Damage Insurance. The Servicer, in accordance
with its customary servicing procedures and underwriting standards, shall
require that each Obligor shall have obtained and shall maintain physical damage
insurance covering the Financed Vehicle.
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SECTION 8.05. Maintenance of Security Interests in Financed Vehicles.
The Servicer shall, in accordance with its customary servicing procedures, take
such steps as are necessary to ensure that perfection of the security interest
created by each Receivable in the related Financed Vehicle has been obtained,
and to maintain such security interest. The Owner Trustee and the Indenture
Trustee hereby authorize the Servicer to take such steps as are necessary to
re-perfect such security interest on behalf of the Trust in the event of the
relocation of a Financed Vehicle or for any other reason. Without limiting the
forgoing, in the event that the Servicer consigns a repossessed Financed Vehicle
to an affiliate for liquidation, it shall take such measures as are necessary or
appropriate to maintain the security interest in the Financed Vehicle in the
hands of the consignee until such Financed Vehicle is liquidated, including
appropriate precautionary UCC-1 filings. In addition, UAC and/or such affiliate
will notify the creditors, if any, of such affiliate that have entered into a
consignment arrangement on or before such arrangements are made.
SECTION 8.06. Covenants of Servicer. The Servicer shall not release the
Financed Vehicle securing any Receivable from the security interest granted by
such Receivable in whole or in part except in the event of payment in full by
the Obligor thereunder or repossession, nor shall the Servicer impair the rights
of the Certificateholders or the Secured Parties in the Receivables, nor shall
the Servicer change the amount of the Scheduled Payment under a Receivable or
change the Amount Financed under a Receivable or reduce the Contract Rate of a
Receivable (except if so ordered by a bankruptcy court in a proceeding
concerning the Obligor or otherwise mandated by law).
SECTION 8.07. Purchase of Receivables Upon Breach. The Servicer or the
Owner Trustee shall inform the other party and the Insurer promptly, in writing,
upon the discovery of (i) any breach by the Servicer of its obligations under
Section 8.06 or (ii) the existence of the Servicer's obligation to purchase a
Receivable pursuant to Section 8.02(a). This obligation shall not constitute an
obligation on the part of the Owner Trustee to discover any such breaches or
circumstances. Unless the breach under Section 8.06 shall have been cured by the
second Record Date following the discovery, the Servicer shall purchase any
Receivable materially and adversely affected by such breach as of such day (or,
at the Servicer's election, as of the first Record Date following the
discovery). In consideration of the purchase of such Receivable, the Servicer
shall remit the Purchase Amount with respect to such Receivable in the manner
specified in Section 9.03. The sole remedy of the Owner Trustee, the Trust, or
the Secured Parties with respect to a breach pursuant to Section 8.06 or the
grant of an extension which triggers an obligation of the Servicer under Section
8.02(a) shall be to require the Servicer to purchase Receivables pursuant to
this Section 8.07, except as provided in Section 13.02.
SECTION 8.08. Servicing Fee. The servicing fee for a Collection Period
shall equal the Monthly Servicing Fee (except that in the case of a successor
Servicer, the servicing fee shall equal such amount as is arranged in accordance
with Section 14.02). The Servicer shall be entitled to retain from payments of
interest on the Receivables collected during a Collection Period an amount equal
to the Monthly Servicing Fee due the Servicer in respect of such Collection
Period and need not deposit such amount in the Collection Account. The Servicer
shall also be entitled to retain, and need not deposit in the Collection
Account, all late fees, Prepayment Charges, other administrative fees
22
or similar charges allowed by applicable law with respect to Receivables, if
any, collected (from whatever source) on the Receivables. The Monthly Servicing
Fee will be paid only out of the funds of the Trust and not from the Owner
Trustee's own funds. So long as Union Acceptance Corporation is the Servicer, if
the Servicer fails to pay the fees and expenses of the Owner Trustee or the
Indenture Trustee pursuant to Section 15.07 hereof or the Indenture, the Owner
Trustee and Indenture Trustee shall be entitled to receive such amount from the
Monthly Servicing Fee prior to payment thereof to the Servicer and the Servicer
shall not retain from collections that portion of the Monthly Servicing Fee
equal to any fees of the Owner Trustee and Indenture Trustee that are due and
payable and any unpaid amount that the Servicer has received notice is due the
Owner Trustee as reimbursement for expenses.
SECTION 8.09. Servicer's Certificate. On or before the Determination
Date following each Collection Period, the Servicer shall deliver to the Owner
Trustee, the Indenture Trustee and the Insurer a Servicer's Certificate in
substantially the form of Exhibit 3 attached hereto containing all information
necessary to make the distributions pursuant to Section 9.04 of the Indenture
(so long as the Notes remain outstanding) for the Collection Period preceding
the date of such Servicer's Certificate and all information necessary for the
Indenture Trustee to send statements to the Noteholders, including (A) the
amount of aggregate collections on the Receivables, (B) the aggregate Purchase
Amount of the Receivables repurchased by UAC and purchased by the Servicer, (C)
with respect to Precomputed Receivables the net deposit from the Collection
Account to the Payahead Account or the net withdrawal from the Payahead Account
to the Collection Account required for the Collection Period in accordance with
Section 9.09, and in the case of a net withdrawal, the Monthly Interest and
Monthly Principal reported on such Servicer's Certificate shall reflect the
portions of such withdrawal allocable to interest and principal, respectively,
in accordance with this Agreement, (D) the amount, if any, to be withdrawn from
the Spread Account and the amount, if any, to be drawn on the Policy, (E)
information respecting (i) delinquent Receivables that are 30, 60 and 90 days
past due, and (ii) the number of repossessions of Financed Vehicles during the
preceding Collection Period, number of unliquidated repossessed Financed
Vehicles, gross and net losses on the Receivables, and recoveries on charged off
Receivables; and (F) each other item listed in Section 9.04 of the Indenture
reasonably requested by a Rating Agency, the Indenture Trustee or the Insurer in
order to monitor the performance of the Receivables. Receivables purchased by
UAC as of the last day of such Collection Period shall be identified by the UAC
account number with respect to such Receivable (as specified in Schedule A to
this Agreement).
SECTION 8.10. Annual Statement as to Compliance; Notice of Default. (a)
The Servicer shall deliver to the Owner Trustee, the Indenture Trustee and the
Insurer, on or before April 30 of each year, beginning on the first April 30
that is at least six months after the Closing Date, an Officers' Certificate,
dated as of December 31 of the preceding year, stating that (i) a review of the
activities of the Servicer during the preceding 12-month period (or in the case
of the initial Officer's Certificate, the period from the Closing Date to and
including the date of such Officer's Certificate) 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, the Servicer has
fulfilled all its obligations under this Agreement throughout such year, or, if
there has been a default in the
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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 8.11 may be obtained by any Certificateholder at
its own expense by a request in writing to the Owner Trustee addressed to the
Corporate Trust Office.
(b) The Servicer shall deliver to a Responsible Officer of the Owner
Trustee, the Indenture Trustee and the Insurer, promptly after having obtained
knowledge thereof, but in no event later than 5 Business Days thereafter,
written notice in an Officers' Certificate of any event which with the giving of
notice or lapse of time, or both, would become an Event of Default under Section
14.01. The Seller or UAC shall deliver to a Responsible Officer of the Owner
Trustee, the Indenture Trustee and the Insurer, promptly after having obtained
knowledge thereof, but in no event later than 5 Business Days thereafter,
written notice in an Officers' Certificate of any event which with the giving of
notice or lapse of time, or both, would become an Event of Default under clause
(ii) of Section 14.01.
SECTION 8.11. Annual Independent Certified Public Accountant's Report.
The Servicer shall cause a firm of independent certified public accountants, who
may also render other services to the Servicer, to deliver to the Owner Trustee,
the Indenture Trustee and the Insurer on or before September 30 of each year
concerning the 12-month period ended June 30 of such year (or shorter period
since the date of this Agreement), beginning on the first September 30 following
the first June 30 after the Closing Date, a report addressed to the Board of
Directors of the Servicer to the effect that such firm has reviewed the
servicing of the Receivables by the Servicer and that such review (1) included
tests relating to new or used automobile, van and light truck loans serviced for
others in accordance with the requirements of the Uniform Single Audit Program
for Mortgage Bankers, to the extent the procedures in such program are
applicable to the servicing obligations set forth in the Agreement, and (2)
except as described in the report, disclosed no exceptions or errors in the
records relating to automobile, van or light truck loans serviced for others
that, in the firm's opinion, paragraph four of such program requires such firm
to report.
The report will also indicate that the firm is independent of the
Servicer within the meaning of the Code of Professional Ethics of the American
Institute of Certified Public Accountants.
SECTION 8.12. Access to Certain Documentation and Information Regarding
Receivables. The Servicer shall provide to the Owner Trustee, Indenture Trustee
and the Insurer access to the Receivables Files in such cases where such parties
shall be required by applicable statutes or regulations to review such
documentation. Access shall be afforded without charge, but only upon reasonable
request and during the normal business hours at the respective offices of the
Servicer. Nothing in this Section shall affect the obligation of the Servicer to
observe any applicable law prohibiting disclosure of information regarding the
Obligors, and the failure of the Servicer to provide access to information as a
result of such obligation shall not constitute a breach of this Section 8.12.
SECTION 8.13. Servicer Expenses. The Servicer shall be required to pay
all expenses incurred by it in connection with its activities hereunder,
including fees and disbursements of
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independent accountants, taxes imposed on the Servicer, and expenses incurred in
connection with regular payments and reports to Noteholders.
SECTION 8.14. Reports to Noteholders. The Owner Trustee shall provide
to any Noteholder who so requests in writing (addressed to the Corporate Trust
Office) a copy of any certificate described in Section 8.09, the annual
statement described in Section 8.10, or the annual report described in Section
8.11. The Owner Trustee may require the requesting party to pay a reasonable sum
to cover the cost of the Owner Trustee's complying with such request.
ARTICLE IX
Collections; Distributions to Noteholders and Certificateholders
SECTION 9.01. Collection Account. The Seller shall establish the
Collection Account with an Eligible Bank as a segregated trust account in the
name of the Trust for the benefit of the Secured Parties with the Indenture
Trustee (at the Indenture Trustee Office) or another Eligible Bank. The Servicer
shall direct the Indenture Trustee to invest the amounts in the Collection
Account in Eligible Investments that mature not later than the Business Day
prior to the next succeeding Payment Date and to hold such Eligible Investments
to maturity. The Indenture Trustee (or its custodian) shall (i) maintain
possession of any negotiable instruments or securities evidencing Eligible
Investments until the time of sale or maturity and each certificated security or
negotiable instrument evidencing an Eligible Investment shall be endorsed in
blank or to the Indenture Trustee or registered in the name of the Owner Trustee
and (ii) cause any Eligible Investment represented by an uncertificated security
to be registered in the name of the Indenture Trustee.
SECTION 9.02. Collections. (a) The Servicer shall remit to the
Collection Account all payments by or on behalf of the Obligors on the
Receivables and all Liquidation Proceeds, both as collected during the
Collection Period net of Monthly Servicing Fees and administrative fees allowed
to be retained by the Servicer pursuant to Section 8.08 and net of charge backs
(attributable to errors in posting, returned checks, or rights of offset for
amounts that should not have been paid or that must be refunded as the result of
a successful claim or defense under bankruptcy or similar laws) not later than
the second Business Day following the Business Day on which such amounts are
received by the Servicer. Notwithstanding the foregoing, for so long as (a) UAC
remains the Servicer, (b) no Event of Default shall have occurred and be
continuing and (c)(1) UAC maintains a short-term rating of at least A-1 by
Standard & Poor's and P-l by Moody's (and for five Business Days following a
reduction in either such rating) or (2) prior to ceasing daily remittances, the
Rating Agency Condition shall have been satisfied (and any conditions or
limitations imposed by the Rating Agencies in connection therewith are complied
with) and the prior written consent of the Insurer (not to be unreasonably
withheld) shall have been obtained, the Servicer may remit all such payments and
Liquidation Proceeds with respect to any Collection Period to the Collection
Account on a less frequent basis, but in no event later than the Determination
Date immediately preceding each Payment Date. The Servicer shall remit any
Advances with respect to a Collection Period to the Collection Account on or
before the Determination Date.
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(b) The Servicer, the Owner Trustee and/or Indenture Trustee shall
deposit in the Collection Account any funds received by such parties in respect
of funds drawn under the Policy from the Insurer.
(c) If the Available Funds for a Payment Date are insufficient to pay
current and past due Insurance Premiums, or any amounts owing to the Insurer
pursuant to the Insurance Agreement including, without limitation,
reimbursements, indemnities, fees and expenses, plus accrued interest thereon,
to the Insurer, the Servicer shall notify the Owner Trustee and the Indenture
Trustee of such deficiency, and the Available Spread Amount, if any, then on
deposit in the Spread Account (after giving effect to any withdrawal to satisfy
a deficiency in Monthly Interest or Monthly Principal) shall be available to
cover such deficiency.
