Exhibit 10.2
SALE AND SERVICING AGREEMENT
among
BMW VEHICLE OWNER TRUST 2004-A,
Issuer,
BMW FS SECURITIES LLC,
Depositor,
BMW FINANCIAL SERVICES NA, LLC,
Seller, Servicer, Administrator and Custodian,
and
CITIBANK, N.A.,
Indenture Trustee
Dated as of May 1, 2004
THIS SALE AND SERVICING AGREEMENT (this "Agreement"), dated as of May 1,
2004, is among BMW VEHICLE OWNER TRUST 2004-A, a Delaware statutory trust (the
"Issuer"), BMW FS SECURITIES LLC, a Delaware limited liability company (the
"Depositor"), BMW FINANCIAL SERVICES NA, LLC, a Delaware limited liability
company ("BMW FS"), as the seller (in such capacity, the "Seller"), as servicer
(in such capacity, the "Servicer"), as administrator (in such capacity, the
"Administrator") and as custodian (in such capacity, the "Custodian"), and
CITIBANK, N.A., a national banking association, as indenture trustee (the
"Indenture Trustee").
WHEREAS, the Issuer desires to purchase a portfolio of receivables arising
in connection with automobile retail installment sale contracts and promissory
notes generated by BMW FS in the ordinary course of its business and sold by BMW
FS to the Depositor;
WHEREAS, the Depositor is willing to sell such receivables to the Issuer;
and
WHEREAS, BMW FS is willing to service such receivables.
NOW, THEREFORE, in consideration of the premises and the mutual covenants
herein contained, the parties hereto agree as follows:
ARTICLE I
DEFINITIONS
Section 1.01. Definitions. Whenever used in this Agreement, the following
words and phrases, unless the context otherwise requires, shall have the
following meanings:
"Advance" means, as to any Payment Date, the aggregate of all scheduled
payments of interest which were due during the related Collection Period that
remained unpaid at the end of such Collection Period and were not collected
during such Collection Period, exclusive of any such scheduled payment which the
Servicer has determined would be a Nonrecoverable Advance if an advance in
respect of such scheduled payment were made.
"Advance Reimbursement Amount" means any amount received or deemed to be
received by the Servicer pursuant to Section 5.11 in reimbursement of an Advance
made out of its own funds.
"Agreement" means this Sale and Servicing Agreement, as the same may be
amended or supplemented from time to time.
"Amount Financed" means with respect to a Receivable, the amount advanced
under the Receivable toward the purchase price of the Financed Vehicle and any
related costs, exclusive of any amount allocable to the premium of force-placed
physical damage insurance covering the Financed Vehicle.
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"Annual Percentage Rate" or "APR" of a Receivable means the annual rate of
finance charges stated in the related Contract.
"Available Amounts" means, with respect to any Payment Date, the sum of
Available Principal and Available Interest.
"Available Amounts Shortfall" shall have the meaning set forth in Section
5.06(b).
"Available Interest" means, with respect to any Payment Date, the sum of
the following amounts, without duplication, allocable to interest received or
allocated by the Servicer on or in respect of the Receivables during the related
Collection Period: (a) that portion of all collections on Receivables allocable
to interest (including the amount, if any, of Advances for that Collection
Period, but excluding the amount, if any, of reimbursements of Advance
previously made to the Servicer), (b) the Purchase Amount of each Receivable
that became a Purchased Receivable during such Collection Period to the extent
attributable to accrued interest on such Receivable, (c) Recoveries for such
Collection Period, (d) Investment Earnings for the related Payment Date, (e)
Liquidation Proceeds for such Collection Period to the extent allocable to
interest and (f) Net Investment Losses deposited by the Servicer; provided,
however, that in calculating the Available Interest the following will be
excluded: all payments and proceeds that are allocable to interest (including
Liquidation Proceeds) of any Purchased Receivables the Purchase Amount of which
has been included in the Available Interest in a prior Collection Period.
"Available Principal" means, with respect to any Payment Date, the sum of
the following amounts, without duplication, with respect to the related
Collection Period: (a) the portion of all collections on Receivables allocable
to principal, (b) Liquidation Proceeds for such Collection Period to the extent
allocable to principal and (c) that portion allocable to principal of the
Purchase Amount of all Receivables that became Purchased Receivables during or
in respect of such Collection Period.
"Basic Documents" means the Trust Agreement, the Indenture, this Agreement,
the Receivables Purchase Agreement, the Administration Agreement, and the Note
Depository Agreement and other documents and certificates delivered in
connection therewith.
"BMW Capital" means BMW US Capital LLC, a Delaware limited liability
company.
"BMW FS" means BMW Financial Services NA, LLC, a Delaware limited liability
company.
"Business Day" means any day other than a Saturday, a Sunday or a day on
which a national banking association or a commercial banking institution in the
State of New Jersey, the State of Delaware or the State of New York is
authorized or obligated by law or executive order to remain closed.
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"Certificate" means a certificate evidencing the beneficial interest of a
Certificateholder in the Trust.
"Certificate Distribution Account" has the meaning assigned to such term in
the Trust Agreement.
"Certificate Final Scheduled Payment Date" means the Payment Date in
October 2010.
"Certificate Percentage Interest" has the meaning assigned to such term in
the Trust Agreement.
"Certificateholders" has the meaning assigned to such term in the Trust
Agreement.
"Class" means any one of the classes of Notes.
"Class A Rate" means the Class A-1 Rate, Class A-2 Rate, Class A-3 Rate or
Class A-4 Rate, as applicable.
"Class A-1 Final Scheduled Payment Date" means the May 25, 2005 Payment
Date.
"Class A-1 Note Balance" means, as of any date of determination, the
Initial Class A-1 Note Balance less all amounts distributed to Class A-1
Noteholders on or prior to such date and allocable to principal.
"Class A-1 Noteholder" means the Person in whose name a Class A-1 Note is
registered in the Note Register.
"Class A-1 Notes" means the 1.18% Asset Backed Notes, Class A-1,
substantially in the form of Exhibit A-1 to the Indenture.
"Class A-1 Rate" means 1.18% per annum.
"Class A-2 Final Scheduled Payment Date" means the October 25, 2006 Payment
Date.
"Class A-2 Noteholder" means the Person in whose name a Class A-2 Note is
registered in the Note Register.
"Class A-2 Notes" means the 1.88% Asset Backed Notes, Class A-2,
substantially in the form of Exhibit A-2 to the Indenture.
"Class A-2 Rate" means 1.88% per annum.
"Class A-3 Final Scheduled Payment Date" means the March 25, 2008 Payment
Date.
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"Class A-3 Noteholder" means the Person in whose name a Class A-3 Note is
registered in the Note Register.
"Class A-3 Notes" means the 2.67% Asset Backed Notes, Class A-3,
substantially in the form of Exhibit A-3 to the Indenture.
"Class A-3 Rate" means 2.67% per annum.
"Class A-4 Final Scheduled Payment Date" means the February 25, 2009
Payment Date.
"Class A-4 Noteholder" means the Person in whose name a Class A-4 Note is
registered in the Note Register.
"Class A-4 Notes" means the 3.32% Asset Backed Notes, Class A-4,
substantially in the form of Exhibit A-4 to the Indenture.
"Class A-4 Rate" means 3.32% per annum.
"Class B Final Scheduled Payment Date" means the October 25, 2010 Payment
Date.
"Class B Noteholder" means the Person in whose name a Class B Note is
registered in the Note Register.
"Class B Notes" means the 3.52% Asset Backed Notes, Class B, substantially
in the form of Exhibit A-5 to the Indenture.
"Class B Rate" means 3.52% per annum.
"Closing Date" means May 12, 2004.
"Collateral" has the meaning specified in the Granting Clause of the
Indenture.
"Collection Account" means the account designated as such, established and
maintained pursuant to Section 5.01(a).
"Collection Period" means with respect to any Payment Date, the calendar
month preceding such Payment Date. Any amount stated as of the last day of a
Collection Period or as of the first day of a Collection Period shall give
effect to the following calculations as determined as of the close of business
on such last day: (i) all applications of collections and (ii) all distributions
to be made on the following Payment Date.
"Commission" means the Securities and Exchange Commission.
"Contract" means a motor vehicle retail installment sale contract or
promissory note.
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"Controlling Class" means with respect to any Notes Outstanding, the Class
A Notes (voting together as a single class) so long as the Class A Notes are
Outstanding, and thereafter the Class B Notes so long as any Class B Notes are
Outstanding (in each case excluding Notes held by the Depositor, the Servicer or
their Affiliates).
"Conveyed Assets" shall have the meaning set forth in Section 2.01.
"Custodian" means BMW FS, in its capacity as custodian of the Receivables.
"Cutoff Date" means the close of business on April 30, 2004.
"Dealer" means the dealer who sold a Financed Vehicle and who originated
the related Receivable and assigned it to BMW FS pursuant to a Dealer Agreement.
"Dealer Agreement" means an agreement between BMW FS and a Dealer pursuant
to which such Dealer sells Contracts to BMW FS, substantially in the form of
Exhibit D.
"Delinquent Receivable" means a Receivable with respect to which more than
20% of any Scheduled Payment is more than 29 days delinquent as of the last day
of the related Collection Period, excluding Receivables with respect to which
the related Financed Vehicle has been repossessed and Liquidated Receivables.
"Delivery" when used with respect to Trust Account Property means:
(a) with respect to bankers' acceptances, commercial paper, negotiable
certificates of deposit and other obligations that constitute "instruments"
within the meaning of Section 9-102(a)(47) of the UCC and are susceptible of
physical delivery, transfer thereof to the Indenture Trustee by physical
delivery to the Indenture Trustee endorsed to, or registered in the name of, the
Indenture Trustee or endorsed in blank, and, with respect to a certificated
security (as defined in Section 8-102(a)(4) of the UCC) transfer thereof (i) by
delivery of such certificated security endorsed to, or registered in the name
of, the Indenture Trustee or (ii) by delivery thereof to a "clearing
corporation" (as defined in Section 8-102(a)(5) of the UCC) and the making by
such clearing corporation of appropriate entries on its books reducing the
appropriate securities account of the transferor and increasing the appropriate
securities account of the Indenture Trustee by the amount of such certificated
security and the identification by the clearing corporation of the certificated
securities for the sole and exclusive account of the Indenture Trustee (all of
the foregoing, "Physical Property"), and, in any event, any such Physical
Property in registered form shall be in the name of the Indenture Trustee or its
nominee; and such additional or alternative procedures as may hereafter become
appropriate to effect the complete transfer of ownership of any such Trust
Account Property to the Indenture Trustee or its nominee or custodian,
consistent with changes in applicable law or regulations or the interpretation
thereof;
(b) with respect to any security issued by the U.S. Treasury, the Federal
Home Loan Mortgage Corporation or by the Federal National Mortgage Association
that is a book-entry security held through the Federal Reserve System pursuant
to federal book-
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entry regulations, the following procedures, all in accordance with applicable
law, including applicable federal regulations and Articles 8 and 9 of the UCC:
book-entry registration of such Trust Account Property to an appropriate
book-entry account maintained with a Federal Reserve Bank by a securities
intermediary that is also a "depository" pursuant to applicable federal
regulations; the making by such securities intermediary of entries in its books
and records crediting such Trust Account Property to the Indenture Trustee's
security account at the securities intermediary and identifying such book-entry
security held through the Federal Reserve System pursuant to federal book-entry
regulations as belonging to the Indenture Trustee; and such additional or
alternative procedures as may hereafter become appropriate to effect complete
transfer of ownership of any such Trust Account Property to the Indenture
Trustee, consistent with changes in applicable law or regulations or the
interpretation thereof;
(c) with respect to any item of Trust Account Property that is an
uncertificated security under Article 8 of the UCC and that is not governed by
clause (b) above, registration on the books and records of the issuer thereof in
the name of the Indenture Trustee or its nominee or custodian who either (i)
becomes the registered owner on behalf of the Indenture Trustee or (ii) having
previously become the registered owner, acknowledges that it holds for the
Indenture Trustee; and
(d) with respect to any item of Trust Account Property that is a security
entitlement causing the securities intermediary to indicate on its books and
records that such security entitlement has been credited to a securities account
of the Indenture Trustee.
"Depositor" means BMW FS Securities LLC and its successors in interest.
"Determination Date" means, with respect to each Payment Date, the 18th
calendar day of the month in which such Payment Date occurs (or if such 18th day
is not a Business Day, the next succeeding Business Day).
"Eligible Deposit Account" means either (a) a segregated account with an
Eligible Institution or (b) a segregated trust account with the corporate trust
department of a depository institution organized under the laws of the United
States of America or any State, having corporate trust powers and acting as
trustee for funds deposited in such account, so long as any of the securities of
such depository institution shall have a credit rating from each Rating Agency
in one of its generic rating categories that signifies investment grade.
"Eligible Institution" means (a) the corporate trust department of the
Indenture Trustee or the Owner Trustee or (b) a depository institution organized
under the laws of the United States of America or any State, that (i) has either
(A) a long-term unsecured debt rating of at least "AA-" by Standard & Poor's and
acceptable to Moody's or (B) a short-term unsecured debt rating or certificate
of deposit rating of at least "A-1+" by Standard & Poor's and acceptable to
Moody's and (ii) the deposits of which are insured by the FDIC.
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"Eligible Investments" means securities, negotiable instruments or security
entitlements that evidence:
(a) direct obligations of, and obligations fully guaranteed as to the full
and timely payment by, the United States of America;
(b) demand deposits, time deposits or certificates of deposit of any
depository institution or trust company incorporated under the laws of the
United States of America or any State (or any domestic branch of a foreign bank)
and subject to supervision and examination by federal or state banking or
depository institution authorities; provided, however, that at the time of the
investment or contractual commitment to invest therein, the commercial paper or
other short-term unsecured debt obligations (other than such obligations the
rating of which is based on the credit of a Person other than such depository
institution or trust company) thereof shall have a credit rating from each
Rating Agency in the highest investment category granted thereby;
(c) commercial paper having, at the time of the investment or contractual
commitment to invest therein, a rating from each Rating Agency in the highest
investment category granted thereby;
(d) investments in money market funds having a rating from each Rating
Agency in the highest investment category granted thereby (including funds for
which the Indenture Trustee or the Owner Trustee or any of their respective
Affiliates is investment manager or advisor);
(e) bankers' acceptances issued by any depository institution or trust
company referred to in clause (b) above;
(f) repurchase obligations with respect to any security that is a direct
obligation of, or fully guaranteed by, the United States of America or any
agency or instrumentality thereof the obligations of which are backed by the
full faith and credit of the United States of America, in either case entered
into with a depository institution or trust company (acting as principal)
described in clause (b) above; and
(g) any other investment with respect to which the Issuer, the Indenture
Trustee or the Servicer has received written notification from each Rating
Agency that the acquisition of such investment will satisfy the Rating Agency
Condition.
"Eligible Servicer" means BMW FS or any other Person that at the time of
its appointment as Servicer (i) is servicing a portfolio of motor vehicle retail
installment sale contracts, promissory notes or motor vehicle installment loans,
(ii) is legally qualified and has the capacity to service the Receivables, (iii)
has demonstrated the ability professionally and competently to service a
portfolio of motor vehicle retail installment sale contracts, promissory notes
or motor vehicle installment loans similar to the Receivables with reasonable
skill and care and (iv) has a minimum net worth of $50,000,000.
"Exchange Act" means the Securities and Exchange Act of 1934, as amended.
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"FDIC" means the Federal Deposit Insurance Corporation, and its successors.
"Financed Vehicle" means a new or used automobile, sport utility vehicle or
motorcycle, together with all accessions thereto, securing an Obligor's
indebtedness under the related Contract.
"First Priority Principal Distribution Amount" means, with respect to any
Payment Date, an amount equal to the excess, if any of (a) the aggregate
outstanding principal amount of the Class A Notes as of the preceding Payment
Date (after giving effect to any principal payments made on the Class A Notes on
such preceding Payment Date) over (b) the Pool Balance at the end of the
Collection Period preceding such Payment Date less the Yield Supplement
Overcollateralization Amount for such Payment Date; provided however, that the
First Priority Principal Distribution Amount shall not exceed the sum of the
aggregate outstanding principal amount of all of the Notes on such Payment Date
(after giving effect to any principal payments made on the Notes on such
preceding Payment Date); and provided further, that the First Priority Principal
Distribution Amount on and after the Final Scheduled Payment Date of a Class of
Class A Notes shall not be less than the amount that is necessary to reduce the
outstanding principal amount of such Class of Class A Notes and all earlier
maturing classes of Class A Notes to zero.
