EXHIBIT 10.97.1
_________________________________________
SERVICING AGREEMENT
Dated as of September 1, 1996
Among
AEGIS AUTO FINANCE, INC.,
Servicer
NORWEST BANK MINNESOTA, NATIONAL
ASSOCIATION
in its capacity as Backup Servicer
and
NORWEST BANK MINNESOTA, NATIONAL
ASSOCIATION
in its capacity as Trustee
Relating to
Aegis Auto Receivables Trust 1996-3
_________________________________________
TABLE OF CONTENTS
Page
I.
RECITALS . . . . . . . . . . . . . . . . . . . . . . 1
II.
DEFINITIONS. . . . . . . . . . . . . . . . . . . . . 1
III.
SERVICING RELATIONSHIP
A. NATURE AND SCOPE OF RELATIONSHIP. . . . . . . . 2
B. GENERAL CONDITIONS. . . . . . . . . . . . . . . 3
IV.
ADMINISTRATION AND SERVICING OF RECEIVABLES
A. DUTIES OF SERVICER. . . . . . . . . . . . . . . 6
B. MAINTENANCE OF RECORDS. . . . . . . . . . . . . 7
C. MAINTENANCE OF SECURITY INTEREST . . . . . 8
D. COLLECTION OF RECEIVABLE PAYMENTS. . . . . 8
E. PHYSICAL DAMAGE INSURANCE . . . . . . . . . . . 8
F. COVENANTS OF THE TRUSTEE AND SERVICER;
NOTICES. . . . . . . . . . . . . . . . . . . . . . . 9
G. PURCHASE OF RECEIVABLES UPON BREACH . . . . . 10
H. SERVICING FEE . . . . . . . . . . . . . . . . 10
I. MONTHLY SERVICING CERTIFICATES. . . . . . . . 11
J. ANNUAL STATEMENT AS TO COMPLIANCE;
ACCOUNTANTS'
SERVICING REPORT. . . . . . . . . . . . . . . . 11
K. ACCESS TO CERTAIN DOCUMENTATION AND
INFORMATION
REGARDING RECEIVABLES . . . . . . . . . . . . 12
L. RESPONSIBILITY FOR INSURANCE POLICIES;
PROCESSING OF
CLAIMS UNDER INSURANCE POLICIES; DAILY
RECORDS AND
REPORTS . . . . . . . . . . . . . . . . . . . 12
M. ENFORCEMENT . . . . . . . . . . . . . . . . . . 13
N. PAYMENT IN FULL ON RECEIVABLE . . . . . . . . 14
O. SUBSTITUTION OF COLLATERAL. . . . . . . . . . 15
P. FIDELITY BOND AND ERRORS AND OMISSIONS
INSURANCE. . . . . . . . . . . . . . . . . . . . . 15
V.
REPRESENTATIONS AND WARRANTIES
A. REPRESENTATIONS AND WARRANTIES OF
SERVICER . . . . . . . . . . . . . . . . . . . . . 16
B. REPRESENTATIONS AND WARRANTIES OF BACKUP
SERVICER . . . . . . . . . . . . . . . . . . . . . . 17
C. SURVIVAL OF REPRESENTATIONS AND
WARRANTIES . . . . . . . . . . . . . . . . . . . . . 18
VI.
EVENTS OF SERVICING DEFAULT. . . . . . . . . . . . 18
VII.
REMEDIES . . . . . . . . . . . . . . . . . . . . . 20
VIII.
RESPONSIBILITY AND AUTHORITY OF SERVICER . . . . . 20
IX.
COLLECTIONS; LOCK-BOX ACCOUNT AND RELATED
BANK ACCOUNTS. . . . . . . . . . . . . . . . . . . 20
X.
DOCUMENTS AND RECORDS
A. SERVICING DOCUMENTS AND RECORDS . . . . . . . 21
B. REPORTS AND CREDIT AGENCIES. . . . . . . 22
XI.
INDEMNIFICATION. . . . . . . . . . . . . . . . . . 22
XII.
TERM AND TERMINATION . . . . . . . . . . . . . . . 23
XIII.
ARBITRATION AND ATTORNEYS' FEES. . . . . . . . . . 23
XIV.
WAIVERS. . . . . . . . . . . . . . . . . . . . . . 24
XV.
NOTICES. . . . . . . . . . . . . . . . . . . . . . 24
XVI.
ASSIGNABILITY. . . . . . . . . . . . . . . . . . . 25
XVII.
FURTHER ASSURANCES . . . . . . . . . . . . . . . . 25
XVIII.
COUNTERPARTS . . . . . . . . . . . . . . . . . . . 25
XIX.
ENTIRE AGREEMENT; AMENDMENTS . . . . . . . . . . . 26
XX.
INSPECTION . . . . . . . . . . . . . . . . . . . . 26
XXI.
LIMIT ON TRUSTEE'S PAYMENT OBLIGATIONS . . . . . . 26
XXII.
SERVICER NOT TO RESIGN . . . . . . . . . . . . . . 26
XXIII.
MERGER OR CONSOLIDATION OF, OR ASSUMPTION OF
THE
OBLIGATIONS OF, OR RESIGNATION OF SERVICER . . . . 27
XXIV.
GOVERNING LAW. . . . . . . . . . . . . . . . . . . 28
SCHEDULE A: SUMMARY OF SERVICES A-1
I. SERVICES A-1
A. CONTRACT SERVICES - COLLECTIONS A-1
B. CONTRACT SERVICES - CUSTOMER SERVICE A-2
II. A. SPECIAL COLLECTION ACTIVITIES A-4
1. Repossession and Sale A-4
2. Credit Enhancement Claims Filing A-4
3. Deficiency A-5
4. Bankruptcies A-6
5. Disability A-6
6. Allotments A-7
7. Skips A-7
III. FEE SCHEDULE A-7
A. GENERAL SERVICING A-7
B. EXPENSE REIMBURSEMENT A-8
C. DEFICIENCY SERVICING A-8
SCHEDULE B: SERVICER MONTHLY ACTIVITY REPORT
B-1
SCHEDULE C: REQUEST FOR RELEASE OF DOCUMENTS
C-1
SCHEDULE D: RELEASE AND ASSIGNMENT D-1
SERVICING AGREEMENT
This SERVICING AGREEMENT is entered into as of
September 1, 1996 (this "Servicing Agreement") among AEGIS
AUTO FINANCE, INC., a Delaware corporation, as servicer
(hereinafter referred to as "Servicer" and, in its separate capacity
as the originator of the Receivables described herein, the
"Originator"), NORWEST BANK MINNESOTA, NATIONAL
ASSOCIATION, a national banking association, in its capacity as
backup servicer (hereinafter referred to as "Backup Servicer") and
NORWEST BANK MINNESOTA, NATIONAL ASSOCIATION,
in its capacity as trustee (hereinafter referred to as "Trustee") in
both cases under that certain Pooling and Servicing Agreement
dated as of September 1, 1996 by and among Aegis Auto Funding
Corp., a Delaware corporation, as Seller, Norwest Bank
Minnesota, National Association in its capacity as Backup
Servicer, and Norwest Bank Minnesota, National Association in its
capacity as Trustee (such agreement, the "Pooling and Servicing
Agreement").
I. RECITALS
WHEREAS, Servicer provides portfolio
management services, including collection assistance, loan
administration and financial reporting to financial institutions in
connection with motor vehicle retail installment sales contracts,
and
WHEREAS, Norwest Bank Minnesota, National
Association, in its capacity as Trustee, is or will become the
holder of those motor vehicle retail installment sales contracts
referred to in Exhibit D to the Pooling and Servicing Agreement
(as such Exhibit is amended or deemed amended pursuant to the
Pooling and Servicing Agreement on any Funding Date,
hereinafter referred to as "Receivables") which were originated by
the Originator, subsequently sold to Aegis Auto Funding Corp.
pursuant to a Purchase Agreement dated as of September 1, 1996
(the "Purchase Agreement") between the Originator and Aegis
Auto Funding Corp., and subsequently deposited by Aegis Auto
Funding Corp. with the Trustee pursuant to the terms of the
Pooling and Servicing Agreement, and
WHEREAS, pursuant to the Pooling and Servicing
Agreement, the Backup Servicer and the Trustee, on behalf of the
Trust created under the Pooling and Servicing Agreement, desire
to avail themselves of the services provided by Servicer, then
Let this be the terms and conditions of this Servicing
Agreement:
II. DEFINITIONS
Capitalized terms not otherwise defined herein shall have
the meanings ascribed thereto in the Pooling and Servicing
Agreement. Whenever used in this Servicing Agreement,
the following terms shall have the following meanings.
Credit Agency. A recognized agency to which Servicer
reports delinquencies, repossessions and redemptions.
Independent Public Accountants. Means any of (a) Xxxxxx
Xxxxxxxx & Co., (b) Deloitte & Touche, LLP, (c) Coopers
& Xxxxxxx, (d) Ernst & Young LLP, (e) KPMG Peat
Marwick and (f) Price Waterhouse, or such other nationally
recognized firm of independent accountants as shall be
acceptable to the parties hereto and the Rating Agencies;
provided, that such firm is independent with respect to the
Servicer within the meaning of the Securities Act of 1933,
as amended.
Loan Documents. Has the meaning set forth in
paragraph III.B.9.
III. SERVICING RELATIONSHIP
A. NATURE AND SCOPE OF RELATIONSHIP
The Servicer hereby agrees to service and administer
the Receivables for the Trust and render those services described
in this Servicing Agreement and in the attached Schedule A. In
performing its duties under this Servicing Agreement, the Servicer
shall have full power and authority to do or cause to be done any
and all things in connection with such servicing and administration
which it may deem necessary or desirable, within the terms of the
Pooling and Servicing Agreement and this Servicing Agreement.
Servicer acknowledges receiving a copy of the Pooling and
Servicing Agreement. Servicer shall report in writing solely to
such officers or other employees of Backup Servicer and Trustee
as Backup Servicer and Trustee may designate from time to time
in writing.
Nothing in this Servicing Agreement shall be
construed as establishing an agency, an employment or a
partnership or joint venture between Backup Servicer, Trustee, any
third party contract purchaser and Servicer.
Furthermore, Backup Servicer shall not use or
permit the use of Servicer's name or the names of any of
Servicer's affiliates in any advertising or promotional materials
prepared by Backup Servicer or on Backup Servicer's behalf
without the prior written consent of Servicer.
Compensation payable to the Servicer under this
Servicing Agreement shall be payable by the Trustee solely from
the Trust Property in accordance with the terms of the Pooling and
Servicing Agreement, and except as provided in the Pooling and
Servicing Agreement, none of the Trust, the Trustee or the
Certificateholders will have any liability to the Servicer with
respect thereto. In accordance with Section 4.04 of the Pooling
and Servicing Agreement, such compensation shall be paid to the
Servicer and/or one or more subservicers as the Servicer may from
time to time direct in writing to the Trustee.
In the event the Backup Servicer shall for any
reason no longer be acting as such (including by reason of
resignation or an Event of Backup Servicing Default as specified
in Section 4.02 or 10.01, respectively, of the Pooling and
Servicing Agreement), the successor Backup Servicer shall
thereupon assume all of the rights and obligations of the outgoing
Backup Servicer under this Servicing Agreement; provided,
however that the successor Backup Servicer shall not be liable for
any acts, omissions or obligations of the outgoing Backup Servicer
prior to such succession or for any breach by the outgoing Backup
Servicer of any of its representations and warranties contained in
this Servicing Agreement or in any related document or agreement
and the outgoing Backup Servicer shall not be relieved of any
liability or obligation hereunder to the extent such obligation or
liability arose prior to the assumption by the successor Backup
Servicer of the obligations of the Backup Servicer hereunder.
B. GENERAL CONDITIONS
1. Servicer agrees to provide the services
hereunder during the term hereof.