SECTION 9.03. Purchase Amounts. Not later than the Determination Date,
the Servicer or UAC shall remit to the Collection Account the aggregate Purchase
Amount for such Collection Period pursuant to Sections 7.02 and 8.07.
SECTION 9.04. Application of Funds. (a) On each Determination Date, the
Servicer shall determine (i) the amount of payments on all Receivables and all
Liquidation Proceeds received during such Collection Period, the amount of
Advances for such Collection Period, and the Purchase Amount for all Receivables
purchased or repurchased with respect to such Collection Period which have been
deposited in the Collection Account (net of amounts required to be paid pursuant
to Section 9.04(d) of the Indenture and excluding amounts required to be paid
pursuant to Sections 7.02, 8.07, and 9.05 but not so paid) after giving effect
to the net transfer from the Collection Account to the Payahead Account or from
the Payahead Account to the Collection Account as provided in Section 9.09, (the
"Available Funds"), and (ii) the amount of funds necessary to make the
distributions required pursuant to Section 9.04(a) of the Indenture, inclusive,
on the next Payment Date. The Servicer shall by a Servicer's Certificate on or
before the Determination Date notify the Owner Trustee and the Indenture Trustee
of such amounts by telecopy to the Corporate Trust Office and the Indenture
Trustee Office or to such numbers as the Owner Trustee or Indenture Trustee may
from time to time provide, followed promptly by mailing such notice to the Owner
Trustee and the Indenture Trustee and to the Insurer.
(b) On any Payment Date on which there are not sufficient Available
Funds to make the distributions required pursuant to Section 9.04(a) of the
Indenture, the Indenture Trustee, or the Servicer on its behalf, shall withdraw
from the Spread Account, to the extent of the Available Spread Amount, an amount
equal to such deficiency and promptly deposit such amount in the Collection
Account. If such deficiency exceeds the Available Spread Amount, the Servicer
shall simultaneously and in the same manner also notify the Owner Trustee, the
Indenture Trustee and the Insurer of the amount of such excess deficiency.
(c) On each Payment Date, the Owner Trustee shall distribute to each
Certificateholder such Certificateholder's interest and principal, if any, for
such Distribution Date, as received from the Indenture Trustee pursuant to
Section 9.04 of the Indenture on such Distribution Date.
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(d) On each Payment Date, the Owner Trustee shall send to each
Certificateholder the statement provided to the Owner Trustee by the Servicer
pursuant to Section 9.04 of this Agreement on such Distribution Date.
(e) In the event that any withholding tax is imposed on the Trust's
payment (or allocations of income) to a Certificateholder, such tax shall reduce
the amount otherwise distributable to the Certificateholder in accordance with
this Section 9.04. The Owner Trustee is hereby authorized and directed to retain
from amounts otherwise distributable to the Certificateholders sufficient funds
for the payment of any tax that is legally owed by the Trust (but such
authorization shall not prevent the Owner Trustee from contesting any such tax
in appropriate proceedings, and withholding payment of such tax, if permitted by
law, pending the outcome of such proceedings). The amount of any withholding tax
imposed with respect to a Certificateholder shall be treated as cash distributed
to such Certificateholder at the time it is withheld by the Trust to be remitted
to the appropriate taxing authority. If there is a possibility that withholding
tax is payable with respect to a distribution (such as a distribution to a
non-U.S. Certificateholder), the Owner Trustee in its sole discretion may (but
unless otherwise required by law shall not be obligated to) withhold such
amounts in accordance with this paragraph (e). In the event that a
Certificateholder wishes to apply for a refund of any such withholding tax, the
Owner Trustee shall reasonably cooperate with such Certificateholder in making
such claim so long as such Certificateholder agrees to reimburse the Owner
Trustee for any out-of-pocket expenses incurred.
(f) Subject to Section 16.01, distributions required to be made to
Certificateholders on any Payment Date shall be made to each Certificateholder
of record on the preceding Record Date either by wire transfer, in immediately
available funds, to the account of such Certificateholder at a bank or other
entity having appropriate facilities therefor, or by check mailed to such
Certificateholder at the address of such Certificateholder appearing in the
Certificate Register.
SECTION 9.05. Advances. (a) As of the last day of the initial
Collection Period, the Servicer shall advance funds equal to the excess, if any,
of Monthly Interest due in respect of the initial Collection Period, over the
Collected Interest for such Collection Period; and (b) as of the last day of
each subsequent Collection Period, the Servicer shall advance funds in the
amount of the Interest Advance Amount (or such other amount as the Servicer
shall reasonably determine to cover an Interest Shortfall) with respect to each
Receivable that is delinquent for more than 30 days, in each such case, to the
extent that the Servicer, in its sole discretion, determines that the Advance
will be recoverable from payments by or on behalf of the Obligor, the Purchase
Amount, or Liquidation Proceeds. With respect to each Receivable, the Advance
paid pursuant to this Section 9.05 shall increase Outstanding Advances.
Outstanding Advances shall be reduced by subsequent payments by or on behalf of
the Obligor, collections of Liquidation Proceeds, or payments of the Purchase
Amount. The Servicer shall remit any Advances with respect to a Collection
Period to the Collection Account by the related Determination Date.
If the Servicer shall determine that an Outstanding Advance with
respect to any Receivable shall not be recoverable, the Servicer shall be
reimbursed from any collections made on other
27
Receivables in the Trust, and Outstanding Advances with respect to such
Receivable shall be reduced accordingly.
SECTION 9.06. Net Deposits. For so long as Union Acceptance Corporation
is the Servicer, Union Acceptance Corporation (in whatever capacity) may make
the remittances with respect to any Payment Date pursuant to Section 9.02 above,
net of amounts to be distributed to itself or its delegee under Section 13.06
(also in whatever capacity), if it determines pursuant to Section 9.02 that
there is no deficiency in Available Funds for such Payment Date. Nonetheless,
the Servicer shall account for all of the above described amounts as if such
amounts were deposited and distributed.
SECTION 9.07. No Segregation of Moneys; No Interest. Subject to Section
9.04, moneys received by the Owner Trustee hereunder need not be segregated in
any manner except to the extent required by law or this Agreement and may be
deposited under such general conditions as may be prescribed by law, and the
Owner Trustee shall not be liable for any interest thereon.
SECTION 9.08. Accounting and Reports to the Certificateholder, the
Internal Revenue Service and Others. The Owner Trustee shall deliver to the
Certificateholder, as may be required by the Code and applicable Treasury
Regulations, or as may be requested by such Certificateholder, such information,
reports or statements as may be necessary to enable each Owner to prepare its
federal and state income tax returns. Consistent with the Trust's
characterization for tax purposes as a security arrangement for the issuance of
non-recourse debt so long as the Seller or any other Person is the sole
beneficiary owner of the Trust, no federal income tax return shall be filed on
behalf of the Trust unless either (i) the Owner Trustee shall receive an Opinion
of Counsel that, based on a change in applicable law occurring after the date
hereof], or as a result of a transfer by the Company permitted by Section
11.03], the Code requires such a filing or (ii) the Internal Revenue Service
shall determine that the Trust is required to file such a return. In the event
that there shall be two or more beneficial owners of the Trust, the Owner
Trustee shall inform the Indenture Trustee in writing of such event, (x) the
Owner Trustee shall prepare or shall cause to be prepared federal and, if
applicable, state or local partnership tax returns required to be filed by the
Trust and shall remit such returns to the Seller (or if the Seller no longer
owns the Certificate, to the Seller to the extent its tax liability is affected
thereby and otherwise to the successor Certificateholder) at least (5) days
before such returns are due to be filed, and (y) capital accounts shall be
maintained for each beneficial owner in accordance with the Treasury Regulations
under Section 704(b) of the Code reflecting each such beneficial owner's share
of the income, gains, deductions, and losses of the Trust and/or guaranteed
payments made by the Trust and contributions to, and distributions from, the
Trust. The Seller (or such successor Certificateholder, as applicable) shall
promptly sign such returns and deliver such returns after signature to the Owner
Trustee and such returns shall be filed by the Owner Trustee with the
appropriate tax authorities. In the event that a "tax matters partner" (within
the meaning of Code Section 6231(a)(7)) is required to be appointed with respect
to the Trust, the Seller is hereby designated as tax matters partner or, if the
Seller is not the Certificateholder, the Seller to the extent its tax liability
is affected thereby and otherwise the successor Certificateholder, shall be
designated as tax matters partner. In no event shall the Owner Trustee or the
Seller (or such designee Certificateholder, as applicable) be liable for any
liabilities, costs or expenses of the Trust or the Noteholders arising out of
the application of any tax law, including federal, state, foreign or local
income or excise taxes or any other tax imposed on or measured by income (or any
interest, penalty or addition with respect thereto or arising from a failure to
comply therewith) except for any such liability, cost or expense attributable to
any act or omission by the Owner Trustee or the Seller (or such designee
Certificateholder as applicable), as the case may be, in breach of its
obligations under this Agreement.
SECTION 9.09. Payahead Account. The Servicer shall establish the
Payahead Account in the name of the Trust on behalf of the Obligors and the
Secured Parties as their interests may appear. The Payahead Account shall be a
segregated interest bearing trust account established with the Indenture Trustee
or another Eligible Bank. Amounts in the Payahead Account shall be invested in
Eligible Investments that mature not later than the Business Day prior to the
next succeeding Payment Date. The Payahead Account is not property of the Trust.
Investment income or interest earned on the Payahead Account shall be remitted
to the Servicer at least monthly, or as frequently as the Servicer may
reasonably request. On or prior to each Payment Date, the Servicer shall
transfer or the Indenture Trustee (as instructed in the Servicer's Certificate)
shall transfer (a) from the Collection Account to the Payahead Account, in
immediately available funds, all Payaheads received by the Servicer and
previously deposited to the Collection Account during the Collection Period as
28
described in Section 8.02(b); and (b) from the Payahead Account to the
Collection Account, in immediately available funds, the aggregate amount of
previously deposited Payaheads to be applied to Scheduled Payments on
Precomputed Receivables for the related Collection Period or prepayments for the
related Collection Period, pursuant to Section 8.02(b), each in the amounts set
forth in the Servicer's Certificate delivered on the related Determination Date.
A single, net transfer between the Payahead Account and the Collection Account
may be made. Any amount deposited in the Payahead Account shall not constitute
Available Funds under Section 9.02. Any amount deposited to the Collection
Account from the Payahead Account pursuant to Section 9.09(b) shall be included
in Available Funds under Section 9.02.
ARTICLE X
Intentionally Blank
ARTICLE XI
The Certificates
SECTION 11.01. The Certificates. The Certificates shall be issued in
the form of one or more certificates and shall initially be issued to the
Seller. The Certificates shall be executed on behalf of the Trust by manual or
facsimile signature of a Responsible Officer of the Owner Trustee. Certificates
bearing the manual or facsimile signatures of individuals who were, at the time
when such signatures shall have been affixed, authorized to sign on behalf of
the Trust, shall be valid and binding obligations of the Trust, notwithstanding
that such individuals or any of them shall have ceased to be so authorized prior
to the authentication and delivery of such Certificates or did not hold such
offices at the date of such Certificates.
SECTION 11.02. Authentication of Certificates. The Owner Trustee shall
cause the Certificates to be executed on behalf of the Trust, authenticated, and
delivered to or upon the written order of the Seller, signed by its chairman of
the board, its president, or any vice president, without further corporate
action by the Seller, in authorized denominations, pursuant to this Agreement.
No Certificate shall entitle its holder to any benefit under this Agreement, or
shall be valid for any purpose, unless there shall appear on such Certificate a
certificate of authentication, substantially as set forth in the forms of
Certificate attached as exhibits to this Agreement, executed by a Responsible
Officer of the Owner Trustee by manual signature; such authentication shall
constitute conclusive evidence that such Certificate shall have been duly
authenticated and delivered hereunder. All Certificates shall be dated the date
of their authentication.
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SECTION 11.03. Registration of Transfer and Exchange of Certificates.
The Owner Trustee shall keep or cause to be kept, at the Corporate Trust Office,
a Certificate Register in which, subject to such reasonable regulations as it
may prescribe, the Owner Trustee shall provide for the registration of
Certificates and of transfers and exchanges of Certificates subject to the
restrictions provided herein.
Upon surrender for registration of transfer of any Certificate at the
Corporate Trust Office, the Owner Trustee shall execute, authenticate, and
deliver, in the name of the designated transferee or transferees, one or more
new Certificates in authorized denominations of a like aggregate amount dated
the date of authentication by the Owner Trustee, provided, however, that
registration of transfer of the Certificates may not be effected unless (A) the
Owner Trustee receives an Opinion of Counsel, satisfactory to it, to the effect
that (i) such transfer may be made in reliance upon an exemption from the
registration requirements of the Securities Act of 1933, as amended, and (ii)
such transfer will not adversely affect the tax treatment of the Trust or the
Notes; (B) the Insurer has consented to such transfer and (C) the Rating Agency
Condition shall have been satisfied with respect to such transfer.
