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POOLING AND SERVICING AGREEMENT
AMONG
DEALER AUTO RECEIVABLES CORP.
as Depositor
PREMIER AUTO FINANCE, INC.
as Servicer
and
[______________________],
not in its individual capacity but solely as Trustee of
DEALER AUTO RECEIVABLES GRANTOR TRUST 2000-1
Dated as of _____________, 2000
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TABLE OF CONTENTS
PAGE
ARTICLE ONE DEFINITIONS. . . . . . . . . . . . . . . . . . . . . . . . . . . 1
SECTION 1.01. GENERAL . . . . . . . . . . . . . . . . . . . . . . . . . . 1
SECTION 1.02. SPECIFIC TERMS. . . . . . . . . . . . . . . . . . . . . . . 1
ARTICLE TWO TRANSFER OF CONTRACTS. . . . . . . . . . . . . . . . . . . . . .14
SECTION 2.01. CLOSING . . . . . . . . . . . . . . . . . . . . . . . . . .14
SECTION 2.02. CONDITIONS TO THE CLOSING . . . . . . . . . . . . . . . . .14
SECTION 2.03. ACCEPTANCE BY TRUSTEE . . . . . . . . . . . . . . . . . . .16
SECTION 2.04. TAX TREATMENT . . . . . . . . . . . . . . . . . . . . . . .16
ARTICLE THREE REPRESENTATIONS AND WARRANTIES . . . . . . . . . . . . . . . .16
SECTION 3.01. REPRESENTATIONS AND WARRANTIES REGARDING THE DEPOSITOR. . .16
SECTION 3.02. REPRESENTATIONS AND WARRANTIES REGARDING THE SERVICER . . .18
ARTICLE FOUR PERFECTION OF TRANSFER AND PROTECTION OF SECURITY
INTERESTS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .19
SECTION 4.01. CUSTODY OF CONTRACTS. . . . . . . . . . . . . . . . . . . .19
SECTION 4.02. FILING. . . . . . . . . . . . . . . . . . . . . . . . . . .21
SECTION 4.03. NAME CHANGE OR RELOCATION . . . . . . . . . . . . . . . . .21
SECTION 4.04. CHIEF EXECUTIVE OFFICE. . . . . . . . . . . . . . . . . . .22
SECTION 4.05. COSTS AND EXPENSES. . . . . . . . . . . . . . . . . . . . .22
ARTICLE FIVE SERVICING OF CONTRACTS. . . . . . . . . . . . . . . . . . . . .22
SECTION 5.01. RESPONSIBILITY FOR CONTRACT ADMINISTRATION. . . . . . . . .22
SECTION 5.02. STANDARD OF CARE. . . . . . . . . . . . . . . . . . . . . .22
SECTION 5.03. RECORDS . . . . . . . . . . . . . . . . . . . . . . . . . .23
SECTION 5.04. INSPECTION. . . . . . . . . . . . . . . . . . . . . . . . .23
SECTION 5.05. TRUST ACCOUNTS. . . . . . . . . . . . . . . . . . . . . . .23
SECTION 5.06. ENFORCEMENT . . . . . . . . . . . . . . . . . . . . . . . .25
SECTION 5.07. TRUSTEE TO COOPERATE. . . . . . . . . . . . . . . . . . . .27
SECTION 5.08. COSTS AND EXPENSES. . . . . . . . . . . . . . . . . . . . .27
SECTION 5.09. MAINTENANCE OF SECURITY INTERESTS IN FINANCED VEHICLES. . .27
SECTION 5.10. MAINTENANCE OF INSURANCE. . . . . . . . . . . . . . . . . .27
ARTICLE SIX THE DEPOSITOR. . . . . . . . . . . . . . . . . . . . . . . . . .28
SECTION 6.01. COVENANTS OF THE DEPOSITOR. . . . . . . . . . . . . . . . .28
SECTION 6.02. LIABILITY OF DEPOSITOR; INDEMNITIES . . . . . . . . . . . .29
SECTION 6.03. MERGER OR CONSOLIDATION OF, OR ASSUMPTION OF THE
OBLIGATIONS OF, DEPOSITOR; CERTAIN LIMITATIONS. . . . . . .29
SECTION 6.04. LIMITATION ON LIABILITY OF DEPOSITOR AND OTHERS . . . . . .30
SECTION 6.05. DEPOSITOR NOT TO RESIGN . . . . . . . . . . . . . . . . . .30
SECTION 6.06. DEPOSITOR MAY OWN CERTIFICATES. . . . . . . . . . . . . . .30
ARTICLE SEVEN REPORTS. . . . . . . . . . . . . . . . . . . . . . . . . . . .31
SECTION 7.01. MONTHLY REPORTS . . . . . . . . . . . . . . . . . . . . . .31
SECTION 7.02. OFFICER'S CERTIFICATE . . . . . . . . . . . . . . . . . . .31
SECTION 7.03. OTHER DATA. . . . . . . . . . . . . . . . . . . . . . . . .31
SECTION 7.04. ANNUAL REPORT OF ACCOUNTANTS. . . . . . . . . . . . . . . .31
SECTION 7.05. ANNUAL STATEMENT OF COMPLIANCE FROM SERVICER. . . . . . . .32
SECTION 7.06. MONTHLY STATEMENTS TO CERTIFICATEHOLDERS. . . . . . . . . .32
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ARTICLE EIGHT SERVICER DEFAULT; SERVICE TRANSFER . . . . . . . . . . . . . .33
SECTION 8.01. SERVICER DEFAULT. . . . . . . . . . . . . . . . . . . . . .33
SECTION 8.02. WAIVER OF SERVICER DEFAULT. . . . . . . . . . . . . . . . .34
SECTION 8.03. SERVICE TRANSFER. . . . . . . . . . . . . . . . . . . . . .34
SECTION 8.04. SUCCESSOR SERVICER TO ACT; APPOINTMENT OF SUCCESSOR
SERVICER. . . . . . . . . . . . . . . . . . . . . . . . . .35
SECTION 8.05. NOTIFICATION TO CERTIFICATEHOLDERS. . . . . . . . . . . . .36
SECTION 8.06. EFFECT OF TRANSFER. . . . . . . . . . . . . . . . . . . . .36
SECTION 8.07. DATABASE FILE . . . . . . . . . . . . . . . . . . . . . . .36
SECTION 8.08. SUCCESSOR SERVICER INDEMNIFICATION. . . . . . . . . . . . .36
SECTION 8.09. RESPONSIBILITIES OF THE SUCCESSOR SERVICER. . . . . . . . .36
SECTION 8.10. LIMITATION OF LIABILITY OF SERVICER.. . . . . . . . . . . .37
SECTION 8.11. MERGER OR CONSOLIDATION OF SERVICER . . . . . . . . . . . .37
SECTION 8.12. SERVICER NOT TO RESIGN. . . . . . . . . . . . . . . . . . .38
SECTION 8.13. APPOINTMENT OF SUBSERVICER. . . . . . . . . . . . . . . . .38
ARTICLE NINE DISTRIBUTIONS, RESERVE FUND AND . . . . . . . . . . . . . . . .38
YIELD SUPPLEMENT ACCOUNT . . . . . . . . . . . . . . . . . . . . . . . . . .38
SECTION 9.01. Monthly Distributions . . . . . . . . . . . . . . . . . . .38
SECTION 9.02. FEES. . . . . . . . . . . . . . . . . . . . . . . . . . . .39
SECTION 9.03. ADVANCES. . . . . . . . . . . . . . . . . . . . . . . . . .39
SECTION 9.04. DISTRIBUTIONS . . . . . . . . . . . . . . . . . . . . . . .39
SECTION 9.05. WITHDRAWAL FROM RESERVE FUND TO COVER A SHORTFALL . . . . .40
SECTION 9.06. REPURCHASES OF CONTRACTS FOR BREACH OF REPRESENTATIONS AND
WARRANTIES. . . . . . . . . . . . . . . . . . . . . . . . .41
SECTION 9.07. SELLER'S REPURCHASE OPTION. . . . . . . . . . . . . . . . .41
SECTION 9.08. REASSIGNMENT OF REPURCHASED CONTRACTS . . . . . . . . . . .41
SECTION 9.09. YIELD SUPPLEMENT ACCOUNT. . . . . . . . . . . . . . . . . .42
ARTICLE TEN THE CERTIFICATES . . . . . . . . . . . . . . . . . . . . . . . .42
SECTION 10.01. THE CERTIFICATES . . . . . . . . . . . . . . . . . . . . .42
SECTION 10.02. EXECUTION, AUTHENTICATION AND DELIVER OF CERTIFICATES. . .42
SECTION 10.03. REGISTRATION OF TRANSFER AND EXCHANGE OF CERTIFICATES. . .42
SECTION 10.04. NO CHARGE; DISPOSITION OF VOID CERTIFICATES. . . . . . . .43
SECTION 10.05. MUTILATED, DESTROYED, LOST OR STOLEN CERTIFICATEs. . . . .43
SECTION 10.06. PERSONS DEEMED OWNERS. . . . . . . . . . . . . . . . . . .43
SECTION 10.07. ACCESS TO LIST OF CERTIFICATEHOLDERS' NAMES
AND ADDRESSES. . . . . . . . . . . . . . . . . . . . . . .43
SECTION 10.08. AUTHENTICATING AGENTS. . . . . . . . . . . . . . . . . . .44
SECTION 10.09. BOOK-ENTRY CERTIFICATES. . . . . . . . . . . . . . . . . .44
SECTION 10.10. NOTICES TO CLEARING AGENCY . . . . . . . . . . . . . . . .45
SECTION 10.11. DEFINITIVE CERTIFICATES. . . . . . . . . . . . . . . . . .45
ARTICLE ELEVEN INDEMNITIES . . . . . . . . . . . . . . . . . . . . . . . . .46
SECTION 11.01. SERVICER INDEMNIFICATION . . . . . . . . . . . . . . . . .46
SECTION 11.02. LIABILITIES TO OBLIGORS. . . . . . . . . . . . . . . . . .46
SECTION 11.03. TAX INDEMNIFICATION. . . . . . . . . . . . . . . . . . . .46
SECTION 11.04. SERVICER'S INDEMNITIES . . . . . . . . . . . . . . . . . .46
SECTION 11.05. OPERATION OF INDEMNITIES . . . . . . . . . . . . . . . . .47
ARTICLE TWELVE THE TRUSTEE . . . . . . . . . . . . . . . . . . . . . . . . .47
SECTION 12.01. DUTIES OF TRUSTEE. . . . . . . . . . . . . . . . . . . . .47
SECTION 12.02. CERTAIN MATTERS AFFECTING THE TRUSTEE. . . . . . . . . . .49
SECTION 12.03. TRUSTEE NOT LIABLE FOR CERTIFICATES OR CONTRACTS . . . . .50
SECTION 12.04. TRUSTEE MAY OWN CERTIFICATES . . . . . . . . . . . . . . .50
SECTION 12.05. LIMITATION ON RIGHTS OF CERTIFICATEHOLDERS . . . . . . . .50
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SECTION 12.06. THE SERVICER TO PAY TRUSTEE'S EXPENSES . . . . . . . . . .51
SECTION 12.07. ELIGIBILITY REQUIREMENTS FOR TRUSTEE . . . . . . . . . . .51
SECTION 12.08. RESIGNATION OR REMOVAL OF TRUSTEE. . . . . . . . . . . . .51
SECTION 12.09. SUCCESSOR TRUSTEE. . . . . . . . . . . . . . . . . . . . .52
SECTION 12.10. MERGER OR CONSOLIDATION OF TRUSTEE . . . . . . . . . . . .52
SECTION 12.11. TAX RETURNS. . . . . . . . . . . . . . . . . . . . . . . .53
SECTION 12.12. OBLIGOR CLAIMS . . . . . . . . . . . . . . . . . . . . . .53
SECTION 12.13. APPOINTMENT OF CO-TRUSTEE OR SEPARATE TRUSTEE. . . . . . .53
SECTION 12.14. REPRESENTATIONS AND WARRANTIES OF TRUSTEE. . . . . . . . .54
SECTION 12.15. PROTECTION OF TITLE. . . . . . . . . . . . . . . . . . . .56
ARTICLE THIRTEEN MISCELLANEOUS . . . . . . . . . . . . . . . . . . . . . . .57
SECTION 13.01. SERVICER NOT TO RESIGN . . . . . . . . . . . . . . . . . .57
SECTION 13.02. PROHIBITED TRANSACTIONS WITH RESPECT TO THE ISSUER . . . .57
SECTION 13.03. MAINTENANCE OF OFFICE OR AGENCY. . . . . . . . . . . . . .58
SECTION 13.04. TERMINATION. . . . . . . . . . . . . . . . . . . . . . . .58
SECTION 13.05. ACTS OF CERTIFICATEHOLDERS . . . . . . . . . . . . . . . .58
SECTION 13.06. CALCULATIONS . . . . . . . . . . . . . . . . . . . . . . .59
SECTION 13.07. AMENDMENT. . . . . . . . . . . . . . . . . . . . . . . . .59
SECTION 13.08. NOTICES. . . . . . . . . . . . . . . . . . . . . . . . . .60
SECTION 13.09. MERGER AND INTEGRATION . . . . . . . . . . . . . . . . . .61
SECTION 13.10. HEADINGS . . . . . . . . . . . . . . . . . . . . . . . . .61
SECTION 13.11. GOVERNING LAW. . . . . . . . . . . . . . . . . . . . . . .61
SECTION 13.12. NO INSOLVENCY PETITION . . . . . . . . . . . . . . . . . .61
SECTION 13.13. THIRD PARTY BENEFICIARY. . . . . . . . . . . . . . . . . .61
SECTION 13.14. NO ADDITIONAL SECURITIES . . . . . . . . . . . . . . . . .61
SECTION 13.15. NO ADDITIONAL INDEBTEDNESS BY THE DEPOSITOR. . . . . . . .61
SECTION 13.16. CERTIFICATES NONASSESSABLE AND FULLY PAID. . . . . . . . .62
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EXHIBITS
Exhibit A-l Form of Certificate for Dealer Auto Receivables Grantor Trust