"Fitch" means Fitch Ratings, and its successors.
"Indenture" means the Indenture, dated as of May 1, 2004, between the
Issuer and the Indenture Trustee.
"Indenture Trustee" means the Person acting as Indenture Trustee under the
Indenture, its successors in interest and any successor trustee under the
Indenture.
"Initial Class A-1 Note Balance" means $313,000,000.
"Initial Class A-2 Note Balance" means $417,000,000.
"Initial Class A-3 Note Balance" means $470,000,000.
"Initial Class A-4 Note Balance" means $256,312,000.
"Initial Class B Note Balance" means $33,521,000.
"Initial Pool Balance" means an amount equal to the aggregate Principal
Balance of the Receivables as of the Cutoff Date.
"Insolvency Event" means, with respect to a specified Person, (a) the
filing of a decree or order for relief by a court having jurisdiction in the
premises in respect of such Person or any substantial part of its property in an
involuntary case under any applicable federal or State bankruptcy, insolvency or
other similar law now or hereafter in effect, or appointing a receiver,
liquidator, assignee, custodian, trustee, sequestrator or similar official for
such Person or for any substantial part of its property, or ordering the
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winding-up or liquidation of such Person's affairs, and such decree or order
shall remain unstayed and in effect for a period of 60 consecutive days; or (b)
the commencement by such Person of a voluntary case under any applicable federal
or State bankruptcy, insolvency or other similar law now or hereafter in effect,
or the consent by such Person to the entry of an order for relief in an
involuntary case under any such law, or the consent by such Person to the
appointment of or taking possession by a receiver, liquidator, assignee,
custodian, trustee, sequestrator or similar official for such Person or for any
substantial part of its property, or the making by such Person of any general
assignment for the benefit of creditors, or the failure by such Person generally
to pay its debts as such debts become due, or the taking of action by such
Person in furtherance of any of the foregoing.
"Interest Distribution Account" means the account designated as such,
established and maintained pursuant to Section 5.01(b).
"Interest Period" means (a) with respect to the Class A-1 Notes, the period
from and including the most recent Payment Date on which interest has been paid
(or, in the case of the first Payment Date, the Closing Date) to but excluding
the next succeeding Payment Date and (b) with respect to the Class A-2, Class
A-3, Class A-4 Notes and Class B Notes, the period from and including the 25/th/
day of the calendar month (or, in the case of the first Payment Date, from and
including the Closing Date) to but excluding the 25/th/ day of the next calendar
month.
"Investment Earnings" means, with respect to any Payment Date, the
investment earnings (net of losses and investment expenses) on amounts on
deposit in the Note Distribution Account to be applied on such Payment Date
pursuant to Section 5.01(d).
"Issuer" means BMW Vehicle Owner Trust 2004-A.
"Lien" means a security interest, lien, charge, pledge, equity or
encumbrance of any kind, other than tax liens, mechanics' liens and any liens
that attach to the respective Receivable by operation of law as a result of any
act or omission by the related Obligor.
"Liquidated Receivable" means a Receivable with respect to which the
earliest of the following shall have occurred: (i) the related Financed Vehicle
has been repossessed and liquidated, (ii) the related Financed Vehicle has been
repossessed in excess of 90 days and has not yet been liquidated, (iii) the
Servicer has determined in accordance with its credit policies that all amounts
that it expects to receive with respect to the Receivable have been received or
(iv) the end of the Collection Period in which the Receivable becomes 150 days
or more past due.
"Liquidation Proceeds" means, with respect to any Receivable that becomes a
Liquidated Receivable, the moneys collected in respect thereof, from whatever
source, during or after the Collection Period in which such Receivable became a
Liquidated Receivable, including liquidation of the related Financed Vehicle,
net of the sum of any out-of-pocket expenses of the Servicer reasonably
allocated to such liquidation and any amounts required by law to be remitted to
the Obligor on such Liquidated Receivable.
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"Minimum Required Rating" means, with respect to BMW Capital, a short-term
unsecured debt rating of the commercial paper of BMW Capital (which commercial
paper is guaranteed by Bayerische Motoren Werke Aktiengesellschaft) equal to or
greater than "Prime-1" by Moody's and "A-1" by Standard & Poor's.
"Moody's" means Xxxxx'x Investors Service, Inc., and its successors.
"Net Investment Losses" means, with respect to a Trust Account and any
Collection Period, the amount, if any, by which the aggregate of all losses and
expenses incurred during such period in connection with the investment of funds
in Eligible Investments in accordance with Section 5.01(d) exceeds the aggregate
of all interest and other income realized during such period on such funds.
"Nonrecoverable Advance" means any Advance made or proposed to be made
pursuant to Section 5.11, which the Servicer believes, in its good faith
judgment, is not, or if made would not be, ultimately recoverable from
Liquidation Proceeds or otherwise. In determining whether an advance is or will
be nonrecoverable, the Servicer need not take into account that it might receive
any amounts in a deficiency judgment.
"Note Balance" means, as of any date of determination, an amount equal to
the sum of (i) the Initial Class A-1 Note Balance, (ii) the Initial Class A-2
Note Balance, (iii) the Initial Class A-3 Note Balance, (iv) the Initial Class
A-4 Note Balance and (v) the Initial Class B Note Balance, less all amounts
allocable to principal distributed to Noteholders on or prior to such date.
"Note Distribution Account" means the account designated as such,
established and maintained pursuant to Section 5.01(b).
"Note Pool Factor" means, with respect to each Class of Notes as of the
close of business on the last day of a Collection Period, a seven-digit decimal
figure equal to the Outstanding Amount of such Class of Notes (after giving
effect to any reductions thereof to be made on the immediately following Payment
Date) divided by the original Outstanding Amount of such Class of Notes. Each
Note Pool Factor will be 1.0000000 as of the Closing Date; thereafter, the Note
Pool Factor will decline to reflect reductions in the Outstanding Amount of such
Class of Notes.
"Noteholders" shall mean the Class A-1 Noteholders, the Class A-2
Noteholders, the Class A-3 Noteholders, the Class A-4 Noteholders or the Class B
Noteholders.
"Obligor" on a Receivable means the purchaser or co-purchasers of the
related Financed Vehicle, and any other Person obligated to make payments
thereunder.
"Officers' Certificate" means a certificate signed by (a) the chairman of
the board, any vice president, the controller or any assistant controller and
(b) the president, a treasurer, assistant treasurer, secretary or assistant
secretary of the Depositor or the Servicer, as appropriate.
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"Opinion of Counsel" means one or more written opinions of counsel, who may
be an employee of or counsel to the Depositor or the Servicer, which counsel
shall be acceptable to the Indenture Trustee, the Owner Trustee or the Rating
Agencies, as applicable, and which shall be addressed to the Owner Trustee and
the Indenture Trustee and which shall be at the expense of the person required
to provide such an Opinion of Counsel.
"Outstanding" has the meaning assigned to such term in the Indenture.
"Outstanding Amount" means, as of any date of determination, the aggregate
principal amount of one Class or of all Classes of Notes, as applicable,
Outstanding as of such date of determination.
"Outstanding Amount Advanced" means, as to any Payment Date, the aggregate
of all Advances remitted by the Servicer out of its own funds pursuant to
Section 5.11, less the aggregate of all related Advance Reimbursement Amounts
actually received prior to such Payment Date.
"Owner Trustee" means Wilmington Trust Company, acting not in its
individual capacity but solely as owner trustee under the Trust Agreement.
"Payment Date" means, with respect to each Collection Period, the
twenty-fifth day of the following month or, if such day is not a Business Day,
the immediately following Business Day, commencing on June 25, 2004.
"Physical Property" has the meaning assigned to such term in the definition
of "Delivery" above.
"Pool Balance" means, with respect to any Payment Date, an amount equal to
the aggregate Principal Balance of the Receivables at the end of the related
Collection Period, after giving effect to all payments of principal received
from Obligors and Purchase Amounts to be remitted by the Servicer for the
related Collection Period, and after reduction to zero of the aggregate
outstanding Principal Balance of all Receivables that became Liquidated
Receivables during such Collection Period.
"Principal Balance" means, with respect to any Receivable and a
Determination Date, the Amount Financed minus an amount equal to, as of the
close of business on the last day of the related Collection Period, that portion
of all amounts received on or prior to such day with respect to such Receivable
and allocable to principal using the Simple Interest Method.
"Principal Distribution Account" means the account designated as such,
established and maintained pursuant to Section 5.01(b).
"Purchase Amount" means, with respect to any Receivable that became a
Purchased Receivable, the unpaid principal balance owed by the Obligor thereon
plus unpaid interest on such amount at the applicable APR to the last day of the
month of repurchase.
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"Purchased Receivable" means a Receivable purchased as of the close of
business on the last day of a Collection Period by or on behalf of the Servicer
pursuant to Section 4.07 or by or on behalf of the Seller pursuant to Section
3.03 hereof and the Receivables Purchase Agreement.
"Rating Agency" means Fitch, Moody's and Standard & Poor's, as the context
may require. If none of Fitch, Moody's or Standard & Poor's or a successor
thereto remains in existence, "Rating Agency" shall mean any nationally
recognized statistical rating organization or other comparable Person designated
by the Depositor.
"Rating Agency Condition" means, with respect to any action, that each
Rating Agency shall have been given 10 days' (or such shorter period as shall be
acceptable to each Rating Agency) prior notice thereof and that each Rating
Agency shall not have notified the Issuer or the Indenture Trustee in writing
that such action will result in a reduction, withdrawal or down-grade of the
then-current rating of any Class of Notes.
"Realized Losses" means, with respect to any Receivable that becomes a
Liquidated Receivable, the excess of the Principal Balance thereof over the
portion of related Liquidation Proceeds allocable to principal.
"Receivable Files" means the following documents with respect to each
Financed Vehicle:
(i) the fully executed original of each Receivable (together with
any agreements modifying each such Receivable, including any deferment
agreement);
(ii) the original credit application, or an electronic copy thereof;
(iii) the original certificate of title or such other documents that
the Servicer or the Seller shall keep on file in accordance with its
customary procedures evidencing the security interest of the Seller in the
related Financed Vehicle; and
(iv) any and all other documents that the Servicer shall have kept
on file in accordance with its customary procedures relating to a
Receivable, an Obligor or a Financed Vehicle.
"Receivables" means any Contract listed on Schedule A (which Schedule may
be in the form of microfiche).
"Receivables Purchase Agreement" means the Receivables Purchase Agreement
dated as of May 1, 2004, between BMW FS, as seller, and the Depositor.
"Record Date" means, as to any Payment Date (i) if the Notes are issued in
book-entry form, the day immediately preceding such Payment Date and (ii) if the
Notes are issued in definitive form, the last day of the month preceding such
Payment Date.
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"Recoveries" means, with respect to any Receivable that becomes a
Liquidated Receivable, monies collected in respect thereof, from whatever
source, during any Collection Period following the Collection Period in which
such Receivable became a Liquidated Receivable, net of the sum of any amounts
expended by the Servicer for the account of the Obligor and any amounts required
by law to be remitted to the Obligor.
"Redemption Price" shall have the meaning set forth in the Indenture.
"Regular Principal Distribution Amount" means, with respect to any Payment
Date, an amount not less than zero equal to the excess, if any, of an amount
equal to (i) the aggregate Outstanding Amount of all the Notes as of the
preceding Payment Date (after giving effect to any principal payments made on
the Notes on such preceding Payment Date) or the Closing Date (in the case of
the first Payment Date), as the case may be, minus (ii) the Pool Balance at the
end of the Collection Period preceding such Payment Date less the Yield
Supplement Overcollateralization Amount with respect to such Payment Date; over
the First Priority Principal Distribution Amount, if any, with respect to such
Payment Date; provided however, that the Regular Principal Distribution Amount
shall not exceed the sum of the aggregate Outstanding Amount of all of the Notes
on such Payment Date (after giving effect to any principal payments made on the
Notes on such preceding Payment Date in respect of the First Priority Principal
Distribution Amount, if any); provided, further, that the Regular Principal
Distribution Amount on and after the Final Scheduled Payment Date of a Class of
Notes shall not be less than the amount that is necessary to reduce the
Outstanding Amount of that Class of Notes and all earlier maturing classes of
Notes to zero.
"Reserve Account" means the account designated as such, established by the
Issuer and maintained by the Indenture Trustee pursuant to Section 5.01(c).
"Reserve Account Initial Deposit" means $9,683,914.50.
"Reserve Account Required Amount" means (a) on the Closing Date, the
Reserve Account Initial Deposit and (b) with respect to any Payment Date, an
amount equal to 1.75% of the Note Balance as of the end of the related
Collection Period; provided, however, that in no event shall the Reserve Account
Required Amount be less than $7,449,165.00.
"Reserve Account Withdrawal Amount" means, with respect to each Payment
Date, the lesser of (c) the excess of (i) the amounts due under Section
5.06(b)(i) through (v) over (ii) Available Amounts for such Payment Date and (y)
the amount on deposit in the Reserve Account for such Payment Date.
"Responsible Officer" means the chairman of the board, the president, any
executive vice president, any vice president, the treasurer, any assistant
treasurer, the secretary, or any assistant secretary of the Servicer.
"Scheduled Payment" means, with respect to each Receivable, the scheduled
monthly payment amount set forth in the related Contract and required to be paid
by the Obligor during each Collection Period.
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"Securities" means the Notes and the Certificates.
"Securityholders" means the Noteholders or the Certificateholders, as the
context may require.
"Seller" means BMW FS and its successor in interest, as the seller of the
Receivables to the Depositor pursuant to the Receivables Purchase Agreement.
"Servicer" means BMW FS, as the servicer of the Receivables, and each
successor to BMW FS (in the same capacity) pursuant to Section 7.03 or 8.03.
"Servicer Termination Event" shall have the meaning set forth in Section
8.01.
"Servicer's Certificate" means an Officers' Certificate of the Servicer
delivered pursuant to Section 4.09, substantially in the form of Exhibit C.
"Servicing Fee" means an amount equal to the sum of (i) the product of the
Servicing Fee Rate and the Pool Balance as of the first day of the related
Collection Period, and (ii) any late fees, prepayment charges, extension fees
and other administrative fees or similar charges collected on the Receivables.
"Servicing Fee Rate" means 1.00% per annum.
"Simple Interest Method" means the method of allocating the monthly
payments received with respect to a Receivable to interest in an amount equal to
the product of (i) the applicable APR, (ii) the period of time (expressed as a
fraction of a year, based on the actual number of days in the calendar month and
365 days in the calendar year) elapsed since the preceding payment was made
under such Receivable and (iii) the outstanding principal amount of such
Receivable, and allocating the remainder of each such monthly payment to
principal.
"Standard & Poor's" means Standard & Poor's Ratings Group, a division of
The XxXxxx-Xxxx Companies, Inc., and its successors.
"Trust" means the Issuer.
"Trust Account Property" means the Trust Accounts, all amounts and
investments held from time to time in any Trust Account (whether in the form of
deposit accounts, Physical Property, book-entry securities, uncertificated
securities or otherwise) and all proceeds of the foregoing.
"Trust Accounts" shall mean the Collection Account, the Note Distribution
Account and the Reserve Account.
"Trust Agreement" means the Amended and Restated Trust Agreement, dated as
of May 1, 2004, between the Depositor and the Owner Trustee.
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"Trust Fees and Expenses" will mean all accrued and unpaid Owner Trustee
and Indenture Trustee's fees and any amounts due to the Owner Trustee and the
Indenture Trustee for reimbursement of expenses or in respect of indemnification
and other administrative fees of the Trust.
"Trust Officer" means, in the case of the Indenture Trustee, any officer
within the Global Trust Service Department of the Indenture Trustee, including
any Assistant Vice President, Assistant Treasurer, Assistant Secretary or any
other officer of the Indenture Trustee customarily performing functions similar
to those performed by any of the above designated officers and also, with
respect to a particular matter, any other officer to whom such matter is
referred because of such officer's knowledge of and familiarity with the
particular subject, in each case having direct responsibility for the
administration of the Basic Documents and, with respect to the Owner Trustee,
any officer in the Corporate Trust Administration Department of the Owner
Trustee with direct responsibility for the administration of the Trust Agreement
and the other Basic Documents on behalf of the Owner Trustee.
"UCC" means the Uniform Commercial Code, as in effect in the relevant
jurisdiction.