Every Certificate presented or surrendered for registration of transfer
or exchange shall be accompanied by a written instrument of transfer in form
satisfactory to the Owner Trustee duly executed by the Holder or his attorney
duly authorized in writing. Each Certificate surrendered for registration of
transfer and exchange shall be canceled and subsequently destroyed by the Owner
Trustee.
No service charge shall be made for any registration of transfer or
exchange of Certificates, but the Owner Trustee may require payment of a sum
sufficient to cover any tax or governmental charge that may be imposed in
connection with any transfer or exchange of Certificates.
SECTION 11.04. Mutilated, Destroyed, Lost, or Stolen Certificates. If
(a) any mutilated Certificate shall be surrendered to the Owner Trustee, or if
the Owner Trustee shall receive evidence to its satisfaction of the destruction,
loss, or theft of any Certificate and (b) there shall be delivered to the Owner
Trustee such security or indemnity as may be required by it to save it harmless,
then in the absence of notice that such Certificate shall have been acquired by
a bona fide purchaser, the Owner Trustee on behalf of the Trust shall execute
and the Owner Trustee shall authenticate and deliver, in exchange for or in lieu
of any such mutilated, destroyed, lost, or stolen Certificate, a new Certificate
of like tenor and denomination. In connection with the issuance of any new
Certificate under this Section 11.04, the Owner Trustee may require the payment
of a sum sufficient to cover any tax or other governmental charge that may be
imposed in connection therewith. Any duplicate Certificate issued pursuant to
this Section 11.04 shall constitute conclusive evidence of ownership in the
Trust, as if originally issued, whether or not the lost, stolen, or destroyed
Certificate shall be found at any time.
SECTION 11.05. Agreement Regarding Tax Matters. The Owner Trustee, the
Seller as initial Certificateholder and each successor Certificateholder (as a
condition to acquiring its Certificate)
30
agree to disregard the Trust as a separate entity and to treat the Notes as
indebtedness for federal, state and local income and franchise tax purposes.
SECTION 11.06. Signature on Returns; Tax Matters Partner. (a) The
Seller shall sign on behalf of the Trust the tax returns of the Trust.
(b) If Subchapter K of the Code should be applicable to the Trust, the
Seller shall be designated the "tax matters partner" of the Trust pursuant to
Section 6231(a)(7)(A) of the Code and applicable Treasury Regulations.
ARTICLE XII
The Seller
SECTION 12.01. Representations and Undertakings of Seller. (a) The
Seller makes the following representations on which the Owner Trustee relies in
accepting the Receivables in trust and executing and authenticating the
Certificates and undertaking its obligations under the Indenture. The Seller
agrees that the representations shall also be for the benefit of the Secured
Parties. The representations speak as of the execution and delivery of this
Agreement and shall survive the sale of the Receivables to the Owner Trustee.
(i) Organization and Good Standing. The Seller
shall have been duly organized and shall be validly existing
as a corporation in good standing under the laws of the State
of Delaware, with power and authority to own its properties
and to conduct its business as such properties shall be
currently owned and such business is presently conducted, and
had at all relevant times, and shall have, power, authority,
and legal right to acquire and own the Receivables.
(ii) Due Qualification. The Seller 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 shall require such
qualifications.
(iii) Power and Authority. The Seller shall have
the power and authority to execute and deliver this Agreement
and to carry out its terms; the Seller shall have full power
and authority to sell and assign the property to be sold and
assigned to and deposited with the Owner Trustee as part of
the Trust and shall have duly authorized such sale and
assignment to the Owner Trustee by all necessary corporate
action; and the execution, delivery, and performance of the
Agreement shall have been duly authorized by the Seller by all
necessary corporate action.
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(iv) Valid Sale; Binding Obligations. This
Agreement shall evidence a valid sale, transfer, and
assignment of the Receivables, enforceable against creditors
of and purchasers from the Seller; and shall evidence a legal,
valid, and binding obligation of the Seller enforceable in
accordance with its terms.
(v) No Violation. The consummation of the
transactions contemplated by the Agreement and the fulfillment
of the terms hereof shall not conflict with, result in any
breach of any of the terms and provisions of, nor constitute
(with or without notice or lapse of time) a default under, the
charter or by-laws of the Seller, or any indenture, agreement,
or other instrument to which the Seller is a party or by which
it shall be bound; nor result in the creation or imposition of
any Lien upon any of its properties pursuant to the terms of
any such indenture, agreement, or other instrument (other than
this Agreement); nor violate any law or, to the best of the
Seller's knowledge, any order, rule, or regulation applicable
to the Seller of any court or of any federal or State
regulatory body, administrative agency, or other governmental
instrumentality having jurisdiction over the Seller or its
properties.
(vi) No Proceedings. There are no proceedings
or investigations pending, or, to the Seller's best knowledge,
threatened, before any court, regulatory body, administrative
agency, or other governmental instrumentality having
jurisdiction over the Seller or its properties: (A) asserting
the invalidity of this Agreement, (B) seeking to prevent the
consummation of any of the transactions contemplated by this
Agreement, (C) seeking any determination or ruling that might
materially and adversely affect the performance by the Seller
of its obligations under, or the validity or enforceability
of, this Agreement, or (D) which might adversely affect the
federal income tax attributes of the Trust.
(b) The Seller further covenants that, prior to termination of the
Trust:
(i) It will not engage at any time in any
business or business activity other than such activities
expressly set forth in its Certificate of Incorporation
delivered to the Insurer on or prior to the Closing Date, and
will not amend its Certificate of Incorporation without the
prior written consent of the Insurer.
(ii) It will not, without the consent of the
Insurer (not to be unreasonably withheld), sell, assign,
pledge or otherwise transfer, in whole, or in part or in any
series of related or unrelated transactions any of its right,
title or interest in or to the Certificates.
(iii) It will not:
(A) Fail to do all things necessary to
maintain its corporate existence separate and apart
from UAC and any other Person, including,
32
without limitation, holding regular meetings of its
stockholders and board of directors and maintaining
appropriate corporate books and records (including a
current minute book);
(B) Suffer any limitation on the
authority of its own directors and officers to
conduct its business and affairs in accordance with
their independent business judgment or authorize or
suffer any Person other than its own officers and
directors to customarily delegated to others under
powers of attorney) for which a corporation's own
Officers and directors would customarily be
responsible;
(C) Fail to (I) maintain or cause to
be maintained by an agent of the Seller under the
Seller's control physical possession of all its books
and records, (II) maintain capitalization adequate
for the conduct of its business, (III) account for
and manage all its liabilities separately from those
of any other Person, including payment by it of all
payroll, administrative expenses and taxes, if any,
from its own assets, (IV) segregate and identify
separately all of its assets from those of any other
Person, (V) to the extent any such payments are made,
pay its employees, officers and agents for services
performed for the Seller or (VI) maintain a separate
office address with a separate telephone number from
those of UAC or any other affiliate thereof; or
(D) Except as may be provided in
this Agreement, or a similar agreement relating to
other securitizations in which the Seller has similar
rights and/or obligations, commingle its funds with
those of UAC or any affiliate thereof or use its
funds for other than the Seller's uses.
SECTION 12.02. Liability of Seller; Indemnities. The Seller shall be
liable in accordance herewith only to the extent of the obligations specifically
undertaken by the Seller under this Agreement.
(i) The Seller shall indemnify, defend, and hold
harmless the Owner Trustee, the Indenture Trustee, their respective
officers, directors, employees and agents, the Trust and the
Noteholders from and against any taxes that may at any time be asserted
against such parties with respect to, and as of the date of, the sale
of the Receivables to the Owner Trustee or the issuance and original
sale of the Certificates and the Notes, including any sales, gross
receipts, general corporation, tangible or intangible personal
property, privilege, or license taxes (but, in the case of the Trust,
not including any taxes asserted with respect to ownership of the
Receivables or federal or other income taxes arising out of
distributions on the Certificates or the Notes) and costs and expenses
in defending against the same.
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(ii) The Seller shall indemnify, defend, and hold
harmless the Owner Trustee, its officers, directors, employees and
agents and the Trust from and against any loss, liability, or expense
incurred by reason of (a) the Seller's willful misfeasance, bad faith,
or negligence in the performance of its duties under this Agreement, or
by reason of reckless disregard of its obligations and duties under
this Agreement and (b) the Seller's violation of federal or State
securities laws in connection with the registration of the sale of the
Certificates.
Indemnification under this Section 12.02 shall include, without
limitation, reasonable fees and expenses of counsel and expenses of litigation.
If the Seller shall have made any indemnity payments to the Owner Trustee or the
Trust pursuant to this Section and the Owner Trustee or the Trust thereafter
shall collect any of such amounts from others, the Owner Trustee or the Trust,
as the case may be, shall repay such amounts to the Seller, without interest.
This indemnification shall survive the termination of this Agreement and the
resignation or removal of the Owner Trustee.
SECTION 12.03. Merger or Consolidation of, or Assumption of the
Obligations of Seller. Any Person (a) into which the Seller may be merged or
consolidated, (b) which may result from any merger or consolidation to which the
Seller shall be a party, or (c) which may succeed to all or substantially all of
the properties and assets of the Seller's business, which Person in any of the
foregoing cases executes an agreement of assumption to perform every obligation
of the Seller under this Agreement, shall be the successor to the Seller
hereunder without the execution or filing of any document or any further act by
any of the parties to this Agreement; provided, however, that (i) immediately
after giving effect to such transaction, no representation or warranty made
pursuant to Section 7.01 shall have been breached and no Event of Default, and
no event that, after notice or lapse of time, or both, would become an Event of
Default shall have happened and be continuing, (ii) the Seller shall have
delivered to the Owner Trustee an Officers' Certificate and an Opinion of
Counsel each stating that such consolidation, merger, or succession and such
agreement of assumption comply with this Section 12.03 and that all conditions
precedent, if any, provided for in this Agreement relating to such transaction
have been complied with and (iii) the Seller shall have delivered 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 the
Owner Trustee and the Indenture Trustee 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 interest.
Notwithstanding the forgoing, the Seller shall not engage in any merger or
consolidation with any Person, or a disposition of all or substantially all of
its assets without the prior written consent of the Insurer, not to be
unreasonably withheld.
SECTION 12.04. Limitation on Liability of Seller and Others. The Seller
and any director or officer or employee or agent of the 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
hereunder. The Seller shall not be under any obligation to appear in, prosecute,
or
34
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.
ARTICLE XIII
The Servicer
SECTION 13.01. Representations of Servicer. The Servicer makes the
following representations on which the Owner Trustee relies in accepting the
Receivables in trust and executing and authenticating the Certificates and
executing and delivering the Indenture. The Servicer agrees that the
representations shall also be for the benefit of the Secured Parties. The
representations speak as of the execution and delivery of this Agreement and
shall survive the sale of the Receivables to the Owner Trustee and the pledge to
the Secured Parties pursuant to the Indenture.
(i) Organization and Good Standing. The Servicer shall
have been duly organized and shall be validly existing as a corporation
under the laws of the State of Indiana, with power and authority to own
its properties and to conduct its business as such properties shall be
currently owned and such business is presently conducted, and had at
all relevant times, and shall have, power, authority, and legal right
to acquire, own, sell, and service the Receivables and to hold the
Receivable Files as custodian on behalf of the Owner Trustee.
(ii) Due Qualification. The 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.
(iii) Power and Authority. The Servicer shall have the
power and authority to execute and deliver this Agreement and to carry
out its terms; and the execution, delivery, and performance of this
Agreement shall have been duly authorized by the Servicer by all
necessary corporate action.
(iv) Binding Obligations. This Agreement shall
constitute a legal, valid, and binding obligation of the Servicer
enforceable in accordance with its terms, except as enforceability may
be limited by bankruptcy, insolvency, reorganization, or other similar
laws affecting the enforcement of creditors' rights in general and by
general principles of equity, regardless of whether such enforceability
shall be considered in a proceeding in equity or at law.
(v) No Violation. The consummation of the transactions
contemplated by this Agreement and the fulfillment of the terms hereof
shall not conflict with, result in any breach of any of the terms and
provisions of, nor constitute (with or without notice or lapse of time)
a default under, the charter or by-laws of the Servicer, or any
indenture, agreement,
35
or other instrument to which the Servicer is a party or by which it
shall be bound; nor result in the creation or imposition of any Lien
upon any of its properties pursuant to the terms of any such indenture,
agreement, or other instrument (other than this Agreement); nor violate
any law or, to the best of the Servicer's knowledge, any order, rule,
or regulation applicable to the Servicer of any court or of any federal
or State regulatory body, administrative agency, or other governmental
instrumentality having jurisdiction over the Servicer or its
properties.