2000-1 Class A Certificates
Exhibit A-2 Form of Certificate for Dealer Auto Receivables Grantor Trust
2000-1 Class B Certificates
Exhibit B Form of Assignment
Exhibit C-1 Form of Closing Certificate of Depositor
Exhibit C-2 Form of Closing Certificate of Servicer/Seller
Exhibit D-1 Form of Opinion of Counsel for Depositor regarding general
corporate matters (including perfection opinion)
Exhibit D-2 Form of Opinion of Counsel for Depositor regarding the "true
sale" nature of the transaction
Exhibit D-3 Form of Opinion of Counsel for Depositor regarding
non-consolidation
Exhibit E Form of Reserve Account Agreement
Exhibit F Form of Certificate of Servicing Officer
Exhibit G Form of Certificate Regarding Repurchased Contracts
Exhibit H List of Contracts
Exhibit I Form of Monthly Report to Certificateholders
Exhibit J Seller's Representations and Warranties
Exhibit K Form of Yield Supplement Agreement
Exhibit L Lockbox Bank and Lockbox Account
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POOLING AND SERVICING AGREEMENT, dated as of __________, 2000, among Dealer
Auto Receivables Corp., a Delaware corporation (the "DEPOSITOR"), Premier Auto
Finance, Inc. a Delaware corporation, as Servicer (in such capacity, the
"SERVICER"), and [___________________________________] not in its individual
capacity but solely as Trustee (in such capacity, the "TRUSTEE") of Dealer Auto
Receivables Grantor Trust 2000-1 (the "ISSUER").
WHEREAS the Depositor is willing to sell, transfer and assign a pool of
installment sale contracts relating to new or used automobiles and light-duty
trucks (collectively, the "CONTRACTS") originated or purchased by Premier Auto
Finance, L.P. and subsequently sold by Premier Auto Finance, L.P. to the
Depositor;
WHEREAS, the Servicer is willing to service the contracts pursuant to the
terms hereof;
NOW, THEREFORE, in consideration of the premises and mutual covenants
herein contained, the parties hereto agree as follows:
ARTICLE ONE
DEFINITIONS
SECTION 1.01. GENERAL. For the purpose of this Agreement, except as
otherwise expressly provided or unless the context otherwise requires, the terms
defined in this Article include the plural as well as the singular, the words
"HEREIN," "HEREOF" and "HEREUNDER" and other words of similar import refer to
this Agreement as a whole and not to any particular article, section or other
subdivision, and Section references refer to Sections of this Agreement.
SECTION 1.02. SPECIFIC TERMS.
"ADVANCE" means, with respect to any Distribution Date, the amounts, if
any, deposited by the Servicer in the Collection Account for such Distribution
Date pursuant to SECTION 9.03.
"AFFILIATE" of any specified Person means any other Person controlling or
controlled by, or under common control with, such specified Person. For the
purposes of this definition, "CONTROL" when used with respect to any specified
Person means the power to direct the management and policies of such Person,
directly or indirectly, whether through the ownership of voting securities, by
contract or otherwise; and the terms "CONTROLLING" or "CONTROLLED" have meanings
correlative to the foregoing.
"AGREEMENT" means this Pooling and Servicing Agreement, as amended,
supplemented or otherwise modified from time to time in accordance with the
terms hereof.
"APPLICANTS" has the meaning assigned in SECTION 10.07.
"AUTHENTICATING AGENT" means any authenticating agent appointed pursuant to
SECTION 10.08.
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"AVAILABLE AMOUNTS" means, with respect to any Distribution Date, the sum
of the Available Interest and the Available Principal for such Distribution
Date.
"AVAILABLE INTEREST" means, with respect to any Distribution Date, the
total (without duplication) of the following amounts received by the Servicer on
or in respect of the Contracts during the related Due Period: (i) all payments
received in respect of such Contract allocated to the payment of interest,
including the interest component of all Net Liquidation Proceeds, (ii) the
interest component of the aggregate of the Repurchase Prices for Contracts
repurchased by the Depositor pursuant to SECTION 9.06 as of the last day of the
related Due Period, (iii) the interest component of the aggregate of the
Repurchase Prices for Contracts purchased by the Servicer pursuant to SECTION
5.06(f) as of the last day of the related Due Period, (iv) all Advances made by
the Servicer pursuant to SECTION 9.03 in respect of delinquent interest payment
on the related Determination Date, (v) the interest component of the amount paid
by the Seller in connection with an optional repurchase of the Contracts
pursuant to SECTION 9.07, (vii) all amounts received in respect of interest,
dividends, gains, income and earnings on investment of funds in the Trust
Accounts as contemplated in the last sentence of SECTION 5.05(d) and (vii) the
Yield Supplement Deposit received by the Trustee.
"AVAILABLE PRINCIPAL" means, with respect to any Distribution Date, the
total (without duplication) of the following amounts received by the Servicer on
or in respect of the Contracts during the related Due Period: (i) all payments
received in respect of such Contract allocated to the payment of principal,
including the principal component of all Net Liquidation Proceeds, (ii) the
principal component of the aggregate of the Repurchase Prices for Contracts
repurchased by the Depositor pursuant to SECTION 9.06 as of the last day of the
related Due Period, (iii) the principal component of the aggregate of the
Repurchase Prices for Contracts purchased by the Servicer pursuant to SECTION
5.06(f) as of the last day of the related Due Period and (iv) the principal
component of the amount paid by the Seller in connection with an optional
repurchase of the Contracts pursuant to SECTION 9.07.
"BUSINESS DAY" means any day other than (a) a Saturday or a Sunday, or (b)
another day on which banking institutions in the city of Chicago, Illinois,
Wilmington, Delaware or New York, New York are authorized or obligated by law,
executive order, or governmental decree to be closed.
"CERTIFICATEHOLDER" or "HOLDER" means the person in whose name either a
Class A Certificate or a Class B Certificate is registered on the Certificate
Register, except that, solely for the purposes of giving any consent, waiver,
request or demand pursuant to this Agreement, any Certificate registered in the
name of the Depositor or any Affiliate of the Depositor shall be deemed not to
be outstanding and the Fractional Interest evidenced thereby shall not be taken
into account in determining whether the requisite Fractional Interest necessary
to effect any such consent, request, waiver or demand has been obtained;
provided, however, that in determining whether the Trustee shall be protected in
relying upon any such consent, waiver, request or demand only Certificates which
the Trustee knows to be so owned shall be so disregarded.
"CERTIFICATE REGISTER" means the register maintained pursuant to SECTION
10.03(a).
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"CERTIFICATE REGISTRAR" or "REGISTRAR" means the registrar appointed
pursuant to SECTION 10.03.
"CERTIFICATES" means the Class A Certificates and the Class B Certificates.
"CLASS" means all Certificates whose form is identical except for variation
in denomination, principal amount or Holder.
"CLASS A CERTIFICATE" means a Certificate evidencing a Fractional Interest
executed and authenticated by the Trustee substantially in the form of EXHIBIT
A-1.
"CLASS A CERTIFICATE BALANCE" shall initially equal the Class A Initial
Certificate Balance and, on any date thereafter, shall equal the Class A
Certificate Balance, reduced by all amounts previously distributed to Class A
Certificateholders and allocable to principal.
"CLASS A CERTIFICATE FACTOR" means, at any time, the percentage (carried
out to seven decimal places) derived from a fraction, the numerator of which is
the Class A Certificate Balance at such time and the denominator of which is the
Class A Initial Certificate Balance.
"CLASS A DISTRIBUTABLE AMOUNT" means, with respect to any Distribution
Date, the sum of the Class A Principal Distributable Amount and the Class A
Interest Distributable Amount.
"CLASS A INITIAL CERTIFICATE BALANCE" means $__________, which is equal to
the aggregate Principal Balance of the Contracts as of the Cutoff Date
multiplied by the Class A Percentage, and with respect to a particular
Certificate means the amount set forth on the face thereof.
"CLASS A INTEREST CARRYOVER SHORTFALL" means, (a) for the initial
Distribution Date, zero, and (b) with respect to any other Distribution Date,
the excess of the Class A Interest Distributable Amount with respect to the
preceding Distribution Date over the amount of interest that was actually
distributed to Class A Certificateholders on such preceding Distribution Date,
plus 30 days of interest on the amount specified herein, to the extent permitted
by law, at the Class A Pass-Through Rate.
"CLASS A INTEREST DISTRIBUTABLE AMOUNT" means, with respect to any
Distribution Date (other than the first Distribution Date), the sum of (i) the
product of (A) one-twelfth (or, with respect to the first Distribution Date, a
fraction, the numerator of which equals the number of days from and including
the Closing Date to but excluding the first Distribution Date and the
denominator of which equals 360) of the Class A Pass-Through Rate and (B) the
Class A Certificate Balance as of the immediately preceding Distribution Date
(after giving effect to distributions of principal made on such immediately
preceding Distribution Date) or, in the case of the first Distribution Date, the
Class A Initial Certificate Balance plus (ii) the Class A Interest Carryover
Shortfall with respect to such Distribution Date.