"Yield Supplement Overcollateralization Amount" means, with respect to any
Payment Date, the dollar amount set forth next to such Payment Date on Schedule
C hereto.
Section 1.02. Other Definitional Provisions.
(a) Capitalized terms used herein that are not otherwise defined shall
have the meanings ascribed thereto in the Indenture or, if not defined therein,
in the Trust Agreement.
(b) All terms defined in this Agreement shall have the defined meanings
when used in any certificate or other document made or delivered pursuant hereto
unless otherwise defined therein.
(c) As used in this Agreement and in any certificate or other document
made or delivered pursuant hereto or thereto, accounting terms not defined in
this Agreement or in any such certificate or other document, and accounting
terms partly defined in this Agreement or in any such certificate or other
document to the extent not defined, shall have the respective meanings given to
them under generally accepted accounting principles. To the extent that the
definitions of accounting terms in this Agreement or in any such certificate or
other document are inconsistent with the meanings of such terms under generally
accepted accounting principles, the definitions contained in this Agreement or
in any such certificate or other document shall control.
(d) The words "hereof," "herein," "hereunder" and words of similar import
when used in this Agreement shall refer to this Agreement as a whole and not to
any particular provision of this Agreement; Article, Section, Schedule and
Exhibit references contained in this Agreement are references to Articles,
Sections, Schedules and Exhibits
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in or to this Agreement unless otherwise specified; and the term "including"
shall mean "including without limitation".
(e) The definitions contained in this Agreement are applicable to the
singular as well as the plural forms of such terms and to the masculine as well
as to the feminine and neuter genders of such terms.
(f) Any agreement, instrument or statute defined or referred to herein or
in any instrument or certificate delivered in connection herewith means such
agreement, instrument or statute as from time to time amended, modified or
supplemented and includes (in the case of agreements or instruments) references
to all attachments thereto and instruments incorporated therein; references to a
Person are also to its permitted successors and assigns.
ARTICLE II
CONVEYANCE OF RECEIVABLES
Section 2.01. Conveyance of Receivables.
In consideration of the Issuer's delivery to or upon the order of the
Depositor of the Notes and the Certificates, the Depositor does hereby sell,
transfer, assign, set over and otherwise convey to the Issuer, without recourse
(subject to the obligations of the Depositor set forth herein), all right, title
and interest of the Depositor in and to:
(i) the Receivables and all moneys received thereon after the
Cutoff Date;
(ii) the security interests in the Financed Vehicles and any
accessions thereto granted by Obligors pursuant to the Receivables and any
other interest of the Depositor in such Financed Vehicles;
(iii) any Liquidation Proceeds and any other proceeds with respect to
the Receivables from claims on any physical damage, credit life or
disability insurance policies covering the Financed Vehicles or the related
Obligors, including any vendor's single interest or other collateral
protection insurance policy;
(iv) any property that shall have secured a Receivable and shall
have been acquired by or on behalf of the Depositor, the Servicer or the
Trust;
(v) all documents and other items contained in the Receivable
Files;
(vi) all of the Depositor's rights (but not its obligations) under
the Receivables Purchase Agreement;
(vii) all right, title and interest in all funds on deposit from time
to time in the Trust Accounts and the Certificate Distribution Account and
in all
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investments therein and proceeds thereof (including all Investment Earnings
thereon); and
(viii) all proceeds from any Receivable repurchased by a Dealer
pursuant to a Dealer Agreement; and
(ix) the proceeds of any and all of the foregoing (collectively,
with the assets listed in clauses (i) through (viii) above, the "Conveyed
Assets").
It is the intention of the Depositor that the transfer and assignment
contemplated by this Agreement shall constitute a sale of the Receivables and
other related property from the Depositor to the Trust and the beneficial
interest in and title to the Receivables and the related property shall not be
part of the Depositor's estate in the event of the filing of a bankruptcy
petition by or against the Depositor under any bankruptcy law. In the event
that, notwithstanding the intent of the Depositor, the transfer and assignment
contemplated hereby is held not to be a sale, this Agreement shall constitute a
grant by the Depositor to the Issuer of a first priority perfected security
interest in all of the Depositor's right, title and interest in and to the
Conveyed Assets and under all accounts, money, chattel paper, securities,
instruments, documents, deposit accounts, certificates of deposit, letters of
credit, advices of credit, banker's acceptances, uncertificated securities,
general intangibles, contract rights, goods and other property consisting of,
arising from or relating to such Conveyed Assets, for the benefit of the
Securityholders as security for the Depositor's obligations hereunder.
ARTICLE III
THE RECEIVABLES
Section 3.01. Representations and Warranties of the Seller.
(a) The Seller has made each of the representations and warranties set
forth in Exhibit A hereto under the Receivables Purchase Agreement and has
consented to the assignment by the Depositor to the Issuer of the Depositor's
rights with respect thereto. Such representations and warranties speak as of the
execution and delivery of this Agreement and as of the Closing Date, but shall
survive the sale, transfer and assignment of the Receivables to the Issuer and
the pledge of such Receivables to the Indenture Trustee. Pursuant to Section
2.01 of this Agreement, the Depositor has sold, assigned, transferred and
conveyed to the Issuer, as part of the assets of the Issuer, its rights under
the Receivables Purchase Agreement, including the representations and warranties
of the Seller therein as set forth in Exhibit A, upon which representations and
warranties the Issuer relies in accepting the Receivables and delivering the
Securities, together with all rights of the Depositor with respect to any breach
thereof, including the right to require the Seller to repurchase Receivables in
accordance with the Receivables Purchase Agreement. It is understood and agreed
that the representations and warranties referred to in this Section shall
survive the sale and delivery of the Receivables to the Issuer or the Custodian.
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(b) The Seller hereby agrees that the Issuer shall have the right to
enforce any and all rights under the Receivables Purchase Agreement assigned to
the Issuer herein, including the right to cause the Seller to repurchase any
Receivable with respect to which it is in breach of any of its representations
and warranties set forth in Exhibit A, directly against the Seller as though the
Issuer were a party to the Receivables Purchase Agreement, and the Issuer shall
not be obligated to exercise any such rights indirectly through the Depositor.
Section 3.02. Representations and Warranties of the Depositor. The
Depositor makes the following representations and warranties, on which the
Issuer relies in accepting the Receivables and delivering the Securities. Such
representations and warranties speak as of the execution and delivery of this
Agreement and as of the Closing Date, but shall survive the sale, transfer and
assignment of the Receivables by the Depositor to the Issuer and the pledge
thereof to the Indenture Trustee pursuant to the Indenture and with respect to
the representations and warranties set forth in paragraphs (d) through (j)
below, shall be non-waivable:
(a) Title. The Depositor shall convey to the Issuer all right, title and
interest of the Depositor in and to the Receivables.
(b) All Filings Made. The Depositor has caused all filings (including UCC
filings) to be made in the State of Ohio and the State of Delaware with respect
to the sale of the Receivables to the Issuer and the pledge contemplated in the
Basic Agreements to the Indenture Trustee.
(c) Liens. The Depositor has not taken any actions to create, incur or
suffer to exist any Lien on or restriction on transferability of any Receivable
except for the Lien of the Indenture and the restrictions on transferability
imposed by this Agreement.
(d) Valid Security Interest. This Agreement creates a valid and continuing
security interest (as defined in the applicable UCC) in the Receivables in favor
of the Issuer, which security interest is prior to all other Liens, and is
enforceable as such as against creditors of and purchasers from the Depositor.
(e) Perfection. The Depositor has taken all steps necessary to perfect its
security interest against the Obligors in the property securing the Receivables.
(f) Tangible Chattel Paper. Each Receivable constitutes "tangible chattel
paper" within the meaning of the applicable UCC.
(g) Good and Marketable Title. The Depositor owns and has good and
marketable title to the Receivables free and clear of any Lien, claim or
encumbrance of any Person.
(h) Filing of Financing Statements. The Depositor has caused or will have
caused, within ten days, the filing of all appropriate financing statements in
the proper filing office in the appropriate jurisdictions under applicable law
in order to perfect the security interest in the Receivables granted to the
Issuer hereunder.
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(i) Other Financing Statements. Other than the security interest granted
to the Issuer pursuant to this Agreement, the Depositor has not pledged,
assigned, sold, granted a security interest in, or otherwise conveyed any of the
Receivables. The Depositor has not authorized the filing of and is not aware of
any financing statements against the Depositor that include a description of
collateral covering the Receivables other than any financing statement relating
to the security interest granted to the Issuer hereunder or that has been
terminated. The Depositor is not aware of any judgment or tax lien filings
against the Depositor.
(j) Original Contract. The Depositor has in its possession all original
copies of the Contracts that constitute or evidence the Receivables. The
Contracts that constitute or evidence the Receivables do not have any marks or
notations indicating that they have been pledged, assigned or otherwise conveyed
to any Person other than the Issuer. All financing statements filed or to be
filed against the Depositor in favor of the Issuer in connection herewith
describing the Receivables contain a statement to the following effect: "A
purchase of or security interest in any collateral described in this financing
statement will violate the rights of the Issuer."
Section 3.03. Repurchase Upon Breach. Each of the Depositor, the Owner
Trustee, the Indenture Trustee, the Seller and the Servicer shall inform the
other parties to this Agreement promptly, in writing, upon the discovery by it
of any breach of the Seller's representations and warranties made pursuant to
Section 3.01 of this Agreement or Section 3.02 of the Receivables Purchase
Agreement, without regard to any limitation set forth in such representation or
warranty concerning the knowledge of the Seller as to the facts stated therein.
Unless any such breach shall have been cured by the last day of the first
Collection Period following the discovery or notice thereof, the Seller shall be
obligated and, if necessary, the Issuer shall enforce the obligations of the
Seller under the Receivables Purchase Agreement, to purchase as of such last day
any Receivable materially and adversely affected by any such breach. In
consideration of the repurchase of any such Receivable, the repurchasing Seller
shall remit the Purchase Amount to the Collection Account and notify in writing
the Indenture Trustee of such deposit, in the manner specified in Section 5.04.
The sole remedy of the Issuer, the Indenture Trustee, the Noteholders, or the
Certificateholders with respect to the unpaid balance plus accrued interest on
any Receivable as to which a breach of a representation or warranty has occurred
pursuant to Section 3.01 of this Agreement or Section 3.02 of the Receivables
Purchase Agreement or the agreement contained in this Section shall be to
require the Seller to purchase such Receivable pursuant to this Section or to
repurchase such Receivable pursuant to the Receivables Purchase Agreement.
Section 3.04. Custody of Receivable Files. To assure uniform quality in
servicing the Receivables and to reduce administrative costs, the Issuer hereby
revocably appoints the Servicer, and the Servicer hereby accepts such
appointment, to act for the benefit of the Issuer and the Indenture Trustee as
custodian of the Receivable Files, which are hereby constructively delivered by
the Issuer to the Indenture Trustee.
Section 3.05. Duties of Servicer as Custodian.
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(a) Safekeeping. The Servicer shall hold the Receivable Files as custodian
for the benefit of the Issuer and the Indenture Trustee, and shall maintain such
accurate and complete accounts, records and computer systems pertaining to each
Receivable File as shall enable the Issuer to comply with this Agreement. In
performing its duties as custodian, the Servicer shall act with reasonable care,
using that degree of skill and attention that the Servicer exercises with
respect to the receivable files relating to all comparable automotive and
motorcycle receivables that the Servicer services for itself or others and the
Servicer acknowledges that for purposes of Section 9-313(c) of the UCC that it
is retaining possession of and acting as custodian for the Receivable Files for
the benefit of the Indenture Trustee. The Servicer shall conduct, or cause to be
conducted, periodic reviews of the Receivable Files held by it under this
Agreement in a manner consistent with its reviews of other receivables serviced
for its own account and of the related accounts, records and computer systems,
in such a manner as shall enable the Issuer or the Indenture Trustee to verify
the accuracy of the Servicer's record keeping. The Servicer shall promptly
report to the Issuer and the Indenture Trustee any material failure on its part
to hold the Receivable Files and maintain its accounts, records and computer
systems as herein provided and shall promptly take appropriate action to remedy
any such material failure. Nothing herein shall be deemed to require an initial
review or any periodic review by the Issuer or the Indenture Trustee of the
Receivable Files.
(b) Maintenance of and Access to Records. The Servicer shall maintain each
Receivable File at one of its offices specified in Schedule B to this Agreement
or at such other office as shall be specified to the Issuer and the Indenture
Trustee by written notice not later than 30 days after any change in location.
The Servicer shall make available to the Issuer and the Indenture Trustee or
their duly authorized representatives, attorneys or auditors a list of locations
of the Receivable Files and the related accounts, records and computer systems
maintained by the Servicer at such times during normal business hours as the
Issuer shall reasonably instruct, which does not unreasonably interfere with the
Servicer's normal operations or customer or employee relations.
Section 3.06. Instructions; Authority to Act. The Servicer shall be deemed
to have received proper instructions with respect to the Receivable Files upon
its receipt of written instructions signed by a Trust Officer of the Indenture
Trustee or, if the Notes have been paid in full, of the Owner Trustee.
Section 3.07. Custodian's Indemnification. The Servicer, as custodian,
shall indemnify the Trust, the Owner Trustee and the Indenture Trustee and each
of their officers, directors, employees and agents for any and all liabilities,
obligations, losses, compensatory damages, payments, costs, or expenses of any
kind whatsoever that may be imposed on, incurred by or asserted against the
Trust, the Owner Trustee or the Indenture Trustee or any of their officers,
directors, employees or agents as the result of any improper act or omission in
any way relating to the maintenance and custody by the Servicer as custodian of
the Receivable Files; provided, however, that the Servicer shall not be liable
to the Owner Trustee, the Indenture Trustee or any such officer, director,
employee or agent of the Owner Trustee or the Indenture Trustee for any portion
of any such amount resulting from the willful misfeasance, bad faith or
negligence of the Owner
20
Trustee or the Indenture Trustee, as the case may be, or any such officer,
director, employee or agent of the Owner Trustee or the Indenture Trustee, as
the case may be.
Indemnification under this Section shall survive the resignation or removal
of the Servicer or the termination of this Agreement with respect to acts or
omissions of such Servicer preceding such resignation or removal and shall
include reasonable fees and expenses of counsel and expenses of litigation, each
of which is duly documented. If the Servicer shall have made any indemnity
payments pursuant to this Section and the Person to or on behalf of whom such
payments are made thereafter collects any of such amounts from others, such
Person shall promptly repay such amounts to the Servicer, without interest.
Section 3.08. Effective Period and Termination. The Servicer's appointment
as custodian shall become effective as of the Cutoff Date and shall continue in
full force and effect unless and until terminated pursuant to this Section. If
BMW FS, or any successor Servicer, shall resign as Servicer in accordance with
the provisions of this Agreement or if all of the rights and obligations of BMW
FS as Servicer or any successor Servicer shall have been terminated under
Section 8.02, the appointment of such Servicer as custodian may be terminated by
the Issuer or by the Holders of Notes evidencing not less than 50% of the Notes
of the Outstanding Amount of the Controlling Class (or, if no Notes are then
Outstanding, the Certificateholders representing not less than 50% of the
aggregate Certificate Percentage Interest, or by the Owner Trustee) in the same
manner as the Indenture Trustee or such Securityholders may terminate the rights
and obligations of the Servicer under Section 8.02. As soon as practicable after
any termination of such appointment (but in no event more than 10 Business Days
after any such termination of appointment), the Servicer shall deliver the
Receivable Files to the Indenture Trustee or the Indenture Trustee's agent at
such place or places as the Indenture Trustee may reasonably designate.
Notwithstanding the termination of BMW FS as custodian, the Indenture Trustee
and the Owner Trustee agree that, upon any such termination and for so long as
BMW FS remains the Servicer hereunder, the Indenture Trustee or the Owner
Trustee, as the case may be, shall provide, or cause its agent to provide,
access to the Receivable Files to the Servicer for the purpose of enabling the
Servicer to perform its obligations under this Agreement with respect to the
servicing of the Receivables.