Servicer, Backup Servicer and Trustee each represent and warrant
that it is duly authorized to enter into the arrangements
contemplated hereby with respect to the Receivables.
2. Servicer may make such communications
with third parties and the ultimate Obligor as are necessary and
proper to perform the services provided for hereunder.
3. The Servicer hereby agrees to act for the
Trust as custodian of all the documents or instruments delivered to
the Servicer with respect to each Receivable, and any and all other
documents that Servicer receives, creates, generates, or otherwise
possesses which relate to a Receivable, an Obligor or a Financed
Vehicle, provided, however, that the Custodian Files, including the
original of the motor vehicle installment sale contract and the
original certificate of title or such documents evidencing the
security interest of the Trust in the Financed Vehicle or efforts
made by the Trustee or its assignor to perfect such security interest
shall be held by the Custodian, which shall be the Trustee. The
Servicer shall maintain in its files copies, computer records or
originals of each of the following documents with respect to each
Receivable and the Financed Vehicle related thereto:
(i) application of the Obligor for credit;
(ii) a copy (but not the original) of the retail
installment sale contract and any amendments
thereto; provided, however, that the Servicer shall
deliver any original amendments to the retail
installment sale contract to the Trustee immediately
following execution thereof;
(iii) a copy (but not the original) of a
certificate of title with a lien notation or an
application therefor;
(iv) copies of the Risk Default Insurance
Policy and the VSI Insurance Policy; and
(v) such other documents as the Servicer may
reasonably request in order to accomplish its duties
under this Servicing Agreement.
Items (i), (ii), (iii), (iv) and (v) shall be referred to
collectively as the "Servicer Files."
4. Upon receipt of the documentation indicated
in Paragraph III.B.3, Servicer shall establish a physical file for
each Receivable, which shall contain the Servicer Files, as well as
copies of all reports developed by or information received by
Servicer with respect to the Receivable, including insurance
certificates and reports of collection activities.
In its capacity as custodian of such files, Servicer
shall hold the Servicer Files and all related files and documents on
behalf of the Trust, and maintain such accurate and complete
accounts, records, and computer systems pertaining to the
Receivables using reasonable care and that degree of skill and
attention with respect to the Receivables and the files and
documents as is customary with other companies in the industry
that service motor vehicle installment sales contracts for
themselves as well as for others.
The Servicer shall keep satisfactory books and
records pertaining to each Receivable and shall make periodic
reports in accordance with this Servicing Agreement. Such
records may not be destroyed or otherwise disposed of except as
provided herein and as allowed by applicable laws, regulations or
decrees; provided, that, such records may be released to the Seller
if the related Receivable is paid in full, the related Financed
Vehicle is repossessed, the Receivable has been either repurchased
or replaced pursuant to the Purchase Agreement with a Substitute
Receivable (as defined therein) or the Receivable otherwise is no
longer being serviced by the Servicer pursuant to this Servicing
Agreement. All documents, whether developed or originated by
the Servicer or not, reasonably required to document or to
properly administer any Receivable shall remain at all times the
property of the Trust. The Servicer shall not acquire any property
rights with respect to such records, and shall not have the right to
possession of them except as subject to the conditions stated in this
Servicing Agreement. The Servicer shall bear the entire cost of
restoration in the event any Loan Documents (as defined below)
shall become damaged, lost or destroyed.
5. Servicer shall make available to the Backup
Servicer, the Trustee and the Certificateholders, or their duly
authorized representatives, attorneys, or auditors, the Servicer
Files and any related accounts, records, and computer systems
maintained by the Servicer, at such times as the Backup Servicer,
the Trustee or any Certificateholder shall reasonably instruct, but
without disrupting Servicer's operations. Without otherwise
limiting the scope of the examination, the Backup Servicer, the
Trustee or any Certificateholder may, upon at least two (2)
Business Days' prior notice and at its own expense, using
generally accepted audit procedures, verify the status of each
Receivable and review the Loan Documents and records relating
thereto for conformity to monthly reports prepared pursuant to
paragraph IV.I. and compliance with the standards represented to
exist as to each Receivable in this Servicing Agreement. Nothing
herein shall require the Backup Servicer, the Trustee or any
Certificateholder to conduct any inspection pursuant to this
Section.
6. Within five (5) Business Days following the
last day of each Collection Period, the Servicer shall forward to
the Backup Servicer, via electronic transfer in a format mutually
acceptable to the Servicer and the Backup Servicer, its
computerized records reflecting (i) all collections received during
such Collection Period with respect to the Receivables and (ii)
information as of the last day of each Collection Period regarding
repossessed Financed Vehicles and sales of repossessed Financed
Vehicles. Within three (3) Business Days of receipt of the
foregoing information, the Backup Servicer shall input such
information onto its computer system such that such information
is immediately available to the Backup Servicer. The Backup
Servicer shall then review such information within five (5)
Business Days of its input onto the Backup Servicer's computer
system and compare it to the information reported by the Servicer
in its Monthly Servicing Certificate delivered to the Backup
Servicer, Trustee and each Rating Agency in the form of Schedule
B (the "Monthly Servicing Certificate"). Any discrepancies shall
then be immediately reported to the Servicer, who shall have ten
(10) Business Days from receipt of notice of discrepancies to
correct all such discrepancies. Any discrepancies which cannot be
corrected in such time period shall be reported by the Servicer to
the Trustee, each Rating Agency and the Certificateholders.
7. On Monday of each week beginning
September 16, 1996, the Servicer shall forward to the Backup
Servicer, via electronic transfer in form mutually acceptable to the
Servicer and the Backup Servicer, its computerized records
reflecting (i) all collections received during the preceding calendar
week with respect to the Receivables and (ii) a listing of all
Receivables with the date through which payments have been made
by the Obligor.
8. Other than the duties specifically set forth in
this Servicing Agreement, the Backup Servicer shall have no
obligation hereunder. The Backup Servicer shall have no liability
for any action taken or omitted by the Servicer. The duties and
obligations of the Backup Servicer shall be determined solely by
the express provisions of this Servicing Agreement and the Pooling
and Servicing Agreement and no implied covenants or obligations
shall be read into this Agreement against the Backup Servicer.
9. Unless otherwise specified herein, the
Servicer shall maintain physical possession, or computerized
records, of good and legible copies of the Servicer Files received
by it; such other instruments or documents that modify or
supplement the terms or conditions of any of the foregoing; and,
all other instruments, documents, correspondence and memoranda
generated by or coming into the possession of the Servicer
(including, but not limited to, insurance premium receipts, ledger
sheets, payment records, insurance claim files, correspondence and
current and historical computerized data files) that are required to
document or service any Receivable. Collectively, all of the
documents described in this paragraph III.B.9 with respect to a
Receivable are referred to as "Loan Documents." The Servicer
shall hold all Loan Documents in trust for the benefit of the
Certificateholders and the Trust; all Loan Documents shall remain
the property of the Trust. The Servicer shall respond to all third
party inquiries concerning ownership of the Receivables by
indicating that the Receivables have been assigned to the Trust.
10. The Servicer may employ or otherwise utilize
subservicers and enter into subservicing agreements in carrying out
its duties and obligations under this Servicing Agreement. An
affiliate of the Servicer, Aegis Consumer Finance, Inc. ("ACF"),
has heretofore entered into a Master Servicing Agreement dated as
of April 6, 1996 (the "Subservicing Agreement") with American
Lenders Facilities, Inc. ("ALFI") pursuant to which ALFI has
agreed to perform certain subservicing duties as therein described.
The Servicer shall cause ALFI to act as subservicer of the
Receivables with respect to the receipt of collections on the
Receivables, custody and application of payments from Obligors
and for the maintenance of individual records for each Receivable
in accordance with the terms of such Subservicing Agreement or
the terms of any new subservicing agreement subsequently entered
into with ALFI for the performance of such duties. The
Subservicing Agreement and any such other subservicing
agreement hereafter entered into by the Servicer and/or ACF shall
provide that the Backup Servicer, at the direction of the Majority
Certificateholders and each Rating Agency, shall have the right to
direct the Servicer to terminate such subservicing arrangement if
(a) the Majority Certificateholders and each Rating Agency
reasonably determine that the subservicer is failing to perform its
obligations thereunder and (b) such failure materially reduces the
amount recovered on defaulted loans. The Servicer agrees to
promptly terminate a subcontracting arrangement if directed to do
so by the Backup Servicer. In addition, should ALFI's
employment as subservicer of the Receivables as described above
be terminated at any time, ALFI shall be entitled to a fee of $5.00
per Receivable.
IV. ADMINISTRATION AND SERVICING OF
RECEIVABLES
A. DUTIES OF SERVICER
The Servicer shall service and administer the
Receivables in compliance with all applicable Federal and State
laws and regulations governing the Servicer and the Receivables,
and shall act prudently and in accordance with customary and usual
servicing procedures for other institutional servicers and applicable
law, and, to the extent not inconsistent with the foregoing, shall
exercise that degree of skill and care it uses for servicing assets
held for its own account.
The Servicer's duties shall include collection and
posting of all payments, responding to inquiries by Obligors or by
Federal, State, or local governmental authorities on the
Receivables, investigating delinquencies, sending payment books
or monthly statements to Obligors, responding to inquiries by
Obligors with respect to the Receivables and furnishing Monthly
Servicing Certificates to the Trustee with respect to distributions
and any additional information reasonably requested by the Trustee
to enable the Trustee to make distributions and produce reports
required under the Pooling and Servicing Agreement.
Without limiting the generality of the foregoing, the
Servicer shall be authorized and empowered to execute and deliver
any and all instruments of satisfaction or cancellation, and all other
comparable instruments, with respect to the Receivables or the
Financed Vehicles.
If the Servicer shall commence a legal proceeding to
enforce a Receivable, the Trustee, acting on behalf of the Trust,
shall thereupon be deemed to have automatically assigned such
Receivable to the Servicer which assignment shall be solely for the
purpose of collection. The Trustee, acting on behalf of the Trust,
shall furnish the Servicer with any powers of attorney and other
documents necessary or appropriate to enable the Servicer to carry
out its servicing and administrative duties hereunder.
B. MAINTENANCE OF RECORDS
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); (ii) reconciliation between
payments or recoveries on (or with respect to) each Receivable and
the amounts from time to time owing in respect of such
Receivable.
To the extent that such records are maintained on a
computer system, the Servicer shall also maintain such computer
system so that the Servicer's master computer records (including
archives) that shall refer to each Receivable indicate that such
Receivable is owned by the Trust.
Such accounts and records shall be kept only for as
long as Servicer is servicing the Receivables for the Trust.
At all times during the term hereof, for so long as
Aegis Auto Finance, Inc. is acting as Servicer, the Servicer shall
keep available at its office located at 000 Xxxxxxxxxx Xxxxxxxxx,
Xxxxxx Xxxx, Xxx Xxxxxx 00000 (or such other location as to which
it shall give written notice to the Trustee and each
Certificateholder), for inspection by Certificateholders a copy of
the list of Receivables, and shall mail a copy of such list to a
Certificateholder upon written request.
C. MAINTENANCE OF SECURITY INTEREST
The Servicer shall cooperate with the Seller in taking
such steps as are necessary to maintain perfection of the security
interest created by each Receivable in the respective Financed
Vehicle. The Trustee, on behalf of the Trust, hereby authorizes
and the Servicer hereby agrees to take such steps (and at the
Trust's expense) as are necessary to re-perfect such security
interest on behalf of the Trust in the event such re-perfection is
necessary or advisable for any reason. The title to each Financed
Vehicle relating to a Receivable included in the Trust initially shall
bear a notation of a lien in the name of the Originator.
D. COLLECTION OF RECEIVABLE PAYMENTS
The Servicer shall use its best efforts to collect all
payments called for under the terms and provisions of the
Receivables as and when the same shall become due.