"CLASS A PASS-THROUGH RATE" means [ ]% per annum computed on the basis of a
360-day year consisting of twelve 30-day months.
"CLASS A PERCENTAGE" means __%.
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"CLASS A POOL FACTOR" means, at any time, the percentage (carried out to
seven decimal places) derived from a fraction, the numerator of which is the
Class A Certificate Balance at such time and the denominator of which is the
aggregate Principal Balance of the Contracts as of the Cutoff Date.
"CLASS A PRINCIPAL CARRYOVER SHORTFALL" means, with respect to any
Distribution Date, the excess of (i) the Class A Principal Distributable Amount
for the preceding Distribution Date over (ii) the amount of principal that was
actually distributed to Class A Certificateholders on such preceding
Distribution Date.
"CLASS A PRINCIPAL DISTRIBUTABLE AMOUNT" means, with respect to any
Distribution Date, the sum of (i) the product of (a) the Class A Percentage and
(b) the Monthly Principal with respect to such Distribution Date plus (ii) the
Class A Principal Carryover Shortfall with respect to such Distribution Date;
PROVIDED, HOWEVER, that the Class A Principal Distributable Amount on the Final
Scheduled Distribution Date shall not be less than the amount that is necessary
(after giving effect to other amounts to be deposited in the Collection Account
on such Distribution Date and allowable to principal) to reduce the outstanding
principal amount of the Class A Certificates to zero..
"CLASS B CERTIFICATE" means a Certificate evidencing a Fractional Interest
executed and authenticated by the Trustee substantially in the form of EXHIBIT
A-2.
"CLASS B CERTIFICATE BALANCE" shall initially equal the Class B Initial
Certificate Balance and, on any date thereafter, shall equal the Class B
Certificate Balance, reduced by all amounts previously distributed to Class B
Certificateholders and allocable to principal.
"CLASS B CERTIFICATE FACTOR" means, at any time, the percentage (carried
out to seven decimal places) derived from a fraction, the numerator of which is
the Class B Certificate Balance at such time and the denominator of which is the
Class B Initial Certificate Balance.
"CLASS B DISTRIBUTABLE AMOUNT" means, with respect to any Distribution
Date, the sum of the Class B Principal Distributable Amount and the Class B
Interest Distributable Amount.
"CLASS B INITIAL CERTIFICATE BALANCE" means $_________, which is equal to
the aggregate Principal Balance of the Contracts as of the Cutoff Date
multiplied by the Class B Percentage, and with respect to a particular
Certificate means the amount set forth on the face thereof.
"CLASS B INTEREST CARRYOVER SHORTFALL" means, (a) for the initial
Distribution Date, zero, and (b) with respect to any Distribution Date, the
excess of the Class B Interest Distributable Amount with respect to the
preceding Distribution Date over the amount of interest that was actually
distributed to Class B Certificateholders on such preceding Distribution Date,
plus 30 days of interest on the amount specified herein, to the extent permitted
by law, at the Class B Pass-Through Rate.
"CLASS B INTEREST DISTRIBUTABLE AMOUNT" means, with respect to any
Distribution Date (other than the first Distribution Date), the sum of (i) the
product of (A) one-twelfth (or, with respect to the first Distribution Date, a
fraction the numerator of which equals the number of days from and including the
Closing Date to but excluding the first Distribution Date and the
- 4 -
denominator of which equals 360) of the Class B Pass-Through Rate and (B) the
Class B Certificate Balance as of the immediately preceding Distribution Date
(after giving effect to distributions of principal made on such immediately
preceding Distribution Date) or, in the case of the first Distribution Date, the
Class B Initial Certificate Balance plus (ii) the Class B Interest Carryover
Shortfall for such Distribution Date.
"CLASS B PASS-THROUGH RATE" means [ ]% per annum computed on the basis of a
360-day year consisting of twelve 30-day months.
"CLASS B PERCENTAGE" means ____%.
"CLASS B POOL FACTOR" means, at any time, the percentage (carried out to
seven decimal places) derived from a fraction, the numerator of which is the
Class B Certificate Balance at such time and the denominator of which is the
aggregate Principal Balance of the Contracts as of the Cutoff Date.
"CLASS B PRINCIPAL CARRYOVER SHORTFALL" means, with respect to any
Distribution Date, the excess of (i) the Class B Principal Distributable Amount
for the preceding Distribution Date over (ii) the amount of principal that was
actually distributed to Class B Certificateholders on such preceding
Distribution Date.
"CLASS B PRINCIPAL DISTRIBUTABLE AMOUNT" means, with respect to any
Distribution Date, the sum of (i) the product of (A) the Class B Percentage and
(B) the Monthly Principal for such Distribution Date plus (ii) the Class B
Principal Carryover Shortfall for such Distribution Date; PROVIDED, HOWEVER,
that the Class B Principal Distributable Amount on the Final Scheduled
Distribution Date shall not be less than the amount that is necessary (after
giving effect to other amounts to be deposited in the Collection Account on such
Distribution Date and allocable to principal) to reduce the outstanding
principal amount of the Class B Certificates to zero.
"CLOSING DATE" means __________, 2000.
"CLEARING AGENCY" means an organization registered as a "clearing agency"
pursuant to Section 17A of the Securities Exchange Act of 1934.
"CLEARING AGENCY PARTICIPANT" means a broker, dealer, bank, other financial
institution or other Person for whom from time tot time a Clearing Agency
effects book-entry transfers and pledges of securities deposited with the
Closing Agency.
"CODE" means the Internal Revenue Code of 1986, as amended.
"COLLECTION ACCOUNT" means a trust account as described in SECTION 5.05
maintained in the name of the Trustee for the benefit of the Certificateholders
and which shall be an Eligible Account.
"COMPUTER DISK" means the computer disk generated by the Servicer which
provides information relating to the Contracts and which was used by the Seller
in selecting the Contracts sold to the Depositor pursuant to the Transfer and
Sale Agreement and by the Depositor in
- 5 -
selecting the Contracts transferred pursuant to this Agreement, and includes the
master file and the history file as well as servicing information with respect
to the Contracts.
"CONTRACT ASSETS" has the meaning assigned in SECTION 2.01 of the Transfer
and Sale Agreement.
"CONTRACT FILE" means, as to each Contract, (a) the original copy of the
Contract, including the executed installment sale contract or other evidence of
the obligation of the Obligor, (b) the original title certificate to the
Financed Vehicle and, where applicable, the certificate of lien recordation, or,
if such title certificate has not yet been issued, an application for such title
certificate, or other appropriate evidence of a security interest in the covered
Financed Vehicle, (c) the assignments of the Contract, (d) the original copy of
any agreement(s) modifying the Contract including, without limitation, any
extension agreement(s) and (e) documents evidencing the existence of physical
damage insurance covering such Financed Vehicle.
"CONTRACT RATE" means, as to any Contract, the annual rate of interest
specified in the Contract.
"CONTRACTS" means the installment sale contracts described in the List of
Contracts and constituting part of the Trust Corpus, and includes, without
limitation, all related security interests and any and all rights to receive
payments which are collected pursuant thereto on or after the Cutoff Date, but
excluding any rights to receive payments which are collected pursuant thereto
prior to the Cutoff Date.
"CORPORATE TRUST OFFICE" means the office of the Trustee at which at any
particular time its corporate trust business shall be principally administered,
which office at the date of the execution of this Agreement is located at the
address set forth in SECTION 13.08.
"CUTOFF DATE" means __________, 2000.
"DEFAULTED CONTRACT" means a Contract with respect to which there has
occurred one or more of the following: (i) all or part of a scheduled payment
under the Contract is 120 days or more than 120 days past due and the Servicer
has not repossessed the related Financed Vehicle, (ii) the Servicer, has in
accordance with its customary servicing procedures, determined that eventual
payment in full is unlikely and has either repossessed and liquidated the
related Financed Vehicle or repossessed and held the related Financed Vehicle in
its repossessed inventory for 90 days, whichever occurs first or (iii) the
relevant Obligor has suffered an Insolvency Event.
"DEFINITIVE CERTIFICATES" has the meaning assigned such term in SECTION
10.09.
"DELINQUENCY AMOUNT" means, as of any Distribution Date, the sum of the
outstanding Principal Balance of all Contracts that were delinquent 60 days or
more as of the close of business on the last day of the related Due Period
(including Contracts which are not Defaulted Contracts in respect of which the
related Financed Vehicles have been repossessed and are still inventory).
- 6 -
"DELINQUENT INTEREST" means, for each Due Period and each Contract, an
amount equal to the product of (i) the Principal Balance of such Contract as of
the first day of such Due Period and (ii) the stated annual percentage rate of
such Contract and (iii) the number of days in the period between the Due Dates
on such Contract divided by 360 minus the amount of interest received with
respect to such Contract during such Due Period.
"DEPOSITOR" has the meaning assigned such term in the preamble hereunder or
any successor thereto.
"DETERMINATION DATE" means the [ ] Business Day following the conclusion of
a Due Period during the term of this Agreement.
"DISTRIBUTION DATE" means the [ ] day of each calendar month during the
term of this Agreement, or if such day is not a Business Day, the next
succeeding Business Day, with the first such Distribution Date hereunder being
__________, 2000.
"DUE DATE" means, with respect to any Contract, the day of the month on
which each scheduled payment of principal and interest is due on such Contract,
exclusive of days of grace.
"DUE PERIOD" means a calendar month during the term of this Agreement, and
the Due Period related to a Determination Date or Distribution Date shall be the
calendar month immediately preceding such date; provided, however, that with
respect to the Initial Determination Date or Initial Distribution Date, the
related Due Period shall be the period from the Cutoff Date to and including
____________.
"ELIGIBLE ACCOUNT" means an account maintained (i) with the Trustee as long
as the Trustee's short-term unsecured debt obligations have a rating of "P-1" by
Moody's and a rating of "A-1+" by Standard & Poor's (the "REQUIRED DEPOSIT
RATING") or (ii) in a segregated trust account with a depository institution or
trust company organized under the laws of the United States of America, or any
of the States thereof, or the District of Columbia, having a certificate of
deposit, short-term deposit or commercial paper rating of at least "P-1" by
Moody's and "A-1+" by Standard & Poor's.
"ELIGIBLE INVESTMENTS" mean book-entry securities, negotiable instruments
or securities represented by instruments in bearer or registered form which
evidence:
(a) direct obligations of, and obligations fully guaranteed as to
timely payment by, the United States of America;
(b) demand deposits, time deposits or certificates of deposit of any
depository institution or trust company incorporated under the laws of the
United States of America or any State (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 senior unsecured debt obligations
(other than such obligations the rating of which is based on the credit of
a Person other than such depository institution or trust company) thereof
shall have a credit rating from the Rating Agency in the highest investment
category granted thereby;
- 7 -
(c) commercial paper having, at the time of the investment or
contractual commitment to invest therein, a rating from the Rating Agency
in the highest investment category granted thereby;
(d) investments in money market funds having a rating from the Rating
Agency in the highest investment category granted thereby (including funds
for which the Trustee or any of its respective Affiliates is investment
manager or advisor);
(e) bankers' acceptances issued by any depository institution or trust
company referred to in CLAUSE (b); and
(f) repurchase obligations with respect to any security that is a
direct obligation of, or fully guaranteed as to timely payment 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).