ARTICLE IV
ADMINISTRATION AND SERVICING OF RECEIVABLES
Section 4.01. Duties of Servicer. The Servicer, for the benefit of the
Issuer and the Indenture Trustee, shall manage, service, administer and make
collections on the Receivables and perform the other actions required by the
Servicer under this Agreement. The Servicer shall service the Receivables in
accordance with its customary and usual procedures. The Servicer's duties shall
include the collection and posting of all payments, responding to inquiries of
Obligors, investigating delinquencies, sending payment coupons to Obligors,
reporting any required tax information to Obligors, monitoring the Collateral,
accounting for collections, furnishing monthly and annual statements to the
Owner Trustee, and the Indenture Trustee with respect to distributions
21
and performing the other duties specified herein. The Servicer also shall
administer and enforce all rights of the holder of the Receivables under the
Receivables and the Dealer Agreements. The Servicer shall, or cause the
Administrator to, prepare, execute and deliver all certificates or other
documents required to be delivered by the Trust pursuant to the Xxxxxxxx-Xxxxx
Act of 2002 or the rules and regulations promulgated thereunder. To the extent
consistent with the standards, policies and procedures otherwise required
hereby, the Servicer shall follow its customary standards, policies and
procedures and shall have full power and authority, acting alone, to do any and
all things in connection with the managing, servicing, administration and
collection of the Receivables that it may deem necessary or desirable. Without
limiting the generality of the foregoing, the Servicer is hereby authorized and
empowered to execute and deliver, on behalf of itself, the Issuer, the Owner
Trustee, the Indenture Trustee, the Certificateholders and the Noteholders, or
any of them, any and all instruments of satisfaction or cancellation, or of
partial or full release or discharge, and all other comparable instruments with
respect to the Receivables and with respect to the Financed Vehicles; provided,
however, that, notwithstanding the foregoing, the Servicer shall not, except
pursuant to an order from a court of competent jurisdiction, release an Obligor
from payment of any unpaid amount due under any Receivable, reduce the related
APR or waive the right to collect the unpaid balance of any Receivable from an
Obligor. The Servicer is hereby authorized to commence, in its own name or in
the name of the Issuer, the Indenture Trustee, the Owner Trustee, the
Certificateholders or the Noteholders, a legal proceeding to enforce a
Receivable pursuant to Section 4.03 or to commence or participate in any other
legal proceeding (including a bankruptcy proceeding) relating to or involving a
Receivable, an Obligor or a Financed Vehicle or self help as permitted by
applicable law. If the Servicer commences or participates in any such legal
proceeding in its own name, the Indenture Trustee or the Issuer shall thereupon
be deemed to have automatically assigned the applicable Receivable to the
Servicer solely for purposes of commencing or participating in such proceeding
as a party or claimant, and the Servicer is authorized and empowered by the
Indenture Trustee or the Issuer to execute and deliver in the Indenture
Trustee's or the Issuer's name any notices, demands, claims, complaints,
responses, affidavits or other documents or instruments in connection with any
such proceeding. If in any enforcement suit or legal proceeding it shall be held
that the Servicer may not enforce a Receivable on the ground that it shall not
be a real party in interest or a holder entitled to enforce such Receivable, the
Owner Trustee shall, at the Servicer's expense and direction, take steps to
enforce such Receivable, including bringing suit in its name or the name of the
Issuer, the Indenture Trustee, the Certificateholders or the Noteholders. The
Owner Trustee and the Indenture Trustee shall upon the written request of the
Servicer furnish the Servicer with any powers of attorney and other documents
reasonably necessary or appropriate to enable the Servicer to carry out its
servicing and administrative duties hereunder.
Section 4.02. Collection of Receivable Payments; Modifications of
Receivables.
(a) Consistent with the standards, policies and procedures required by
this Agreement, the Servicer shall make all reasonable efforts to collect all
payments called for under the terms and provisions of the Receivables as and
when the same shall become due, and shall follow such collection procedures as
it follows with respect to all
22
comparable motor vehicle receivables that it services for itself or others and
otherwise act with respect to the Receivables in such a manner as will, in the
reasonable judgment of the Servicer, maximize the amount to be received by the
Trust with respect thereto. The Servicer is authorized in its discretion to
waive any prepayment charge, late payment charge or any other similar fees that
may be collected in the ordinary course of servicing any Receivable.
(b) The Servicer may grant payment extensions only to the extent
permissible in its "Collection and Servicing Guidelines" as in effect from time
to time; provided, that no such extension shall extend the final payment date on
any Receivable beyond the last day of the Collection Period ending six months
prior to the Class B Final Scheduled Payment Date.
(c) Upon any extension not in accordance with this Section, the Servicer
shall be required to purchase the related Receivable in accordance with Section
4.07.
Section 4.03. Realization upon Receivables. Consistent with its customary
procedures, the Servicer shall use its best efforts to repossess or otherwise
convert the ownership of and liquidate any Financed Vehicle securing a
Receivable with respect to which the Servicer shall have determined that
eventual payment in full is unlikely and with respect to which the Servicer
determines that such repossession or other action to be in the best interest of
the Trust.
Section 4.04. Physical Damage Insurance. The Servicer shall, in accordance
with its customary servicing procedures, require each Obligor to obtain and
maintain physical loss damage insurance covering the related Financed Vehicle as
of the execution of the related Receivable.
Section 4.05. Maintenance of Security Interests in Financed Vehicles.
(a) The Servicer shall, in accordance with its customary servicing
procedures, take such steps as are reasonably necessary to maintain perfection
of the security interest created by each Receivable in the related Financed
Vehicle. The Servicer is hereby authorized to take such steps as are necessary
to re-perfect such security interest in the event of the relocation of a
Financed Vehicle, or for any other reason. In the event that the assignment of a
Receivable to the Issuer is insufficient, without a notation on the related
Financed Vehicle's certificate of title, or without fulfilling any additional
administrative requirements under the laws of the State in which such Financed
Vehicle is located, to perfect a security interest in the related Financed
Vehicle in favor of the Issuer, the Servicer hereby agrees that the designation
of BMW FS as the secured party on the certificate of title is in its capacity as
agent of the Issuer.
(b) The Depositor, the Owner Trustee, the Indenture Trustee and the
Servicer hereby agree that, upon the occurrence of a Servicer Termination Event,
the Indenture Trustee may take or cause to be taken such actions as may, in the
opinion of counsel to the Indenture Trustee, be necessary to perfect or
re-perfect the security interests in the Financed Vehicles in the name of the
Issuer, including by amending the title documents
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of the Financed Vehicles. The Servicer hereby agrees to pay all expenses related
to such perfection or reperfection and to take all action necessary therefor.
Section 4.06. Covenants of Servicer. By its execution and delivery of this
Agreement, the Servicer hereby covenants as follows (upon which covenants the
Issuer, the Indenture Trustee and the Owner Trustee rely in accepting the
Receivables and delivering the applicable Securities):
(a) Liens in Force. No Financed Vehicle securing a Receivable shall be
released in whole or in part from the security interest granted by such
Receivable, except upon payment in full of such Receivable or as otherwise
contemplated herein.
(b) No Impairment. The Servicer shall do nothing to impair the rights of
the Trust in the property of the Trust.
(c) No Amendments. The Servicer shall not extend or otherwise amend the
terms of any Receivable, except in accordance with Section 4.02.
(d) Restrictions on Liens. The Servicer shall not (A) create, incur or
suffer to exist, or agree to create, incur or suffer to exist, or consent to or
permit in the future (upon the occurrence of a contingency or otherwise) the
creation, incurrence or existence of any Lien on or restriction on
transferability of any Receivable except for the Lien of the Indenture and the
restrictions on transferability imposed by this Agreement or (B) other than as
contemplated herein, sign or file any UCC financing statements in any
jurisdiction that names BMW FS or the Depositor as a debtor, and any Person
other than the Depositor, the Indenture Trustee or the Issuer as a secured party
or sign any security agreement authorizing any secured party thereunder to file
any such financing statement, in each case with respect to the Receivables or
the related property.
Section 4.07. Purchase of Receivables Upon Breach. Upon discovery by any
of the Servicer, the Seller, the Depositor, the Owner Trustee or the Indenture
Trustee of a breach of any of the covenants set forth in Sections 4.02(b),
4.05(a) or 4.06, the party discovering such breach shall give prompt written
notice to the other; provided, however, that the failure to give any such notice
shall not affect any obligation of the Servicer under this Section 4.07. On or
before the last day of the first Collection Period following its discovery or
receipt of notice of the breach of any covenant set forth in Sections 4.02(b),
4.05(a) or 4.06 that materially and adversely affects the interests of the
Issuer, the Indenture Trustee, the Owner Trustee, the Certificateholders or the
Noteholders in any Receivable, the Servicer shall, unless such breach shall have
been cured in all material respects by such date, purchase from the Issuer the
Receivable affected by such breach. In consideration of the purchase of any such
Receivable, the Servicer shall remit the related Purchase Amount into the
Collection Account, with written notice to the Indenture Trustee of such
deposit, in the manner specified in Section 5.04. Subject to Section 7.02, it is
understood and agreed that the obligation of the Servicer to purchase any
Receivable with respect to which such a breach has occurred and is continuing
shall, if such obligation is fulfilled, constitute the sole remedy against the
Servicer for such
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breach available to the Issuer, the Owner Trustee, the Indenture Trustee, the
Certificateholders or the Noteholders.
Section 4.08. Servicing Fee. The Servicing Fee shall be payable to the
Servicer on each Payment Date. That part of the Servicing Fee based on the
Servicing Fee Rate shall be calculated on the basis of a 360-day year comprised
of twelve 30-day months. The Servicer shall be required to pay all expenses
incurred by it in connection with its activities under this Agreement (including
taxes imposed on the Servicer and expenses incurred in connection with
distributions and reports made by the Servicer to the Owner Trustee and the
Indenture Trustee).
Section 4.09. Servicer's Certificate. Not later than 10:00 a.m. (New York
City time) on each Determination Date, the Servicer shall deliver to the Owner
Trustee, the Indenture Trustee and the Depositor, with a copy to each Rating
Agency, a Servicer's Certificate containing all information necessary to make
the distributions to be made on the related Payment Date pursuant to Section
5.06 for the related Collection Period and any other information the Indenture
Trustee may reasonably request. Such Servicer's Certificate shall be certified
by a Responsible Officer of the Servicer that the information provided is
complete and no defaults have occurred. Receivables to be purchased by the
Servicer or to be repurchased by the Seller and each Receivable that became a
Liquidated Receivable shall be identified by the Servicer by account number with
respect to such Receivable (as specified in the Schedule of Receivables).
Section 4.10. Annual Statement as to Compliance; Notice of Servicer
Termination Event.
(a) The Servicer shall deliver to the Owner Trustee, the Indenture Trustee
and each Rating Agency, within 90 days after the end of the Servicer's fiscal
year, an Officer's Certificate signed by a Responsible Officer of the Servicer,
stating that (i) a review of the activities of the Servicer during the preceding
12-month period (or such shorter period in the case of the first such Officer's
Certificate) and of the performance of its obligations under this Agreement has
been made under such officer's supervision and (ii) to such officer's knowledge,
based on such review, the Servicer has fulfilled all its obligations under this
Agreement throughout such period 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.
(b) The Servicer shall deliver to the Owner Trustee, the Indenture Trustee
and each Rating Agency, promptly after having obtained knowledge thereof, but in
no event later than two Business Days thereafter, written notice in an Officer's
Certificate of any event that is a Servicer Termination Event under Section
8.01.
Section 4.11. Annual Independent Accountants' Report. The Servicer shall
cause a firm of independent certified public accountants, which may also render
other services to the Servicer or its Affiliates, to deliver to the Owner
Trustee, the Indenture Trustee and each Rating Agency, within 90 days after the
end of each fiscal year, a report addressed to the Board of Directors, or
similar body, of the Servicer, the Owner Trustee
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and the Indenture Trustee, to the effect that (i) the firm is independent of the
Depositor and the Servicer within the meaning of the Code of Professional Ethics
of the American Institute of Certified Public Accountants; (ii) a review in
accordance with agreed-upon procedures was made of the Servicer's Certificates
relating to such fiscal year, including the delinquency, default and loss
statistics required to be specified therein and, except as disclosed in the
accountants' report, no exceptions or errors in the Servicer's Certificates were
found; and (iii) a review in accordance with agreed-upon procedures was made of
the Servicer's compliance with its servicing obligations in this Agreement,
including without limitation the obligations of the Servicer set forth in
Section 4.02(b), and, except as disclosed in the accountants' report, no
exceptions to such compliance were found.
Section 4.12. Access to Certain Documentation and Information Regarding
Receivables. The Servicer shall provide to representatives of the Owner Trustee,
the Indenture Trustee, the Certificateholders and the Noteholders reasonable
access to the documentation regarding the Receivables and the related Trust
property. Access shall be afforded without charge, but only upon reasonable
request, which does not unreasonably interfere with the Servicer's normal
business operations or employee or customer relations, and during the normal
business hours at the offices of the Servicer upon prior written notice to the
Servicer of at least one Business Day. Nothing in this Section shall affect the
obligation of the Servicer to observe any applicable law prohibiting disclosure
of information regarding the Obligors and the failure of the Servicer to provide
access to information as a result of such obligation shall not constitute a
breach of this Section.
Section 4.13. Term of Servicer. The Servicer hereby covenants and agrees
to act as Servicer under, and for the term of, this Agreement.
Section 4.14. Access to Information Regarding Trust and Basic Documents.
The Servicer shall furnish to the Owner Trustee from time to time such
information regarding the Trust or the Basic Documents as the Owner Trustee
shall reasonably request. The Indenture Trustee shall furnish to the Owner
Trustee annually a copy of the Note Register. The Servicer shall furnish to the
Owner Trustee copies of all documents and reports required to be provided by the
Servicer pursuant to this Article IV.
ARTICLE V
DISTRIBUTIONS; STATEMENTS TO SECURITYHOLDERS
Section 5.01. Establishment of Accounts.
(a) The Servicer, for the benefit of the Noteholders and the
Certificateholders, shall cause the Indenture Trustee to establish and maintain
in the name of the Indenture Trustee an Eligible Deposit Account (the
"Collection Account"), bearing a designation clearly indicating that the funds
deposited therein are held for the benefit of the Noteholders and the
Certificateholders.
(b) The Issuer, for the benefit of the Noteholders, shall cause the
Indenture Trustee to establish with and maintain in the name of the Indenture
Trustee an Eligible
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Deposit Account (the "Note Distribution Account"), bearing a designation clearly
indicating that the funds deposited therein are held for the benefit of the
Noteholders. The Issuer shall also cause to be established two administrative
subaccounts within the Note Distribution Account at the Eligible Institution
then maintaining the Note Distribution Account, which subaccounts shall be
designated the "Interest Distribution Account" and the "Principal Distribution
Account", respectively. The Interest Distribution Account and the Principal
Distribution Account are established and maintained solely for administrative
purposes.
(c) The Issuer, for the benefit of the Noteholders and the
Certificateholders, shall cause the Indenture Trustee to establish with and
maintain in the name of the Indenture Trustee an Eligible Deposit Account (the
"Reserve Account"), bearing a designation clearly indicating that the funds
deposited therein are held for the benefit of the Noteholders and the
Certificateholders
(d) Funds on deposit in the Collection Account and the Reserve Account
shall be invested by the Indenture Trustee in Eligible Investments selected in
writing by the Servicer; provided, however, that if the Servicer fails to select
any Eligible Investment, the Indenture Trustee shall invest such funds in an
Eligible Investment described in clause (d) of the definition of "Eligible
Investment" herein. All such Eligible Investments shall be held by the Indenture
Trustee for the benefit of the Noteholders or the Certificateholders, as
applicable; provided, for each Collection Period such amount shall be calculated
on the Determination Date and on each Payment Date all interest and other
investment income (net of Net Investment Losses) on funds on deposit in the
Collection Account for the related Collection Period shall be paid to the
Servicer as part of the servicing compensation or to the Indenture Trustee as
compensation. Other than as permitted in writing by the Rating Agencies, funds
on deposit in the Trust Accounts shall be invested in Eligible Investments that
will mature not later than the Business Day immediately preceding the next
Payment Date. Funds deposited in a Trust Account on a day that immediately
precedes a Payment Date upon the maturity of any Eligible Investments are not
required to be invested overnight.
(e) In the event that there are Net Investment Losses in Eligible
Investments chosen by the Servicer, the Servicer shall deposit into the
Collection Account, no later than one Business Day prior to the Payment Date,
the amount of the Net Investment Losses. The Indenture Trustee shall not be held
liable in any way for any Net Investment Losses, except for losses attributable
to the Indenture Trustee's failure to make payments on such Eligible Investments
issued by the Indenture Trustee, in its commercial capacity as principal obligor
and not as Indenture Trustee, in accordance with their terms.