In addition, the Servicer, on behalf of the Trust,
shall use its best efforts to repossess or otherwise recover the
Financed Vehicle securing any Receivable as to which the Servicer
shall have determined, after consultation with Seller if Servicer so
requests, that eventual payment in full is unlikely and such
repossession or recovery is permitted under the terms of the
Receivable and any applicable law. The Servicer shall be entitled
to recover all reasonable expenses incurred by it in the course of
repossessing and liquidating the Financed Vehicle into cash
proceeds.
Subject to the provisions of paragraph IV.A. above,
the Servicer shall follow such customary and usual practices and
procedures as it shall deem necessary or advisable in its servicing
of automotive receivables, which may include selling the Financed
Vehicle at public or private sale in accordance with applicable state
law. 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 the Servicer
shall determine in its discretion that such repair and/or
repossession will increase the Liquidation Proceeds or Insurance
Proceeds by an amount greater than the amount of such expenses.
E. PHYSICAL DAMAGE INSURANCE
1. The Servicer, in accordance with its
customary servicing procedures, shall use its best efforts to ensure
that each Obligor maintains physical damage insurance covering
the Financed Vehicle throughout the lesser of the term of the Trust
or the Receivable.
2. In the event of any physical loss or damage
to a Financed Vehicle from any cause, whether through accidental
means or otherwise, the Servicer shall have no obligation to cause
the affected Financed Vehicle to be restored or repaired.
However, the Servicer shall comply with the provisions of any
insurance policy or policies directly or indirectly related to any
physical loss or damage to a Financed Vehicle.
3. The Servicer will administer the filings of
claims under the VSI Insurance Policy and the Risk Default
Insurance Policy as provided under paragraph IV.L. hereof.
F. COVENANTS OF THE TRUSTEE AND
SERVICER; NOTICES
1. The Servicer shall (1) prior to a default with
respect to a Receivable, not release any 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 upon transfer of the Financed
Vehicle to a successor purchaser following repossession by the
Servicer, (2) not impair the rights of the Certificateholders or the
Trustee in the Receivables, (3) not increase the number of
Scheduled Payments due under a Receivable except as permitted
in paragraph A.3.e of Schedule A, (4) prior to the termination of
the Trust, not sell, pledge, assign, or transfer to any other Person,
or grant, create, incur, assume, or suffer to exist any Lien on any
Receivable transferred to the Trust or any interest therein, except
for assignment to the Risk Default Insurer upon its request after
the Risk Default Insurer has paid a claim in full, (5) immediately
notify the Trustee of the existence of any material Lien on any
Receivable, (6) defend the right, title, and interest of the Trust in,
to and under the Receivables transferred to the Trust, against all
claims of third parties claiming through or under the Servicer,
(7) deposit into the Lock-Box Account all payments received by
the Servicer with respect to the Receivables in accordance with this
Servicing Agreement, (8) comply in all respects with the terms and
conditions of this Servicing Agreement relating to the obligation of
Seller to repurchase Receivables from the Trust pursuant to the
Pooling and Servicing Agreement, or the obligation of the
Originator to repurchase Receivables from the Seller pursuant to
the Purchase Agreement, (9) promptly notify the Trustee of the
occurrence of any Event of Servicing Default and any breach by
the Backup Servicer of any of its covenants or representations and
warranties contained herein, (10) with the cooperation of the
Seller, make any filings, reports, notices, or applications and seek
any consents or authorizations from any and all government
agencies, tribunals, or authorities in accordance with the UCC and
any state vehicle license or registration authority on behalf of the
Trust as may be necessary or advisable or reasonably requested by
the Trustee to create, maintain, and protect a first-priority security
interest of the Trustee in, to, and on the Financed Vehicles and a
first-priority security interest of the Trust in, to, and on the
Receivables transferred to it and (11) take all reasonable action
necessary to maximize the returns pursuant to the Risk Default
Insurance Policy and the VSI Insurance Policy.
2. The Trustee shall promptly notify the
Servicer of any actual knowledge on its part (i) of any
abandonment of any Financed Vehicle by an Obligor, (ii) of any
material change in the condition or value of any Financed Vehicle,
(iii) of any waste committed with respect to any Financed Vehicle;
(iv) of any failure on the part of an Obligor to keep the Financed
Vehicle insured or in good condition and repair, (v) of any
permanent or substantial injury to a Financed Vehicle caused by
unreasonable use, abuse or neglect or (vi) of any other matter
which would adversely affect or result in diminution of the value
of any Financed Vehicle.
3. The Servicer will promptly advise the
Trustee of any inquiry received from an Obligor which
contemplates the consent of the Trustee. Inquiries contemplating
consent of the Trustee shall include, but not be limited to,
inquiries about settlement of any unasserted claim or defense, or
compromise of any amount an Obligor owes or any other matters
the Servicer should reasonably understand are not within the
Servicer's authority under this Servicing Agreement.
4. Notwithstanding any other provision of this
Servicing Agreement, the Trustee and the Backup Servicer (except
if and when the Backup Servicer is acting as the Servicer
hereunder) shall be under no duty or obligation to investigate or
inquire into the status of any Obligor or Financed Vehicle and
"actual knowledge" referred to in subparagraphs 2 and 3 of this
paragraph IV.F. shall be limited to actual knowledge of a Trustee
Officer.
G. PURCHASE OF RECEIVABLES UPON BREACH
The Servicer shall inform each Rating Agency, the
Trustee, the Backup Servicer and each Certificateholder promptly,
in writing, upon the discovery of any breach pursuant to Section
3.01 of the Pooling and Servicing Agreement. The Servicer has
no duty to investigate or determine the existence of any breach
except as specified herein. Unless the breach shall have been
cured within the time periods specified in Section 3.02 of the
Pooling and Servicing Agreement, the Trustee shall use all
reasonable efforts to cause the Seller to repurchase or replace the
affected Receivables in accordance with Section 3.02 of the
Pooling and Servicing Agreement, and enforce the repurchase or
substitution obligations of the Originator under Section 7.02 of the
Purchase Agreement. In consideration of the purchase of such
Receivable, the Trustee shall use all reasonable efforts to cause the
Seller or the Originator to remit the Purchase Amount or the
substitute Receivable to the Trustee. The Trustee's rights with
respect to this paragraph IV.G. shall not subject the Trustee to any
duty or obligation upon a breach by the Seller or the Originator of
its representations, warranties or covenants as set forth above,
other than to take action as described herein and as may be
directed by the Certificateholders in accordance with and subject
to the condition and limitation set forth in the Pooling and
Servicing Agreement.
H. SERVICING FEE
The Servicer shall be paid a monthly servicing fee
("Servicing Fee") with respect to each Receivable serviced under
this Servicing Agreement during a Collection Period in accordance
with paragraph III of Schedule A hereto. The Servicing Fee shall
be due on the succeeding Distribution Date. In the event this
Servicing Agreement is terminated on a date other than the last day
of a Collection Period, then the Servicing Fee for such period shall
be determined on a pro rata basis. In the event that the Backup
Servicer assumes the responsibilities and obligations of the
Servicer under this Servicing Agreement, the Backup Servicer shall
be entitled to receive its normal and customary fee for such
services with respect to comparable quality Receivables, not to
exceed those set forth in the Fee Schedule set forth in paragraph
III of Schedule A attached hereto.
I. MONTHLY SERVICING CERTIFICATES
The Servicer shall deliver to the Backup Servicer, the
Trustee (which shall deliver a copy to each Certificateholder), each
Rating Agency and the Seller, on each Determination Date, a
Monthly Servicing Certificate substantially in the form of Schedule
B hereto containing all information necessary for the Trustee to
calculate and make the distributions pursuant to Section 5.06 of the
Pooling and Servicing Agreement.
J. ANNUAL STATEMENT AS TO COMPLIANCE;
ACCOUNTANTS' SERVICING REPORT
1. The Servicer shall deliver to the Backup
Servicer, the Trustee, each Certificateholder, and each Rating
Agency, on or before March 31 of each year, an Officer's
Certificate, dated effective as of December 31 of the preceding
year beginning with the calendar year ended December 31, 1996,
stating that (i) a review of the activities of the Servicer during the
preceding 12-month period and of its performance under this
Servicing Agreement has been made under such officer's
supervision and (ii) based on such review, the Servicer has
materially fulfilled all its obligations under this Servicing
Agreement throughout such year, or, if there has been a default in
the fulfillment of any such obligation, specifying each such default
known to such officer and the nature and status thereof. A copy
of such certificate may be obtained by any Certificateholder by a
request in writing to the Servicer from any such Certificateholder.
2. Unless required more frequently by each
Rating Agency, on each yearly anniversary of the Closing Date,
the Servicer at the expense of the Trust, shall cause a firm of
Independent Public Accountants to furnish a statement to the
Trustee, each Rating Agency and each Certificateholder to the
effect that such firm has examined certain documents and records
relating to the servicing of the Receivables and the reporting
requirements with respect thereto as set forth in this Agreement,
and that, on the basis of such examination, such servicing and
reporting requirements have been conducted in compliance with
this Agreement, except for (i) such exceptions as such firm shall
believe to be immaterial and (ii) such other exceptions as shall be
set forth in such statement.
3. If (a) the Reserve Requirement shall be
increased because either (i) the "60 Day + Delinquency Rate" (as
defined in the definition of Reserve Requirement) exceeds 4.75%
of the Pool Balance (as set forth in clause (2) of the definition of
Reserve Requirement) or (ii) the cumulative Net Losses with
respect to the Receivables exceed the applicable percentages of the
Original Pool Balance (as set forth in clause (4) of the definition
of Reserve Requirement) or (b) an Event of Servicing Default shall
have occurred and be continuing, then, at the request of the
Majority Certificateholders not more frequently than once every
six months, the Trustee, within 30 days of such request, shall
cause a firm of Independent Public Accountants to review certain
documents and records of the Servicer relating to the servicing of
the Receivables and the reporting requirements with respect thereto
as set forth in this Agreement, and furnish a statement to the effect
specified in paragraph IV.J.2 above.
4. The Servicer shall deliver to each Rating
Agency, the Trustee, the Backup Servicer and each
Certificateholder, promptly after having obtained actual knowledge
thereof, but in no event later than five (5) Business Days
thereafter, written notice in an Officer's Certificate of the Servicer
of any event which with the giving of notice or lapse of time, or
both, would become an Event of Master Servicing Default under
Section 10.01 of the Pooling and Servicing Agreement or an Event
of Servicing Default under paragraph VI hereof.
K. ACCESS TO CERTAIN DOCUMENTATION AND
INFORMATION REGARDING RECEIVABLES
The Trustee and the Servicer shall, upon written
request, each provide to or cause the Certificateholders to have
access to its Custodian Files or Servicer Files, as the case may be,
relating to the Receivables. Access shall be afforded without
charge, but only upon reasonable request and during the normal
business hours at the offices of the Trustee or the Servicer, as the
case may be. Nothing in this Section shall affect the obligation of
the Trustee or the Servicer to observe any applicable law
prohibiting disclosure of information regarding the Obligors, and
the failure of the Trustee or the Servicer to provide access to
information as a result of such obligation shall not constitute a
breach of this paragraph IV.K.
L. RESPONSIBILITY FOR INSURANCE POLICIES;
PROCESSING OF CLAIMS UNDER INSURANCE
POLICIES; DAILY RECORDS AND REPORTS
1. The Servicer, on behalf of the Trust, will
administer and enforce all rights and responsibilities of the holder
of the Receivables provided for in the Insurance Policies relating
to the Receivables. The Servicer, on behalf of the Trust, shall
verify that an endorsement listing each Receivable has been issued
with respect to each Receivable under the Risk Default Insurance
Policy, that each Receivable is listed by the VSI Insurer as covered
under the VSI Insurance Policy, and that the Risk Default
Insurance Policy names the Trustee as the insured and the VSI
Insurance Policy names the Trustee as an additional insured.