"EXTENSION FEE" means any extension fee paid by the Obligor on a Contract.
"FINAL SCHEDULED DISTRIBUTION DATE" means __________, ____.
"FINANCED VEHICLE" means a new or used automobile or light-duty truck,
together with all accessions thereto, securing the Obligor's indebtedness under
the related Contract.
"FRACTIONAL INTEREST" means an undivided interest in the Issuer and, as to
a particular Certificateholder, means the undivided interest in the Issuer owned
by that Certificateholder equal to the percentage obtained by dividing (a) the
Certificate Balance of all Certificates held by such Certificateholder at the
time of determination by (b) the aggregate of the Certificate Balance of all of
the Certificates held by all Certificateholders at such time.
"HOLDER" means a Person in whose name a Certificate is registered in the
Certificate Register.
"INSOLVENCY EVENT" means, with respect to a specified Person, (i) the entry
of a decree or order for relief by a court or regulatory authority having
jurisdiction in respect of such Person in an involuntary case under the federal
bankruptcy laws, as now or hereafter in effect, or any other present or future,
federal or state, bankruptcy, insolvency or similar law, or appointing a
receiver, liquidator, assignee, custodian, trustee, sequestrator or other
similar official for such Person or for any substantial part of its property, or
ordering the winding-up or liquidation of such Person's affairs, and the
continuance of any such decree or order unstayed and in effect for a period of
60 consecutive days; (ii) the commencement of an involuntary case under the
federal bankruptcy laws, as now or hereinafter in effect, or another present or
future federal or state bankruptcy, insolvency or similar law and such case is
not dismissed within 60 days; or (iii) the commencement by such Person of a
voluntary case under the federal bankruptcy laws, as now or hereinafter in
effect, or any other present or future federal or state, bankruptcy, insolvency
or similar law, or the consent by such Person to the appointment of or taking
possession by a receiver, liquidator, assignee, custodian, trustee, sequestrator
or other similar official for such Person or for any substantial part of its
property, or the making by such Person of an assignment
-8-
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 corporate action by such Person
in furtherance of any the foregoing.
"LATE PAYMENT PENALTY FEES" means any late payment fees paid by Obligors on
Contracts after all sums received have been allocated first to regular
installments due or overdue and all such installments are then paid in full.
"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 Contract by operation of law.
"LIST OF CONTRACTS" means the list identifying each Contract constituting
part of the Trust Corpus, which list (a) identifies each Contract and (b) sets
forth as to each Contract (i) the Principal Balance as of the applicable Cutoff
Date, (ii) the amount of monthly payments due from the Obligor, (iii) the
Contract Rate and (iv) the maturity date, and which list (as in effect on the
Closing Date) is attached to this Agreement as EXHIBIT H.
"LOCKBOX" means the Lockbox maintained by the Lockbox Bank identified on
EXHIBIT L hereto.
"LOCKBOX ACCOUNT" means the account maintained with the Lockbox Bank and
identified on EXHIBIT L hereto.
"LOCKBOX AGREEMENT" means the ________________ dated as of ____________,
__________ by and among the Servicer, the Depositor, the Trustee and
_____________, with respect to the Lockbox Account, unless such agreement shall
be terminated in accordance with its terms, in which even "LOCKBOX AGREEMENT"
shall mean such other agreement, in form and substance acceptable to the
above-described parties.
"LOCKBOX BANK" means the financial institution maintaining the Lockbox
Account and identified on EXHIBIT L hereto or any successor thereto.
"MONTHLY PRINCIPAL" means, as to any Distribution Date, the following
amount calculated as of the related Determination Date: the difference between
(i) the Principal Balance of the Contracts as of the first day of the Due Period
preceding the Due Period in which such Distribution Date occurs (or, in the case
of the first Distribution Date, the Principal Balance of the Contracts as of the
Cutoff Date) and (ii) the Principal Balance of the Contracts as of the first day
of the Due Period in which such Distribution Date occurs; provided, that on the
Final Scheduled Distribution Date, Monthly Principal shall equal the aggregate
of the Class A Certificate Balance and the Class B Certificate Balance.
"MONTHLY REPORT" has the meaning assigned in SECTION 7.06.
"MONTHLY SERVICING FEE" means, as to any Distribution Date, the product of
one-twelfth of 1% and the Principal Balance of the Contracts as of the preceding
Distribution Date.
"MOODY'S" means Xxxxx'x Investors Service, Inc. or any successor thereto.
- 9 -
"NET LIQUIDATION LOSSES" means, as of any Distribution Date, with respect
to a Defaulted Contract, the amount, if any, by which (a) the outstanding
Principal Balance of such Defaulted Contract plus accrued and unpaid interest
thereon at the Contract Rate to the date on which such Defaulted Contract became
a Defaulted Contract exceeds (b) the Net Liquidation Proceeds for such Defaulted
Contract.
"NET LIQUIDATION PROCEEDS" means, as to any Defaulted Contract, the
proceeds realized on the sale or other disposition of the related Financed
Vehicle, including proceeds realized on the repurchase of such Financed Vehicle
by the originating dealer for breach of warranties, and the proceeds of any
insurance relating to such Financed Vehicle, after payment of all reasonable
expenses incurred thereby, together, in all instances, with the expected or
actual proceeds of any recourse rights relating to such Contract as well as any
post-disposition proceeds received by the Servicer.
"OBLIGOR" means such person who owes payments under a Contract.
"OFFICER'S CERTIFICATE" means a certificate signed by the Chairman, the
President, a Vice President, the Treasurer, an Assistant Treasurer, the
Controller, an Assistant Controller, the Secretary or an Assistant Secretary of
any Person delivering such certificate and delivered to the Person to whom such
certificate is required to be delivered. In the case of an Officer's Certificate
of the Servicer, at least one of the signing officers must be a Servicing
Officer. Unless otherwise specified, any reference herein to an Officer's
Certificate shall be to an Officer's Certificate of the Servicer.
"OPINION OF COUNSEL" means a written opinion of counsel (who may be counsel
to the Depositor or the Servicer) acceptable to the Trustee.
"PAYING AGENT" has the meaning assigned in SECTION 9.01(b).
"PERFORMANCE GUARANTEE" means the Performance Guarantee dated as of the
date hereof by the Performance Guarantor, as amended, supplemented or otherwise
modified from time to time.
"PERFORMANCE GUARANTOR" means Virginia Surety Company, Inc., an Illinois
corporation, or its successor, in its capacity as Performance Guarantor under
the Performance Guarantee.
"PERSON" means any individual, corporation, partnership, joint venture,
association, joint stock company, trust (including any beneficiary thereof),
unincorporated organization or government or any agency or political subdivision
thereof.
"POOL BALANCE" means, as of any date, the aggregate Principal Balance of
Contracts as of the close of business on such date.
"PRINCIPAL BALANCE" means, as of the close of business on the last day of
any Due Period, an amount equal to the unpaid principal balance of such Contract
as of the opening of business on the Cutoff Date, reduced by the sum of all
payments received by the Servicer as of such date allocable to principal;
PROVIDED, HOWEVER, that (i) if (x) a Contract is repurchased by the Seller
pursuant to SECTION 5.01 of the Transfer and Sale Agreement or by the
Performance Guarantor
- 10 -
pursuant to the Performance Guarantee or by the Depositor pursuant to SECTION
9.05 or by the Servicer pursuant to SECTION 5.06(f) as of the last day of such
Due Period, or if (y) the Seller gives notice of its intent to repurchase the
Contracts pursuant to SECTION 5.02 of the Transfer and Sale Agreement and
SECTION 9.07 on the next succeeding Distribution Date, in each case the
Principal Balance of such Contract or Contracts shall be deemed as of the close
of business on the last day of such Due Period and each Due Period thereafter to
be zero and (ii) from and after the Due Period in which a Contract becomes a
Defaulted Contract, the Principal Balance of such Contract shall be deemed to be
zero.
"RATING AGENCY" means each of Moody's and Standard & Poor's, so long as
such Persons maintain a rating on the Certificates; and if either Moody's or
Standard & Poor's no longer maintains a rating on the Certificates, such other
nationally recognized statistical rating organization selected by the Depositor.
"RECORD DATE" means, with respect to any Distribution Date, the last
Business Day of the preceding calendar month.
"REIMBURSEMENT AMOUNT" has the meaning assigned in SECTION 9.03 hereof.
"REPURCHASE PRICE" means, with respect to a Contract to be repurchased
hereunder as of the last day of any Due Period, an amount equal to (a) the
Principal Balance of such Contract as of such day, plus (b) accrued and unpaid
interest at the Contract Rate on such Contract through the end of such Due
Period.
"REQUIRED DEPOSIT RATING" has the meaning assigned in the definition of
"Eligible Account."
"RESERVE AGENT" means the Reserve Agent named in the Reserve Fund
Agreement, and any successor thereto pursuant to the terms of the Reserve Fund
Agreement.
"RESERVE FUND" means the Reserve Fund established and maintained pursuant
to the Reserve Fund Agreement. The Reserve Fund shall in no event be deemed part
of the Trust Corpus.
"RESERVE FUND AGREEMENT" means the Reserve Fund Agreement, dated as of
__________, 2000 among the Depositor, the Reserve Agent and the Trustee (as
amended, supplemented or otherwise modified from time to time).
"RESERVE FUND DEPOSITS" shall have the meaning provided in the Reserve Fund
Agreement.
"RESERVE FUND INITIAL DEPOSIT" means $_________.
"RESERVE FUND REQUISITE AMOUNT" means, with respect to any Distribution
Date, an amount equal to ___________________.
"RESPONSIBLE OFFICER" means, with respect to the Trustee, the chairman and
any vice chairman of the board of directors, the president, the chairman and
vice chairman of any
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executive committee of the board of directors, every vice president, assistant
vice president, the secretary, every assistant secretary, cashier or any
assistant cashier, controller or assistant controller, the treasurer, every
assistant treasurer, every trust officer, assistant trust officer and every
other officer or assistant officer of the Trustee customarily performing
functions similar to those performed by persons who at the time shall be such
officers, respectively, or to whom a corporate trust matter is referred because
of knowledge of, familiarity with, and authority to act with respect to a
particular matter.
"SELLER" means Premier Auto Finance, L.P., an Illinois limited partnership,
or its successor, in its capacity as Seller of Contract Assets under the
Transfer and Sale Agreement.
"SERVICER" means Premier Auto Finance, Inc., a Delaware corporation, or its
successor, until any Service Transfer hereunder and thereafter means the
Successor Servicer appointed pursuant to ARTICLE VIII below with respect to the
duties and obligations required of the Servicer under this Agreement.
"SERVICER DEFAULT" has the meaning assigned to such term in SECTION 8.01.
"SERVICE TRANSFER" has the meaning assigned in SECTION 8.03(a).
"SERVICING FEE" means, on any Determination Date, the sum of (a) the
Monthly Servicing Fee payable on the related Distribution Date, (b) Late Payment
Penalty Fees received by the Servicer during the related Due Period, and (c)
Extension Fees received by the Servicer during the related Due Period.
"SERVICING OFFICER" means any officer of the Servicer involved in, or
responsible for, the administration and servicing of Contracts whose name
appears on a list of servicing officers appearing in an Officer's Certificate
furnished to the Trustee by the Servicer, as the same may be amended from time
to time.