(f) (i) The Indenture Trustee shall possess all right, title and
interest in all funds and investment property on deposit from time to time in or
credited to the Trust Accounts and in all proceeds thereof (including all income
thereon) and all such funds, investment property, proceeds and income shall be
part of the Trust Estate, except as otherwise set forth herein. The Trust
Accounts shall be under the sole dominion and control of the Indenture Trustee
for the benefit of the Noteholders and the Certificateholders, as applicable.
If, at any time, any Trust Account ceases to be an
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Eligible Deposit Account, the Indenture Trustee (or the Servicer on its behalf)
shall within 10 Business Days (or such longer period, not to exceed 30 calendar
days, as to which each Rating Agency may consent) establish a new Trust Account
as an Eligible Deposit Account and shall transfer any cash or any investments
from the account that is no longer an Eligible Deposit Account to the Trust
Account.
(ii) With respect to the Trust Account Property, the Indenture
Trustee agrees, by its acceptance hereof, that:
A. any Trust Account Property that is held in deposit accounts shall
be held solely in the Eligible Deposit Accounts, subject to the last sentence of
Section 5.01(f)(i); and each such Eligible Deposit Account shall be subject to
the exclusive custody and control of the Indenture Trustee, and the Indenture
Trustee shall have sole signature authority with respect thereto;
B. any Trust Account Property that constitutes Physical Property
shall be delivered to the Indenture Trustee in accordance with paragraph (a) of
the definition of "Delivery" and shall be held, pending maturity or disposition,
solely by the Indenture Trustee or a securities intermediary (as such term is
defined in Section 8-102(a)(14) of the UCC) acting solely for the Indenture
Trustee;
C. any Trust Account Property that is a book-entry security held
through the Federal Reserve System pursuant to federal book-entry regulations
shall be delivered in accordance with paragraph (b) of the definition of
"Delivery" and shall be maintained by the Indenture Trustee, pending maturity or
disposition, through continued book-entry registration of such Trust Account
Property as described in such paragraph;
D. any Trust Account Property that is an "uncertificated security"
under Article 8 of the UCC and that is not governed by clause (C) above shall be
delivered to the Indenture Trustee in accordance with paragraph (c) of the
definition of "Delivery" and shall be maintained by the Indenture Trustee,
pending maturity or disposition, through continued registration of the Indenture
Trustee's (or its nominee's) ownership of such security; and
E. any Trust Account Property that is a security entitlement shall
be delivered in accordance with paragraph (d) of the definition herein of
"Delivery" and shall be held pending maturity or disposition by the Indenture
Trustee or a securities intermediary acting solely for the Indenture Trustee.
(iii) The Servicer shall have the power, revocable by the Indenture
Trustee or by the Owner Trustee with the consent of the Indenture Trustee,
following a Servicer Termination Event to instruct the Indenture Trustee to
make withdrawals and payments from the Trust Accounts and the Certificate
Distribution Account for the purpose of withdrawing any amounts deposited
in error into such accounts.
Section 5.02. Collections. The Servicer shall remit to the Collection
Account all payments by or on behalf of the Obligors with respect to the
Receivables (other than
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Purchased Receivables), all Liquidation Proceeds and any subsequent Recoveries
on the Business Day prior to the Payment Date for so long as BMW Capital has the
Minimum Required Rating. So long as BMW Capital has the Minimum Required Rating,
the Servicer will remit all such amounts described in the preceding sentence
within two Business Days of receipt to an account established and maintained by
BMW Capital. If BMW Capital no longer has the Minimum Required Rating, the
Servicer shall remit to the Collection Account all payments by or on behalf of
the Obligors with respect to the Receivables (other than Purchased Receivables),
all Liquidation Proceeds and any subsequent Recoveries within two Business Days
of receipt thereof. Notwithstanding anything herein to the contrary, so long as
BMW FS is the Servicer, BMW FS may withhold from the deposit into the Collection
Account any amounts indicated on the related Servicer's Certificate as being due
and payable to the Seller and pay such amounts directly to the Seller. For
purposes of this Article V, the phrase "payments by or on behalf of Obligors"
shall mean payments made with respect to the Receivables by Persons other than
the Servicer or the Seller.
Section 5.03. Application of Collections.
All payments received from or on behalf of an Obligor during each
Collection Period with respect to each Receivable (other than a Purchased
Receivable), shall be applied to interest and principal in accordance with the
Simple Interest Method.
Section 5.04. Purchase Amounts. If BMW Capital has the Minimum Required
Rating, the Servicer and the Seller shall deposit or cause to be deposited in
the Collection Account the Purchase Amount as described in the first sentence of
Section 5.02. So long as BMW Capital has the Minimum Required Rating, the
Servicer will deposit the Purchase Amount into an account established and
maintained by BMW Capital, such deposit being made within two Business Days of
the event giving rise to such Purchase Amounts. If BMW Capital no longer has the
Minimum Required Rating, the Servicer or the Seller shall deposit or cause to be
deposited in the Collection Account, on or prior to each Determination Date, the
aggregate Purchase Amount with respect to Purchased Receivables and the Servicer
shall deposit therein all amounts to be paid under Sections 4.07 and 9.01.
Section 5.05. Reserved.
Section 5.06. Distributions.
(a) On each Determination Date, the Servicer shall calculate all amounts
required to be deposited pursuant to this Section and deliver a Servicer's
Certificate pursuant to Section 4.09.
(b) On each Payment Date, the Servicer shall instruct the Indenture
Trustee in writing (based on the information contained in the Servicer's
Certificate delivered on the related Determination Date pursuant to Section
4.09) to make the following deposits and distributions from Available Amounts on
deposit in the Collection Account, and, in the event of a shortfall in meeting
the payments described in clauses (i) through (v) below
29
(an "Available Amounts Shortfall"), from amounts withdrawn from the Reserve
Account, in the following order and priority:
(i) to the Servicer, the Servicing Fee (and any accrued and unpaid
Servicing Fees from prior Collection Periods), and Nonrecoverable Advances;
(ii) to the Interest Distribution Account, (a) the aggregate amount
of interest accrued for the related Interest Period on each of the Class A
Notes at their respective Class A Rate on the principal outstanding as of
the previous Payment Date after giving effect to all payments of principal
to the Class A Noteholders on the preceding Payment Date; and (b) the
excess, if any, of the amount of interest payable to the Class A
Noteholders on prior Payment Dates over the amounts actually paid to the
Class A Noteholders on those prior Payment Dates, plus interest on any such
shortfall at the related Class A Rate to the extent permitted by law;
(iii) to the Principal Distribution Account, the First Priority
Principal Distribution Amount, if any;
(iv) to the Interest Distribution Account, (a) the aggregate amount
of interest accrued for the related Interest Period on each of the Class B
Notes at the Class B Rate on such Notes on the principal outstanding as of
the previous Payment Date after giving effect to all payments of principal
to the Class B Noteholders on the preceding Payment Date and (b) the
excess, if any, of the amount of interest payable to the Class B
Noteholders on prior Payment Dates over the amounts actually paid to the
Class B Noteholders on those prior Payment Dates, plus interest on any such
shortfall at the Class B Rate to the extent permitted by law;
(v) to the Principal Distribution Account, the Regular Principal
Distribution Amount;
(vi) to the Reserve Account, the amount, if any, necessary to cause
the amount on deposit in the Reserve Account to equal the Reserve Account
Required Amount;
(vii) to the Indenture Trustee and the Owner Trustee, any accrued and
unpaid Trust Fees and Expenses, in each case to the extent such fees and
expenses have not been previously paid by the Servicer; provided that,
until the Notes have been paid in full, the annual amount paid to the
Trustees out of Available Amounts described in this clause (vii) shall not
exceed $10,000; and
(viii) any Available Amounts remaining, if any, to the Certificate
Distribution Account.
On each Payment Date, the Servicer shall instruct the Indenture Trustee to
distribute (based on the information contained in the Servicer's Certificate
delivered on the related Determination Date pursuant to Section 4.09), any
amounts deposited into the
30
Principal Distribution Account as payment of principal on the Notes pursuant to
priority set forth in Section 8.02(d) of the Indenture. Notwithstanding that the
Notes have been paid in full, the Indenture Trustee shall continue to maintain
the Collection Account hereunder until the Certificate Percentage Interest is
reduced to zero.
Section 5.07. Reserve Account.
(a) On or prior to the Closing Date, the Issuer shall cause to have
deposited an amount equal to the Reserve Account Initial Deposit into the
Reserve Account from the net proceeds of the sale of the Notes. The Reserve
Account shall be an asset of the Issuer.
(b) In the event that the Servicer's Certificate states that there is an
Available Amounts Shortfall, then the Indenture Trustee shall withdraw the
Reserve Account Withdrawal Amount from the Reserve Account and deposit such
Reserve Account Withdrawal Amount into the Collection Account no later than
12:00 noon, New York City time, on the Business Day prior to the related Payment
Date.
(c) In the event that the amount on deposit in the Reserve Account (after
giving effect to all deposits thereto and withdrawals therefrom on such Business
Day prior to a Payment Date) is greater than the Reserve Account Required Amount
on any Payment Date, the Indenture Trustee shall release and distribute all such
amounts on such Payment Date to the Certificateholders. Upon any such
distribution to the Certificateholders, the Noteholders shall have no further
rights in, or claims to, such amounts.
(d) In the event that, on any Payment Date, the amount on deposit in the
Reserve Account shall be less than the Reserve Account Required Amount, the
Available Amounts remaining after the payment of the amounts set forth in
Section 5.06(b)(i) through (v), up to an amount equal to such shortfall, shall
be deposited by the Indenture Trustee to the Reserve Account on such Payment
Date.
(e) Subject to Section 9.01, amounts on deposit in the Reserve Account
will continue to be applied pursuant to Section 5.06 following payment in full
of the Outstanding Amount of the Notes until the Pool Balance is reduced to
zero. Following the payment in full of the aggregate Outstanding Amount of the
Notes and of all other amounts owing or to be distributed hereunder or under the
Indenture or the Trust Agreement to Noteholders and the termination of the
Trust, any amount then allocated to the Reserve Account shall be paid to the
Certificateholders.
Section 5.08. Statements to Securityholders. On each Determination Date,
the Servicer shall provide to the Indenture Trustee (with a copy to each Rating
Agency and each Paying Agent (if any)) for the Indenture Trustee to forward to
each Noteholder of record as of the most recent Record Date and to the Owner
Trustee (with a copy to each Paying Agent (if any)) for the Owner Trustee to
forward to each Certificateholder of record as of the most recent Record Date a
statement substantially in the form of Exhibit
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B setting forth at least the following information as to the Securities to the
extent applicable:
(a) the amount of collections received with respect to the Receivables
during the related Collection Period and allocable to principal allocable to
each Class of Notes on such Payment Date;
(b) the amount of collections received with respect to the Receivables
during the related Collection Period and allocable to interest allocable to each
Class of Notes on such Payment Date;
(c) the Outstanding Amount of each Class of Notes, the Note Pool Factor
for each such Class as of the close of business on the related Payment Date,
after giving effect to payments allocated to principal reported under clause (a)
above;
(d) the amount of the Servicing Fee paid to the Servicer and the amount of
any fees payable to the Owner Trustee, the Custodian or the Indenture Trustee
with respect to the related Collection Period;
(e) the amount of any interest carryover shortfall on such Payment Date
and the change, if any, in such amounts from those with respect to the
immediately preceding Payment Date;
(f) the aggregate amounts of Realized Losses, if any, with respect to the
related Collection Period;
(g) the Pool Balance as of the close of business on the last day of the
related Collection Period, after giving effect to payments allocated to
principal reported under clause (a) above;
(h) the balance of the Reserve Account on the related Determination Date
after giving effect to deposits and withdrawals to be made on such Payment Date,
if any;
(i) the amount of any deposit to the Reserve Account and the amount and
application of any funds withdrawn from the Reserve Account with respect to such
Payment Date;
(j) the aggregate principal balance of all Receivables that became
Liquidated Receivables or Purchased Receivables during the related Collection
Period;
(k) the aggregate principal balance and number of Receivables that are 30
to 59 days, 60 to 89 days or 90 days or more delinquent as of the last day of
the related Collection Period;
(l) any Available Amounts Shortfall after giving effect to payments on
such Payment Date, and any change in such amounts from the preceding statement;
32
(m) the aggregate Purchase Amounts for Receivables, if any, that were or
are to be purchased during or with respect to such Collection Period;
(n) the aggregate Principal Balance and number of all Receivables with
respect to which the related Financed Vehicle was repossessed;
(o) the amount to be distributed to the Certificate Distribution Account;
(p) the aggregate Principal Balance and number of Receivables with respect
to which the Servicer granted a deferment; and
(q) the Yield Supplement Overcollateralization Amount for the next Payment
Date.
Each amount set forth on the Payment Date statement under clauses (a), (b)
or (l) above shall be expressed as a dollar amount per $1,000 of original
principal balance of a Note.
The Indenture Trustee will make such report (and, at its option, any
additional files containing the same information in an alternative format)
available each month to Noteholders and the Rating Agencies via the Indenture
Trustee's internet website. The Indenture Trustee's internet website shall
initially be located at "xxx.xx.xxxxxxxxxx.xxx". Such parties that are unable to
use the website are entitled to have a paper copy mailed to them via first class
mail by calling the customer service desk at (000) 000-0000 and indicating such.
The Indenture Trustee shall have the right to change the way such statements are
distributed in order to make such distribution more convenient or more
accessible to the above parties and the Indenture Trustee shall provide timely
and adequate notification to all above parties regarding any such changes.
Section 5.09. Reserved.
Section 5.10. Reserved.
Section 5.11. Advances by the Servicer.
(a) By the close of business on the day required by Section 5.02, the
Servicer shall deposit into the Collection Account, out of its own funds, the
related Advance.
(b) On each Payment Date, the Servicer shall reimburse itself for the
Outstanding Amount Advanced to the extent of actual collections of late
scheduled payments.
(c) If the Servicer determines that any advance made pursuant to this
Section 5.11 has become a Nonrecoverable Advance and at the time of such
determination there exists an Outstanding Amount Advanced, then the Servicer
shall reimburse itself out of funds in the Collection Account for the amount of
such Nonrecoverable Advance, but only to the extent of such Outstanding Amount
Advanced.
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ARTICLE VI
THE DEPOSITOR
Section 6.01. Representations, Warranties and Covenants of Depositor. The
Depositor makes the following representations, warranties and covenants to the
Issuer, the Servicer, the Indenture Trustee and the Seller and on which the
Issuer relies in accepting the Receivables and delivering the Securities. Such
representations, warranties and covenants speak as of the execution and delivery
of this Agreement and as of the Closing Date, and shall survive the sale,
transfer and assignment of the Receivables by the Depositor to the Issuer and
the pledge thereof to the Indenture Trustee pursuant to the Indenture.
(a) Organization and Good Standing. The Depositor is duly organized and
validly existing as a limited liability company in good standing under the laws
of the State of Delaware, with the power and authority to own its properties and
to conduct its business as such properties are currently owned and such business
is presently conducted.
(b) Due Qualification. The Depositor is duly qualified to do business as a
foreign limited liability company in good standing, and has obtained all
necessary licenses and approvals in all jurisdictions where the failure to do so
would materially and adversely affect the Depositor's ability to transfer the
Receivables to the Trust pursuant to this Agreement or the validity or
enforceability of the Receivables.
(c) Power and Authority. The Depositor has the corporate power and
authority to execute and deliver this Agreement and the other Basic Documents to
which it is a party and to carry out their respective terms; the Depositor has
full power and authority to sell and assign the property to be sold and assigned
to and deposited with the Issuer, and the Depositor shall have duly authorized
such sale and assignment to the Issuer by all necessary action; and the
execution, delivery and performance of this Agreement and the other Basic
Documents to which the Depositor is a party have been duly authorized by the
Depositor by all necessary action.
(d) Valid Sale; Binding Obligation. This Agreement effects a valid
transfer and assignment of the Receivables and the other Trust property related
thereto conveyed by the Depositor to the Trust hereunder, in each case
enforceable against creditors of and purchasers from the Depositor. This
Agreement and the other Basic Documents to which the Depositor is a party, when
duly executed and delivered by the other parties hereto and thereto, shall
constitute legal, valid and binding obligations of the Depositor, enforceable
against the Depositor in accordance with their respective terms, except as the
enforceability thereof may be limited by bankruptcy, insolvency, reorganization
or similar laws now or hereafter in effect relating to or affecting creditors'
rights generally and to general principles of equity (whether applied in a
proceeding at law or in equity).