(vi) No Proceedings. There are no proceedings or
investigations pending, or, to the Servicer's knowledge, threatened,
before any court, regulatory body, administrative agency, or other
governmental instrumentality having jurisdiction over the Servicer or
its properties: (A) asserting the invalidity of this Agreement, (B)
seeking to prevent the consummation of any of the transactions
contemplated by this Agreement, (C) seeking any determination or ruling
that might materially and adversely affect the performance by the
Servicer of its obligations under, or the validity or enforceability
of, this Agreement, or (D) which might adversely affect the federal
income tax attributes of the Trust.
SECTION 13.02. Indemnities of Servicer. The Servicer shall be liable in
accordance herewith only to the extent of the obligations specifically
undertaken by the Servicer under this Agreement.
(i) The Servicer shall defend, indemnify, and hold
harmless the Owner Trustee, the Indenture Trustee, and their officers,
directors, employees and agents, the Trust, the Certificateholders and
the Noteholders from and against any and all costs, expenses, losses,
damages, claims, and liabilities, arising out of or resulting from the
use, ownership, or operation by the Servicer or any affiliate thereof
of a Financed Vehicle.
(ii) The Servicer shall indemnify, defend and hold
harmless the Owner Trustee, the Indenture Trustee, their officers,
directors, employees and agents and the Trust from and against any
taxes that may at any time be asserted against such parties with
respect to the transactions contemplated herein, including, without
limitation, any sales, gross receipts, general corporation, tangible or
intangible personal property, privilege, or license taxes (but, in the
case of the Trust, not including any taxes asserted with respect to,
and as of the date of, the sale of the Receivables to the Trust or the
issuance and original sale of the Certificates, the Notes, or asserted
with respect to ownership of the Receivables, or federal or other
income taxes arising out of distributions on the Certificates or the
Notes) and costs and expenses in defending against the same.
(iii) The Servicer shall indemnify, defend, and hold
harmless the Owner Trustee, the Indenture Trustee, the Insurer, their
officers, directors, employees and agents, and the Trust, the
Certificateholders and the Noteholders from and against any and all
costs, expenses, losses, claims, damages, and liabilities to the extent
that such cost, expense, loss, claim, damage, or liability arose out
of, or was imposed upon such parties through, the negligence, willful
misfeasance, or bad faith of the Servicer in the performance of its
duties
36
under this Agreement, or by reason of reckless disregard of its
obligations and duties under this Agreement. This indemnity shall
survive the termination of this Agreement or the Trust and the
resignation or removal of the Owner Trustee.
(iv) The Servicer shall indemnify, defend, and hold
harmless the Owner Trustee, the Indenture Trustee, their respective
officers, directors, employees and agents and the Trust from and
against 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 herein contained, except to the
extent that such cost, expense, loss, claim, damage or liability: (a)
shall be due to the willful misfeasance, bad faith, or negligence of
the Owner Trustee or the Indenture Trustee; (b) relates to any tax
other than the taxes with respect to which either the Seller or
Servicer shall be required to indemnify the Owner Trustee or the
Indenture Trustee; (c) shall arise from the breach of any of
representations or warranties of the Owner Trustee set forth in Section
15.13 or by the Indenture Trustee set forth in Section 15.13 of the
Indenture; (d) shall be one as to which the Seller is required to
indemnify the Owner Trustee or the Indenture Trustee; or (e) shall
arise out of or be incurred in connection with the acceptance or
performance by the Owner Trustee of the duties of successor Servicer.
Indemnification under this Section 13.02 shall include reasonable fees
and expenses of counsel and expenses of litigation. If the Servicer shall have
made any indemnity payments pursuant to this Section and the recipient
thereafter collects any of such amounts from others, the recipient shall
promptly repay such amounts to the Servicer, without interest. This
indemnification shall survive the termination of this Agreement and the removal
of the Servicer.
SECTION 13.03. Merger or Consolidation of, or Assumption of the
Obligations of Servicer. Any Person (a) into which the Servicer may be merged or
consolidated, (b) which may result from any merger or consolidation to which the
Servicer shall be a party, or (c) which may succeed to all or substantially all
of the properties and assets of the Servicer's indirect automobile financing and
receivables servicing business, which Person in any of the foregoing cases
executes an agreement of assumption to perform every obligation of the Servicer
hereunder, shall be the successor to the Servicer under this Agreement without
further act on the part of any of the parties to this Agreement; provided,
however, that (i) immediately after giving effect to such transaction, no Event
of Default, and no event which, after notice or lapse of time, or both, would
become an Event of Default shall have happened and be continuing, (ii) the
Servicer shall have delivered to the Owner Trustee an Officers' Certificate and
an Opinion of Counsel each stating that such consolidation, merger or succession
and such agreement of assumption comply with this Section 13.03 and that all
conditions precedent provided for in this Agreement relating to such transaction
have been complied with and (iii) the Servicer shall have delivered 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 the Owner Trustee and the Secured Parties 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
interest. Notwithstanding the forgoing, the Servicer shall not engage in any
merger or consolidation
37
in which it is not the surviving corporation without the prior written consent
of the Insurer, not to be unreasonably withheld.
SECTION 13.04. Limitation on Liability of Servicer and Others. Neither
the Servicer nor any of the directors or officers or employees or agents of the
Servicer shall be under any liability to the Trust, the Indenture Trustee, the
Certificateholders or the Noteholders, except as provided under this Agreement,
for any action taken or for refraining from the taking of any action pursuant to
this Agreement; provided, however, that this provision shall not protect the
Servicer or any such person against any liability that would otherwise be
imposed by reason of willful misfeasance, bad faith, or negligence in the
performance of duties or by reason of reckless disregard of obligations and
duties under this Agreement. The Servicer and any director or officer or
employee or agent of the Servicer may rely in good faith on any document of any
kind prima facie properly executed and submitted by any Person respecting any
matters arising under this Agreement.
Except as provided in this Agreement, the Servicer shall not be under
any obligation to appear in, prosecute, or defend any legal action that shall
not be incidental to its duties to service the Receivables in accordance with
this Agreement (collection actions with respect to Defaulted Receivables are
understood to be incidental to the Servicer's duties to service the
Receivables), and that in its opinion may involve it in any expense or
liability.
SECTION 13.05. Servicer Not to Resign. The Servicer shall not resign
from its obligations and duties under this Agreement except upon determination
that the performance of its duties shall no longer be permissible under
applicable law or otherwise with the consent of the Owner Trustee, the Indenture
Trustee and the Insurer. Any determination described above permitting the
resignation of the Servicer shall be evidenced by an Opinion of Counsel to such
effect delivered to the Owner Trustee. No such resignation shall become
effective until the Owner Trustee or a successor servicer shall have assumed the
responsibilities and obligations of the Servicer in accordance with Section
14.02.
SECTION 13.06. Delegation of Duties. Except as provided in Section
13.03 hereof, it is understood and agreed by the parties hereto that the
Servicer or the Seller may at any time delegate any duties including duties as
custodian to any Person willing to accept such delegation and to perform such
duties (including any affiliate of the Servicer) in accordance with the
customary procedures of the Servicer. In connection with such delegation, the
Servicer or the Seller may assign rights to the delegee or direct the payment to
the delegee of benefits or amounts otherwise inuring to the benefit of, or
payable to, the Seller or the Servicer hereunder. Any such delegation shall not
relieve the Servicer or the Seller of their respective liability and
responsibility with respect to such duties, and shall not constitute a
resignation within Section 13.05 hereof. The Servicer shall give written notice
to the Rating Agencies, the Owner Trustee, the Indenture Trustee and the Insurer
of any such delegation.
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ARTICLE XIV
Servicer Default
SECTION 14.01. Events of Servicer Default. If any one of the following
events ("Events of Servicer Default") shall occur and be continuing:
(i) Any failure by the Servicer or UAC to deliver to
the Collection Account (or to the Indenture Trustee for distribution to
the Noteholders) any proceeds or payment required to be so delivered
under the terms of the Indenture, this Agreement or the Purchase
Agreement or any failure by the Servicer to deliver any Servicer's
Certificate pursuant to Section 8.09 that, in either case, shall
continue unremedied for a period of two Business Days (A) after written
notice from either the Owner Trustee, the Indenture Trustee or the
Insurer (so long as the Insurer is not in default of its obligations
under the Policy) or by the holders of Notes evidencing not less than
25% of the aggregate outstanding balance of the Notes is received by
the Servicer or UAC as specified in this Agreement or (B) after
discovery by an officer of the Servicer; or
(ii) Failure on the part of the Servicer, the Seller or
UAC duly to observe or to perform in any material respect any other
covenants or agreements of the Servicer, the Seller or UAC, as the case
may be, set forth in this Agreement or the Purchase Agreement, which
failure shall (a) materially and adversely affect the rights of
Certificateholders or the Secured Parties and (b) 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 to
the Servicer, UAC or the Seller, as the case may be, by the Owner
Trustee, the Indenture Trustee or the Insurer (so long as the Insurer
is not in default of its obligations under the Policy) or by the
holders of Notes evidencing not less than 25% of the aggregate
outstanding balance of the Notes; or
(iii) The occurrence of an Insolvency Event with respect to
the Servicer;
then, and in each and every case, so long as an Event of Default shall not have
been remedied, the Insurer (so long as the Insurer is not in default of its
obligations under the Policy), or the Indenture Trustee (upon direction to do so
by the holders of Notes evidencing not less than 25% of the outstanding
principal balance of the Notes if the Insurer is in default under the Policy),
by notice then given in writing to the Servicer may, terminate all of the rights
and obligations of the Servicer under this Agreement. In addition, if a Trigger
Event (as defined in the Insurance Agreement) shall have occurred, the Insurer
may (A) require that the Owner Trustee deliver a notice of termination to the
Servicer and appoint a successor Servicer designated by the Insurer in such
notice pursuant to Section 14.02; (B) require that the Owner Trustee amend
certificates of title relating to the Financed Vehicles and take other actions
to identify the Indenture Trustee (on behalf of the Secured Parties) as the new
secured party on such certificates of title; (C) as provided in the Insurance
Agreement, require that the Servicer or successor Servicer or the Owner Trustee
instruct Obligors in respect of the
39
Receivables to remit payment on the Receivable directly to the Owner Trustee or
a separate account established exclusively for the Trust; and (D) as provided in
the Insurance Agreement, compel transfer by the Servicer of all Receivables
Files and, if applicable, certain rights in respect of servicing systems assets
to the Insurer or to the successor Servicer designated by the Insurer. On or
after the receipt by the Servicer of such written notice, all authority and
power of the Servicer under this Agreement, whether with respect to the
Certificates, the Notes or the Receivables or otherwise, shall, without further
action, pass to and be vested in the Owner Trustee (except that the Owner
Trustee may but shall not be required to make Advances) or such successor
Servicer as may be appointed under Section 14.02 pursuant to and under this
Section 14.01; and, without limitation, the Owner Trustee is hereby authorized
and empowered to execute and deliver, on behalf of the predecessor Servicer, as
attorney-in-fact or otherwise, any and all documents and other instruments, and
to do or accomplish all other acts or things necessary or appropriate to effect
the purposes of such notice of termination, whether to complete the transfer and
endorsement of the Receivables and related documents, or otherwise. The
predecessor Servicer shall cooperate with the successor Servicer and the 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 of electronic records related to the Receivables in such form
as the successor Servicer may reasonably request and the transfer to the
successor Servicer for administration by it of all cash amounts that shall at
the time be held by the predecessor Servicer for deposit, or shall thereafter be
received with respect to a Receivable. 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 14.01 shall be paid
by the predecessor Servicer upon presentation of reasonable documentation of
such costs and expenses.
SECTION 14.02. Appointment of Successor. (a) Upon the Servicer's
receipt of notice of termination pursuant to Section 14.01 or the Servicer's
resignation in accordance with the terms of this Agreement, the predecessor
Servicer shall continue to perform its functions as Servicer under this
Agreement, in the case of termination, only until the date specified in such
termination notice or, if no such date is specified in a notice of termination,
until receipt of such notice and, in the case of resignation, until the later of
(x) the date 45 days from the delivery to the Owner Trustee and the Indenture
Trustee of written notice of such resignation (or written confirmation of such
notice) in accordance with the terms of this Agreement and (y) the date upon
which the predecessor Servicer shall become unable to act as Servicer, as
specified in the notice of resignation and accompanying Opinion of Counsel. In
the event of the Servicer's resignation or termination hereunder, the Indenture
Trustee shall appoint a successor Servicer, which successor Servicer shall be
reasonably acceptable to the Insurer (so long as the Insurer is not in default
of its obligations under the Policy), and the successor Servicer shall accept
its appointment by a written assumption in form acceptable to the Owner Trustee
and the 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 14.02, the Indenture Trustee without
further action shall automatically be appointed the successor Servicer.
Notwithstanding the above, the Indenture Trustee shall, if it shall be legally
unable or unwilling so to act, appoint, or petition a court of competent
jurisdiction to appoint, any established financial institution, having a net
worth of not less than $50,000,000 and whose regular
40
business shall include the servicing of automotive receivables, as the successor
to the Servicer under this Agreement and which financial institution is, in the
case of appointment by the Owner Trustee, reasonably acceptable to the Insurer
and the Indenture Trustee.