2. The Servicer will administer the filings of
claims under the VSI Insurance Policy and Risk Default Insurance
Policy by filing the appropriate notices related to claims as well as
claims with the respective carriers or their authorized agents, all
in accordance with the terms of the VSI Insurance Policy and Risk
Default Insurance Policy. The Servicer shall file all such claims
regardless of whether a Receivable may have become a Purchased
Receivable or a Liquidated Receivable. The Servicer shall file
such claims on a timely basis after obtaining knowledge of the
events giving rise to such claims, subject to the servicing standard
set forth in paragraph IV.A. hereof. The Servicer will utilize such
notices, claim forms and claim procedures as are required by the
respective insurance carriers. The Servicer shall notify the Trustee
and Seller of (i) any such claims actually denied under the
applicable Risk Default Insurance Policy or VSI Insurance Policy
and (ii) those claims which would have been denied under such
Risk Default Insurance Policy or VSI Insurance Policy had the
Receivable(s) not been repurchased from the Trust, and in both
cases, the reasons for such denials. The Servicer shall cause all
Insurance Proceeds to be deposited to the Lock-Box Account
within two (2) Business Days of receipt thereof.
The Servicer shall not be required to pay any
premiums or, other than administering the filing of claims and
performing reporting requirements specified in the VSI Insurance
Policy and Risk Default Insurance Policy in connection with filing
such claims, perform any obligations of any named insured under
the foregoing VSI Insurance Policy and Risk Default Insurance
Policy, and shall not be required to institute any litigation or
proceeding or otherwise enforce the obligations of any insurer
thereunder. Notwithstanding any provision to the contrary in the
Pooling and Servicing Agreement, the Servicer shall not be
responsible to any Certificateholder or the Seller (i) for any act or
omission to act done in order to comply with the requirements or
satisfy any provisions of the VSI Insurance Policy or Risk Default
Insurance Policy or (ii) for any act or omission to act, absent
willful misconduct or gross negligence, done or omitted in
compliance with this Servicing Agreement. In the case of any
inconsistency between this Servicing Agreement and the terms of
any VSI Insurance Policy or Risk Default Insurance Policy, the
Servicer shall comply with the latter.
3. Notwithstanding any other provision in this
Servicing Agreement to the contrary, the Trustee and the Backup
Servicer, unless it is acting as Servicer, shall not be under any
obligation to administer the Receivables as required by the VSI
Insurance Policy and/or Risk Default Insurance Policy.
M. ENFORCEMENT
1. The Servicer will, consistent with the standard of
care required by paragraph IV.A. hereof, act with respect to the
Receivables and the Insurance Policies in such manner as will, in
the reasonable judgment of the Servicer, maximize the amount to
be received by the Trust with respect thereto.
2. The Servicer may and shall, at the direction of
the Trustee, xxx to enforce or collect upon the Receivables and the
Insurance Policies (including unpaid claims), with the prior
approval of the Trustee, in the name of and as agent for the Trust.
If the Servicer commences a legal proceeding to enforce a
Receivable or an Insurance Policy, the act of commencement shall
be deemed to be an automatic assignment of the Receivable and
the related rights under the Insurance Policies by the Trustee to the
Servicer for purposes of collection only. If, however, in any
enforcement suit or legal proceeding it is held that the Servicer
may not enforce a Receivable or an Insurance Policy on the
grounds that it is not a real party in interest or a holder entitled to
enforce the Receivable or the Insurance Policy, the Trustee, on
behalf of the Trust, shall, at the Servicer's request, take such steps
as the Servicer deems reasonably necessary to enforce the
Receivable or the Insurance Policy, including bringing suit in its
name or the names of the Certificateholders. The Servicer shall
be entitled to reimbursement for expenses incurred in connection
with enforcement or collection activities with respect to the
Receivables pursuant to this paragraph IV.M.2.
3. The Servicer shall exercise any rights of recourse
against third persons that exist with respect to any Receivable in
accordance with the Servicer's usual practice and the standard of
care required by paragraph IV.A hereof. In exercising such
recourse rights, the Servicer is hereby authorized on the Trustee's
behalf to reassign the Receivable and to deliver the certificate of
title to the Financed Vehicle to the person against whom recourse
exists at the price set forth in the document creating the recourse.
4. The Servicer may not permit any rescission
or cancellation of any Receivable nor may it take any action with
respect to any Receivable or Insurance Policy which would
materially impair the rights or interest of the Trust or the
Certificateholders therein or in the proceeds thereof.
5. Except as otherwise provided in paragraph I.A.3
of Schedule A hereto, neither the Backup Servicer nor the Servicer
may increase or reduce the amount of any Scheduled Payments,
change any Receivable, APR, extend the maturity date of or
rework any Receivable, modify or change any Obligor with respect
to any Receivable or modify any other material term of a
Receivable.
N. PAYMENT IN FULL ON RECEIVABLE
Upon payment in full on any Receivable, the
Servicer shall notify the Custodian pursuant to Section 3.03 of the
Pooling and Servicing Agreement, prior to the next succeeding
Distribution Date, by a certificate of a Servicing Officer
substantially in the form of Schedule C hereto and request for
release of the related Custodian File (which certificate shall include
a statement to the effect that all amounts received in connection
with such payment in full which are required to be deposited in the
Collection Account or the Lock-Box Account pursuant to
Section 5.02 of the Pooling and Servicing Agreement have been so
deposited). Upon receipt of such request, the Custodian shall
promptly release or cause to be released such Receivable and the
related Custodian File by executing a release and assignment in the
form of Schedule D hereto, which shall be without recourse to the
Trustee. The Custodian shall be authorized, upon receipt of a
request for release from the Servicer in the form of Schedule C
hereto, to execute an instrument in satisfaction of such Receivable
and to take such other actions and execute such other documents
as the Servicer deems necessary to discharge the Obligor
thereunder and eliminate the security interest in the Financed
Vehicle related thereto. Upon request of a Servicing Officer, the
Trustee shall perform such other acts as reasonably requested by
the Servicer and otherwise cooperate with the Servicer in
enforcement of the Certificateholders' rights and remedies with
respect to the Receivables.
O. SUBSTITUTION OF COLLATERAL
In the event a Financed Vehicle sustains significant
physical damage such that the insurance company carrying the
physical damage insurance covering such Financed Vehicle
determines that the Financed Vehicle is not repairable, the
Servicer, the Trustee or the Seller may permit the Obligor to
pledge a vehicle of equal or greater market value than that of the
Financed Vehicle immediately prior to sustaining the physical
damage, provided, that any such substitution shall not be made if
to do so would void coverage of the related Receivable under the
VSI Insurance Policy or the Risk Default Insurance Policy, and
provided further that the value of Financed Vehicles (prior to
sustaining the physical damage) for which substitutions may be
made shall not exceed in the aggregate ten percent (10%) of the
Original Pool Balance. The second vehicle shall be substituted as
the collateral ("Substituted Financed Vehicle") for the Receivable
and the terms of the Receivable shall not be amended or modified
except to reflect the substituted collateral. The Servicer shall,
within 90 days of the purchase of the Substituted Financed
Vehicle, cause the certificate of title for the Substituted Financed
Vehicle to be delivered to the Trustee as Custodian pursuant to
Section 3.03 of the Pooling and Servicing Agreement; provided,
however, that if the certificate of title is not delivered to the
Trustee within such 90-day period, the Seller shall be deemed to
be in breach of its representations and warranties in the Pooling
and Servicing Agreement. In accordance with Section 3.03 of the
Pooling and Servicing Agreement, the Servicer shall make
appropriate notation in its records of the substitution of the
collateral.
P. FIDELITY BOND AND ERRORS AND
OMISSIONS INSURANCE
The Servicer shall maintain, at its own expense, (i)
an errors and omissions insurance policy and (ii) a blanket fidelity
bond (but only to the extent ALFI or any other subservicer
appointed by the Servicer to perform the collection activities and
related services specified to be performed by ALFI in paragraph
III. B. 10 hereof does not maintain a blanket fidelity bond with
respect to such servicing functions to be performed hereunder;
provided if the Servicer does participate in performing any such
functions, it shall maintain a blanket fidelity bond), in each case
with broad coverage with responsible companies on all officers,
employees or other persons acting on behalf of the Servicer in any
capacity with regard to the Receivables to handle funds, money,
documents and papers relating to the Receivables. Any such
fidelity bond and errors and omissions insurance shall protect and
insure the Servicer against losses, including forgery, theft,
embezzlement, fraud, errors and omissions and negligent acts of
such persons and shall be maintained in a form and amount that
would meet the requirements of prudent institutional motor vehicle
installment sales contract servicers. No provision of this
paragraph IV.P. requiring such fidelity bond and errors and
omissions insurance shall diminish or relieve the Servicer from its
duties and obligations as set forth in this Agreement. The Servicer
shall be deemed to have complied with this provision if one of its
respective Affiliates has such fidelity bond and errors and
omissions policy coverage and, by the terms of such fidelity bond
and errors and omission policy, the coverage afforded thereunder
extends to the Servicer. The Servicer shall cause each and every
subservicer for it to maintain a policy of insurance covering errors
and omissions and a fidelity bond which would meet such
requirements. Upon request of the Trustee, the Servicer shall
cause to be delivered to the Trustee a certification evidencing
coverage under such fidelity bond and insurance policy. Any such
fidelity bond or insurance policy shall not be cancelled or modified
in a materially adverse manner without ten days' prior written
notice to the Trustee, each Rating Agency and the
Certificateholders.
V. REPRESENTATIONS AND WARRANTIES
A. REPRESENTATIONS AND WARRANTIES OF
SERVICER
1. Servicer is a corporation duly organized,
validly existing and in good standing under the laws of the
jurisdiction of its incorporation, and has full corporate power and
authority to enter into this Agreement and to carry out the
provisions of this Agreement.
2. This Agreement and all other instruments or
documents to be delivered hereunder or pursuant hereto, and the
transactions contemplated hereby, have been duly authorized by all
necessary corporate proceedings of Servicer; this Agreement has
been duly and validly executed and delivered by Servicer; and,
assuming due authorization, execution and delivery by Backup
Servicer and the Trustee, this Agreement is a valid and legally
binding agreement of Servicer enforceable in accordance with its
terms.
3. The execution and delivery of this Agreement
by Servicer hereunder and the compliance by Servicer with all
provisions of this Agreement do not conflict with or violate any
applicable law, regulation or order and do not conflict with or
result in a breach of or default under any of the terms or
provisions of any contract or agreement to which Servicer is
subject or by which it or its property is bound, nor does such
execution, delivery or compliance violate the certificate of
incorporation or bylaws of Servicer.
4. During the term of this Agreement, Servicer
will maintain fire and theft, general liability, business interruption
and employee fidelity insurance coverage in such amounts and
upon such terms as shall be customary given the nature and extent
of Servicer's business activities.
5. The Servicer is not in violation of, and the
execution, delivery and performance of this Servicing Agreement
by the Servicer will not constitute a violation with respect to, any
order or decree of any court or any order, regulation or demand
of any federal, state, municipal or governmental agency, which
violation might have consequences that would materially and
adversely affect the condition (financial or other) or operations of
the Servicer or its properties or might have consequences that
would affect the performance of its duties hereunder;
6. No proceeding of any kind, including but not
limited to litigation, arbitration, judicial or administrative, is
contemplated by or, to the Servicer's knowledge, pending or
threatened against the Servicer which would under any
circumstance have a material adverse effect on the execution,
delivery, performance or enforceability of this Servicing
Agreement;
7. To the best of Servicer's knowledge all
electronic data provided by the Servicer will be at the time of
delivery thereof true and correct;
8. No information, certificate of an officer,
statement furnished in writing or report delivered to the Backup
Servicer by the Servicer will, to the knowledge of the Servicer,
contain any untrue statement of a material fact or omit a material
fact necessary to make the information, certificate, statement or
report not misleading; and
9. The Servicer is an Eligible Servicer as of the
Closing Date and shall remain an Eligible Servicer throughout the
term of this Servicing Agreement.