(e) No Violation. The consummation of the transactions contemplated by
this Agreement and the other Basic Documents and the fulfillment of the terms of
this Agreement and the other Basic Documents shall not conflict with, result in
any breach of
34
any of the terms or provisions of or constitute (with or without notice or lapse
of time, or both) a default under, the limited liability company agreement of
the Depositor, or any indenture, agreement, mortgage, deed of trust or other
instrument to which the Depositor is a party or by which it is bound; or result
in the creation or imposition of any Lien upon any of its properties pursuant to
the terms of any such indenture, agreement, mortgage, deed of trust or other
instrument, other than this Agreement and the other Basic Documents; or violate
any law, order, rule or regulation applicable to the Depositor of any court or
federal or state regulatory body, administrative agency or other governmental
instrumentality having jurisdiction over the Depositor.
(f) No Proceedings. There are no proceedings or investigations pending or,
to the Depositor's knowledge, threatened, against the Depositor before any
court, regulatory body, administrative agency or other tribunal or governmental
instrumentality having jurisdiction over the Depositor or its properties: (i)
asserting the invalidity of this Agreement or any other Basic Document; (ii)
seeking to prevent the issuance of the Notes or the Certificates or the
consummation of any of the transactions contemplated by this Agreement or any
other Basic Document; (iii) seeking any determination or ruling that might
materially and adversely affect the performance by the Depositor of its
obligations under, or the validity or enforceability of, this Agreement or any
other Basic Document; or (iv) seeking to adversely affect the federal income tax
or other federal, state or local tax attributes of the Trust, the Notes or the
Certificates.
(g) No Consents. The Depositor is not required to obtain the consent of
any other party or any consent, license, approval, registration, authorization,
or declaration of or with any governmental authority, bureau or agency in
connection with the execution, delivery, performance, validity or enforceability
of this Agreement or any other Basic Document to which it is a party that has
not already been obtained.
Section 6.02. Company Existence. During the term of this Agreement, the
Depositor will keep in full force and effect its existence, rights and
franchises as a limited liability company under the laws of the jurisdiction of
its formation and will obtain and preserve its qualification to do business in
each jurisdiction in which such qualification is or shall be necessary to
protect the validity and enforceability of this Agreement, the Basic Documents
and each other instrument or agreement necessary or appropriate to the proper
administration of this Agreement and the transactions contemplated hereby. In
addition, all transactions and dealings between the Depositor and its Affiliates
will be conducted on an arm's-length basis.
Section 6.03. Liability of Depositor. The Depositor shall be liable in
accordance herewith only to the extent of the obligations specifically
undertaken by the Depositor under this Agreement (which shall not include
distributions on account of the Notes or the Certificates).
Section 6.04. Merger or Consolidation of, or Assumption of the Obligations
of, Depositor. Any Person with which the Depositor shall merge or consolidate or
which the Depositor shall permit to become the successor to the Depositor's
business shall execute an agreement of assumption of every obligation of the
Depositor under this
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Agreement and the other Basic Documents. Whether or not such assumption
agreement is executed, such successor Person shall be the successor to the
Depositor under this Agreement without the execution or filing of any document
or any further act on the part of any of the parties to this Agreement. The
Depositor shall provide prompt notice of any merger, consolidation or succession
pursuant to this Section to the Owner Trustee, the Indenture Trustee, the
Servicer, the Securityholders and the Rating Agencies. Notwithstanding the
foregoing, the Depositor shall not merge or consolidate with any other Person or
permit any other Person to become a successor to the Depositor's business unless
(w) immediately after giving effect to such transaction, no representation or
warranty made pursuant to Section 3.02 or 6.01 shall have been breached (for
purposes hereof, such representations and warranties shall speak as of the date
of the consummation of such transaction), (x) the Depositor shall have delivered
to the Owner Trustee, the Indenture Trustee and the Servicer an Officer's
Certificate and an Opinion of Counsel each stating that such consolidation,
merger or succession and such agreement of assumption comply with this Section
and that all conditions precedent provided for in this Agreement relating to
such transaction have been complied with, (y) the Rating Agency Condition shall
have been satisfied and (z) the Depositor shall have delivered to the Owner
Trustee, the Indenture Trustee and the Servicer an Opinion of Counsel stating
that, in the opinion of such counsel, either (A) all financing statements and
continuation statements and amendments thereto have been executed and filed that
are necessary to preserve and protect the interest of the Trust in the
Receivables and reciting the details of such filings or (B) no such action is
necessary to preserve and protect such interest.
Section 6.05. Limitation on Liability of Depositor and Others. The
Depositor and any director, officer, employee or agent of the Depositor may rely
in good faith on the advice of counsel or on any document of any kind, prima
facie properly executed and submitted by any Person respecting any matters
arising hereunder. The Depositor shall be under no obligation to appear in,
prosecute or defend any legal action that shall not be incidental to its
obligations under this Agreement and that in its opinion may involve it in any
expense or liability.
Section 6.06. Depositor May Own Securities. The Depositor and any
Affiliate thereof may in its individual or any other capacity become the owner
or pledgee of Securities with the same rights as it would have if it were not
the Depositor or an Affiliate thereof, except as expressly provided herein or in
any Basic Document.
Section 6.07. Depositor to Provide Copies of Relevant Securities Filings.
The Depositor shall provide or cause to be provided to the Servicer a copy of
any document filed by the Depositor subsequent to the date hereof with the
Commission pursuant to the Securities Act or the Exchange Act that relate
specifically to the Trust, the Notes or the Certificates.
Section 6.08. Amendment of Depositor's Organizational Documents. The
Depositor shall not amend its organizational documents except in accordance with
the provisions thereof.
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ARTICLE VII
THE SERVICER
Section 7.01. Representations, Warranties and Covenants of Servicer. The
Servicer makes the following representations, warranties and covenants upon
which the Issuer is deemed to have relied in acquiring the Receivables. Such
representations, warranties and covenants speak as of the execution and delivery
of this Agreement and as of the Closing Date, and shall survive the sale of the
Receivables to the Issuer and the pledge thereof to the Indenture Trustee
pursuant to the Indenture.
(a) Organization and Good Standing. The Servicer is a limited liability
company duly organized and validly existing under the laws of the State of
Delaware. The Servicer is duly authorized to own its properties and transact its
business and is in good standing in each jurisdiction in which the character of
the business transacted by it or any properties owned or leased by it requires
such authorization and in which the failure to be so authorized would have a
material adverse effect on the business, properties, assets, or condition
(financial or other) of the Servicer and its subsidiaries, considered as one
enterprise. The Servicer has, and at all relevant times had, the power,
authority and legal right to acquire, own, and service the Receivables.
(b) Licenses and Approvals. The Servicer has obtained all necessary
licenses and approvals, in all jurisdictions where the failure to do so would
materially and adversely affect the Servicer's ability to acquire, own and
service the Receivables.
(c) Power and Authority. The Servicer has the power and authority to
execute and deliver this Agreement and the other Basic Documents to which it is
a party and to carry out their respective terms; and the execution, delivery and
performance of this Agreement and the other Basic Documents to which it is a
party have been duly authorized by the Servicer by all necessary action.
(d) Binding Obligation. This Agreement and the other Basic Documents to
which it is a party constitute legal, valid and binding obligations of the
Servicer, enforceable against the Servicer in accordance with their respective
terms, except as the enforceability thereof may be limited by bankruptcy,
insolvency, reorganization or other similar laws affecting the enforcement of
creditors' rights generally and to general principles of equity whether applied
in a proceeding in equity or at law.
(e) No Violation. The consummation of the transactions contemplated by
this Agreement and the other Basic Documents to which it is a party and the
fulfillment of their respective terms shall not conflict with, result in any
breach of any of the terms and provisions of, or constitute (with or without
notice or lapse of time or both) a default under, the limited liability company
agreement of the Servicer, or any indenture, agreement, mortgage, deed of trust
or other instrument to which the Servicer is a party or by which it is bound; or
result in the creation or imposition of any Lien upon any of its properties
pursuant to the terms of any such indenture, agreement, mortgage, deed of trust
or other instrument, other than this Agreement and the other Basic Documents, or
violate
37
any law, order, rule or regulation applicable to the Servicer of any court or
federal or state regulatory body, administrative agency or other governmental
instrumentality having jurisdiction over the Servicer or any of its properties.
(f) No Proceedings. There are no proceedings or investigations pending or,
to the Servicer's knowledge, threatened, against the Servicer before any court,
regulatory body, administrative agency or other tribunal or governmental
instrumentality having jurisdiction over the Servicer or its properties: (i)
asserting the invalidity of this Agreement or any of the other Basic Documents;
(ii) seeking to prevent the issuance of the Securities or the consummation of
any of the transactions contemplated by this Agreement or any of the other Basic
Documents; (iii) seeking any determination or ruling that might materially and
adversely affect the performance by the Servicer of its obligations under, or
the validity or enforceability of, this Agreement or any of the other Basic
Documents; or (iv) seeking to adversely affect the federal income tax or other
federal, state or local tax attributes of the Securities.
Section 7.02. Indemnities of Servicer. The Servicer shall be liable in
accordance herewith only to the extent of the obligations specifically
undertaken by the Servicer and the representations made by the Servicer under
this Agreement:
(a) The Servicer shall indemnify, defend and hold harmless the Issuer, the
Owner Trustee, the Indenture Trustee, the Securityholders and the Depositor and
any of the officers, directors, employees and agents of the Issuer, the Owner
Trustee and the Indenture Trustee from and against any and all reasonable and
duly documented costs, expenses, losses, damages, claims and liabilities arising
out of or resulting from the use, ownership or operation by the Servicer or any
Affiliate thereof of a Financed Vehicle, excluding any losses incurred in
connection with the sale of any repossessed Financed Vehicles in a commercially
reasonable manner and in compliance with the terms of this Agreement.
(b) The Servicer shall indemnify, defend and hold harmless the Issuer, the
Owner Trustee, the Indenture Trustee, the Depositor, and their respective
officers, directors, agents and employees, and the Securityholders, from and
against any taxes that may at any time be asserted against any of such parties
with respect to the transactions contemplated in this Agreement, including any
sales, gross receipts, tangible or intangible personal property, privilege or
license taxes (but not including any federal or other income taxes, including
franchise taxes), and any reasonable costs and expenses in defending against the
same.
(c) The Servicer shall indemnify, defend and hold harmless the Issuer, the
Owner Trustee, the Indenture Trustee, the Depositor, the Securityholders and any
of the officers, directors, employees or agents of the Issuer, the Owner
Trustee, the Depositor and the Indenture Trustee from and against any and all
reasonable and duly documented costs, expenses, losses, claims, damages and
liabilities to the extent that such cost, expense, loss, claim, damage or
liability arose out of, or was imposed upon any such Person through, the gross
negligence, willful misfeasance or bad faith of the Servicer in
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the performance of its duties under this Agreement or by reason of reckless
disregard of its obligations and duties under this Agreement.
For purposes of this Section, in the event of the termination of the rights
and obligations of BMW FS (or any successor thereto pursuant to Section 7.03) as
Servicer pursuant to Section 8.02, or the resignation by such Servicer pursuant
to this Agreement, such Servicer shall be deemed to be the Servicer pending
appointment of a successor Servicer (other than the Indenture Trustee) pursuant
to Section 8.03.
Indemnification under this Section shall survive the resignation or removal
of the Servicer or the termination of this Agreement with respect to acts of the
Servicer prior thereto, and shall include reasonable fees and expenses of
counsel and reasonable expenses of litigation. If the Servicer shall have made
any indemnity payments pursuant to this Section and the Person to or on behalf
of whom such payments are made thereafter collects any of such amounts from
others, such Person shall promptly repay such amounts to the Servicer, without
interest.
Section 7.03. Merger or Consolidation of, or Assumption of the Obligations
of, Servicer. Any Person (i) into which the Servicer may be merged or
consolidated, (ii) resulting from any merger or consolidation to which the
Servicer shall be a party, (iii) that acquires by conveyance, transfer or lease
substantially all of the assets of the Servicer or (iv) succeeding to the
business of the Servicer, which Person shall execute an agreement of assumption
to perform every obligation of the Servicer under this Agreement, shall be the
successor to the Servicer under this Agreement without the execution or filing
of any paper or any further act on the part of any of the parties to this
Agreement. The Servicer shall provide notice of any merger, consolidation or
succession pursuant to this Section to the Owner Trustee, the Indenture Trustee
and each Rating Agency. Notwithstanding the foregoing, the Servicer shall not
merge or consolidate with any other Person or permit any other Person to become
a successor to the Servicer's business unless (i) immediately after giving
effect to such transaction, no representation or warranty made pursuant to
Section 7.01 shall have been breached (for purposes hereof, such representations
and warranties shall speak as of the date of the consummation of such
transaction) and no event that, after notice or lapse of time or both, would
become a Servicer Termination Event shall have occurred, (ii) the Servicer shall
have delivered to the Owner Trustee and the Indenture Trustee an Officer's
Certificate and an Opinion of Counsel each stating that such consolidation,
merger or succession and such agreement of assumption comply with this Section
and that all conditions precedent provided for in this Agreement relating to
such transaction have been complied with and (iii) the Servicer shall have
delivered to the Owner Trustee and the Indenture Trustee an Opinion of Counsel
stating that either (A) all financing statements and continuation statements and
amendments thereto have been executed and filed that are necessary to preserve
and protect the interest of the Trust and the Indenture Trustee, respectively,
in the assets of the Trust and reciting the details of such filings or (B) no
such action shall be necessary to preserve and protect such interest. The
Servicer shall be permitted to transfer and assign its duties and obligations
under this Agreement to an affiliate that has succeeded to substantially all of
the assets and liabilities of the Servicer in connection with a
39
reorganization of the Servicer; provided that the resulting entity represents
and warrants that it is not less creditworthy than the Servicer immediately
prior to such reorganization.
Section 7.04. Limitation on Liability of Servicer and Others.
(a) Neither the Servicer nor any of its directors, officers, employees or
agents shall be under any liability to the Issuer, the Depositor, the Indenture
Trustee, the Owner Trustee, the Noteholders or the Certificateholders, except as
provided in this Agreement, for any action taken or for refraining from the
taking of any action pursuant to this Agreement; provided, however, that this
provision shall not protect the Servicer or any such Person against any
liability that would otherwise be imposed by reason of a breach of this
Agreement or willful misfeasance, bad faith or negligence in the performance of
duties. The Servicer and any director, officer, employee or agent of the
Servicer may conclusively rely in good faith on the written advice of counsel or
on any document of any kind prima facie properly executed and submitted by any
Person respecting any matters arising under this Agreement.
(b) The parties expressly acknowledge and consent to the Indenture Trustee
simultaneously acting in the capacity of successor Servicer and Indenture
Trustee. The Indenture Trustee may, in such capacities, discharge its separate
functions fully, without hindrance or regard to conflict of interest principles,
duty of loyalty principles or other breach of fiduciary duties to the extent
that any such conflict or breach arises from the performance by the Indenture
Trustee of express duties set forth in this Agreement in any of such capacities.
Section 7.05. Appointment of Subservicer. The Servicer may at any time
appoint a subservicer to perform all or any portion of its obligations as
Servicer hereunder; provided however, that the Servicer shall remain obligated
and be liable to the Owner Trustee, the Indenture Trustee and the
Securityholders for the servicing and administering of the Receivables in
accordance with the provisions hereof without diminution of such obligation and
liability by virtue of the appointment of such subservicer and to the same
extent and under the same terms and conditions as if the Servicer alone were
servicing and administering the Receivables. The fees and expenses of any
subservicer shall be as agreed between the Servicer and such subservicer from
time to time, and none of the Owner Trustee, the Indenture Trustee, the Issuer
or the Securityholders shall have any responsibility therefor.
Section 7.06. Servicer Not to Resign.
(a) Subject to the provisions of Section 7.03, the Servicer shall not
resign from the obligations and duties imposed on it by this Agreement as
Servicer except upon a determination that the performance of its duties under
this Agreement shall no longer be permissible under applicable law.