"SHORTFALL" means, with respect to a Distribution Date, the sum of (a) the
excess, if any, of the amounts described in clauses (iv) through (v) of SECTION
9.04(b) over the Available Interest for such Distribution Date minus the amounts
payable therefrom pursuant to clauses (i) through (iii) of SECTION 9.04(b) on
such Distribution Date plus (b) the excess, if any, of the amounts described in
clauses (vi) and (vii) of SECTION 9.04(b) over the Available Amounts for such
Distribution Date minus the amounts payable therefrom pursuant to clauses (i)
through (v) of SECTION 9.04(b) on such Distribution Date.
"SIMPLE INTEREST CONTRACT" means any Contract providing for the allocation
of payments made thereunder to principal and interest in accordance with the
Simple Interest Method.
"SIMPLE INTEREST METHOD" means the method of allocating a fixed level
payment to principal and interest pursuant to which the portion of such payment
that is allocated to the payment of interest is equal to the product of the
fixed rate of interest multiplied by the unpaid Principal Balance multiplied by
the period of time elapsed since the preceding payment of interest was made and
the remainder of such payment is allocated to the payment of principal.
- 12 -
"STANDARD & POOR'S" means Standard & Poor's Ratings Services, a division
of The McGraw Hill Company or any successor thereto.
"TRANSACTION DOCUMENTS" means this Agreement, the Transfer and Sale
Agreement, the Lockbox Agreement, the Reserve Fund Agreement, the Performance
Guarantee and the Yield Supplement Agreement.
"TRANSFER AND SALE AGREEMENT" means the Transfer and Sale Agreement dated
as of __________, 2000 by and between the Depositor and the Seller, as amended,
supplemented or otherwise modified from time to time.
"TRUST ACCOUNTS" means the Collection Account.
"TRUST CORPUS" has the meaning given to such term in SECTION 2.01(b)
hereof. Although the Depositor has pledged the Reserve Fund to the Trustee
pursuant to the Reserve Fund Agreement, the Reserve Fund shall not under any
circumstances be deemed to be a part of or otherwise includable in the Issuer or
the Trust Corpus.
"TRUSTEE'S FEE" means, with respect to any Distribution Date,
_______________.
"UCC" means the Uniform Commercial Code as enacted in Illinois.
"UNCOLLECTIBLE ADVANCE" means with respect to any Determination Date and
any Contract, the amount, if any, if advanced by the Servicer in respect of such
Contract pursuant to SECTION 9.03, which the Servicer has as of such
Determination Date determined in good faith would not be ultimately recoverable
by the Servicer from insurance policies on the related Financed Vehicle, the
related Obligor or out of Net Liquidation Proceeds with respect to such
Contract. The determination by the Servicer that it has made an Uncollectible
Advance shall be evidenced by an Officer's Certificate delivered to the Trustee.
"UNDERWRITERS" means Chase Securities Inc. and Aon Capital Markets.
"YIELD SUPPLEMENT ACCOUNT" shall have the meaning assigned to such term in
SECTION 9.09.
"YIELD SUPPLEMENT AGREEMENT" means the agreement, dated as of the date of
this Agreement, between ____________________, substantially in the form attached
hereto as EXHIBIT K.
"YIELD SUPPLEMENT AMOUNT" means, with respect to any Distribution Date, the
aggregate amount on deposit in the Yield Supplement Account after giving effect
to the withdrawal therefrom of the related Yield Supplement Deposit and without
regard to any amounts on deposit therein in respect of interest or investment
earnings earned on the investment of amounts on deposit therein in Eligible
Investments for any period.
"YIELD SUPPLEMENT DEPOSIT" means, with respect to any Distribution Date,
________________.
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ARTICLE TWO
TRANSFER OF CONTRACTS
SECTION 2.01. CLOSING. There is hereby created by the Depositor, as
settlor, a separate trust which shall be known as the Dealer Auto Receivables
Grantor Trust 2000-1. The Issuer shall be administered pursuant to the
provisions of this Agreement for the benefit of the Certificateholders. The
Trustee is hereby specifically empowered to conduct business dealings on behalf
of the Issuer in accordance with the terms hereof. On the Closing Date, in
consideration of the Trustee's delivery of the Certificates to and upon the
order of the Depositor, the Depositor does hereby sell, transfer, assign, set
over and otherwise convey to the Issuer by execution of an assignment
substantially in the form of EXHIBIT B hereto, without recourse other than as
expressly provided herein, (i) all the right, title and interest of the
Depositor in and to the Contracts listed on the List of Contracts delivered on
the Closing Date (including, without limitation, all security interests and all
rights to receive payments and prepayments which are collected pursuant thereto
on or after the Cutoff Date, including any liquidation proceeds therefrom), (ii)
all security interests in each Financed Vehicle, (iii) all rights of the
Depositor to proceeds from any claims on theft, physical damage, credit life or
disability insurance or other individual insurance policy relating to any such
Contract, an Obligor or a Financed Vehicle securing such Contract, (iv) all
documents contained in the related Contract Files, (v) all rights (but not the
obligations) of the Depositor against any originating dealer or other third
party (i.e. the originators of the Contracts) under any agreements between the
Seller and such originating dealers or third party, (vi) all rights of the
Depositor in the Lockbox, the Lockbox Account and related Lockbox Agreement to
the extent they relate to the Contracts, (vii) any rebates of premiums and other
amounts relating to insurance policies, extended service contracts, other repair
agreements or any other items financed under such Contract, (viii) all rights
(but not the obligations) of the Depositor under the Transfer and Sale
Agreement, including but not limited to the Depositor's rights under ARTICLE V
thereof, (ix) all rights of the Depositor under the Performance Guarantee, (x)
the remittances, deposits and payments made into the Trust Accounts from time to
time and amounts in the Trust Accounts from time to time (and any investments of
such amounts), and (xi) all proceeds and products of the foregoing (the property
in clauses (i)-(xi) above, being the "TRUST CORPUS"). Although the Depositor and
the Trustee agree that such transfer is intended to be a sale of ownership of
the Trust Corpus, rather than the granting of a security interest to secure a
borrowing, and that the Trust Corpus shall not be property of the Depositor, in
the event such transfer is deemed to be of a mere security interest to secure a
borrowing, the Depositor shall be deemed to have granted the Trustee on behalf
of the Issuer for the benefit of the Certificateholders a perfected first
priority security interest in such Trust Corpus and this Agreement shall
constitute a security agreement under applicable law.
SECTION 2.02. CONDITIONS TO THE CLOSING. On or before the Closing Date,
the Depositor shall deliver or cause to be delivered the following documents to
the Trustee:
(a) The initial List of Contracts, certified by the Chairman of the
Board, President or any Vice President of the Depositor, together with an
assignment substantially in the form of EXHIBIT B hereto.
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(b) A certificate of an officer of the Seller substantially in the
form of EXHIBIT B to the Transfer and Sale Agreement and of an Officer of
the Depositor substantially in the form of EXHIBIT C hereto.
(c) Opinions of counsel for the Seller and the Depositor substantially
in the form of XXXXXXXX X-0, X-0 and D-3 hereto (and including as an
addressee thereof each Rating Agency).
(d) A letter or letters from Ernst & Young LLP, or another nationally
recognized accounting firm, addressed to the Seller and the Underwriters
and stating that such firm has reviewed a sample of the Contracts and
performed specific procedures for such sample with respect to certain
contract terms and which identifies those Contracts which do not conform.
(e) Copies of resolutions of the general partner of the Seller and the
Board of Directors of each of the Servicer and the Depositor or of the
Executive Committee of the Board of Directors of each of the Servicer and
the Depositor approving the execution, delivery and performance of this
Agreement and the other Transaction Documents to which any of them is a
party, as applicable, and the transactions contemplated hereunder and
thereunder, certified in each case by the Secretary or an Assistant
Secretary of the general partner of the Seller, the Servicer and the
Depositor.
(f) Officially certified recent evidence of due incorporation and good
standing of each of the Servicer and the Depositor under the laws of
Delaware.
(g) Evidence of proper filing with the appropriate offices in Illinois
of UCC financing statements executed by the Seller, as debtor, naming the
Depositor as secured party (and the Trustee as assignee) and identifying
the Contract Assets as collateral; and evidence of proper filing with the
appropriate offices in Illinois of UCC financing statements executed by the
Depositor, as debtor, (i) naming the Trustee as secured party and
identifying the Trust Corpus as collateral and (ii) naming the Trustee as
secured party and identifying the Reserve Fund Deposits therein as
collateral.
(h) An Officer's Certificate listing the Servicer's Servicing
Officers.
(i) Evidence of deposit in the Collection Account of all funds
received with respect to the Contracts on or after the Cutoff Date to the
second Business Day preceding the Closing Date, together with an Officer's
Certificate from the Seller to the effect that such amount is correct.
(j) The Officer's Certificate of the Seller specified in SECTION
2.02(b) of the Transfer and Sale Agreement.
(k) A fully executed Transfer and Sale Agreement.
(l) A fully executed copy of the Reserve Fund Agreement, together with
evidence of deposit in the Reserve Fund of the Reserve Fund Initial Deposit
by the Depositor in accordance with the Reserve Fund Agreement.
- 15 -
(m) A fully executed Yield Supplement Agreement, together with
evidence of deposit in the Yield Supplement Account of the Yield Supplement
Deposit by the Depositor in accordance with the Yield Supplement Agreement.
SECTION 2.03. ACCEPTANCE BY TRUSTEE. On the Closing Date, upon the
acceptance by the Depositor of the Certificates, the ownership of the Trust
Corpus will be 100% vested to the Issuer.
SECTION 2.04. TAX TREATMENT. It is the intention of the Depositor that, for
federal income tax purposes, the Issuer will be classified as a grantor trust
and not as an association taxable as a corporation. The Depositor and the
Servicer by entering into this Agreement, and each Certificateholder by the
purchase of a Certificate, agree to report such transactions for federal income
tax purposes in a manner consistent with such characterization.
ARTICLE THREE
REPRESENTATIONS AND WARRANTIES
The Seller under the Transfer and Sale Agreement has made each of the
representations and warranties set forth in EXHIBIT J hereto and has consented
to the assignment by the Depositor to the Trustee of the Depositor's rights with
respect thereto. Such representations speak as of the execution and delivery of
this Agreement and as of the Closing Date in the case of the Contracts, but
shall survive the sale, transfer and assignment of the Contracts to the Trustee.
Pursuant to SECTION 2.01 of this Agreement, the Depositor has sold, assigned,
transferred and conveyed to the Trustee as part of the Trust Corpus its rights
under the Transfer and Sale Agreement, including without limitation, the
representations and warranties of the Seller therein as set forth in EXHIBIT J
attached hereto, together with all rights of the Depositor with respect to any
breach thereof including any right to require the Seller to repurchase any
Contract in accordance with the Transfer and Sale Agreement. It is understood
and agreed that the representations and warranties set forth or referred to in
this Section shall survive delivery of the Contract Files to the Trustee or any
custodian.
The Depositor hereby represents and warrants to the Trustee and the
Certificateholders that it has entered into the Transfer and Sale Agreement with
the Seller, that the Seller has made the representations and warranties in the
Transfer and Sale Agreement as set forth in EXHIBIT J hereto, that such
representations and warranties run to and are for the benefit of the Depositor,
and that pursuant to SECTION 2.01 of this Agreement the Depositor has
transferred and assigned to the Trustee all rights of the Depositor to cause the
Seller under the Transfer and Sale Agreement to repurchase Contracts in the
event of a breach of such representations and warranties or, in the event of the
Seller's failure to repurchase such Contracts, to cause the Performance
Guarantor pursuant to the Performance Guarantee to repurchase such Contracts.