(b) Upon appointment, the 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 Monthly
Servicing Fee and all of the rights granted to the predecessor Servicer, by the
terms and provisions of this Agreement. The predecessor Servicer shall be
entitled to be reimbursed for Outstanding Advances.
(c) In connection with such appointment, the Owner Trustee may make
such arrangements for the successor Servicer out of payments on Receivables it
and such successor Servicer shall agree; provided, however, that no such
compensation shall be in excess of that permitted the original Servicer under
this Agreement. The Owner Trustee and such successor Servicer shall take such
action, consistent with this Agreement, as shall be necessary to effectuate any
such succession.
SECTION 14.03. Notice of Events of Servicer Default. Upon any notice of
an Event of Servicer Default or upon any termination of, or appointment of a
successor to, the Servicer pursuant to this Article XIV, the Owner Trustee shall
give prompt written notice thereof to Certificateholders at their respective
addresses appearing in the Certificate Register and to the Indenture Trustee for
further notice thereof to the Noteholders.
SECTION 14.04. Waiver of Past Defaults. The Insurer (so long as the
Insurer is not in default of its obligations under the Policy) or the Indenture
Trustee (if the Insurer is in default under the Policy) upon direction from
holders of Notes evidencing not less than 51% of the outstanding principal
balance of the Notes may waive any default by the Servicer in the performance of
its obligations hereunder and its consequences, except a default in making any
required deposits to or payments from the Collection Account in accordance with
this Agreement; provided, that no waiver of any default or provision of this
Agreement shall become effective without the consent of the Insurer (unless the
Insurer is in default of its obligations under the Policy). Upon any such waiver
of a past default, such default shall cease to exist, and any Event of Default
arising therefrom shall be deemed to have been remedied for every purpose of
this Agreement. No such waiver shall extend to any subsequent or other default
or impair any right consequent thereon.
ARTICLE XV
The Owner Trustee
SECTION 15.01. Duties of Owner Trustee. The Owner Trustee, both prior
to and after the occurrence of an Event of Default, shall undertake to perform
such duties as are specifically set forth in this Agreement. If an Event of
Default shall have occurred and shall not have been cured and, in
41
the case of an Event of Default described in clause (i) of Section 14.01, the
Owner Trustee has received notice of such Event of Default, the Owner Trustee
shall exercise such of the rights and powers vested in it by this Agreement, and
shall use the same degree of care and skill in their exercise, as a prudent
person would exercise or use under the circumstances in the conduct of his own
affairs; provided, however, that if the Owner Trustee shall assume the duties of
the Servicer pursuant to Section 14.02, the Owner Trustee in performing such
duties shall use the degree of skill and attention customarily exercised by a
servicer with respect to automobile receivables that it services for itself or
others.
It shall be the duty of the Owner Trustee to discharge (or cause to be
discharged) all its responsibilities pursuant to the terms of this Agreement and
the other documents to which the Trust is a party and to administer the Trust in
the interest of the Certificateholders, subject to and in accordance with the
provisions of this Agreement and the other documents to which the Trust is a
party. Without limiting the foregoing, the Owner Trustee shall on behalf of the
Trust file and prove any claim or claims that may exist on behalf of the Trust
against the Seller in connection with any claims paying procedure as part of an
insolvency or a receivership proceeding involving the Seller. Notwithstanding
the foregoing, the Owner Trustee shall be deemed to have discharged its duties
and responsibilities hereunder and under the other documents to which the Trust
is a party to the extent the Administrator has agreed in the Administration
Agreement to perform any act or to discharge any duty of the Owner Trustee
hereunder or under any other document to which the Trust is a party, and the
Owner Trustee shall not be held liable for the default or failure of the
Administrator to carry out its obligations under the Administration Agreement.
Except as expressly provided in the documents to which the Trust is a party, the
Owner Trustee shall have no obligation to administer, service or collect the
Receivables or to maintain, monitor or otherwise supervise the administration,
servicing or collection of the Receivables.
The Owner Trustee, upon receipt of all resolutions, certificates,
statements, opinions, reports, documents, orders or other instruments furnished
to the Owner Trustee that shall be specifically required to be furnished
pursuant to any provision of this Agreement, shall examine them to determine
whether they conform to the requirements of this Agreement.
No provision of this Agreement shall be construed to relieve the Owner
Trustee from liability for its own negligent action, its own negligent failure
to act, or its own bad faith; provided, however, that:
(i) Prior to the occurrence of an Event of Default, and
after the curing of all such Events of Servicer Default that may have
occurred, the duties and obligations of the Owner Trustee shall be
determined solely by the express provisions of this Agreement, the
Owner Trustee shall not be liable except for the performance of such
duties and obligations as shall be specifically set forth in this
Agreement, no implied covenants or obligations shall be read into this
Agreement against the Owner Trustee and, in the absence of bad faith on
the part of the Owner Trustee, or manifest error, the Owner Trustee may
conclusively rely on the truth of the statements and the correctness of
the opinions expressed in any certificates or opinions furnished to the
Owner Trustee and conforming to the requirements of this Agreement;
(ii) The Owner Trustee shall not be liable for an error
of judgment made in good faith by a Responsible Officer, unless it
shall be proved that the Owner Trustee shall have been negligent in
ascertaining the pertinent facts;
(iii) The Owner Trustee shall not be liable with respect
to any action taken, suffered, or omitted to be taken in good faith in
accordance with this Agreement or at the direction of the Certificates
relating to the time, method, and place of conducting any proceeding
for any remedy available to the Owner Trustee, or exercising any trust
or power conferred upon the Owner Trustee, under this Agreement;
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(iv) The Owner Trustee shall not be charged with
knowledge of any failure by the Servicer to comply with the obligations
of the Servicer referred to in clauses (i) or (ii) of Section 14.01, or
of any failure by the Seller to comply with the obligations of the
Seller referred to in clause (ii) of Section 14.01, unless a
Responsible Officer of the Owner Trustee receives written notice of
such failure (it being understood that knowledge of the Servicer or the
Servicer as custodian, in its capacity as agent for the Owner Trustee,
is not attributable to the Owner Trustee) from the Servicer or the
Seller, as the case may be; and
(v) Without limiting the generality of this Section or
Section 15.04, the Owner Trustee shall have no duty (A) to see to any
recording, filing, or depositing of this Agreement or any agreement
referred to therein or any financing statement evidencing a security
interest in the Receivables or the Financed Vehicles, or to see to the
maintenance of any such recording or filing or depositing or to any
rerecording, refiling or redepositing of any thereof, (B) to see to any
insurance of the Financed Vehicles or Obligors or to effect or maintain
any such insurance, (C) to see to the payment or discharge of any tax,
assessment, or other governmental charge or any Lien or encumbrance of
any kind owing with respect to, assessed, or levied against, any part
of the Trust, (D) to confirm or verify the contents of any reports or
certificates of the Servicer delivered to the Owner Trustee pursuant to
this Agreement believed by the Owner Trustee to be genuine and to have
been signed or presented by the proper party or parties, or (E) to
inspect the Financed Vehicles at any time or ascertain or inquire as to
the performance or observance of any of the Seller's or the Servicer's
representations, warranties or covenants or the Servicer's duties and
obligations as Servicer and as custodian of the Receivable Files under
this Agreement.
The Owner Trustee shall not be required to expend or risk its own funds
or otherwise incur financial liability in the performance of any of its duties
hereunder, or in the exercise of any of its rights or powers, if there shall be
reasonable ground for believing that the repayment of such funds or adequate
indemnity against such risk or liability shall not be reasonably assured to it,
and none of the provisions contained in this Agreement shall in any event
require the Owner Trustee to perform, or be responsible for the manner of
performance of, any of the obligations of the Servicer under this Agreement
except during such time, if any, as the Owner Trustee shall be the successor to,
and be vested with the rights, duties, powers, and privileges of, the Servicer
in accordance with the terms of this Agreement. Except for actions expressly
authorized by this Agreement, the Owner Trustee shall take no action reasonably
likely to impair the security interests created or existing under any Receivable
or to impair the value of any Receivable.
SECTION 15.02. Owner Trustee's Certificate. On or as soon as
practicable after each Payment Date on which Receivables shall be (i) assigned
to UAC pursuant to Section 7.02 or deemed to be assigned to the Seller as a
result of the application of Available Funds in respect of Defaulted Receivables
pursuant to Sections 9.04 and 9.05 or (ii) assigned to the Servicer pursuant to
Section 8.07 or to the Certificateholder pursuant to Section 16.02, the Owner
Trustee shall, at the written request of the Servicer, execute a Owner Trustee's
Certificate, substantially in the form of, in the case of an assignment to UAC,
Exhibit 1, or, in the case of an assignment to the Servicer, Exhibit 2, based
43
on the information contained in the Servicer's Certificate for the related
Collection Period, amounts deposited to the Collection Account, and notices
received pursuant to this Agreement, identifying the Receivables repurchased or
deemed to be repurchased by UAC pursuant to Section 7.02 or 9.02 or purchased by
the Servicer pursuant to Section 8.07 or the Certificateholders pursuant to
Section 16.02 during such Collection Period, and shall deliver such Owner
Trustee's Certificate, accompanied by a copy of the Servicer's Certificate for
such Collection Period to UAC or the Servicer, as the case may be. The Owner
Trustee's Certificate shall be an assignment pursuant to Section 15.03.
SECTION 15.03. Owner Trustee's Assignment of Purchased Receivables.
With respect to each Receivable repurchased by UAC pursuant to Section 7.02, or
deemed to be so repurchased pursuant to Section 9.02, purchased by the Servicer
pursuant to Section 8.07 or the Certificateholders pursuant to Section 16.02,
the Owner Trustee shall assign, as of the last day of the Collection Period
during which such Receivable became a Defaulted Receivable or became subject to
repurchase by UAC or purchase by the Servicer or the Certificateholders, without
recourse, representation, or warranty, to UAC, the Servicer or the
Certificateholders (as the case may be) all the Owner Trustee's right, title,
and interest in and to such Receivables, and all security and documents relating
thereto, such assignment being an assignment outright and not for security. If
in any enforcement suit or legal proceeding it shall be held that the Servicer
may not enforce a Receivable on the ground that it shall not be a real party in
interest or a holder entitled to enforce the Receivable, the Owner Trustee
shall, at the Servicer's expense, take such steps as the Owner Trustee deems
necessary to enforce the Receivable, including bringing suit in its name and/or
the name of the Indenture Trustee.
SECTION 15.04. Certain Matters Affecting the Owner Trustee. Except as
otherwise provided in Section 15.01:
(i) The Owner Trustee may rely and shall be protected
in acting or refraining from acting upon any resolution, Officers'
Certificate, Servicer's Certificate, certificate of auditors, or any
other certificate, statement, instrument, opinion, report, notice,
request, consent, order, appraisal, bond, or other paper or document
believed by it to be genuine and to have been signed or presented by
the proper party or parties.
(ii) The Owner Trustee may consult with counsel and any
written advice or Opinion of Counsel shall be full and complete
authorization and protection in respect of any action taken or suffered
or omitted by it under this Agreement in good faith and in accordance
with such written advice or Opinion of Counsel.
(iii) The Owner Trustee shall be under no obligation to
exercise any of the rights or powers vested in it by this Agreement, or
to institute, conduct, or defend any litigation under this Agreement or
in relation to this Agreement, at the request, order, or direction of
any of the Certificateholders pursuant to the provisions of this
Agreement, unless such Certificateholders shall have offered to the
Owner Trustee reasonable security or indemnity reasonably satisfactory
to the Owner Trustee against the costs, expenses, and liabilities that
may be incurred therein or thereby. Nothing contained in this
Agreement,
44
however, shall relieve the Owner Trustee of the obligations, upon the
occurrence of an Event of Default (that shall not have been cured), to
exercise such of the rights and powers vested in it by this Agreement,
and to use the same degree of care and skill in their exercise as a
prudent man would exercise or use under the circumstances in the
conduct of his own affairs.
(iv) The Owner Trustee shall not be liable for any
action taken, suffered, or omitted by it in good faith and believed by
it to be authorized or within the discretion or rights or powers
conferred upon it by this Agreement.
(v) Prior to the occurrence of an Event of Default and
after the curing of all Events of Servicer Default that may have
occurred, the Owner Trustee shall not be bound to make any
investigation into the facts of matters stated in any resolution,
certificate, statement, instrument, opinion, report, notice, request,
consent, order, approval, bond, or other paper or document, unless
requested in writing so to do by the Indenture Trustee or holders of
Notes evidencing not less than 25% of the outstanding principal balance
of the Notes; provided, however, that if the payment within a
reasonable time to the Owner Trustee of the costs, expenses, or
liabilities likely to be incurred by it in the making of such
investigation shall be, in the opinion of the Owner Trustee, not
reasonably assured to the Owner Trustee by the security afforded to it
by the terms of this Agreement, the Owner Trustee may require
reasonable indemnity against such cost, expense, or liability as a
condition to so proceeding. The reasonable expense of every such
examination shall be paid by the Servicer or, if paid by the Owner
Trustee, shall be reimbursed by the Servicer upon demand. Nothing in
this clause (v) shall affect the obligation of the Servicer to observe
any applicable law prohibiting disclosure of information regarding the
Obligors.