B. REPRESENTATIONS AND WARRANTIES OF
BACKUP SERVICER
1. Backup Servicer is a national banking
association in good standing under the laws of the United States,
and has full corporate power and authority to enter into this
Agreement and to carry out the provisions of this Agreement.
Backup Servicer has all licenses, approvals and consents to conduct
its business as contemplated by this Agreement, except to the
extent that the failure to possess such licenses, approvals and
consents does not have a material adverse effect on the ability of
the Backup Servicer to perform its duties under this Agreement.
2. This Agreement and all other instruments or
documents to be delivered hereunder or pursuant hereto, and the
transactions contemplated hereby, have been duly authorized by all
necessary corporate proceedings of Backup Servicer; this
Agreement has been duly and validly executed and delivered by
Backup Servicer; and, assuming due authorization, execution and
delivery by Servicer, this Agreement is a valid and legally binding
agreement of Backup Servicer enforceable in accordance with its
terms.
3. The execution and delivery of this Agreement
by Backup Servicer hereunder and the compliance by Backup
Servicer with all provisions of this Agreement do not conflict with
or violate any applicable law, regulation or order and do not
conflict with or result in a breach of or default under any of the
terms or provisions of any contract or agreement to which Backup
Servicer is subject or by which it or its property is bound, nor
does such execution, delivery or compliance violate the Certificate
of Incorporation or Bylaws of Backup Servicer.
C. SURVIVAL OF REPRESENTATIONS AND
WARRANTIES
The representations and warranties set forth in this
paragraph V are made as of the date of this Servicing Agreement
and shall survive the date of this Servicing Agreement. Upon
discovery by the Backup Servicer, the Trustee or the Servicer of
a breach of any of the foregoing representations and warranties,
the party discovering such breach shall give prompt written notice
to the other parties.
VI. EVENTS OF SERVICING DEFAULT
If any one of the following events ("Events of Servicing
Default") shall occur and be continuing:
(i) Any failure by the Servicer to deliver to the
Trustee any proceeds or payment required to
be so delivered under the terms of this
Servicing Agreement that shall continue
unremedied for a period of two (2) Business
Days after the earlier to occur of (a) the
date on which written notice of such failure
shall have been received by the Servicer or
(b) a Servicing Officer shall have actual
knowledge thereof or, with reasonable
diligence, should have had knowledge
thereof; or
(ii) Failure on the part of the Servicer to
observe or to perform in any material
respect any other covenants or agreements
set forth in this Servicing Agreement which
continue unremedied for a period of thirty
(30) days after the earlier to occur of (a) the
date on which written notice of such failure
shall have been received by the Servicer or
(b) a Servicing Officer shall have actual
knowledge thereof or, with reasonable
diligence, should have had knowledge
thereof; or
(iii) The entry of a decree or order by a court or
agency or supervisory authority having
jurisdiction in the premises for the
appointment of a conservator, receiver,
trustee, or liquidator for the Servicer in any
bankruptcy, insolvency, readjustment of
debt, marshalling of assets and liabilities, or
similar proceedings, or for the winding-up
or liquidation of its affairs, and the
continuance of any such decree or order
unstayed and in effect for a period of thirty
(30) consecutive days; or
(iv) The consent by the Servicer to the
appointment of a trustee, conservator,
receiver, or liquidator in any bankruptcy,
insolvency, readjustment of debt,
marshalling of assets and liabilities, or
similar proceedings of or relating to the
Servicer and involving substantially all of its
property; or
(v) The Servicer shall admit in writing its
inability to pay its debts generally as they
become due, file a petition of any applicable
bankruptcy, insolvency, or reorganization
statute, make an assignment for the benefit
of its creditors, or voluntarily suspend
payment of its obligations; or
(vi) The failure by the Servicer to provide true
and correct electronic data, in violation of
representations and warranties made by the
Servicer in paragraph V.A. hereof, which
violation shall be material and shall continue
unremedied for a period of 30 days after the
date on which written notice of such failure
requiring the same to be remedied, shall
have been sent (1) to the Servicer by the
Trustee, or (2) to the Servicer and to the
Trustee by the Holders of Certificates
evidencing not less than 20% of the Voting
Interests thereof; or
(vii) The assignment by the Servicer to a delegate
of its duties or rights hereunder, except as
specifically permitted hereunder, or any
attempt to make such an assignment; or
(viii) The failure to provide the Trustee at least
thirty (30) days prior written notice of a
merger or consolidation involving the
Servicer or assumption of obligations of the
Servicer, or the failure to receive the
approval by each Rating Agency (such
approval not to be unreasonably withheld) of
such merger or consolidation involving the
Servicer or assumption of obligations of the
Servicer pursuant to paragraph XXIII of this
Servicing Agreement; or
(ix) Any fraud, gross negligence or willful
misconduct on the part of the Servicer with
respect to the Receivables or its duties
hereunder.
Then, and in each and every case and so long as an
Event of Servicing Default described above shall not have been
remedied in the period, if any, provided for in the applicable
subsection, the Trustee may, and shall, either at the direction of
the Majority Certificateholders or, in the case of an Event of
Servicing Default described in subsections (iii), (iv) or (v) above,
at the direction of the Risk Default Insurer, terminate all of the
rights and obligations of the Servicer under this Servicing
Agreement.
On or after the receipt by the Servicer of such
written notice, all authority and power of the Servicer under this
Servicing Agreement, with respect to the Receivables or otherwise,
shall pass to and be vested in the Backup Servicer or in any
successor Servicer to be appointed by the Trustee at the direction
of the Majority Certificateholders or at the direction of the Risk
Default Insurer, provided that the direction of the Risk Default
Insurer shall be subject to the consent of the Majority
Certificateholders and each Rating Agency. The Backup Servicer
is hereby authorized and empowered to execute and deliver on
behalf of the Servicer, as attorney-in-fact or otherwise, any and all
documents and other instruments, and to do or accomplish all other
acts with things necessary to effect the purposes of such notice of
termination, whether to complete the transfer and endorsement of
the Receivable files, or otherwise. Anything to the contrary herein
notwithstanding, the Backup Servicer may appoint agents to
perform its duties as successor Servicer hereunder.
The Servicer shall cooperate with the Backup
Servicer in effecting the termination of the responsibilities and
rights of the Servicer under this Servicing Agreement, including
the transfer to the Backup Servicer or any successor Servicer for
administration by it of all cash amounts that shall at the time be
held by the Servicer or shall have been deposited by the Servicer
in any account or that shall thereafter be received by the Servicer
with respect to a Receivable.
The Backup Servicer or the successor Servicer
appointed by the Trustee (including by reason of an Event of
Servicing Default under this Section or resignation pursuant to
Section XXII) shall be successor in all respects to the Servicer in
its capacity as Servicer and custodian under this Servicing
Agreement; provided, however that the Backup Servicer or
successor Servicer shall not be liable for any acts, omissions or
obligations of the Servicer that arose prior to such succession or
for any breach by the outgoing Servicer of any of its
representations and warranties contained in this Servicing
Agreement or in any related document or agreement, and the
outgoing Servicer shall not be relieved of any liability or
obligations hereunder to the extent such obligation or liability arose
prior to such succession. The Servicer shall be entitled to receive
all Servicing Fees and recovery of all costs up to the date of the
transfer to the successor Servicer of all functions referenced under
this Servicing Agreement.
VII. REMEDIES
In addition to the right to terminate contained in
Section VI, the Servicer agrees that upon the happening of any
Event of Servicing Default (as defined herein), the Backup
Servicer or the successor Servicer may avail itself of any other
relief to which the Backup Servicer or the successor Servicer may
be legally or equitably entitled, subject only to the provision of
Section XIII of this Servicing Agreement.
VIII. RESPONSIBILITY AND AUTHORITY OF
SERVICER
Subject to the limitations set forth herein or in the
Pooling and Servicing Agreement, the Servicer shall have the full
power and authority, acting alone and without the consent of the
Trustee or the Backup Servicer, to do any and all things in
connection with such servicing and administration that it may deem
reasonably necessary or desirable, to collect the Receivables, to
disburse the proceeds and to protect the interests of the Trustee
and the Certificateholders in the Receivables.
IX. COLLECTIONS; LOCK-BOX ACCOUNT AND
RELATED BANK ACCOUNTS
Any amounts received by the Servicer, including all
payments by or on behalf of the Obligors (other than Purchased
Receivables), all Liquidation Proceeds, Insurance Proceeds and
other Recoveries, all as collected during the Collection Period in
respect of a Receivable being serviced by the Servicer, shall be
remitted to the Lock-Box Account as soon as practicable, but in
no event later than the close of business on the Business Day after
receipt thereof by the Servicer.
The Servicer shall maintain the Lock-Box Account
and shall collect and hold in trust (for the benefit of the Trust) in
such account all funds received on account of the Obligors until
such funds are transferred to the Trustee or in accordance with its
instructions. On a daily basis the posted balance (in excess of
$2,000) related to the Receivables in the Lock-Box Account shall
be transferred by wire transfer to the Trustee.
Such funds shall not be commingled with the funds
of any other person; provided that there may be deposited in the
Lock-Box Account moneys collected on other motor vehicle
installment sales contracts originated by Aegis Finance and its
affiliates. The Servicer shall be responsible for all charges with
respect to the Lock-Box Account and, insofar as such charges
relate to the Receivables, shall be reimbursed in accordance with
the instructions set forth in the Monthly Servicer Certificate. The
Servicer shall provide written notice to the Trustee of the location
and account number of the Lock-Box Accounts promptly after
establishing or changing the same.
Xxxxx Fargo Bank, N.A. will serve as the initial
Lock-Box Account Depository with respect to the Receivables.
The Servicer shall provide thirty (30) days' prior notice to the
Trustee of its appointment of a successor Lock-Box Account
Depository, which such successor Lock-Box Account Depository
shall be an Eligible Institution.
The Servicer shall deposit into the Lock-Box
Account all amounts (including late payments) remitted by
Obligors to the Servicer under the terms of the Receivables within
one (1) Business Day after receipt thereof. The Servicer shall
provide the Lock-Box Account Depository with a report providing
instructions related to distributions of funds from the Lock-Box
Account to the Collection Account.
The Servicer shall deposit in the Collection Account
the aggregate Purchase Amount with respect to Purchased
Receivables. All such deposits shall be made in Automated
Clearinghouse Corporation next-day funds or immediately available
funds, on the Business Day following receipt thereof.
X. DOCUMENTS AND RECORDS
A. SERVICING DOCUMENTS AND RECORDS
1. All documents with respect to an Obligor
account and delivered to Servicer hereunder will be held in trust
and kept safely by Servicer as delivered.
2. The Servicer shall hold in trust and keep
safely for the benefit of the Trust the computer records relating to
the Obligor accounts and the proceeds thereof.
3. The Servicer will furnish copies of any audit
reports prepared for the Servicer (either internal or otherwise) with
respect to the Receivables to the Trustee promptly upon the receipt
thereof by Servicer.
4. All data, documents and information held by
the Servicer on behalf of the Trust shall be held in confidence and
not used or disclosed for any purpose other than as contemplated
by this Servicing Agreement or as required by law or as may be
necessary to enforce their respective rights under this Servicing
Agreement.
B. REPORTS AND CREDIT AGENCIES
1. In addition to its normal reporting, the
Servicer shall also furnish Backup Servicer upon request with such
reports as are required by this Servicing Agreement and such
additional information underlying the data in the aforesaid reports
as may be reasonably pertinent to Backup Servicer's needs and that
can be generated by the Servicer's existing data processing system
without undue effort or expense. The reports required by this
Servicing Agreement shall be substantially in the form of Schedule
B hereto.