(b) Notice of any determination that the performance by the Servicer of
its duties hereunder is no longer permitted under applicable law shall be
communicated to the Owner Trustee and the Indenture Trustee at the earliest
practicable time (and, if such
40
communication is not in writing, shall be confirmed in writing at the earliest
practicable time) and any such determination shall be evidenced by an Opinion of
Counsel to such effect delivered by the Servicer to the Owner Trustee and the
Indenture Trustee concurrently with or promptly after such notice. No
resignation of the Servicer shall become effective until a successor Servicer
acceptable to the Indenture Trustee has assumed the responsibilities and
obligations of the resigning Servicer in accordance with Section 8.03. If no
Servicer has been appointed within 30 days of resignation or removal, or the
date upon which any regulatory authority requires such resignation, the
Indenture Trustee may petition any court of competent jurisdiction for such
appointment.
Section 7.07. Servicer May Own Securities. The Servicer, and any Affiliate
of the Servicer, may, in its individual or any other capacity, become the owner
or pledgee of Securities with the same rights as it would have if it were not
the Servicer or an Affiliate thereof, except as expressly provided herein or in
any Basic Document. Except as set forth herein or in the other Basic Documents,
Securities so owned by or pledged to Servicer or any such Affiliate shall have
an equal and proportionate benefit under the provisions of this Agreement and
the other Basic Documents, without preference, priority, or distinction as among
all of the Securities of the same class.
ARTICLE VIII
DEFAULT
Section 8.01. Servicer Termination Events. For purposes of this Agreement,
the occurrence and continuance of any of the following shall constitute a
"Servicer Termination Event":
(a) any failure by the Servicer to deposit into the Collection Account any
proceeds or payment required to be so delivered under the terms of this
Agreement that continues unremedied for a period of five Business Days after
written notice is received by the Servicer or after discovery of such failure by
a Responsible Officer of the Servicer;
(b) failure on the part of the Servicer duly to observe or perform, in any
material respect, any covenants or agreements of the Servicer set forth in this
Agreement, which failure (i) materially and adversely affects the rights of the
Noteholders and (ii) continues unremedied for a period of 60 days after
discovery of such failure by a Responsible Officer of the Servicer or after the
date on which written notice of such failure requiring the same to be remedied
shall have been given to the Servicer by any of the Owner Trustee, the Indenture
Trustee or Noteholders evidencing not less than 50% of the Outstanding Amount of
the Notes of the Controlling Class; or
(c) the occurrence of an Insolvency Event with respect to the Servicer.
Section 8.02. Consequences of a Servicer Termination Event. (a) If a
Servicer Termination Event shall occur, the Indenture Trustee may, and at the
direction of Noteholders evidencing 50% of the Outstanding Amount of the Notes
of the
41
Controlling Class, terminate all of the rights and obligations of the Servicer
under this Agreement by notice in writing to the Servicer. On or after the
receipt by the Servicer of such written notice, all authority, power,
obligations and responsibilities of the Servicer under this Agreement
automatically shall pass to, be vested in and become obligations and
responsibilities of the successor Servicer appointed by the Controlling Class;
provided, however, that such successor Servicer shall have no liability with
respect to any obligation that was required to be performed by the terminated
Servicer prior to the date that such successor Servicer becomes the Servicer or
any claim of a third party based on any alleged action or inaction of the
terminated Servicer. The successor Servicer is authorized and empowered by this
Agreement to execute and deliver, on behalf of the terminated Servicer, as
attorney-in-fact or otherwise, any and all documents and other instruments and
to do or accomplish all other acts or things necessary or appropriate to effect
the purposes of such notice of termination, whether to complete the transfer and
endorsement of the Receivables and related documents to show the Indenture
Trustee (or the Owner Trustee if the Notes have been paid in full) as lienholder
or secured party on the related certificates of title of the Financed Vehicles
or otherwise.
(b) All reasonable costs and expenses (including attorneys' fees) incurred
in connection with transferring the servicing duties to the successor Servicer
and amending this agreement to reflect such succession as Servicer, shall be
paid by the predecessor Servicer.
(c) The predecessor Servicer shall cooperate with the Indenture Trustee
and any successor Servicer in effecting the termination of the predecessor
Servicer's responsibilities and rights hereunder including, without limitation,
providing the Indenture Trustee and successor Servicer, as applicable, all
documents and records in electronic or other form reasonably requested by it to
enable it to perform the Servicer's functions hereunder and the transfer to the
Indenture Trustee or such successor Servicer, as applicable, all amounts which
shall at the time or thereafter be or should have been deposited by the
predecessor Servicer in the Collection Account and any other Trust Account
maintained with respect to the Securities. Neither the Indenture Trustee nor any
other successor Servicer shall be deemed to be in default hereunder by reason of
any failure to make, or any delay in making, any distribution hereunder or any
portion thereof caused by (i) the failure of the predecessor Servicer to
deliver, or any delay in delivering, cash, documents or records to it, (ii) the
failure of the predecessor Servicer to cooperate or (iii) restrictions imposed
by any regulatory authority having jurisdiction over the predecessor Servicer.
(d) The successor Servicer will not be responsible for delays attributable
to the predecessor Servicer's failure to deliver information, defects in the
information supplied by the predecessor Servicer or other circumstances beyond
the control of the successor Servicer.
(e) The successor Servicer will make arrangements with the predecessor
Servicer for the prompt and safe transfer of, and the predecessor Servicer shall
provide to the successor Servicer, all necessary servicing files and records
held by the predecessor Servicer with respect to the Receivables including the
Receivable File and a computer
42
tape in readable form as of the most recent Business Day containing all
information necessary to enable the successor Servicer to service the
Receivables. The predecessor Servicer shall be obligated to pay the reasonable
costs associated with the transfer of the servicing files and records to the
successor Servicer.
(f) The successor Servicer shall have no responsibility and shall not be
in default hereunder nor incur any liability for any failure, error, malfunction
or any delay in carrying out any of its duties if any such failure or delay
results from the successor Servicer acting in accordance with information
prepared or supplied by a person other than the successor Servicer of the
failure of any such person to prepare or provide such information. The successor
Servicer shall have no responsibility, shall not be in default and shall incur
no liability (i) for any act or failure to act by any third party, including the
predecessor Servicer, the Issuer, the Owner Trustee or the Indenture Trustee or
for any inaccuracy or omission in a notice or communication received by the
successor Servicer from any third party or (ii) which is due to or results from
the invalidity, unenforceability of any Receivable with applicable law or the
breach or the inaccuracy of any representation or warranty made with respect to
any Receivable.
Section 8.03. Appointment of Successor Servicer.
(a) On and after the time the Servicer receives a notice of termination
pursuant to Section 8.02 or upon the resignation of the Servicer pursuant to
Section 7.06, the Indenture Trustee shall be the successor in all respects to
the Servicer in its capacity as Servicer under this Agreement and shall be
subject to all the rights, responsibilities, restrictions, duties, liabilities
and termination provisions relating to the Servicer under this Agreement, except
as otherwise stated herein. The Depositor, the Owner Trustee, the Indenture
Trustee and such successor Servicer shall take such action, consistent with this
Agreement, as shall be necessary to effectuate any such succession. If a
successor Servicer is acting as Servicer hereunder, it shall be subject to
termination under Section 8.02 upon the occurrence of any Servicer Termination
Event after its appointment as successor Servicer.
(b) On and after the time the Servicer receives a notice of termination
pursuant to Section 8.02 or upon the resignation of the Servicer pursuant to
Section 7.06, or if the Indenture Trustee is legally unable or unwilling to act
as Servicer, the Controlling Class may exercise at any time its right to appoint
a successor to the Servicer, and shall have no liability to the Owner Trustee,
the Indenture Trustee, the Servicer, the Depositor, any Noteholders, any
Certificateholders or any other Person if it does so. Notwithstanding the above,
if the Indenture Trustee shall be legally unable or unwilling to act as
Servicer, the Indenture Trustee, the Owner Trustee or Noteholders evidencing 50%
of the Outstanding Amount of the Notes of the Controlling Class may petition a
court of competent jurisdiction to appoint any Eligible Servicer as the
successor to the Servicer. Pending appointment pursuant to the preceding
sentence, the Indenture Trustee shall act as successor Servicer unless it is
legally unable to do so, in which event the outgoing Servicer shall continue to
act as Servicer until a successor has been appointed and accepted such
appointment.
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(c) 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 Servicing Fee
and all the rights granted to the predecessor Servicer by the terms and
provisions of this Agreement.
Section 8.04. Notification to Securityholders. Upon any termination of, or
appointment of a successor to, the Servicer pursuant to this Article VIII, the
Owner Trustee shall give prompt written notice thereof to the
Certificateholders, and the Indenture Trustee shall give prompt written notice
thereof to the Noteholders and each Rating Agency.
Section 8.05. Waiver of Past Defaults. Noteholders evidencing not less
than a majority of the Outstanding Amount of the Notes of the Controlling Class
may, on behalf of all Securityholders, waive in writing any default by the
Servicer in the performance of its obligations hereunder and its consequences,
except a default in making any required deposits to or payments from any of the
Trust Accounts in accordance with this Agreement. Upon any such waiver of a past
default, such default shall cease to exist, and any Servicer Termination Event
arising therefrom shall be deemed to have been remedied for every purpose of
this Agreement. No such waiver shall extend to any subsequent or other default
or impair any right consequent thereto.
ARTICLE IX
TERMINATION
Section 9.01. Optional Purchase of All Receivables.
(a) On the Payment Date following the last day of a Collection Period as
of which the Pool Balance is equal to or less than 10% of the sum of the Initial
Pool Balance, the Servicer shall have the option to purchase the Receivables
from the Trust. To exercise such option, the Servicer shall deposit to the
Collection Account pursuant to Section 5.04 an amount equal to the Redemption
Price and shall succeed to all interests in and to the Receivables. The exercise
of such option shall effect a retirement, in whole but not in part, of all
outstanding Notes.
(b) As described in Article IX of the Trust Agreement, notice of any
termination of the Trust shall be given by the Servicer to the Owner Trustee and
the Indenture Trustee as soon as practicable after the Servicer has received
notice thereof.
(c) Following the satisfaction and discharge of the Indenture and the
payment in full of the principal of and interest on the Notes, the
Certificateholders will succeed to the rights of the Noteholders hereunder and
the Owner Trustee will succeed to the rights of, and assume the obligations to
make payments to Certificateholders of, the Indenture Trustee pursuant to this
Agreement.
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ARTICLE X
MISCELLANEOUS
Section 10.01. Amendment.
(a) This Agreement may be amended by the Depositor, the Servicer, the
Indenture Trustee and the Issuer, without the consent of any of the Noteholders
or the Certificateholders, to cure any ambiguity, to correct or supplement any
provisions in this Agreement or for the purpose of adding any provisions to or
changing in any manner or eliminating any of the provisions in this Agreement or
of modifying in any manner the rights of the Noteholders or the
Certificateholders; provided, however, that such action shall not, as evidenced
by an Opinion of Counsel delivered to the Owner Trustee and the Indenture
Trustee, adversely affect in any material respect the interests of any
Noteholder or Certificateholder; provided further, that such action shall not be
deemed to adversely affect in any material respect the interests of any
Noteholder and no Opinion of Counsel to that effect shall be required if the
person requesting the amendment obtains a letter from the Rating Agencies
stating that the amendment would not result in the downgrading or withdrawal of
any rating then assigned to the Notes.
(b) This Agreement may also be amended from time to time by the Depositor,
the Servicer and the Issuer, with the prior written consent of the Indenture
Trustee, Noteholders holding not less than a majority of the Note Balance and
the Holders (as defined in the Trust Agreement) of outstanding Certificates
evidencing not less than a majority of the aggregate Certificate Percentage
Interest, for the purpose of adding any provisions to or changing in any manner
or eliminating any of the provisions of this Agreement or of modifying in any
manner the rights of the Securityholders; provided, however, that no such
amendment shall (i) increase or reduce in any manner the amount of, or
accelerate or delay the timing of, collections of payments on Receivables or
distributions that shall be required to be made for the benefit of the
Securityholders or (ii) reduce the aforesaid percentage of the Outstanding
Amount of the Notes or the Notes of the Controlling Class and the Certificate
Percentage Interests, the Securityholders of which are required to consent to
any such amendment, without the consent of the Noteholders holding all
Outstanding Notes and Certificateholders holding all outstanding Certificates.
Promptly after the execution of any amendment or consent, the Administrator
shall furnish written notification of the substance of such amendment or consent
to each Securityholder, the Indenture Trustee and each Rating Agency.
It shall not be necessary for the consent of Securityholders pursuant to
this Section to approve the particular form of any proposed amendment or
consent, but it shall be sufficient if such consent shall approve the substance
thereof.
Prior to the execution of any amendment to this Agreement, the Owner
Trustee, on behalf of the Issuer, and the Indenture Trustee shall be entitled to
receive and rely upon an Opinion of Counsel stating that the execution of such
amendment is authorized
45
or permitted by this Agreement and the Opinion of Counsel referred to in Section
10.02(i). The Owner Trustee, on behalf of the Issuer, and the Indenture Trustee
may, but shall not be obligated to, enter into any such amendment that affects
the Owner Trustee's or the Indenture Trustee's, as applicable, own rights,
duties or immunities under this Agreement or otherwise.
Section 10.02. Protection of Title to Trust.
(a) The Servicer shall execute and file such financing statements and
cause to be executed and filed such continuation statements, all in such a
manner and in such places as may be required by law fully to preserve, maintain
and protect the interest of the Issuer and the Indenture Trustee in the
Receivables and the proceeds thereof. The Servicer shall deliver or cause to be
delivered to the Owner Trustee and the Indenture Trustee file-stamped copies of,
or filing receipts for, any document filed as provided above as soon as
available following such filing.
(b) Neither the Depositor nor the Servicer shall change its name or
structure in any manner that would, could or might make any financing statement
or continuation statement filed in accordance with paragraph (a) above seriously
misleading within the meaning of Section 9-507 of the UCC, unless it shall have
given the Owner Trustee and the Indenture Trustee at least five days' prior
written notice thereof and shall have promptly filed appropriate amendments to
all previously filed financing statements or continuation statements.
(c) Each of the Depositor and the Servicer shall have an obligation to
give the Owner Trustee and the Indenture Trustee at least five Business Days'
prior written notice of any change of its jurisdiction of organization (within
the meaning of the UCC) if, as a result of such change, the applicable
provisions of the UCC would require the filing of any amendment of any
previously filed financing or continuation statement or of any new financing
statement, and shall promptly file any such amendment or new financing
statement. The Servicer shall at all times maintain each office from which it
shall service Receivables, and its chief executive office, within the United
States of America.
(d) The Servicer shall maintain accounts and records as to each Receivable
accurately and in sufficient detail to permit (i) a person adequately trained in
the use of the Servicer's data system to know at any time the status of each
such Receivable, including payments and recoveries made and payments owing (and
the nature of each) and (ii) reconciliation between payments or recoveries on or
with respect to each such Receivable and the amounts from time to time deposited
in the Collection Account in respect of each such Receivable.
(e) The Servicer shall maintain its computer systems so that, from and
after the time of sale under this Agreement of the Receivables, the Servicer's
master computer records (including any backup archives) that refer to a
Receivable shall be coded to reflect that such Receivable is part of the
portfolio of Receivables that is the subject of this Agreement and is held by
the Indenture Trustee for BMW Vehicle Owner Trust 2004-A. Indication of such
Receivable's inclusion in the portfolio shall be deleted from
46
or modified on the Servicer's computer systems when, and only when, the related
Receivable shall have been paid in full or repurchased.
(f) If at any time the Depositor or the Servicer shall propose to sell,
grant a security interest in or otherwise transfer any interest in motor vehicle
receivables to any prospective purchaser, lender or other transferee, the
Servicer shall give to such prospective purchaser, lender or other transferee
computer tapes, records or printouts (including any restored from backup
archives) that, if they shall refer in any manner whatsoever to any Receivable,
shall indicate clearly that such Receivable has been sold and is owned by the
Issuer and has been pledged to the Indenture Trustee.
(g) The Servicer shall permit the Indenture Trustee and its agents upon
reasonable notice and at any time during normal business hours, which does not
unreasonably interfere with the Servicer's normal operations or customer or
employee relations, to inspect, audit and make copies of and abstracts from the
Servicer's records regarding any Receivable.
(h) Upon request, the Servicer shall furnish to the Owner Trustee or the
Indenture Trustee, within 15 Business Days, a list of all Receivables (by
contract number and name of Obligor) then held as part of the Trust, together
with a reconciliation of such list to the Schedule of Receivables and to each of
the Servicer's Certificates furnished prior to such request indicating removal
of Receivables from the Trust.