(vi) The Owner Trustee may execute any of the trusts or
powers hereunder or perform any duties under this Agreement either
directly or by or through agents or attorneys or a custodian. The Owner
Trustee shall not be responsible for any misconduct or negligence
solely attributable to the acts or omissions of the Servicer in its
capacity as Servicer or custodian.
(vii) Subsequent to the sale of the Receivables by the
Seller to the Owner Trustee, the Owner Trustee shall have no duty of
independent inquiry, except as may be required by Section 15.01, and
the Owner Trustee may rely upon the representations and warranties and
covenants of the Seller and the Servicer contained in this Agreement
with respect to the Receivables and the Receivable Files.
SECTION 15.05. Owner Trustee Not Liable for Certificates or
Receivables. The recitals contained herein and in the Certificates (other than
the certificate of authentication on the Certificates) shall be taken as the
statements of the Seller or the Servicer, as the case may be, and the Owner
Trustee assumes no responsibility for the correctness thereof. The Owner Trustee
shall make no representations as to the validity or sufficiency of this
Agreement or of the Certificates (other than the certificate of authentication
on the Certificates), or of any Receivable or related document. The
45
Owner Trustee shall at no time have any responsibility or liability for or with
respect to the legality, validity, and enforceability of any security interest
in any Financed Vehicle or any Receivable, or the perfection and priority of
such a security interest or the maintenance of any such perfection and priority,
or for or with respect to the efficacy of the Trust or its ability to generate
the payments to be distributed to the Certificateholder or the Noteholders under
this Agreement or the Indenture, including, without limitation: the existence,
condition, location, and ownership of any Financed Vehicle; the existence and
enforceability of any physical damage insurance, lender's single interest
insurance, or credit life or disability and hospitalization insurance with
respect to any Receivable; the existence and contents of any Receivable or any
computer or other record thereof; the validity of the assignment of any
Receivable to the Trust or of any intervening assignment; the completeness of
any Receivable; the performance or enforcement of any Receivable; the compliance
by the Seller or the Servicer with any warranty or representation made under
this Agreement or in any related document and the accuracy of any such warranty
or representation prior to the Owner Trustee's receipt of notice or other
discovery of any noncompliance therewith or any breach thereof; any investment
of monies by the Servicer or any loss resulting therefrom (it being understood
that the Owner Trustee shall remain responsible for any Trust property that it
may hold); the acts or omissions of the Seller, the Servicer, or any Obligor; an
action of the Servicer taken in the name of the Owner Trustee; or any action by
the Owner Trustee taken at the instruction of the Servicer; provided, however,
that the foregoing shall not relieve the Owner Trustee of its obligation to
perform its duties under this Agreement. Except with respect to a claim based on
the failure of the Owner Trustee to perform its duties under this Agreement or
based on the Owner Trustee's negligence or willful misconduct, no recourse shall
be had for any claim based on any provision of this Agreement, the
Certificateholder or the Noteholders, or any Receivable or assignment thereof
against the Owner Trustee in its individual capacity, the Owner Trustee shall
not have any personal obligation, liability, or duty whatsoever to any
Certificateholder or the Noteholders or any other Person with respect to any
such claim, and any such claim shall be asserted solely against the Trust or any
indemnitor who shall furnish indemnity as provided in this Agreement. The Owner
Trustee shall not be accountable for the use or application by the Seller of any
of the Certificates or Notes or of the proceeds thereof, or for the use or
application of any funds paid to the Seller or the Servicer in respect of the
Receivables.
SECTION 15.06. Owner Trustee May Own Notes. The Owner Trustee in its
individual or any other capacity may become the owner or pledgee of Notes with
the same rights as it would have if it were not Trustee.
SECTION 15.07. Owner Trustee's and Indenture Trustee's Fees and
Expenses. (a) The Servicer shall pay to the Owner Trustee, and the Owner Trustee
shall be entitled to, reasonable compensation (which shall not be limited by any
provision of law in regard to the compensation of a trustee of an express trust)
for all services rendered by it in the execution of the trusts created by this
Agreement and in the exercise and performance of any of the Owner Trustee's
powers and duties under this Agreement and the Indenture, and the Servicer shall
pay or reimburse the Owner Trustee upon its request for all reasonable expenses,
disbursements, and advances (including the reasonable compensation and the
expenses and disbursements of its counsel and of all persons not regularly in
its employ) incurred or made by the Owner Trustee in accordance with any
provisions of this
46
Agreement and the Indenture, except any such expense, disbursement, or advance
as may be attributable to its willful misfeasance, negligence, or bad faith, and
the Servicer shall indemnify the Owner Trustee (which, for purposes of this
section, shall include its directors, officers, employees, and agents) for and
hold it harmless against any loss, liability, or expense incurred without
willful misfeasance, negligence, or bad faith on its part, arising out of or in
connection with the acceptance or administration of the Trust, including the
costs and expenses of defending itself against any claim or liability in
connection with the exercise or performance of any of its powers or duties under
this Agreement and the Indenture. Additionally, the Seller, pursuant to Section
12.02, and the Servicer, pursuant to Section 13.02, respectively, shall
indemnify the Owner Trustee with respect to certain matters. This indemnity
shall survive the termination of this Agreement and the Indenture or the
termination of the Trust and the resignation or removal of the Owner Trustee.
(b) The Servicer hereby agrees to pay or reimburse the fees and
expenses of the Indenture Trustee as provided in Section 15.07 of the Indenture.
SECTION 15.08. Eligibility Requirements for Owner Trustee. The Owner
Trustee under this Agreement shall at all times be a corporation (i) having an
office in the same State as the location of the Corporate Trust Office as
specified in this Agreement; (ii) organized and doing business under the laws of
such State or the United States of America; (iii) authorized under such laws to
exercise corporate trust powers; (iv) having a net worth of at least
$50,000,000; (v) subject to supervision or examination by federal or State
authorities; and (vi) the long-term unsecured debt of which is rated at least
Baa3 or which is approved by the Insurer and each Rating Agency. If such
corporation shall publish reports of condition at least annually, pursuant to
law or to the requirements of the aforesaid supervising or examining authority,
then for the purpose of this Section 15.08, the combined capital and surplus of
such corporation shall be deemed to be its combined capital and surplus as set
forth in its most recent report of condition so published. In case at any time
the Owner Trustee shall cease to be eligible in accordance with the provisions
of this Section 15.08, the Owner Trustee shall resign immediately in the manner
and with the effect specified in Section 15.09.
SECTION 15.09. Resignation or Removal of Owner Trustee. The Owner
Trustee may at any time resign and be discharged from the trusts hereby created
by giving written notice thereof to the Servicer. Upon receiving such notice of
resignation, the Servicer, with the prior written consent of the Insurer, shall
promptly appoint a successor Owner Trustee, by written instrument, in duplicate,
one copy of which instrument shall be delivered to the resigning Trustee and one
copy to the successor Owner Trustee. If no successor Owner Trustee shall have
been so appointed and have accepted appointment within 30 days after the giving
of such notice of resignation, the resigning Trustee may petition any court of
competent jurisdiction for the appointment of a successor Owner Trustee.
If at any time the Owner Trustee shall cease to be eligible in
accordance with the provisions of Section 15.08 and shall fail to resign after
written request therefor by the Servicer, or if at any time the Owner Trustee
shall be legally unable to act, or shall be adjudged a bankrupt or insolvent, or
a receiver of the Owner Trustee or of its property shall be appointed, or any
public officer shall take
47
charge or control of the Owner Trustee or of its property or affairs for the
purpose of rehabilitation, conservation, or liquidation, then the Servicer may
remove the Owner Trustee. If it shall remove the Owner Trustee under the
authority of the immediately preceding sentence, the Servicer shall promptly
appoint a successor Owner Trustee by written instrument, in duplicate, one copy
of which instrument shall be delivered to the Owner Trustee so removed and one
copy to the successor Owner Trustee.
Any resignation or removal of the Owner Trustee and appointment of a
successor Owner Trustee pursuant to any of the provisions of this Section 15.09
shall not become effective until acceptance of appointment by the successor
Owner Trustee pursuant to Section 15.10.
SECTION 15.10. Successor Owner Trustee. Any successor Owner Trustee
appointed pursuant to Section 15.09 shall execute, acknowledge, and deliver to
the Servicer and to its predecessor Owner Trustee an instrument accepting such
appointment under this Agreement, and thereupon the resignation or removal of
the predecessor Owner Trustee shall become effective and such successor Owner
Trustee, without any further act, deed, or conveyance, shall become fully vested
with all the rights, powers, duties, and obligations of its predecessor under
this Agreement, with like effect as if originally named as Trustee. The
predecessor Owner Trustee shall deliver to the successor Owner Trustee all
documents and statements held by it under this Agreement; and the Servicer and
the predecessor Owner Trustee shall execute and deliver such instruments and do
such other things as may reasonably be required for fully and certainly vesting
and confirming in the successor Owner Trustee all such rights, powers, duties,
and obligations.
No successor Owner Trustee shall accept appointment as provided in this
Section 15.10 unless at the time of such acceptance such successor Owner Trustee
shall be eligible pursuant to Section 15.08.
Upon acceptance of appointment by a successor Owner Trustee pursuant to
this Section 15.10, the Servicer shall mail notice of the successor of such
Trustee under this Agreement to the Indenture Trustee and to all Holders of
Certificates at their addresses as shown in the Certificate Register. If the
Servicer shall fail to mail such notice within 10 days after acceptance of
appointment by the successor Owner Trustee, the successor Owner Trustee shall
cause such notice to be mailed at the expense of the Servicer.
SECTION 15.11. Merger or Consolidation of Owner Trustee. Any
corporation into which the Owner Trustee may be merged or converted or with
which it may be consolidated, or any corporation resulting from any merger,
conversion, or consolidation to which the Owner Trustee shall be a party, or any
corporation succeeding to all or substantially all of the corporate trust
business of the Owner Trustee, shall be the successor of the Owner Trustee
hereunder, provided such corporation shall be eligible pursuant to Section
15.08, without the execution or filing of any instrument or any further act on
the part of any of the parties hereto, anything herein to the contrary
notwithstanding.
SECTION 15.12. Appointment of Co-Trustee or Separate Owner Trustee.
Notwithstanding any other provisions of this Agreement, at any time, for the
purpose of meeting any legal
48
requirements of any jurisdiction in which any part of the Trust or any Financed
Vehicle may at the time be located, the Servicer and the Owner Trustee acting
jointly shall have the power and shall execute and deliver all instruments to
appoint one or more Persons approved by the Owner Trustee to act as co-trustee,
jointly with the Owner Trustee, or separate trustee or separate trustees, of all
or any part of the Trust, and to vest in such Person, in such capacity and for
the benefit of the Certificateholders, such title to the Trust, or any part
thereof, and, subject to the other provisions of this Section 15.12, such
powers, duties, obligations, rights, and trusts as the Servicer and the Owner
Trustee may consider necessary or desirable. If the Servicer shall not have
joined in such appointment within 15 days after the receipt by it of a request
so to do, or in the case an Event of Default shall have occurred and be
continuing, the Owner Trustee alone shall have the power to make such
appointment. No co-trustee or separate trustee under this Agreement shall be
required to meet the terms of eligibility as a successor Owner Trustee pursuant
to Section 15.08 and no notice to Certificateholders of the appointment of any
co-trustee or separate trustee shall be required pursuant to Section 15.10.
Each separate trustee and co-trustee shall, to the extent permitted by
law, be appointed and act subject to the following provisions and conditions:
(i) All rights, powers, duties, and obligations
conferred or imposed upon the Owner Trustee shall be conferred upon and
exercised or performed by the Owner Trustee and such separate trustee
or co-trustee jointly (it being understood that such separate trustee
or co-trustee is not authorized to act separately without the Owner
Trustee joining in such act), except to the extent that under any law
of any jurisdiction in which any particular act or acts are to be
performed (whether as Trustee under this Agreement or as successor to
the Servicer under this Agreement), the Owner Trustee shall be
incompetent or unqualified to perform such act or acts, in which event
such rights, powers, duties, and obligations (including the holding of
title to the Trust or any portion thereof in any such jurisdiction)
shall be exercised and performed singly by such separate trustee or
co-trustee, but solely at the direction of the Owner Trustee;
(ii) No trustee under this Agreement shall be personally
liable by reason of any act or omission of any other trustee under this
Agreement; and
(iii) The Servicer and the Owner Trustee acting jointly
may at any time accept the resignation of or remove any separate
trustee or co-trustee.