2. Backup Servicer and Trustee understand that
all transactions with respect to an Obligor account will be reported
by Servicer to one or more Credit Agencies in the name of the
Seller or its applicable affiliate as required by contract and by law.
Servicer will comply with all Credit Agency agreements.
XI. INDEMNIFICATION
The Servicer agrees to indemnify the Backup
Servicer and the Trustee and hold the Backup Servicer and the
Trustee, their respective officers, employees and agents harmless
against any and all claims, losses, penalties, fines, forfeitures,
legal fees and related costs, judgments, and any other costs, fees
and expenses that the Backup Servicer or the Trustee, as the case
may be, may sustain in any way related to failure of the Servicer
to perform its duties and service the Receivables in compliance
with the terms of this Servicing Agreement. The Servicer shall
immediately notify the Backup Servicer and the Trustee if a claim
is made by a third party with respect to this Servicing Agreement
or the Receivables, assume (with the consent of the Backup
Servicer and the Trustee) the defense of any such claim and pay all
expenses in connection therewith, including counsel fees, and
promptly pay, discharge and satisfy any judgment or decree which
may be entered against it or the Backup Servicer or the Trustee in
respect of such claim. This right to indemnification shall survive
the termination of this Servicing Agreement.
XII. TERM AND TERMINATION
1. The Servicer agrees to service all
Receivables for their full term and until their expiration or earlier
termination.
2. In the event the Trustee, on behalf of the
Trust, transfers any Receivable(s), the transferee shall have the
option to terminate the servicing of the respective Obligor
account(s) by providing thirty (30) days written notice to Servicer.
3. The holder of the Residual Interest may at
any time replace the Servicer with a substitute Eligible Servicer
upon the delivery of written notice of such substitution stating the
name and address of such substitute Servicer to the Master
Trustee, the Trustee, each Rating Agency and the predecessor
Servicer at least 90 days prior to the change in Servicer, provided
(1) the holder of the Residual Interest delivers to the Trustee in
connection with such substitution evidence of the consent of at
least the Majority Certificateholders to the change and (2) provided
further that such substitute Servicer shall have executed an
agreement of assumption, acceptable to the Trustee and each
Rating Agency, under which it assumes every obligation and duty
of the Servicer under this Servicing Agreement. Upon the
occurrence of the foregoing, such substitute Servicer shall be
deemed the Servicer for all purposes under this Servicing
Agreement.
Should the transferee or holder of the Residual
Interest elect to terminate the servicing as indicated above, the
Servicer shall be entitled to a five ($5.00) dollars per Receivable
transfer fee, such fee to be paid by the transferee or holder of the
Residual Interest on the date of transfer.
XIII. ARBITRATION AND ATTORNEYS' FEES
1. It is understood that this Servicing
Agreement is made in good faith and should there arise, from any
unforeseen cause, a difference of opinion or of interpretation of
this Servicing Agreement which cannot be settled amicably
between the Trustee, the Backup Servicer and the Servicer, such
difference or interpretations shall be submitted to a decision of a
board of arbitration.
2. The aforementioned board of arbitration shall
be composed of two (2) arbitrators and an umpire meeting in the
State of Minnesota, unless otherwise agreed to by the Trustee, the
Backup Servicer and the Servicer.
3. The members of the board of arbitration shall
be active or retired disinterested officials of insurance companies
or financial institutions. Each party shall appoint its arbitrator, and
the two arbitrators shall choose an umpire before instituting the
hearing. If the respondent fails to appoint its arbitrator within
thirty (30) days after being requested to do so by the claimant, the
latter shall also appoint the second arbitrator.
If the two arbitrators fail to agree upon the
appointment of an umpire within two (2) weeks after their
nominations, each of them shall name three (3), of whom the other
shall decline two (2) and the decision shall be made by drawing
lots. The claimant shall submit its initial brief within twenty (20)
days from appointment of the umpire. The respondent shall submit
its brief within twenty (20) days thereafter, and the claimant may
submit a reply brief within ten (10) days after filing of the
respondent's brief.
4. The board shall make an award with regard
to the custom and usage of the business contemplated by this
Servicing Agreement. The board shall issue its award in writing
based upon a hearing at which evidence may be introduced without
following strict rules of evidence but in which cross-examination
and rebuttal shall be allowed.
The board shall make its award within thirty
(30) days following the termination of the hearing unless the
parties consent to an extension. A decision by the majority of the
members of the board shall become the award of the board and
shall be final and binding upon all parties to the proceeding. Either
party may apply to the United States District Court, sitting in the
State of Minnesota, for an order confirming the award. If such an
order is issued, the attorneys' fees of the party so applying and the
court cost will be paid by the party against whom confirmation is
sought.
5. Each party shall bear the expense of its
arbitrator and shall jointly and equally bear with the other party
the expense of the umpire. The remaining costs of the arbitration
proceeding (including attorneys' fees of the parties) shall be
allocated by the board in its award. Notwithstanding any other
provision hereof, any expenses (including attorney's fees) incurred
by the Trustee or the Backup Servicer shall be reimbursed from
the Trust.
XIV. WAIVERS
No failure or delay on the part of the Servicer, the
Trustee or the Backup Servicer in exercising any power, right or
remedy under this Servicing Agreement shall operate as a waiver
thereof, nor shall any single or partial exercise of any such power,
right or remedy, preclude any other or further exercise thereof or
the exercise of any other power, right or remedy, except by a
written instrument signed by the party to be charged or as
otherwise expressly provided herein.
XV. NOTICES
Except as otherwise provided herein, all notices,
requests, consents, demands and other communications given
hereunder shall be in writing. All notices of whatever kind shall be
either personally delivered or sent by telecopy or other form of
rapid transmission and confirmed by United States mail, properly
addressed and with full postage prepaid, addressed as follows:
To Servicer: Aegis Auto Finance,
Inc.
000 Xxxxxxxxxx
Xxxxxxxxx
Xxxxxx Xxxx, XX
00000
Attn: Xxxxxx X.
Xxxxxxxx, President
Telecopy No. (201)
418-7339
To Backup Servicer: Norwest Bank
Minnesota,
National Association
Corporate Trust
Services Asset
Backed
Administration
Xxxxx Xxxxxx xxx
Xxxxxxxxx Xxx.
Xxxxxxxxxxx, XX
00000-0000
Telecopy No. (612)
667-3539
To Trustee: Norwest Bank
Minnesota,
National Association
Corporate Trust
Services Asset
Backed
Administration
Xxxxx Xxxxxx xxx
Xxxxxxxxx Xxx.
Xxxxxxxxxxx, XX
00000-0000
Telecopy No. (612)
667-3539
or to such other address as such party shall have
specified in writing in the manner set forth above.
All notices to the Certificateholders shall be sent in
the manner specified in the Pooling and Servicing
Agreement.
XVI. ASSIGNABILITY
No party may assign any of its rights or obligations
hereunder without the prior written consent of the other parties.
Nothing in this Servicing Agreement is intended to confer,
expressly or by implication, upon any Person other than the
Trustee, the Backup Servicer and the Servicer any rights or
remedies under or by reason of this Servicing Agreement.
XVII. FURTHER ASSURANCES
Each party agrees, if reasonably requested by
another party, to execute and deliver such additional documents or
instruments and take such further actions as may be reasonably
necessary to effect the transactions contemplated by this
Agreement.
XVIII. COUNTERPARTS
This Servicing Agreement may be executed in
counterparts, each of which shall be deemed an original but all of
which taken together shall constitute but one and the same
document.
XIX. ENTIRE AGREEMENT; AMENDMENTS
This Servicing Agreement, including the Schedules
attached hereto and the documents referred to herein, contains the
entire agreement between the parties hereto with respect to the
transactions contemplated hereby and supersedes all prior
understandings, negotiations, commitments and writings with
respect thereto. This Servicing Agreement may not be modified,
changed or supplemented except upon the express written consent
of each of the parties hereto. The Trustee shall not agree to any
amendment of this Servicing Agreement without the prior written
consent of the Majority Certificateholders. In the event of any
conflict between this Servicing Agreement and a Schedule hereto,
the Schedule shall govern.
XX. INSPECTION
Any party hereto or its designated agents, and any
Certificateholder, may, during ordinary business hours and after
reasonable notice, inspect, audit, check and make abstracts from
any party's books, accounts, records and other papers directly
pertaining to the subject matter of this Servicing Agreement or the
Schedules hereto. All costs and expenses of such activities shall
be borne by the inspecting party. Each party shall use reasonable
efforts to facilitate any such inspection.
XXI. LIMIT ON TRUSTEE'S PAYMENT
OBLIGATIONS
Neither the Trustee, nor Norwest Bank Minnesota,
National Association, nor any of its affiliates, shall have any
obligation to make any payment to the Servicer in respect of any
payment obligation of the Trustee to the Servicer under this
Servicing Agreement, any Schedules, riders or amendments hereto
otherwise than from funds held by the Trustee pursuant to the
Pooling and Servicing Agreement. The Servicer hereby
specifically consents to the same and agrees that under no
circumstances will it offset or otherwise withhold amounts owing
to it from remittances made by it to the Trustee pursuant to this
Servicing Agreement, or any Schedules hereto or any riders or
amendments hereto.
XXII. SERVICER NOT TO RESIGN
1. The Servicer shall not resign from the
obligations and duties imposed on it as Servicer under this
Servicing Agreement except (i) in the event that the performance
of its duties under this Servicing Agreement shall no longer be
permissible under applicable law or it shall no longer be an
Eligible Servicer or (ii) if the Backup Servicer has taken over the
duties of the Servicer in accordance with the terms hereof or upon
the appointment of a successor or substitute Servicer (other than
the Backup Servicer) to take over the duties and obligations of the
Servicer hereunder. Notice of any such determination permitting
the resignation of the Servicer shall be communicated in writing to
the Trustee, the Backup Servicer and each Rating Agency at the
earliest practicable time and any such determination shall be
evidenced by an Opinion of Counsel to such effect delivered to the
Trustee concurrently with or promptly after such notice. No such
resignation shall become effective until an Eligible Servicer shall
have assumed the responsibilities and obligations of the Servicer;
provided, however, in the event that the Backup Servicer is unable
to act as Servicer hereunder and a successor Eligible Servicer has
not been appointed within thirty (30) days, the Trustee may
petition a court of competent jurisdiction for the appointment of a
successor Eligible Servicer acceptable to the Majority
Certificateholders.
2. Upon the Servicer's receipt of notice of
termination pursuant to paragraph VI. or upon the Servicer's
resignation pursuant to this paragraph, the Backup Servicer shall
perform as Servicer until such time, if ever, as a successor
Servicer who is an Eligible Servicer reasonably acceptable to each
Rating Agency and the Majority Certificateholders shall have been
appointed by the Trustee and shall have assumed the duties and
responsibilities of the Servicer.
3. 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 applicable portion of the
Servicing Fee and all of the rights granted to the predecessor
Servicer, by the terms and provisions of the Pooling and Servicing
Agreement.
XXIII.