SECTION 3.01. REPRESENTATIONS AND WARRANTIES REGARDING THE DEPOSITOR. By
its execution of this Agreement, the Depositor represents and warrants to the
Trustee and the Certificateholders that:
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(a) ASSUMPTION OF SELLER'S REPRESENTATIONS AND WARRANTIES. The
representations and warranties set forth in EXHIBIT J are true and correct.
(b) ORGANIZATION AND GOOD STANDING. The Depositor is a corporation
duly organized, validly existing and in good standing under the laws of the
jurisdiction of its organization and has the corporate power to own its
assets and to transact the business in which it is currently engaged. The
Depositor is duly qualified to do BUSINESS as a foreign corporation and is
in good standing in each jurisdiction in which the character of the
business transacted by it or properties owned or leased by it requires such
qualification and in which the failure so to qualify would have a material
adverse effect on the business, properties, assets, or condition (financial
or other) of the Depositor or on the Certificateholders.
(c) AUTHORIZATION; VALID SALE; BINDING OBLIGATIONS. The Depositor has
the power and authority to make, execute, deliver and perform its
obligations under this Agreement and the other Transaction Documents to
which it is a party and all of the transactions contemplated under this
Agreement and the other Transaction Documents to which it is a party, and
to create the Issuer and cause it to make, execute, deliver and perform its
obligations under this Agreement and the other Transaction Documents to
which it is a party and has taken all necessary corporate action to
authorize the execution, delivery and performance of this Agreement and the
other Transaction Documents to which it is a party and to cause the Issuer
to be created. This Agreement, shall effect a valid sale, transfer and
assignment of the Trust Corpus, enforceable against the Depositor and
creditors of and purchasers from the Depositor. This Agreement and the
other Transaction Documents to which the Depositor is a party constitute
the legal, valid and binding obligation of the Depositor enforceable in
accordance with their terms, except as enforcement of such terms may be
limited by bankruptcy, insolvency or similar laws affecting the enforcement
of creditors' rights generally and by the availability of equitable
remedies.
(d) NO CONSENT REQUIRED. The Depositor is not required to obtain the
consent of any other party or any consent, license, approval or
authorization from, or registration or declaration with, any governmental
authority, bureau or agency in connection with the execution, delivery,
performance, validity or enforceability of this Agreement or the other
Transaction Documents to which it is a party.
(e) NO VIOLATIONS. The execution, delivery and performance of this
Agreement and the other Transaction Documents to which it is a party by the
Depositor, and the consummation of the transactions contemplated hereby and
thereby, will not violate any provision of any existing law or regulation
or any order or decree of any court or of any Federal or state regulatory
body or administrative agency having jurisdiction over the Depositor or any
of its properties or the Articles of Incorporation or Bylaws of the
Depositor, or constitute a material breach of any mortgage, indenture,
contract or other agreement to which the Depositor is a party or by which
the Depositor or any of the Depositor's properties may be bound, or result
in the creation or imposition of any security interest, lien, charge,
pledge, preference, equity or encumbrance of any kind
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upon any of its properties pursuant to the terms of any such mortgage,
indenture, contract or other agreement, other than as contemplated by the
Transaction Documents.
(f) LITIGATION. No litigation or administrative proceeding of or
before any court, tribunal or governmental body is currently pending, or to
the knowledge of the Depositor threatened, against the Depositor or any of
its properties or with respect to this Agreement, the other Transaction
Documents to which it is a party or the Certificates (1) which, if
adversely determined, would in the opinion of the Depositor have a material
adverse effect on the business, properties, assets or condition (financial
or otherwise) of the Depositor or on the Certificateholders or the
transactions contemplated by this Agreement or the other Transaction
Documents to which the Depositor is a party, (2) which might adversely
affect the federal income tax or other federal, state or local tax
attributes of the Certificates, (3) asserting the invalidity of this
Agreement, any other Transaction Document or the Certificates or (4)
seeking to prevent the issuance of the Certificates or the consummation of
the transactions contemplated by the Transaction Documents.
(g) PLACE OF BUSINESS; NO CHANGES. The Depositor's sole place of
business (within the meaning of Article 9 of the UCC) is as set forth in
SECTION 13.08. The Depositor has not changed its name, whether by amendment
of its Articles of Incorporation, by reorganization or otherwise, and has
not changed the location of its place of business, within the four months
preceding the Closing Date.
Such representations 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 Contracts to the Trustee.
SECTION 3.02. REPRESENTATIONS AND WARRANTIES REGARDING THE SERVICER. The
Servicer represents and warrants to the Trustee and the Certificateholders that:
(a) ORGANIZATION AND GOOD STANDING. The Servicer is a corporation duly
organized, validly existing and in good standing under the laws of the
jurisdiction of its organization and has the corporate power to own its
assets and to transact the business in which it is currently engaged. The
Servicer is duly qualified to do business as a foreign corporation and is
in good standing in each jurisdiction in which the character of the
business transacted by it or properties owned or leased by it requires such
qualification and in which the failure so to qualify would have a material
adverse effect on the business, properties, assets, or condition (financial
or otherwise) of the Servicer or on the Certificateholders. The Servicer is
properly licensed in each jurisdiction to the extent required by the laws
of such jurisdiction to service the Contracts in accordance with the terms
hereof other than such licenses the failure to obtain would not have a
material adverse effect on the business, properties, assets, or condition
(financial or otherwise) of the Servicer or on the ability of the Servicer
to perform its obligations hereunder.
(b) AUTHORIZATION; BINDING OBLIGATIONS. The Servicer has the power and
authority to make, execute, deliver and perform this Agreement and the
other Transaction Documents to which the Servicer is a party and all of the
transactions contemplated under this Agreement and the other Transaction
Documents to which the Servicer is a party,
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and has taken all necessary corporate action to authorize the execution,
delivery and performance of this Agreement and the other Transaction
Documents to which the Servicer is a party. This Agreement and the other
Transaction Documents to which the Servicer is a party constitute the
legal, valid and binding obligation of the Servicer enforceable in
accordance with their terms, except as enforcement of such terms may be
limited by bankruptcy, insolvency or similar laws affecting the enforcement
of creditors' rights generally and by the availability of equitable
remedies.
(c) NO CONSENT REQUIRED. The Servicer is not required to obtain the
consent of any other party or any consent, license, approval or
authorization from, or registration or declaration with, any governmental
authority, bureau or agency in connection with the execution, delivery,
performance, validity or enforceability of this Agreement and the other
Transaction Documents to which the Servicer is a party.
(d) NO VIOLATIONS. The execution, delivery and performance of this
Agreement and the other Transaction Documents to which the Servicer is a
party by the Servicer will not violate any provisions of any existing law
or regulation or any order or decree of any court or of any Federal or
state regulatory body or administrative agency having jurisdiction over the
Servicer or any of its properties or the Articles of Incorporation or
Bylaws of the Servicer, or constitute a material breach of any mortgage,
indenture, contract or other agreement to which the Servicer is a party or
by which the Servicer or any of the Servicer's properties may be bound, or
result in the creation of or imposition of any security interest, lien,
pledge, preference, equity or encumbrance of any kind upon any of its
properties pursuant to the terms of any such mortgage, indenture, contract
or other agreement, other than this Agreement.
(e) LITIGATION. No litigation or administrative proceeding of or
before any court, tribunal or governmental body is currently pending, or to
the knowledge of the Servicer threatened, against the Servicer or any of
its properties or with respect to this Agreement, any other Transaction
Document to which the Servicer is a party or the Certificates which, if
adversely determined, would in the opinion of the Servicer have a material
adverse effect on the business, properties, assets or condition (financial
or otherwise) of the Servicer or the Issuer or the transactions
contemplated by this Agreement or any other Transaction Document to which
the Servicer is a party.
ARTICLE FOUR
PERFECTION OF TRANSFER AND PROTECTION OF SECURITY INTERESTS
SECTION 4.01. CUSTODY OF CONTRACTS. (a) Subject to the terms and
conditions of this SECTION 4.01, the contents of each Contract File shall be
held in the custody of the Servicer for the benefit of, and as agent for, the
Certificateholders and the Trustee as the owner thereof.
(b) The Servicer agrees to maintain the related Contract Files at its
offices where they are currently maintained, or at such other offices of
the Servicer in the State of Illinois as shall from time to time be
identified to the Trustee by written notice. The Servicer may temporarily
move individual Contract Files or any portion thereof without
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notice as necessary to conduct collection and other servicing activities in
accordance with its customary practices and procedures; PROVIDED, HOWEVER,
that the Servicer will take all action necessary to maintain the perfection
of the Trustee's interest in the Contracts and the proceeds thereof. It is
intended that by the Servicer's agreement pursuant to this SECTION 4.01 the
Trustee shall be deemed to have possession of the Contract Files for
purposes of SECTION 9-305 of the Uniform Commercial Code of the State in
which the Contract Files are located.
(c) As custodian, the Servicer shall have and perform the following
powers and duties:
(i) hold the Contract Files on behalf of the Certificateholders
and the Trustee, maintain accurate records pertaining to each Contract
to enable it to comply with the terms and conditions of this
Agreement, maintain a current inventory thereof, conduct annual
physical inspections of Contract Files held by it under this Agreement
and certify to the Trustee annually that it continues to maintain
possession of such Contract Files;
(ii) implement policies and procedures in writing and signed by a
Servicing Officer with respect to persons authorized to have access to
the Contract Files on the Servicer's premises and the receipting for
Contract Files taken from their storage area by an employee of the
Servicer for purposes of servicing or any other purposes;
(iii) attend to all details in connection with maintaining
custody of the Contract Files on behalf of the Certificateholders and
the Trustee;
(iv) at all times maintain the original of the fully executed
Contract;
(v) clearly identify the assignment of the Contract and the
contemporaneous grant of a security interest therein to the Trustee;
and
(vi) within 30 days of the Closing Date deliver an Officer's
Certificate to the Trustee certifying that as of a date no earlier
than the Closing Date it has conducted an inventory of the Contract
Files and that there exists a Contract File for each Contract and
stating all exceptions to such statement, if any.
(d) The Servicer shall promptly report to the Trustee any failure by
it to hold the Contract Files as herein provided and shall promptly take
appropriate action to remedy any such failure. In acting as custodian of
the Contract Files, the Servicer further agrees not to assert any legal or
beneficial ownership interest in the Contracts or the Contract Files,
except as provided in SECTION 5.06. The Servicer agrees to indemnify the
Certificateholders and the Trustee for any and all liabilities,
obligations, losses, damages, payments, costs, or expenses of any kind
whatsoever which may be imposed on, incurred by or asserted against the
Certificateholders and the Trustee as the result of any act or omission by
the Servicer relating to the maintenance and custody of the Contract Files;
PROVIDED, HOWEVER, that the Servicer will not be liable for any portion of
any such amount resulting from the gross negligence or willful misconduct
of any Certificateholder or the
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Trustee. The Trustee shall have no duty to monitor or otherwise oversee the
Servicer's performance as custodian hereunder.