Any notice, request, or other writing given to the Owner Trustee shall
be deemed to have been given to each of the then separate trustees and
co-trustees, as effectively as if given to each of them. Every instrument
appointing any separate trustee or co-trustee shall refer to this Agreement and
the conditions of this Article XV. Each separate trustee and co-trustee, upon
its acceptance of the trusts conferred, shall be vested with the estates or
property specified in its instrument of appointment, either jointly with the
Owner Trustee or separately, as may be provided therein, subject to all the
provisions of this Agreement, specifically including every provision of this
Agreement
49
relating to the conduct of, affecting the liability of, or affording protection
to, the Owner Trustee. Each such instrument shall be filed with the Owner
Trustee and a copy thereof given to the Servicer.
Any separate trustee or co-trustee may at any time appoint the Owner
Trustee, its agent or attorney-in-fact with full power and authority, to the
extent not prohibited by law, to do any lawful act under or in respect of this
Agreement on its behalf and in its name. If any separate trustee or co-trustee
shall die, become incapable of acting, resign, or be removed, all of its
estates, properties, rights, remedies, and trusts shall vest in and be exercised
by the Owner Trustee, to the extent permitted by law, without the appointment of
a new or successor Owner Trustee.
SECTION 15.13. Representations and Warranties of Owner Trustee. The
Owner Trustee shall make the following representations and warranties on which
the Seller, the Certificateholders and the Noteholders may rely:
(i) Organization and Existence. The Owner Trustee is a
Delaware banking corporation duly organized and validly existing under
the laws of the State of Delaware and authorized to engage in a banking
and trust business under such laws.
(ii) Power and Authority. The Owner Trustee has full
power, authority, and legal right to execute, deliver, and perform this
Agreement, and shall have taken all necessary action to authorize the
execution, delivery, and performance by it of this Agreement.
(iii) Duly Executed. This Agreement shall have been duly
executed and delivered by the Owner Trustee and shall constitute the
legal, valid, and binding agreement of the Owner Trustee, enforceable
in accordance with its terms, except as such enforceability may be
limited by (i) bankruptcy, insolvency, liquidation, reorganization,
moratorium, conservatorship, receivership or other similar laws now or
hereinafter in effect relating to the enforcement of creditors' rights
in general, as such laws would apply in the event of a bankruptcy,
insolvency, liquidation, reorganization, moratorium, conservatorship,
receivership or similar occurrence affecting the Owner Trustee, and
(ii) general principles of equity (regardless of whether such
enforceability is considered in a proceeding in equity or at law) as
well as concepts of reasonableness, good faith and fair dealing.
ARTICLE XVI
Termination
SECTION 16.01. Termination of the Trust. The respective obligations and
responsibilities of the Seller, the Servicer and the Owner Trustee created
hereby and the Trust created by this Agreement shall terminate upon (i) the
disposition of the Trust corpus as of the last day of any Collection Period at
the direction of the Certificateholder, at its option, pursuant to Section
16.02, or (ii) the payment to Noteholders and the Insurer of all amounts
required to be paid to them pursuant
50
to this Agreement, the Indenture and the Insurance Agreement (as set forth in
writing by the Insurer) and the disposition of all property held as part of the
Trust; provided, however, that the Trust shall terminate one year and one day
following the date of the occurrence of (i) above, if on the date of such
occurrence, UAC's Consolidated Tangible Net Worth is less than $45,000,000, plus
50% of UAC's cumulative Consolidated Net Income (with no reduction for losses)
from and after August 31, 1995; provided, further, that in no event shall the
trust created by this Agreement continue beyond the expiration of 21 years from
the date as of which this Agreement is executed. The Servicer shall promptly
notify the Owner Trustee of any prospective termination pursuant to this Section
16.01. Notwithstanding the foregoing, the Trust shall continue and the Owner
Trustee shall pursue recovery of any Preference Amounts under the Policy and the
distribution of the same to Noteholders until the Policy terminates by its own
terms.
SECTION 16.02. Optional Disposition of All Receivables. On the last day
of any Collection Period on which the Pool Balance is equal to or less than 10%
of the Original Pool Balance, any Certificateholders owning a majority of
interest in the outstanding Certificates shall have the option to cause the
Owner Trustee to sell (to the Certificateholders or any other person designated
by such Certificateholders) the corpus of the Trust at a price (the "Optional
Disposition Price") equal to the fair market value of the Receivables, but not
less than the sum of (x) 100% of the outstanding principal balance of the Notes
(including any overdue principal or interest thereon), (y) accrued and unpaid
interest on such amount computed at a rate equal to the weighted average
Contract Rate, and (z) all amounts due and owing to the Insurer under this
Agreement, the Indenture and the Insurance Agreement minus any amounts
representing payments received on the Receivables not yet applied to the
interest related thereto or to reduce the principal balance thereof. The
proceeds of such sale will be deposited into the Collection Account for
distribution to the Indenture Trustee (and, to the extent applicable, the
Insurer) on the next succeeding Payment Date. In connection with such
disposition, the Certificateholder is required to pay any unpaid fees and
expenses of the Owner Trustee and the Indenture Trustee that it would otherwise
have been entitled to pursuant to this Agreement. The Servicer shall notify the
Owner Trustee and the Certificateholder on or before the Determination Date if
the Pool Balance as of the end of the related Collection Period will be less
than or equal to 10% of the Original Pool Balance. The Certificateholder shall
notify the Owner Trustee on or before the Determination Date if the
Certificateholder intends to exercise its option to purchase the corpus of the
Trust pursuant to this Section 16.02. Such price shall be deposited to the
Collection Account in immediately available funds by 12:00 noon, New York City
time, on the Payment Date and, upon notice to the Owner Trustee of such deposit,
the Owner Trustee shall transfer the Receivables and the Receivable Files to the
purchaser, whereupon the Certificates shall no longer evidence any right or
interest in the Receivables or any proceeds thereof.
ARTICLE XVII
Miscellaneous Provisions
SECTION 17.01. Amendment. This Agreement may be amended by the Seller,
the Servicer and the Owner Trustee, without the consent of any of the
Certificateholders or the Noteholders, to
51
cure any ambiguity, to correct or supplement any provisions in this Agreement,
or to add any other provisions with respect to matters or questions arising
under this Agreement that shall not be inconsistent with the provisions of this
Agreement; provided, however, that such action shall not, as evidenced by an
Opinion of Counsel, adversely affect in any material respect the interests of
any Certificateholders or the Secured Parties.
Notwithstanding anything to the contrary in this Agreement (i) no
amendment of this Agreement shall be effective without the prior written consent
of the Insurer and the holders of 51% of the outstanding Note Balances and (ii)
except as provided in the third paragraph of this Section 17.01, no amendment to
this Agreement shall be recognized or be effective without the written consent
of the Owner Trustee and receipt by the Owner Trustee of an Opinion of Counsel
to the effect that such amendment will not cause the Trust to be treated as an
association taxable as a corporation or as a publicly-traded partnership.
Promptly after the execution of any amendment or consent, the Owner
Trustee shall furnish written notification of the substance of such amendment or
consent to each Certificateholder.
It shall not be necessary for the consent of Certificateholders
pursuant to this Section 17.01 to approve the particular form of any proposed
amendment or consent, but it shall be sufficient if such consent shall approve
the substance thereof. The manner of obtaining such consents and of evidencing
the authorization of the execution thereof by Certificateholders shall be
subject to such reasonable requirements as the Owner Trustee may prescribe.
Prior to the execution of any amendment to this Agreement, the Owner
Trustee shall be entitled to receive and rely upon an Opinion of Counsel stating
that the execution of such amendment is authorized or permitted by this
Agreement and the Opinion of Counsel referred to in Section 17.02(i)(1). The
Owner Trustee may, but shall not be obligated to, enter into any such amendment
which affects the Owner Trustee's own rights, duties, or immunities under this
Agreement.
SECTION 17.02. Protection of Title to Trust.
(a) The 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 the Trust under this Agreement in the Receivables and in
the proceeds thereof. The Seller shall deliver (or cause to be delivered) to the
Owner Trustee and the 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 the Seller nor the Servicer shall change its name,
identity, or corporate structure in any manner that would, could, or might make
any financing statement or continuation statement filed by the Seller in
accordance with paragraph (a) above seriously misleading within the meaning of
ss. 9-402(7) of the UCC, unless it shall have given the Owner Trustee at least
60 days' prior written notice thereof.
52
(c) The Seller and the Servicer shall give the Owner 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 (in which case the
Servicer shall file or cause to be filed such amendment or continuation
statement or new financing statement). The Owner Trustee shall be permitted to
waive the 60 day notice period to any shorter period; provided that such UCC
financing statements or amendments have been filed on or before the effective
date of any such waiver. The 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) The 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) The Servicer shall maintain its computer systems so that, from and
after the time of sale under this Agreement of the Receivables to the Owner
Trustee, the Servicer's master computer records (including any back-up archives)
that refer to a Receivable shall indicate clearly with reference to the
particular trust that such Receivable is owned by the Owner Trustee. Indication
of the Owner Trustee's ownership of a Receivable shall be deleted from or
modified on the Servicer's computer systems when, and only when, the Receivable
shall have been paid in full or repurchased.
(f) If at any time the Seller or the Servicer shall propose to sell,
grant a security interest in, or otherwise transfer any interest in automotive
receivables to any prospective purchaser, lender, or other transferee, the
Servicer shall give to such prospective purchaser, lender, or other transferee
computer tapes, records, or print-outs (including any restored from back-up
archives) that, if they shall refer in any manner whatsoever to any Receivable,
shall indicate clearly that such Receivable has been sold and is owned by the
Owner Trustee.
(g) The Servicer shall permit the Owner Trustee and its agents at any
time during normal business hours to inspect, audit, and make copies of and
abstracts from the Servicer's records regarding any Receivable.
(h) Upon request, the Servicer shall furnish to the Owner Trustee and
the Indenture Trustee, within five Business Days, a list of all Receivables (by
contract number and name of Obligor) then held as part of the Trust, together
with a reconciliation of such list to the Schedule of Receivables and to each of
the Servicer's Certificates furnished before such request indicating removal of
Receivables from the Trust.
(i) The Servicer shall deliver to the Owner Trustee and the Indenture
Trustee:
53
(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 the
Owner 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 90 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 90-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 the Owner 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.
SECTION 17.03. Limitation on Rights of Certificateholders. The death or
incapacity of a Certificateholder shall not operate to terminate this Agreement
or the Trust, nor entitle such Certificateholder's legal representatives or
heirs to claim an accounting or to take any action or commence any proceeding in
any court for a partition or winding up of the Trust, nor otherwise affect the
rights, obligations, and liabilities of the parties to this Agreement or any of
them.
No Certificateholder shall have any right to vote (except as provided
in Section 17.01, 17.03 or 17.07) or in any manner otherwise control the
operation and management of the Trust, or the obligations of the parties to this
Agreement except as expressly set forth herein, nor shall anything in this
Agreement set forth, or contained in the terms of the Certificates, be construed
so as to constitute the Certificateholders from time to time as members of an
association; nor shall any Certificateholder be under any liability to any third
person by reason of any action taken pursuant to any provision of this
Agreement.
No Certificateholder shall have any right by virtue or by availing
itself of any provisions of this Agreement to institute any suit, action, or
proceeding in equity or at law upon or under or with respect to this Agreement,
unless such Holder previously shall have given to the Owner Trustee a written
notice of default and of the continuance thereof, as hereinbefore provided, and
unless also the Certificateholder requests in writing to the Owner Trustee to
institute such action, suit, or proceeding in its own name as Trustee under this
Agreement and shall have offered to the Owner Trustee such reasonable indemnity
as it may require against the costs, expenses, and liabilities to be incurred
therein or thereby, and the Owner Trustee, for 30 days after its receipt of such
notice, request, and offer of indemnity, shall have neglected or refused to
institute any such action, suit, or proceeding and during such 30-day period no
direction inconsistent with such written request has been given to the Owner
Trustee.
54
SECTION 17.04. Governing Law. This Agreement shall be construed in
accordance with the laws of the State of [Delaware] applicable to agreements
made and to be performed within the State of [Delaware], and the obligations,
rights, and remedies of the parties under this Agreement shall be determined in
accordance with such laws.
SECTION 17.05. Notices. All demands, notices, and communications under
this Agreement shall be in writing, personally delivered, sent by facsimile to,
sent by courier to or mailed by certified mail, return receipt requested, and
shall be deemed to have been duly given unless otherwise provided herein, upon
receipt (a) in the case of the Seller to the agent for service as specified in
this Agreement, at the following address: UAC Securitization Corporation, 0000
Xxxxxx Xxxxx Xxxx, Xxxxx 0000-X, Xxxxxx Xxxxxxx, Xxxxxxx 00000, or at such other
address as shall be designated by the Seller in a written notice to the Servicer
or Trustee; (b) in the case of the Servicer to the agent for service as
specified in this Agreement, at the following address, Union Acceptance
Corporation, 000 Xxxxx Xxxxxxxxx Xxxxxx, Xxxxxxxxxxxx, Xxxxxxx 00000, (c) in the
case of the Owner Trustee, at the Corporate Trust Office, (d) in the case of the
Insurer, at ____________________________________ and (e) in the case of the
Indenture Trustee __________________________. Unless otherwise provided herein,
any notice so mailed within the time prescribed in this Agreement shall be
conclusively presumed to have been duly given, whether or not the
Certificateholder shall receive such notice.