MERGER OR CONSOLIDATION OF, OR ASSUMPTION OF
THE
OBLIGATIONS OF, OR RESIGNATION 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, (c) which may
succeed to the properties and assets of the Servicer substantially as
a whole, or (d) which may succeed to the duties and obligations of
the Servicer under this Servicing Agreement which Person
executes an agreement of assumption to perform every obligation
of the Servicer hereunder, shall be the successor to the Servicer
under this Servicing Agreement without further act on the part of
any of the parties to this Servicing Agreement; provided, however,
prior to any merger or consolidation of, or assumption of the
obligations of, the Servicer, each Rating Agency shall have
delivered to the Servicer, the Backup Servicer, the Trustee and
each Certificateholder a statement that such transaction shall not
have an adverse effect on the ratings assigned to the Rated
Certificates; further provided, however, that (i) immediately after
giving effect to such transaction, no Event of Servicing Default (as
defined in paragraph VI.), and no event which, after notice or
lapse of time, or both, would become an Event of Servicing
Default shall have happened and be continuing, (ii) the Servicer
shall have delivered to the Trustee an Officer's Certificate stating
that such consolidation, merger or succession and such agreement
of assumption comply with this paragraph XXIII. and that all
conditions precedent provided for in this Servicing Agreement
relating to such transaction have been complied with, and (iii) the
Servicer shall have delivered to the Trustee an Opinion of Counsel
either (A) stating that, in the opinion of such counsel, all financing
statements, continuation statements and amendments and notations
on certificates of title thereto have been executed and filed that are
necessary fully to preserve and protect the interest of the Trustee
in the Receivables and the Financed Vehicles, 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. Without receipt by the Trustee of written notice
from the Servicer of such merger, consolidation or succession at
least thirty days prior to such action by the Servicer and approval
by each Rating Agency and the Majority Certificateholders, which
approval shall not be unreasonably withheld, such merger,
consolidation or succession shall constitute an Event of Servicing
Default with respect to the Servicer.
XXIV. GOVERNING LAW.
This Servicing Agreement shall be governed by and
construed in accordance with the laws of the State of New York
without regard or reference to principles of conflicts of laws of
such State.
IN WITNESS WHEREOF, the parties hereto have
caused this Servicing Agreement to be executed as of the date first
written above.
SERVICER:
AEGIS AUTO
FINANCE,
INC.
By:
Xxxxxx X.
Xxxxxxxx
President
[Signatures continue on following page]
BACKUP
SERVICER:
NORWEST
BANK
MINNESOTA
, NATIONAL
ASSOCIATIO
N, in its
capacity as
Backup
Servicer under
the Pooling
and Servicing
Agreement
By:
Name:
Xxxxxxx Xxxxx
Title:
Corporate Trust Officer
TRUSTEE:
NORWEST
BANK MINNESOTA,
NATIONAL
ASSOCIATION, in its
capacity as
Trustee under the
Pooling and
Servicing Agreement
By:
Name:
Xxxxxxx Xxxxx
Title:
Corporate Trust Officer
[Counterpart signature page to Servicing Agreement]
ACKNOWLEDGEMENT AND AGREEMENT OF SELLER
The undersigned hereby acknowledges this Servicing
Agreement and agrees, in its capacity as Seller, to be bound by the
applicable provisions hereof.
AEGIS AUTO FUNDING CORP.,
In its capacity as Seller under the
Pooling and Servicing Agreement
By:
Xxxxxxx Xxxxx
Vice President
SCHEDULE A - SUMMARY OF SERVICES
I. SERVICES
A. CONTRACT SERVICES - COLLECTIONS
1. Prior to the execution of this Agreement
Servicer has established a Lock-Box
Account at Xxxxx Fargo Bank, N.A.
2. Servicer shall be responsible for the mailing
of payment coupon books or monthly
statements. Payment books shall contain
coupons in sufficient quantity to allow
Obligor to enclose a coupon with each
scheduled payment per the terms of the
related contract. Each payment coupon book
may contain up to 36 coupons.
For those Obligor accounts whose contract
term exceeds 36 months a new coupon book
for the remaining term will be sent in the
35th month.
3. Servicer shall process Obligor accounts for
which the Obligor fails to make a payment
on the applicable payment due date (a
"Delinquency") on the following basis:
a. Commencing on the first business
day on which an Obligor is
delinquent by more than ten (10)
days, Servicer shall, at the Servicer's
discretion, either (1) phone the
Obligor, (2) if no contact is made
after phoning, the Servicer may send
a letter to the Obligor asking the
Obligor to immediately contact the
Servicer, or (3) order a field call by
an outside agency to the Obligor.
b. Servicer may request the Seller's
authorization to repossess an
Obligor's vehicle at any time after an
Obligor is delinquent and Servicer
has satisfactory reason to believe that
Obligor will not pay. However,
such authorization will be deemed
given if Servicer cannot obtain
timely authorization, provided
Servicer has determined that any
delay would impede the Servicer's
ability to service the Obligor's
vehicle. Servicer shall create and
maintain a report of any Obligor's
vehicle it repossesses and all events
leading to such action.
c. If an Obligor requests a change to
his normal monthly due date (a "Due
Date Change") and if the Obligor has
defaulted on his obligations under a
Receivable or if the Servicer
reasonably believes such default is
imminent, Servicer may grant such
Due Date Change to the extent the
Servicer deems in the best interest of
the Certificateholders; however, no
Due Date Change shall be granted
beyond the currently due month.
d. Except as otherwise provided in this
agreement, if an Obligor has been
delinquent for more than thirty-five
(35) days, Servicer shall request
Seller's authorization to repossess
pursuant to Section IA3.b. of this
Schedule A.
e. If an Obligor requests an extension
of the currently required monthly
payment to extend the end of the
loan term (a "Loan Extension") and
if the Obligor has defaulted on his
obligations under a Receivable or if
the Servicer reasonably believes such
default is imminent, Servicer may to
the extent the Servicer deems in the
best interest of the Certificateholders
grant such Loan Extension once each
year.
Servicer shall grant a Loan
Extension only to those Obligors
who have made at least six (6)
regularly scheduled payments; and in
no case shall the number of Loan
Extensions per loan exceed the
number of years in the loan term. In
no event may any modification cause
the final payment date to extend
beyond the Final Scheduled
Distribution Date for the
Receivables.
B. CONTRACT SERVICES - CUSTOMER SERVICE
1. If Servicer receives written or oral notice
from an Obligor of such Obligor's refusal to
make payments on the Obligor's account,
Servicer shall enter such notice into its
computer records.
2. The Seller shall have the responsibility to
apply for title to the motor vehicle covered
by the contract. Servicer shall send, or
cause to be sent, to Trustee all titles to such
motor vehicles. With respect to titles
received, Servicer shall verify that Aegis
Finance is noted as lien holder.
3. Servicer shall notify Originator and/or
Custodian of any discrepancies with respect
to the lien holder indicated on received
titles. Servicer shall further notify Originator
and/or Custodian of missing titles.
Originator shall be responsible for correcting
title discrepancies and obtaining missing
titles.
4. Servicer shall not release any title to a
vehicle except upon the full payment of the
remaining obligor principal balance by the
Obligor or others, or the repossession and
sale of the related vehicle, or the release of
the title to Originator for the correcting of
title problems, or as required by law, or as
directed by Custodian. Custodian will
release title to Servicer on a timely basis,
pursuant to Section 3.04(c) of the Pooling
and Servicing Agreement.
5. Servicer shall perform the following
insurance tracking functions with respect to
a contract until the earlier of the
repossession and sale of the vehicle or the
remaining obligor principal balance is paid
in full by the Obligor or others:
a. Seller shall provide initial physical
damage insurance information at the
time of portfolio boarding.
b. Servicer shall notify Seller and/or
Custodian if Servicer has not
received a copy of a physical damage
insurance policy for an Obligor's
vehicle within twenty (20) days of
the receipt of a Notice of
Cancellation/Non-Renewal.
c. Servicer shall produce a monthly
Insurance Expiration report showing
those Obligor accounts for whom a
Notice of Cancellation/Non-Renewal
has been received or the expiration
date for an Obligor's insurance
policy in Servicer's computer records
has elapsed.
d. Servicer shall not be liable for any
loss or liability resulting from the
lack of insurance coverage on any
Obligor vehicles if it has complied
with the foregoing.
6. Servicer shall negotiate and settle any claims
relating to physical damage to a vehicle and
endorse any insurance company drafts for
such claim subject to the following
conditions:
a. Servicer shall endorse a draft for
payment of a claim to body shop or
other auto repair service.
b. If the Obligor's account is more than
thirty (30) days delinquent, Servicer
shall attempt to collect all currently
due amounts. If unable to make such
collection, Servicer shall request
Seller's authorization to repossess
vehicle from the repair facility
pursuant to Section I-A-3.b. of this
Schedule A. To effect such
repossession, Servicer may negotiate
for the release of the vehicle from
the repair facility in exchange for the
endorsed draft in the amount of the
repairs and an agreement to hold the
repair facility harmless for the
release of the vehicle.
7. Servicer shall calculate early payoffs of
remaining obligor principal balance per the
terms of the related sales contract. Seller
authorization is required for any payoff
amount other than the full calculated
amount. Notwithstanding any condition in
this Agreement, Servicer, however, shall
have the right (in the event of early payoff)
to waive any remaining obligor principal
balance of twenty-five dollars ($25.00) or
less.
8. Upon receipt by Servicer of the full payment
of the remaining Obligor principal balance
by the Obligor, the Custodian shall release
to the Servicer which in turn shall release
and forward to the Obligor the original of
the installment sales contract.
II.
A. SPECIAL COLLECTION ACTIVITIES
1. Repossession and Sale
The following terms shall govern the
repossession and sale of the vehicle:
a. Servicer shall order repossession
services from licensed, bonded
agents.
b. Within five (5) business days after
repossession or sooner if required by
law, Servicer shall prepare and mail
a Notice of Intent (the "NOI") to the
Obligor and send a copy of the NOI
once per month together with their
monthly reports to the Seller.
c. Servicer shall cause the repossessed
vehicle to be delivered to a location
as designated by Seller for the
amount of time required by
applicable State law for Obligor
redemption (the "Obligor
Redemption Period").
d. After the expiration of the Obligor
Redemption Period, Seller may
authorize Servicer to arrange for the
sale and disposition of the vehicle.
2. Credit Enhancement Claims Filing
Within the provisions of the Fee Schedule
set forth in paragraph III of this Schedule,
Servicer shall perform the following
insurance functions with respect to a
Receivable and will comply with all
necessary operating and claims filing
procedures (which may be modified by the
insurance company from time to time and by
mutual consent of the Seller and the
Servicer) pursuant to each Credit
Enhancement:
a. With respect to the Risk Default
Insurance Policy, Servicer shall: (1)
file notice of loss within the earlier
of (a) 60 days from the date of
expiration of the Obligor Redemption
Period or (b) 30 days from the date
the Financed Vehicle was sold at
auction, (2) maintain claim data
components, (3) calculate the claim
amount and (4) submit to the Insurer
all supporting documents for each
claim required by the Risk Default
Insurance Policy.
b. With respect to the VSI Insurance
Policy, Servicer shall:
(1) if appropriate, prior to
liquidation and within ninety (90)
days of date of loss, file an initial
notice of loss which shall mean the
following for purposes of this
Section only:
(A) For physical damage,
the date of repossession;
(B) For instrument non-
filing insurance, the date of
filing of a superior lien;
(C) For a skip, the date of
the first delinquency plus 150
days; and
(D) For a repossession,
the date the damage
occurred.
(2) maintain physical and electronic
information, (3) calculate the claim
amount, (4) prepare physical and
electronic information and complete
claim form and (5) in the case of a
claim dispute, select an independent
appraiser and file an appraisal report
within thirty (30) days of initial
claim filing rejection.
3. Deficiency
a. After the repossession and sale of a
vehicle, in order to calculate a
deficiency, if any, Servicer shall
request the cancellation of any
financed product related to the
vehicle (e.g., credit life, disability
insurance, etc.), file for any refunds
associated therewith and furnish a
cancellation report to Custodian.
b. After taking into account any
cancellation refunds, Servicer shall
compute any deficiency resulting
from the repossession and sale of a
vehicle and notify Obligor of any
such deficiency.
c. At the discretion and instruction of
the Seller, Servicer shall commence
collection activities on any such
established Obligor deficiency
accounts.