(e) The Servicer shall make available to the Trustee or its respective
duly authorized representatives, attorneys or auditors, the Contract Files
and the related accounts, records and computer systems maintained by the
Servicer at such times during normal operating hours as the Trustee shall
reasonably instruct which does not unreasonably interfere with the
Servicer's normal operations or customer or employee relations.
(f) Upon instruction from the Trustee, the Servicer shall release any
document in the Contract Files to the Trustee, or its agents or designee at
such place or places as such Person may reasonably designate as soon as
reasonably practicable to the extent it does not unreasonably interfere
with the Servicer's normal operations or customer or employee relations.
The Servicer shall not be responsible for any loss occasioned by the
failure of the Trustee, or its agents or designees, to return any document
or any delay in doing so.
(g) The Servicer's appointment as custodian shall become effective as
of the Cutoff Date and shall continue in full force and effect until
terminated pursuant to this SECTION 4.01(g) or until this Agreement shall
be terminated. If all of the rights and obligations of the Servicer shall
have been terminated under SECTION 8.03, the appointment of the Servicer as
custodian may be terminated by the Trustee or by Certificateholders holding
Certificates representing more than 50% of the Certificate Balance, in the
same manner as the Trustee or the Certificateholders may terminate the
rights and obligations of the Servicer under SECTION 8.03. As soon as
practicable after any termination of such appointment, the Servicer shall,
at its expense, deliver the Contract Files to the Trustee or the Trustee's
agent at such place or places as the Trustee may reasonably designate.
Notwithstanding the termination of the Servicer as custodian, the Trustee
agrees that upon any such termination, the Trustee shall provide, or cause
its agent to provide, access to the Contract Files to the Servicer for the
purpose of carrying out its duties and responsibilities with respect to the
servicing of the Contracts hereunder.
SECTION 4.02. FILING. On or prior to the Closing Date, the Servicer shall
cause the UCC financing statement(s) referred to in SECTION 2.02(g) hereof to be
filed and from time to time the Servicer shall take and cause to be taken such
actions and execute such documents as are necessary or desirable or as the
Trustee may reasonably request to perfect and protect the Trustee's first
priority perfected interest in the Trust Corpus against all other persons,
including, without limitation, the filing of financing statements, amendments
thereto and continuation statements, the execution of transfer instruments and
the making of notations on or taking possession of all records or documents of
title.
SECTION 4.03. NAME CHANGE OR RELOCATION. (a) During the term of this
Agreement, neither the Seller nor the Depositor shall change its name, identity
or structure or relocate its chief executive office without first giving at
least 30 days' prior written notice to the Trustee.
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(b) If any change in either the Seller's or the Depositor's name,
identity or structure or other action would make any financing or
continuation statement or notice of lien filed under this Agreement
seriously misleading within the meaning of applicable provisions of the UCC
or any title statute, the Servicer, no later than five days after the
effective date of such change, shall file such amendments as may be
required to preserve and protect the Trustee's interests in the Trust
Corpus and the proceeds thereof. In addition, neither the Seller nor the
Depositor shall change its place of business (within the meaning of Article
9 of the UCC) from the location specified in SECTION 13.08 below unless it
has first taken such action as is advisable or necessary to preserve and
protect the Trustee's interest in the Trust Corpus. Promptly after taking
any of the foregoing actions, the Servicer shall deliver to the Trustee an
opinion of counsel reasonably acceptable to the Trustee stating that, in
the opinion of such counsel, all financing statements or amendments
necessary to preserve and protect the interests of the Trustee in the Trust
Corpus have been filed, and reciting the details of such filing.
SECTION 4.04. CHIEF EXECUTIVE OFFICE. During the term of this Agreement,
the Depositor will maintain its chief executive office in one of the States of
the United States, except Louisiana, Tennessee, Colorado, Kansas, New Mexico,
Oklahoma, Utah or Wyoming.
SECTION 4.05. COSTS AND EXPENSES. The Servicer agrees to pay all reasonable
costs and disbursements in connection with the perfection and the maintenance of
perfection, as against all third parties, of the Trustee's right, title and
interest in and to the Contracts (including, without limitation, the security
interest in the Financed Vehicles granted thereby).
ARTICLE FIVE
SERVICING OF CONTRACTS
SECTION 5.01. RESPONSIBILITY FOR CONTRACT ADMINISTRATION. The Servicer will
have the sole obligation to manage, administer, service and make collections on
the Contracts and perform or cause to be performed all contractual and customary
undertakings of the holder of the Contracts to the Obligor. The Trustee, at the
written request of a Servicing Officer, shall furnish the Servicer with any
powers of attorney or other documents necessary or appropriate in the opinion of
the Trustee to enable the Servicer to carry out its servicing and administrative
duties hereunder. The Servicer is hereby appointed the servicer hereunder until
such time as any Service Transfer may be effected under ARTICLE VIII.
SECTION 5.02. STANDARD OF CARE. In managing, administering, servicing and
making collections on the Contracts pursuant to this Agreement, the Servicer
will exercise that degree of skill and care consistent with the skill and care
that the Servicer exercises with respect to similar contracts serviced by the
Servicer for itself and others, and, in any event, no less degree of skill and
care than would be exercised by a prudent servicer of motor vehicle retail
installment sales contracts; PROVIDED, HOWEVER, that notwithstanding the
foregoing, the Servicer shall not release or waive the right to collect the
unpaid balance on any Contract.
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SECTION 5.03. RECORDS. The Servicer shall, during the period it is servicer
hereunder, maintain such books of account and other records as will enable the
Trustee to determine the status of each Contract.
SECTION 5.04. INSPECTION. (a) At all times during the term hereof, the
Servicer shall afford the Trustee and its authorized agents reasonable access
during normal business hours to the Servicer's records relating to the Contracts
and will cause its personnel to assist in any examination of such records by the
Trustee, or such authorized agents and allow copies of the same to be made. The
examination referred to in this Section will be conducted in a manner which does
not unreasonably interfere with the Servicer's normal operations or customer or
employee relations. Without otherwise limiting the scope of the examination the
Trustee may, using generally accepted audit procedures, verify the status of
each Contract and review the Computer Disk and records relating thereto for
conformity to Monthly Reports prepared pursuant to ARTICLE VII and compliance
with the standards represented to exist as to each Contract in this Agreement.
(b) At all times during the term hereof, the Servicer shall keep
available a copy of the List of Contracts at its principal executive office
for inspection by the Trustee.
SECTION 5.05. TRUST ACCOUNTS. (a) On or before the Closing Date, the
Trustee shall establish the Collection Account in the name of the Trustee for
the benefit of the Certificateholders. The Trustee is hereby required to ensure
that each of the Trust Accounts is established and maintained as an Eligible
Account.
(b) The Trustee shall deposit (or the Servicer shall deposit, with
respect to payments by or on behalf of the Obligors and Net Liquidation
Proceeds received directly by the Servicer), without deposit into any
intervening account, into the Collection Account as promptly as practical
(but in any case not later than the second Business Day following the
receipt thereof):
(i) All payments on the Contracts (as well as Late Payment
Penalty Fees and Extension Fees) received by the Servicer on or after
the Cutoff Date (which for the purpose of this paragraph (b)(i) shall
include those monies deposited in the Lockbox Account allocable to
principal and interest on the Contracts);
(ii) All Net Liquidation Proceeds related to the Contracts;
(iii) The aggregate of the Repurchase Prices for Contracts
repurchased by the Depositor as described in SECTION 9.06 which
amounts shall be funded with amounts coming from the Seller pursuant
to SECTION 5.01 of the Transfer and Sale Agreement or from the
Performance Guarantor pursuant to the Performance Guarantee;
(iv) The aggregate of the Repurchase Prices for Contracts
purchased by the Servicer as described in SECTION 5.06(f);
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(v) All Advances made by the Servicer pursuant to SECTION 9.03;
(vi) All amounts paid by the Seller in connection with an
optional repurchase of the Contracts described in SECTION 9.07;
(vii) All amounts received in respect of interest, dividends,
gains, income and earnings on investments of funds in the Collection
Account as contemplated herein.
(c) If the Servicer so directs, in writing, the Trustee shall in its
capacity as Trustee hereunder, invest the amounts in the Collection Account
in Eligible Investments that mature not later than one Business Day prior
to the next succeeding Distribution Date. Once such funds are invested, the
Trustee shall not change the investment of such funds. Any loss on such
investments shall be deposited in the Collection Account by the Servicer
out of its own funds immediately as realized. Funds in the Collection
Account not so invested must be insured to the extent permitted by law by
the Bank Insurance Fund or the Savings Association Insurance Fund of the
Federal Deposit Insurance Corporation. Subject to the restrictions herein,
the Trustee may purchase an Eligible Investment from itself or an
Affiliate. Subject to the other provisions hereof, the Trustee shall have
sole control over each such investment and the income thereon, and any
certificate or other instrument evidencing any such investment, if any,
shall be delivered directly to the Trustee or its agent, together with each
document of transfer, if any, necessary to transfer title to such
investment to the Trustee in a manner which complies with this SECTION
5.05(c). All interest, dividends, gains upon sale and other income from, or
earnings on, investments of funds in the Collection Account shall be
deposited in the Collection Account pursuant to SECTION 5.05(b) and
distributed on the next Distribution Date pursuant to SECTION 9.04(b). The
Depositor and the Trustee agree and acknowledge that the Trustee is to have
"CONTROL" (within the meaning of Section 8-102 of the UCC as enacted in
Illinois) of collateral comprised of "INVESTMENT PROPERTY" (within the
meaning of Section 9-115 of the UCC as enacted in Illinois) for all
purposes of this Agreement.
(d) Notwithstanding anything to the contrary herein, the Servicer may
remit payments on the Contracts and Net Liquidation Proceeds to the
Collection Account in next-day funds or immediately available funds no
later than ____ a.m., Central time, on the Business Day prior to the next
succeeding Distribution Date, but only for so long as (a)(i) the short-term
certificate of deposit ratings of the Servicer are at least P-1 by Xxxxx'x
and "A-1" by Standard & Poor's or (ii) the Rating Agency shall have
notified the Servicer and the Trustee, in writing, that monthly remittances
of collections will not result in reduction or withdrawal of any then
outstanding rating of any outstanding Note or Certificate and (b) the
Servicer is Premier Auto Finance, Inc.
(e) The Servicer shall apply collections received in respect of a
Contract as follows:
(i) First, to reimburse any outstanding Advances made by the
Servicer with respect to such Contract;
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(ii) Second, to interest accrued on such Contract as of such date
and then to principal to the extent due and owing under such Contract;
(iii) Third, to pay any unpaid late charges or extension fees (if
any) due and owing under such Contract; and
(iv) Fourth, to prepay the principal of such Contract.
(f) The Servicer will, from time to time as provided herein, be
permitted to withdraw from the Collection Account any amount deposited
therein that, based on the Servicer's good-faith determination, was
deposited in error or required to be repaid to the related Obligor.
SECTION 5.06. ENFORCEMENT. (a) The Servicer will, consistent with SECTION
5.02, act with respect to the Contracts in such manner as will maximize the
receipt of all payments called for under the terms of the Contracts. The
Servicer shall use its best efforts to cause Obligors to make all payments on
the Contracts directly to the Lockbox Account. The Servicer will act in a
commercially reasonable manner with respect to the repossession and disposition
of a Financed Vehicle following a default under the related Contract with a view
to realizing proceeds at least equal to the Financed Vehicle's fair market
value. If the Servicer determines that eventual payment in full of a Contract is
unlikely, the Servicer will follow its normal practices and procedures to
recover all amounts due upon that Contract, including repossessing and disposing
of the related Financed Vehicle at a public or private sale or taking other
action permitted by applicable law. The Servicer will be entitled to recover all
reasonable out-of-pocket expenses incurred by it in liquidating a Contract and
disposing of the related Financed Vehicle.