SECTION 17.06. Severability of Provisions. If any one or more of the
covenants, agreements, provisions, or terms of this Agreement shall be for any
reason whatsoever held invalid, then such covenants, agreements, provisions, or
terms shall be deemed severable from the remaining covenants, agreements,
provisions, or terms of this Agreement and shall in no way affect the validity
or enforceability of the other provisions of this Agreement.
SECTION 17.07. Assignment. Notwithstanding anything to the contrary
contained herein, except as provided below or in Sections 12.03 and 13.03 and as
provided in the provisions of this Agreement concerning the resignation of the
Servicer, this Agreement may not be assigned by the Seller or the Servicer
without the prior written consent of the Owner Trustee and the
Certificateholders.
SECTION 17.08. Certificates Nonassessable and Fully Paid.
Certificateholders shall not be personally liable for obligations of the Trust.
The interests represented by the Certificates shall be nonassessable for any
losses or expenses of the Trust or for any reason whatsoever, and, upon
authentication thereof by the Owner Trustee pursuant to Section 11.02,
Certificates shall be deemed fully paid.
SECTION 17.09. Nonpetition Covenants. Notwithstanding any prior
termination of this Agreement, the Servicer, UAC and the Owner Trustee shall
not, prior to the date which is one year and one day after the termination of
this Agreement with respect to the Trust or the Seller, acquiesce, petition or
otherwise invoke or cause the Trust or the Seller to invoke the process of any
court or
55
government authority for the purpose of commencing or sustaining a case against
the Trust or the Seller under any Federal or state bankruptcy, insolvency or
similar law or appointing a receiver, liquidator, assignee, trustee, custodian,
sequestrator or other similar official of the Trust or the Seller or any
substantial part of its property, or ordering the winding up or liquidation of
the affairs of the Trust or the Seller.
SECTION 17.10. Counterparts. For the purpose of facilitating the
execution of this Agreement and for other purposes, this Agreement may be
executed simultaneously in any number of counterparts, each of which
counterparts shall be deemed to be an original, and all of which counterparts
shall constitute but one and the same instrument.
SECTION 17.11. Third Party Beneficiary. This Agreement shall inure to
the benefit of the Insurer, the Indenture Trustee and their successors and
assigns.
[Next page is signature page]
56
IN WITNESS WHEREOF, the parties hereto have caused this Trust and
Servicing Agreement to be duly executed by their respective officers as of the
day and year first above written.
UAC SECURITIZATION CORPORATION,
as Seller
By
TITLE: Vice President
UNION ACCEPTANCE CORPORATION,
as Servicer
By
TITLE: Vice President
______________________________,
as Owner Trustee
By
TITLE: Vice President
57
Exhibit 1
Owner Trustee's Certificate
pursuant to Section 15.02
of the Trust and Servicing Agreement
________________________, as owner trustee (the "Owner Trustee") of the
UACSC ____- __ Owner Trust created pursuant to the Trust and Servicing Agreement
(the "Trust Agreement") dated as of ________________, among UAC Securitization
Corporation, as depositor (the "Seller"), Union Acceptance Corporation, as
servicer (the "Servicer") and the Owner Trustee, does hereby sell, transfer,
assign, and otherwise convey to Union Acceptance Corporation without recourse,
representation, or warranty, all of the Owner Trustee's right, title, and
interest in and to all of the Receivables (as defined in the Trust Agreement)
identified in the attached Servicer's Certificate as "Purchased Receivables,"
which have been repurchased by the Seller pursuant to Section 7.02 and all
security and documents relating thereto.
IN WITNESS WHEREOF I have hereunto set my hand this _____ day of
-----------------, -------.
------------------------------------
58
Exhibit 2
Owner Trustee's Certificate
pursuant to Section 15.02
of the Trust and Servicing Agreement
________________________, as trustee (the "Owner Trustee") of the UACSC
____-__ Owner Trust created pursuant to the Trust and Servicing Agreement (the
"Trust Agreement") dated as of ________________, among UAC Securitization
Corporation, as depositor (the "Seller"), Union Acceptance Corporation, as
servicer (the "Servicer") and the Owner Trustee, does hereby sell, transfer,
assign, and otherwise convey to the [Servicer or the Certificateholders],
without recourse, representation, or warranty, all of the Owner Trustee's right,
title, and interest in and to all of the Receivables (as defined in the Trust
Agreement) identified in the attached Servicer's Certificate as "Purchased
Receivables," which have been purchased by [the Servicer pursuant to Section
8.07 or by the Certificateholders pursuant to Section 16.02], and all security
and documents relating thereto.
IN WITNESS WHEREOF I have hereunto set my hand this _____ day of
-----------------, --------.
------------------------------------------
59
Exhibit 3
Form of Servicer's Certificate
pursuant to Sections 8.09 and 9.02
of the Trust and Servicing Agreement
SERVICER'S CERTIFICATE
60
EXHIBIT A
CERTIFICATE OF TRUST OF
UACSC OWNER TRUST ______-____
This Certificate of Trust of UACSC Owner Trust ______-____ (the
"Trust"), dated as of ___________________, is being duly executed and filed by
_________________, a [Delaware banking corporation], as trustee, to form a
business trust under the [Delaware Business Trust Act (12 Del. Code, Section
3801 et seq.)].
1. Name. The name of the business trust formed hereby is UACSC OWNER
TRUST -----------.
2. [Delaware] Trustee. The name and business address of the trustee of
the Trust in the State of [Delaware] is ____________________, (Address),
Attention: ________________.
IN WITNESS WHEREOF, the undersigned, being the sole trustee of the
Trust, has executed this Certificate of Trust as of the date first above
written.
___________________________,
not in its individual capacity but solely as owner
trustee under a Trust Agreement dated as of
--------------,
By:
Name:
Title:
61
EXHIBIT B
[Form of Certificate]
THIS CERTIFICATE HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS
AMENDED. NEITHER THIS CLASS IC CERTIFICATE NOR ANY PORTION HEREOF MAY BE
TRANSFERRED, ASSIGNED, EXCHANGED OR OTHERWISE PLEDGED OR CONVEYED EXCEPT (1) IN
COMPLIANCE WITH THE REGISTRATION PROVISIONS OF SUCH ACT OR PURSUANT TO AN
AVAILABLE EXEMPTION FROM SUCH REGISTRATION PROVISIONS AND (2) IN COMPLIANCE WITH
THE RESTRICTIONS OF THE POOLING AND SERVICING AGREEMENT REFERRED TO HEREIN.
UACSC ____-__ OWNER TRUST
AUTOMOBILE RECEIVABLE
BACKED CERTIFICATE
evidencing an undivided interest in the Trust, as defined below, the property of
which includes a pool of simple interest installment loan and security
agreements and installment sales contracts secured by new and used automobiles,
light trucks and vans. The contracts were sold to the Owner Trustee by UAC
Securitization Corporation.
(This Certificate does not represent an interest in or obligation of UAC
Securitization Corporation or any of its affiliates. Neither this Certificate
nor the underlying Receivables, as defined below, are insured or guaranteed by
any other government agency).
NUMBER One Unit
R-1
THIS CERTIFIES THAT UAC Securitization Corporation, a Delaware
corporation, is the registered owner of a nonassessable, fully-paid interest in
the UACSC ____-__ Owner Trust (the "Trust"), a Delaware business trust. The
Trust was created pursuant to a Trust and Servicing Agreement dated as of
________________ (the "Agreement"), among UAC Securitization Corporation as
Seller, Union Acceptance Corporation, as Servicer and ________________________
(the "Owner Trustee"), a summary of certain of the pertinent provisions of which
is set forth below. A copy of the Agreement may be examined during normal
business hours at the Corporate Trust Office of the Owner Trustee by any
Certificateholder upon request. To the extent not otherwise defined herein, the
capitalized terms used herein have the meanings assigned to them in the
Agreement. This Certificate is issued under and is subject to the terms,
provisions, and conditions of the Agreement, to which Agreement the holder of
this Certificate by virtue of the acceptance hereof assents and by which such
holder is bound. The property of the Trust includes a pool of simple and
precomputed interest loan and security agreements and installment sales
contracts for new and used automobiles, light trucks, vans and van conversions
(the "Receivables"), all monies paid thereon, and all monies due thereon,
including Accrued Interest, after ________________ (but excluding Accrued
Interest paid or due before the Closing Date), security interests in the
vehicles financed thereby, certain bank accounts and the proceeds thereof and
certain other property and rights described in the Agreement and the proceeds of
the foregoing.
This Certificate represents an interest in certain assets of the Trust,
including the right to receive a portion of the collections and other amounts at
the times and in the amounts specified in the Agreement. The rights of the
Certificateholders in the assets of the Trust are subordinated to the rights of
the Noteholders as set forth in the Indenture and the Agreement.
Unless the certificate of authentication hereon shall have been
executed by a Responsible Officer of the Owner Trustee, by manual or facsimile
signature, this Certificate shall not entitle the holder hereof to any benefit
under the Agreement or be valid for any purpose. Registration of transfer of
this Certificate to a person may not be effected unless (a)
62
the Insurer consents to such transfer, (b) the Owner Trustee receives an Opinion
of Counsel, satisfactory to it, to the effect that such transfer may be made in
reliance upon an exemption from the registration requirements of the Securities
Act of 1933, as amended, (c) such transfer will not adversely affect the tax
treatment of the Trust or the Notes, and (d) the Rating Agency Condition has
been satisfied with respect to such transfer. Notwithstanding the foregoing, the
Seller shall have no obligation to register this Certificate under the
Securities Act of 1933, as amended.
The obligations and responsibilities created by the Agreement and the
Trust created thereby shall terminate upon the payment to Certificateholders of
all amounts required to be paid to them pursuant to the Agreement and the
disposition of all property held as part of the Trust. The holder of a majority
in interest of the outstanding Certificates may at its option cause the Owner
Trustee to sell the corpus of the Trust at a price not to be less than the price
specified in the Agreement; however, such right is exercisable only as of the
last day of a Collection Period on which the Pool Balance is less than or equal
to 10% of the Original Pool Balance. The Certificateholders are required to pay
any unpaid fees and expenses of the Owner Trustee and in connection with such
disposition.
Although this Certificate summarizes certain provisions of the
Agreement, this Certificate does not purport to summarize the Agreement and
reference is made to the Agreement for information with respect to the
interests, rights, benefits, obligations, proceeds and duties evidenced hereby
and the rights, duties and obligations of the Owner Trustee. In the event of any
inconsistency or conflict between the terms of this Certificate and the terms of
the Agreement, the terms of the Agreement shall control. By acceptance of this
Certificate, the holder agrees to be bound by the terms of the Agreement,
including the agreement to treat the Trust as a partnership for income tax
purposes and the Certificates as an equity interest therein.
63
IN WITNESS WHEREOF, the Owner Trustee on behalf of the Trust and not in
its individual capacity has caused this Certificate to be duly executed.
Dated:
UACSC ____-__ OWNER TRUST
By ________________________, solely in its
capacity as Owner Trustee
By
Responsible Officer
CERTIFICATE OF AUTHENTICATION
This is the Certificate referred to in the
within-mentioned Agreement.
------------------------,
as Owner Trustee
By
Signatory
Dated:
64
ASSIGNMENT
FOR VALUE RECEIVED the undersigned hereby sells, assigns and transfers unto
PLEASE INSERT SOCIAL SECURITY
OR OTHER IDENTIFYING NUMBER
OF ASSIGNEE
(Please print or typewrite name and address, including postal zip code, of
assignee) the within Certificate, and all rights thereunder, hereby irrevocably
constituting and appointing Attorney to transfer said Certificate on the books
of the Certificate Registrar, with full power of substitution in the premises.
Dated:
*
Signature Guaranteed:
*
* NOTICE: The signature to this assignment must correspond with the name as it
appears upon the face of the within Certificate in every particular, without
alteration, enlargement or any change whatever. Such signature must be
guaranteed by a member of the New York Stock Exchange or a commercial bank,
trust company savings bank or other savings and loan institution.
65
Schedule A
to the Trust and
Servicing Agreement
SCHEDULE OF RECEIVABLES
Seller Name of
Account Number Obligor Amount Financed
(as of the Cutoff Date)
$
A COPY OF THE SCHEDULE OF RECEIVABLES, INCLUDING THE
ABOVE CAPTIONED INFORMATION WITH RESPECT TO EACH
RECEIVABLE, WAS DELIVERED TO THE OWNER TRUSTEE WITH A
COUNTERPART OF THE TRUST AND SERVICING AGREEMENT.
66
Schedule B
to the Trust and
Servicing Agreement
1. Location of Receivables:
Union Acceptance Corporation
000 X. Xxxxxxxxx Xxxxxx
Xxxxxxxxxxxx, XX 00000