(i) The Servicer shall deliver to the Owner Trustee and the Indenture
Trustee promptly after the execution and delivery of this Agreement and each
amendment hereto, an Opinion of Counsel stating that, in the opinion of such
counsel, either (i) all financing statements and continuation statements have
been executed and filed that are necessary to fully preserve and protect the
interest of the Trust and the Indenture Trustee in the Receivables, and reciting
the details of such filings or referring to prior Opinions of Counsel in which
such details are given, or (ii) no such action shall be necessary to preserve
and protect such interest. Each Opinion of Counsel referred to in clause (i) or
(ii) of this paragraph shall specify any action necessary (as of the date of
such opinion) to be taken in the following year to preserve and protect such
interest.
Section 10.03. Notices. All demands, notices, communications and
instructions upon or to the Depositor, the Servicer, the Issuer, the Owner
Trustee, the Indenture Trustee or any Rating Agency under this Agreement shall
be in writing, personally delivered, faxed and followed by first class mail, or
mailed by certified mail, return receipt requested, and shall be deemed to have
been duly given upon receipt (a) in the case of the Depositor, 000 Xxxxxxxx
Xxxxx Xxxx, Xxxxxxxxx Xxxx, Xxx Xxxxxx 00000, Attention: Vice President Finance
and Risk; (b) in the case of the Servicer, Administrator and Custodian, to BMW
FS, 000 Xxxxxxxx Xxxxx Xxxx, Xxxxxxxxx Xxxx, Xxx Xxxxxx 00000, Attention: Vice
President Finance and Risk, (c) in the case of the Indenture Trustee, to
Citibank, N.A., 000 Xxxx Xxxxxx, 00xx Xxxxx, Xxx Xxxx, Xxx Xxxx 00000,
Attention: Corporate Trust - BMW Vehicle Owner Trust 2004-A; (d) in the case of
the Issuer or the Owner Trustee, at the Corporate Trust Administration
Department (as defined in the Trust Agreement); (e) in the case of Fitch, to Xxx
Xxxxx Xxxxxx Xxxxx, 00xx
00
xxxxx, Xxx Xxxx, XX 00000; (f) in the case of Moody's, to 00 Xxxxxx Xxxxxx, Xxx
Xxxx, Xxx Xxxx 00000, Attention: ABS Monitoring Department, and (g) in the case
of Standard & Poor's, to 00 Xxxxx Xxxxxx (00xx Xxxxx), Xxx Xxxx, Xxx Xxxx 00000,
Attention: Asset Backed Surveillance Department; or, as to each of the
foregoing, at such other address as shall be designated by written notice to the
other parties.
Section 10.04. Assignment by the Depositor or the Servicer. Notwithstanding
anything to the contrary contained herein, except as provided in Sections 6.04
and 7.03 herein and as provided in the provisions of this Agreement concerning
the resignation of the Servicer, this Agreement may not be assigned by the
Depositor or the Servicer.
Section 10.05. Limitations on Rights of Others. The provisions of this
Agreement are solely for the benefit of the Depositor, the Servicer, the Seller,
the Issuer, the Owner Trustee, the Certificateholders, the Indenture Trustee and
the Noteholders, and nothing in this Agreement, whether express or implied,
shall be construed to give to any other Person any legal or equitable right,
remedy or claim in the Trust Estate or under or in respect of this Agreement or
any covenants, conditions or provisions contained herein.
Section 10.06. Severability. Any provision of this Agreement that is
prohibited or unenforceable in any jurisdiction shall, as to such jurisdiction,
be ineffective to the extent of such prohibition or unenforceability without
invalidating the remaining provisions hereof, and any such prohibition or
unenforceability in any jurisdiction shall not invalidate or render
unenforceable such provision in any other jurisdiction.
Section 10.07. Counterparts. This Agreement may be executed by the parties
hereto in any number of counterparts, each of which when so executed and
delivered shall be an original, but all of which shall together constitute but
one and the same instrument.
Section 10.08. Headings. The headings of the various Articles and Sections
herein are for convenience of reference only and shall not define or limit any
of the terms or provisions hereof.
Section 10.09. Governing Law. THIS AGREEMENT SHALL BE CONSTRUED IN
ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK, WITHOUT REFERENCE TO ITS
CONFLICT OF LAW PROVISIONS (OTHER THAN SECTION 5-1401 OF THE GENERAL OBLIGATIONS
LAW), AND THE OBLIGATIONS, RIGHTS AND REMEDIES OF THE PARTIES HEREUNDER SHALL BE
DETERMINED IN ACCORDANCE WITH SUCH LAWS.
Section 10.10. Assignment by Issuer. The Depositor hereby acknowledges and
consents to any mortgage, pledge, assignment and grant of a security interest by
the Issuer to the Indenture Trustee pursuant to the Indenture for the benefit of
the Noteholders of all right, title and interest of the Issuer in, to and under
the Receivables or the assignment of any or all of the Issuer's rights and
obligations hereunder to the Indenture Trustee.
48
Section 10.11. Nonpetition Covenants. Notwithstanding any prior termination
of this Agreement, the parties hereto shall not, prior to the date that is one
year and one day after the termination of this Agreement with respect to the
Issuer or the Depositor, acquiesce, petition or otherwise invoke or cause the
Issuer or the Depositor to invoke the process of any court or government
authority for the purpose of commencing or sustaining a case against the Issuer
or the Depositor under any federal or state bankruptcy, insolvency or similar
law, or appointing a receiver, liquidator, assignee, trustee, custodian,
sequestrator or other similar official of the Issuer or the Depositor or any
substantial part of its property, or ordering the winding up or liquidation of
the affairs of the Issuer or the Depositor.
Section 10.12. Limitation of Liability of Owner Trustee and Indenture
Trustee.
(a) Notwithstanding anything contained herein to the contrary, this
Agreement has been countersigned by Wilmington Trust Company not in its
individual capacity but solely in its capacity as Owner Trustee of the Issuer
and in no event shall Wilmington Trust Company in its individual capacity or,
except as expressly provided in the Trust Agreement, as Owner Trustee of the
Issuer have any liability for the representations, warranties, covenants,
agreements or other obligations of the Issuer hereunder or in any of the
certificates, notices or agreements delivered pursuant hereto, as to all of
which recourse shall be had solely to the assets of the Issuer in accordance
with the priorities set forth herein. For all purposes of this Agreement, in the
performance of its duties or obligations hereunder or in the performance of any
duties or obligations of the Issuer hereunder, the Owner Trustee shall be
subject to, and entitled to the benefits of, the terms and provisions of
Articles VI, VII and VIII of the Trust Agreement.
(b) Notwithstanding anything contained herein to the contrary, this
Agreement has been accepted by Citibank, N.A., not in its individual capacity
but solely as Indenture Trustee, and in no event shall Citibank, N.A. have any
liability for the representations, warranties, covenants, agreements or other
obligations of the Issuer hereunder or in any of the certificates, notices or
agreements delivered pursuant hereto, as to all of which recourse shall be had
solely to the assets of the Issuer in accordance with the priorities set forth
herein.
Section 10.13. Depositor Payment Obligation. The Depositor shall be
responsible for the payment of all fees and expenses of the Trust, the Owner
Trustee and the Indenture Trustee paid by any of them in connection with any of
their obligations under the Basic Documents to obtain or maintain or monitor the
renewal of any required license of the Trust under the Pennsylvania Motor
Vehicle Sales Finance Act.
49
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed by their respective officers as of the day and year first above
written.
BMW VEHICLE OWNER TRUST 2004-A
By: WILMINGTON TRUST COMPANY,
not in its individual capacity
but solely as Owner Trustee
By: /s/ Xxxxx X. Xxxxxxxx
-----------------------------------
Name: Xxxxx X. Xxxxxxxx
Title: Financial Services Officer
BMW FS SECURITIES LLC
By: /s/ Xxxxxx Xxxxxx
-----------------------------------
Name: Xxxxxx Xxxxxx
Title: Treasurer
By: /s/ Xxxxxx Xxxxxxxx
-----------------------------------
Name: Xxxxxx Xxxxxxxx
Title: Vice President - Finance
BMW FINANCIAL SERVICES NA, LLC.
By: /s/ Xxxxxx Xxxxxx
-----------------------------------
Name: Xxxxxx Xxxxxx
Title: Treasurer
By: /s/ Xxxxxx Xxxxxxxx
-----------------------------------
Name: Xxxxxx Xxxxxxxx
Title: Vice President - Finance
CITIBANK, N.A., not in its individual
capacity but solely as Indenture Trustee
By: /s/ Xxxxxxx Xxxxxxxx
-----------------------------------
Name: Xxxxxxx Xxxxxxxx
Title: Vice President
50
SCHEDULE A
Schedule of Receivables
-----------------------
[To be Delivered to the Indenture Trustee at Closing]
SCHEDULE B
Location of Receivable Files
----------------------------
BMW Financial Services NA, LLC
0000 Xxxx Xxxxxx Xxxxxx
Xxxxxx, Xxxx 00000
SCHEDULE C
Yield Supplement Overcollateralization Amount
[To be provided separately]
EXHIBIT A
Representations and Warranties of the Seller
--------------------------------------------
Under Section 3.02(a) and 3.02(b) of the Receivables Purchase Agreement
-----------------------------------------------------------------------
A-1
EXHIBIT B
Form of Payment Date Statement to Securityholders
-------------------------------------------------
BMW Financial Services NA, LLC
BMW Vehicle Owner Trust 2004-A Payment Date Statement to Securityholders
Principal Distribution Amount
--------------------------------------------------------------------------------
Class A-1 Notes: ($ per $1,000 original principal balance)
Class A-2 Notes: ($ per $1,000 original principal balance)
Class A-3 Notes: ($ per $1,000 original principal balance)
Class A-4 Notes: ($ per $1,000 original principal balance)
Class B Notes: ($ per $1,000 original principal balance)
Available Interest
Class A-1 Notes: ($ per $1,000 original principal balance)
Class A-2 Notes: ($ per $1,000 original principal balance)
Class A-3 Notes: ($ per $1,000 original principal balance)
Class A-4 Notes: ($ per $1,000 original principal balance)
Class B Notes ($ per $1,000 original principal balance)
Note Balance:
Class A-1 Notes:
Class A-2 Notes:
Class A-3 Notes:
Class A-4 Notes:
Class B Notes:
Note Pool Factor:
Class A-1 Notes:
Class A-2 Notes:
Class A-3 Notes:
Class A-4 Notes:
Class B Notes:
Servicing Fee
Owner Trustee Fee
Indenture Trustee Fee
Interest Carryover Shortfall
Realized Losses
Pool Balance
B-1
Reserve Account balance
Reserve Account Deposits and Withdrawals
Reserve Account Withdrawal Shortfall
Liquidated Receivables or Purchased Receivables
Principal Balance of Receivables and number of Receivables that were delinquent:
30 to 59 days
60 to 89 days
90 days or more
Available Amounts Shortfall
Purchase Amounts
Principal Balance of Receivables and number of Receivables that were repossessed
Certificate Distribution Account Amount
Principal Balance and Number of deferments granted by Servicer
Yield Supplement Overcollateralization Amount
B-2
EXHIBIT C
Form of Servicer's Certificate
------------------------------
[Available from Servicer]
C-1
EXHIBIT D
Form Of Dealer Agreement
------------------------
[Available from Servicer]
D-1
TABLE OF CONTENTS
Page
ARTICLE I DEFINITIONS.....................................................1
Section 1.01. Definitions................................................1
Section 1.02. Other Definitional Provisions.............................15
ARTICLE II CONVEYANCE OF RECEIVABLES......................................16
Section 2.01. Conveyance of Receivables.................................16
ARTICLE III THE RECEIVABLES................................................17
Section 3.01. Representations and Warranties of the Seller..............17
Section 3.02. Representations and Warranties of the Depositor...........18
Section 3.03. Repurchase Upon Breach....................................18
Section 3.04. Custody of Receivable Files...............................18
Section 3.05. Duties of Servicer as Custodian...........................19
Section 3.06. Instructions; Authority to Act............................19
Section 3.07. Custodian's Indemnification...............................19
Section 3.08. Effective Period and Termination..........................20
ARTICLE IV ADMINISTRATION AND SERVICING OF RECEIVABLES....................20
Section 4.01. Duties of Servicer........................................20
Section 4.02. Collection of Receivable Payments; Modifications of
Receivables...............................................21
Section 4.03. Realization upon Receivables..............................22
Section 4.04. Physical Damage Insurance.................................22
Section 4.05. Maintenance of Security Interests in Financed Vehicles....22
Section 4.06. Covenants of Servicer.....................................23
Section 4.07. Purchase of Receivables Upon Breach.......................23
Section 4.08. Servicing Fee.............................................24
Section 4.09. Servicer's Certificate....................................24
Section 4.10. Annual Statement as to Compliance; Notice of Servicer
Termination Event.........................................24
Section 4.11. Annual Independent Accountants' Report....................25
Section 4.12. Access to Certain Documentation and Information
Regarding Receivables.....................................25
Section 4.13. Term of Servicer..........................................25
i
TABLE OF CONTENTS
(continued)
Page
Section 4.14. Access to Information Regarding Trust and Basic
Documents.................................................25
ARTICLE V DISTRIBUTIONS; STATEMENTS TO SECURITYHOLDERS...................25
Section 5.01. Establishment of Accounts.................................25
Section 5.02. Collections...............................................28
Section 5.03. Application of Collections................................28
Section 5.04. Purchase Amounts..........................................28
Section 5.05. Reserved..................................................28
Section 5.06. Distributions.............................................29
Section 5.07. Reserve Account...........................................30
Section 5.08. Statements to Securityholders.............................31
Section 5.09. Reserved..................................................32
Section 5.10. Reserved..................................................32
Section 5.11. Advances by the Servicer..................................32
ARTICLE VI THE DEPOSITOR..................................................33
Section 6.01. Representations, Warranties and Covenants of Depositor....33
Section 6.02. Company Existence.........................................34
Section 6.03. Liability of Depositor....................................35
Section 6.04. Merger or Consolidation of, or Assumption of the
Obligations of, Depositor.................................35
Section 6.05. Limitation on Liability of Depositor and Others...........35
Section 6.06. Depositor May Own Securities..............................35
Section 6.07. Depositor to Provide Copies of Relevant Securities
Filings...................................................36
Section 6.08. Amendment of Depositor's Organizational Documents.........36
ARTICLE VII THE SERVICER...................................................36
Section 7.01. Representations, Warranties and Covenants of Servicer.....36
Section 7.02. Indemnities of Servicer...................................37
Section 7.03. Merger or Consolidation of, or Assumption of the
Obligations of, Servicer..................................38
Section 7.04. Limitation on Liability of Servicer and Others............39
ii
TABLE OF CONTENTS
(continued)
Page
Section 7.05. Appointment of Subservicer................................39
Section 7.06. Servicer Not to Resign....................................39
Section 7.07. Servicer May Own Securities...............................40
ARTICLE VIII DEFAULT........................................................40
Section 8.01. Servicer Termination Events...............................40
Section 8.02. Consequences of a Servicer Termination Event..............41
Section 8.03. Appointment of Successor Servicer.........................42
Section 8.04. Notification to Securityholders...........................43
Section 8.05. Waiver of Past Defaults...................................43
ARTICLE IX TERMINATION....................................................43
Section 9.01. Optional Purchase of All Receivables......................43
ARTICLE X MISCELLANEOUS..................................................44
Section 10.01. Amendment.................................................44
Section 10.02. Protection of Title to Trust..............................45
Section 10.03. Notices...................................................46
Section 10.04. Assignment by the Depositor or the Servicer...............47
Section 10.05. Limitations on Rights of Others...........................47
Section 10.06. Severability..............................................47
Section 10.07. Counterparts..............................................47
Section 10.08. Headings..................................................47
Section 10.09. Governing Law.............................................47
Section 10.10. Assignment by Issuer......................................47
Section 10.11. Nonpetition Covenants.....................................48
Section 10.12. Limitation of Liability of Owner Trustee and Indenture
Trustee...................................................48
Section 10.13. Depositor Payment Obligation..............................48
Schedule A Schedule of Receivables
Schedule B Location of Receivable Files
Schedule C Yield Supplement Overcollateralization Amount
iii
TABLE OF CONTENTS
(continued)
Page
Exhibit A Representations and Warranties of the Seller under Section 3.02 of
the Receivables Purchase Agreement
Exhibit B Form of Payment Date Statement to Securityholders
Exhibit C Form of Servicer's Certificate
Exhibit D Form of Dealer Agreement
iv