4. Bankruptcies
If Servicer receives written notice that an
Obligor has become subject to bankruptcy
proceedings under Federal or State law,
Servicer or its designee (attorney if
required) shall provide the following
services as necessary:
a. Servicer shall immediately cease all
collection activity and otherwise
comply with the Bankruptcy Code
and all related laws and regulations.
b. Servicer shall file a claim with the
applicable court.
c. Servicer shall obtain legal services
for the prosecution of the claim
when necessary.
d. Servicer shall monitor the receipts of
funds being paid through the
applicable bankruptcy plan.
e. Upon dismissal of an action under
bankruptcy, Servicer shall service
the Obligor's account pursuant to the
standard collection procedures of
Section I of this Schedule A.
f. Should the Obligor account be the
subject of a reaffirmation or court
ordered modified payment schedule,
Servicer shall administer and collect
the account in the same fashion as
that prior to the bankruptcy
proceedings.
5. Disability
If Servicer is notified in writing of an
Obligor's disability claim and evidence of
the Obligor's disability insurance policy is
on file, Servicer shall suspend all collection
activity on such Obligor's account until such
time as Obligor resumes his normal payment
schedule, however:
a. Servicer shall continue to monitor
such Obligor's account until the
earlier of the date on which:
1) A claim approval or denial
has been received; or
2) The Obligor resumes
payment, at which time
Servicer will resume
collection activity pursuant to
Section III of this agreement.
b. If Obligor's disability claim is
denied, Servicer shall resume
collection activity pursuant to Section
I of this Agreement and the terms
and conditions of the related sales
contract.
c. Servicer's collection procedures for
a disability account shall comply
with the terms stipulated on the
related sales contract.
6. Allotments
Servicer shall have been notified at the time
of loan boarding if an Obligor will be
subject to military allotment processing. If
Servicer has not received an allotment
verification on a designated allotment
account within 60 days of any subsequent
allotment establishment and the designated
Obligor's account is greater than 45 days
delinquent, Servicer shall request Seller's
authorization to repossess pursuant to
Section I.A.3.b of this Schedule A.
7. Skips
If Servicer determines that Obligor has
become a skip, Servicer shall conduct skip-
tracing efforts for a period of 30 days. If
such skip-tracing efforts prove unsuccessful,
Servicer will file (if applicable) the
necessary claim forms with Seller's
insurance carriers as described in II A(2) of
Schedule B of this document.
III. FEE SCHEDULE
Servicer shall be entitled to receive the following fees and
costs no later than the Distribution Date immediately
following each related Collection Period:
A. GENERAL SERVICING
1. For all Receivables with an outstanding
balance greater than zero dollars ($0.00) as
of the first day of the related Collection
Period, a monthly serving fee equal to one-
twelfth of 1.85% of the outstanding balance
or $10.00, whichever is greater.
2. All extension fees that are received during
the related Collection Period.
3. All late charges that are received during the
related Collection Period.
4. A charge of $25.00 per filing of Credit
Enhancement claims forms with the
designated Insurers during the related
Collection Period.
B. EXPENSE REIMBURSEMENT
1. All out-of-pocket expenses incurred by
Servicer in the pursuit of its job functions as
described in this Schedule (including but not
limited to filing fees, investigation fees,
repossession fees, transportation and storage
fees, legal fees, DMV fees, etc.) shall be
reimbursed to the Servicer at Servicer's
actual cost. In addition Servicer shall be
entitled to an administrative fee equal to 8%
of all out-of-pocket expenses. Servicer shall
provide the Trustee with documentation for
all such out-of-pocket expenses as a
condition to payment.
2. All postage costs associated with the mailing
of insurance follow-up letters, payment
statements, including Notice of Intent and
Deficiency Statement, during the related
Remittance Period.
3. All expenses relating to establishing,
maintaining and transferring funds from the
Lock-Box account to the relevant Collection
Account maintained by the Trustee. Such
expenses shall be reimbursed at actual cost
provided the Servicer include copies of
related invoices.
C. DEFICIENCY SERVICING
For those Obligor accounts that have been the
subject of a short insurance payoff, within the
related Collection Period, Servicer shall cause the
account to be moved to a "non-performing" loan
pool and marked inactive.
All collection activity by Servicer will be suspended
until such time as the Seller directs Servicer to
resume collection efforts. Upon such reactivation,
a one time set-up fee of fifty ($50.00) dollars will
be charged and payable on the next Distribution
Date.
For each Collection Period that an Obligor account
remains in the above described deficiency condition,
a servicing fee will be charged and payable on the
related Distribution Date based on the following
schedule:
1. $1.00 per month for months 1-4 that a
subject Receivable remains in the nonperforming loan pool.
2. $0.50 per month for months 5-8 that a
Receivable remains in the nonperforming loan pool.
3. $0.10 per month for each month thereafter
that a Receivable remains in the nonperforming loan pool.
SCHEDULE B
SERVICER MONTHLY ACTIVITY REPORT
Aegis Auto Receivables Trust 1996-3
Automobile Receivable Pass-Through Certificates
Series 1996-3
I. COLLECTION ACTIVITY INTEREST PRINCIPAL
TOTALS
Beginning of Period Pool Principal Balance 0
Additional Receivables Purchased 0
Scheduled Payments 0 0
0
Full & Partial Prepayments 0 0
0
Risk Default Insurance Cash Proceeds 0 0
0
Receivables Repurchased by Seller
Recoveries (on Liquidated and Defaulted
Receivables)
Miscellaneous Servicer Collections
Available Distribution Amount 0 0
0
Net Losses 0
End of Period Pool Balance 0
II. SERVICING COMPENSATION
Amount
(ATTACH BREAKOUT OF FEES)
Servicer Compensation
III. POOL BALANCE INFORMATION
Original Pool Balance: Beginning of Period
End of Period
Pool Balance
Pool Factor
Weighted Average Coupon (WAC)
Weighted Average Remaining Maturity (WAM)
Remaining Number of Contracts
IV. RECEIVABLES REPURCHASED/SUBSTITUTED BY SELLER
Number of Receivables Repurchased
Principal Amount
Number of Additional Receivables Substituted
Principal Amount
V. EXTENSIONS
Number of Extensions granted
Principal Amount
VI. DELINQUENCY INFORMATION*
% of
# of Principal Outstanding
Contracts Balance Pool Balance
30-59 Days Delinquent
60-90 Days Delinquent
90 Days or more Delinquent
*Excluding Liquidated and Defaulted Receivables
VII. REPOSSESSION INFORMATION
Current Period Inventory
Number of Receivables as to which Vehicles have been
Repossessed (and NOI expired)
Principal Balances of Receivables relating to Vehicles
which have been Repossessed (and NOI expired)
VIII. LIQUIDATED AND DEFAULTED RECEIVABLES
Current Period Cumulative
Number of Liquidated Receivables*
Principal Balance of Liquidated Receivables**
(Prior to Liquidation)
Number of Defaulted Receivables***
Principal Balance of Defaulted Receivables
Total Principal Balance of Liquidated Defaulted Receivables
*Includes Receivables transferred to Risk Default Insurer for liquidation
**Excludes Receivables previously characterized as Defaulted Receivables
***180 days delinquent
IX. RECOVERIES
Current Period Cumulative
Liquidation Proceeds
VSI Physical Damage/Loss Insurance Proceeds
Rebates of Servicer Cancelled Warranty Contracts
Consumer Insurance
Other
Total Recoveries
X. RISK DEFAULT POLICY INSURED RETENTION AMOUNT
Beginning Balance
Add: Prefunded Receivables
Add: Quarterly Reserve Loss Deficiency
Less: Approved Claims
Less: Surplus in Quarterly Loss Reserve
Ending Balance
XI. NET LOSSES
Current Period Cumulative
Principal Balance of Liquidated and Defaulted Receivables
Less: Recoveries
Less: Risk Default Insurance Proceeds
Net Losses
XII. INSURANCE CLAIMS
Current Period Cumulative
Number of Risk Default Insurance Claims
Amount of Risk Default Insurance Claims
Retention Amount
Number of VSI Insurance Claims
Amount of VSI Physical Damage/Loss Insurance Claims
Number of Risk Defaulted Insurance Claims Rejected
Principal Balance of Receivables relating to Risk Default
Insurance Claims Rejected
SERVICER COMPENSATION BREAKDOWN Amount
Servicing Fees
Collection Expenses Incurred
Claim Filing Fees
Bank Charges
Late fees, extension fees collected
Postage
Total Servicer Compensation
SCHEDULE C
REQUEST FOR RELEASE OF DOCUMENTS
To: Norwest Bank Minneapolis, National Association,
as Custodian
Xxxxx Xxxxxx xxx Xxxxxxxxx Xxxxxx
Xxxxxxxxxxx, XX 00000-0000
Re: Aegis Auto Receivables Trust 1996-3; Servicing
Agreement dated as of September 1, 1996 by and
among Aegis Auto Finance, Inc., Norwest Bank
Minneapolis, National Association, as Trustee, and
Norwest Bank Minneapolis, National Association,
as Backup Servicer.
In connection with the administration of the pool of
Receivables held by you as Custodian for the Trustee, we request the
release and acknowledge receipt of the (Custodian's Receivable
Files/[specify documents]) for the Receivable described below, for the
reason indicated.
Borrower's Name, Address & Zip Code:
Receivable Number: [list here or on attached schedule]
Reason for Requesting Documents (check one or put code on attached
schedule)
_____ 1. Receivable Paid in Full (Servicer hereby certifies that all
amounts received in connection therewith have been
credited to the Collection Account as provided in the
Pooling and Servicing Agreement.)
_____ 2. Receivable Repurchased Pursuant to Section 3.02 of the
Pooling and Servicing Agreement (Servicer hereby certifies
that any applicable repurchase price has been credited to
the Collection Account as provided in the Pooling and
Servicing Agreement.)
_____ 3. Receivable [to be] Liquidated (Servicer hereby certifies that
all proceeds of foreclosure, insurance or other liquidation
[have been finally received and credited] [when received
shall be credited] to the Collection Account pursuant to the
Pooling and Servicing Agreement.)
_____ 4. Receivable to be transferred to Risk Default Insurer for
liquidation (servicer hereby certifies that all proceeds of
insurance when received shall be credited to the Collection
Account pursuant to the Pooling and Servicing Agreement).
_____ 5. Receivable in Foreclosure
_____ 6. Other (explain)
If box 1, 2, 3 or 4 above is checked, and if all or part of
the Custodian's Receivable File was previously released to us, please
deliver to us a copy of our previous request for release on file with you,
as well as any additional documents in your possession relating to the
above specified Receivable.
If box 5 or 6 above is checked, upon our return of all of the
above documents to you as Custodian, please acknowledge your receipt
by signing in the space indicated below, and returning this form.
AEGIS AUTO FINANCE,
INC.
Servicer
By:________________________________
Name:
Title:
Date:______________________________
Documents returned to Custodian:
NORWEST BANK MINNEAPOLIS, NATIONAL ASSOCIATION,
as Custodian
By: _______________________________
Name:
Title:
Date:
______________________________
SCHEDULE D
RELEASE AND ASSIGNMENT
PURSUANT TO SECTION IV.N.
OF THE SERVICING AGREEMENT
Norwest Bank Minnesota, National Association, as custodian (the
"Custodian") for the Trustee of the Aegis Auto Receivables Trust Series
1996-3 created pursuant to the Pooling and Servicing Agreement (the
"Pooling and Servicing Agreement") dated as of September 1, 1996
among Aegis Auto Funding Corp. (the "Seller"), Norwest Bank
Minnesota, National Association, as master servicer (the "Backup
Servicer") and as trustee (the "Trustee"), does hereby transfer, assign and
release to the Seller, without recourse, representation or warranty of the
Trustee, all of the Trustee's right, title and interest in and to the
Receivable and related Custodian File (as defined in the Pooling and
Servicing Agreement) identified as paid in full in the attached Servicer's
Request For Release of Documents, and all security and documents
relating thereto.
IN WITNESS WHEREOF, I have hereunto set my hand this
day of 199 .
Norwest Bank Minnesota,
National Association,
as Custodian
By
_____________________________________
[Name]
[Title]