(b) The Servicer may xxx to enforce or collect upon Contracts, in its
own name, if possible, or as agent for the Trustee. If the Servicer elects
to commence a legal proceeding to enforce a Contract, the act of
commencement shall be deemed to be an automatic assignment of the Contract
to the Servicer for purposes of collection only. If, however, in any
enforcement suit or legal proceeding it is held that the Servicer may not
enforce a Contract on the ground that it is not a real party in interest or
a holder entitled to enforce the Contract, the Trustee shall, at the
Servicer's expense, take such steps as the Servicer deems reasonably
necessary to enforce the Contract, including bringing suit in its name.
(c) The Servicer shall exercise any rights of recourse against third
persons that exist with respect to any Contract in accordance with the
Servicer's usual practice. In exercising recourse rights, the Servicer is
authorized on the Issuer's behalf to reassign the Defaulted Contract or the
related Financed Vehicle to the Person against whom recourse exists at the
price set forth in the document creating the recourse; PROVIDED, HOWEVER,
the Servicer in exercising recourse against any third persons as described
in the immediately preceding sentence shall do so in such manner as to
maximize the aggregate recovery with respect to the Contract; and PROVIDED
FURTHER, HOWEVER, that notwithstanding the foregoing the Servicer in its
capacity as such may exercise such recourse only if such Contract (i) was
not required to be repurchased by the Seller pursuant to the Transfer and
Sale Agreement or (ii) was required to be repurchased by
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the Seller and the Seller has defaulted on such repurchase obligation and
the Performance Guarantor has defaulted on its obligation to repurchase
such Contract pursuant to the Performance Guarantee.
(d) The Servicer will not permit any rescission or cancellation of any
Contract due to the acts or omissions of the Depositor.
(e) The Servicer may grant to the Obligor on any Contract an extension
of payments due under such Contract; PROVIDED that (i) the Servicer
believes in good faith that such extension is necessary to avoid
liquidation of the Contract and will maximize the amount received under the
Contract, (ii) such extension is consistent with the Servicer's customary
servicing procedures and is consistent with SECTION 5.02, (iii) such
extension does not extend the maturity date of the Contract beyond the
month preceding the Final Scheduled Distribution Date and (iv) such
extension does not modify the terms of the Contract in a manner which
constitutes a cancellation of the Contract and the creation of a new
contract for federal income tax purposes.
(f) The Servicer may agree to modify or amend any Contract if such
modification or amendment is consistent with the Servicer's customary
servicing procedures and is consistent with SECTION 5.02; PROVIDED that the
Servicer hereby covenants that it will not (i) release the Lien on a
Financed Vehicle granted in such Contract, (ii) undertake any action which
would materially and adversely impact the rights of the Trustee in such
Contract, (iii) modify, alter or change the Contract Rate of such Contract,
(iv) modify, alter or change the number of installment payments the related
Obligor is obligated to make under such Contract or (v) increase the
Principal Balance of such Contract. The Servicer hereby agrees that it
shall purchase a Contract (together with all related Contract Assets) as of
the last day of the immediately preceding Due Period, at its Repurchase
Price, not later than the second Distribution Date after the Servicer
becomes aware, or should have become aware, or receives written notice from
the Depositor or the Trustee of any breach of a covenant of the Servicer
set forth in clauses (i) through (iv) above or in SECTION 5.06(e) above
that materially adversely affects the interest of the Certificateholders in
such Contract or the collectibility of the Contract (without regard to the
benefits of the Reserve Fund) and which breach has not been cured.
(g) The Servicer will not add to the outstanding Principal Balance of
any Contract the premium of any physical damage or other individual
insurance on a Financed Vehicle securing such Contract it obtains on behalf
of the Obligor under the terms of such Contract, but may create a separate
Obligor obligation with respect to such premium if and as provided by the
Contract.
(h) If the Servicer shall have repossessed a Financed Vehicle on
behalf of the Issuer, the Servicer shall either (i) maintain at its expense
physical damage insurance with respect to such Financed Vehicle or (ii)
indemnify the Issuer against any damage to such Financed Vehicle prior to
resale or other disposition. The Servicer shall not allow such repossessed
Financed Vehicles to be used in an active trade or business, but rather
shall
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dispose of the Financed Vehicle in a reasonable time in accordance with the
Servicer's normal business practices.
SECTION 5.07. TRUSTEE TO COOPERATE. Upon payment in full on any Contract,
the Servicer will notify the Trustee and the Depositor on the next succeeding
Distribution Date by certification of a Servicing Officer (which certification
shall include a statement to the effect that all amounts received in connection
with such Contract which are required to be deposited in the Collection Account
pursuant to SECTION 5.05 have been so deposited) and shall (if the Servicer is
not then in possession of the Contracts and Contract Files) request delivery of
the Contract and Contract File to the Servicer. Upon receipt of such delivery
and request, the Trustee shall promptly release or cause to be released such
Contract and Contract File to the Servicer. Upon receipt of such Contract and
Contract File, each of the Depositor and the Servicer is authorized to execute
an instrument in satisfaction of such Contract and to do such other acts and
execute such other documents as the Servicer deems necessary to discharge the
Obligor thereunder and eliminate the security interest in the Financed Vehicle
related thereto. The Servicer shall determine when a Contract has been paid in
full; to the extent that insufficient payments are received on a Contract
credited by the Servicer as prepaid or paid in full and satisfied, the shortfall
shall be paid by the Servicer out of its own funds. From time to time as
appropriate for servicing and repossession in connection with any Contract, if
the Servicer is not then in possession of the Contracts and Contract Files, the
Trustee shall, upon written request of a Servicing Officer and delivery to the
Trustee of a receipt signed by such Servicing Officer, cause the original
Contract and the related Contract File to be released to the Servicer and shall
execute such documents as the Servicer shall deem reasonably necessary to the
prosecution of any such proceedings. Such receipt shall obligate the Servicer to
return the original Contract and the related Contract File to the Trustee when
the need by the Servicer has ceased unless the Contract shall be repurchased as
described in SECTION 9.07. Upon request of a Servicing Officer, the Trustee
shall perform such other acts as reasonably requested by the Servicer and
otherwise cooperate with the Servicer in the enforcement of the
Certificateholders' rights and remedies with respect to the Contracts.
SECTION 5.08. COSTS AND EXPENSES. All costs and expenses incurred by the
Servicer in carrying out its duties hereunder, fees and expenses of accountants
and payments of all fees and expenses incurred in connection with the
enforcement of Contracts (including enforcement of Defaulted Contracts and
repossessions of Financed Vehicles securing such Contracts) and all other fees
and expenses not expressly stated hereunder to be for the account of the Issuer
shall be paid by the Servicer and the Servicer shall not be entitled to
reimbursement hereunder except as otherwise provided in SECTION 5.06(a).
SECTION 5.09. MAINTENANCE OF SECURITY INTERESTS IN FINANCED VEHICLES. The
Servicer shall take such steps as are necessary to maintain continuous
perfection and the first priority of the security interest created by each
Contract in the related Financed Vehicle. The Trustee hereby authorizes the
Servicer to take such steps as are necessary to perfect such security interest
and to maintain the first priority thereof in the event of a relocation of a
Financed Vehicle or for any other reason.
SECTION 5.10. MAINTENANCE OF INSURANCE. The Servicer shall, at its own
cost and expense, during the term of its service as Servicer maintain in force
an insurance policy or
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financial guarantee bond to protect against losses due to errors and omissions
by the Servicer in the performance of its duties hereunder. Such insurance
policy or financial guarantee bond shall be in form and in an amount as is
generally customary among Persons which service a portfolio of automobile retail
installment sale contracts and which are generally regarded as servicers
acceptable to institutional investors.
ARTICLE SIX
THE DEPOSITOR
SECTION 6.01. COVENANTS OF THE DEPOSITOR.
(a) CORPORATE EXISTENCE. During the term of this Agreement, the
Depositor will keep in full force and effect its existence, rights and
franchises as a corporation under the laws of the jurisdiction of its
incorporation and will obtain and preserve its qualification to do business
in each jurisdiction in which such qualification is or shall be necessary
to protect the validity and enforceability of this Agreement, the other
Transaction Documents and each other instrument or agreement necessary or
appropriate to the proper administration of this Agreement and the
transactions contemplated hereby.
(b) ARM'S LENGTH TRANSACTIONS. During the term of this Agreement, all
transactions and dealings between the Depositor and its Affiliates will be
conducted on an arm's-length basis.
(c) NO OTHER BUSINESS. The Depositor shall not engage in any business
other than financing, purchasing, owning, selling and managing the
Contracts in the manner contemplated by this Agreement and the other
Transaction Documents and activities incidental thereto.
(d) NO BORROWING. The Depositor shall not issue, incur, assume,
guarantee or otherwise become liable, directly or indirectly, for any
Indebtedness except for any Indebtedness permitted by or arising under the
Transaction Documents. The proceeds of the Certificates shall be used
exclusively to fund the Depositor's purchase of the Contracts and the other
assets specified in this Agreement and to pay the transactional expenses of
the Depositor.
(e) GUARANTEES, LOANS ADVANCES AND OTHER LIABILITIES. Except as
otherwise contemplated by the Transaction Documents, the Depositor shall
not make any loan or advance or credit to, or guarantee (directly or
indirectly or by an instrument having the effect of assuming another's
payment or performance on any obligation or capability of so doing or
otherwise), endorse or otherwise become contingently liable, directly or
indirectly, in connection with the obligations, stocks or dividends of, or
own, purchase, repurchase or acquire (or agree contingently to do so) any
stock, obligations, assets or securities of, any other interest in, or make
any capital contribution to, any other Person.
(f) CAPITAL EXPENDITURES. The Depositor shall not make any expenditure
(by long-term or operating lease or otherwise) for capital assets (either
realty or personalty).
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(g) RESTRICTED PAYMENTS. Except as permitted by the Transaction
Documents, the Depositor shall not, directly or indirectly, (i) pay any
dividend or make any distribution (by reduction of capital or otherwise),
whether in cash, property, securities or a combination thereof, to any
owner of an equity interest in the Depositor, (ii) redeem, purchase, retire
or otherwise acquire for value any such equity interest or security or
(iii) set aside or otherwise segregate any amounts for any such purpose.
SECTION 6.02. LIABILITY OF DEPOSITOR; INDEMNITIES. The Depositor shall be
liable in accordance herewith only to the extent of the obligations specifically
undertaken by the Depositor under this Agreement.
The Depositor shall indemnify, defend and hold harmless the Trustee and the
Servicer from and against any taxes that may at any time be asserted against any
such Person with respect to the transactions contemplated herein and in the
other Transaction Documents, including any sales, gross receipts, general
corporation, tangible personal property, Illinois personal property replacement
privilege or license taxes (but, in the case of the Trustee, not including any
taxes asserted with respect to, and as of the date of, the transfer of the
Contracts to the Trustee or the issuance and original sale of the Certificates,
or asserted with respect to ownership of the Contracts, or federal or other
income taxes arising out of distributions on the Certificates) and costs and
expenses in defending against the same.
The Depositor shall indemnify, defend and hold harmless the Trustee and the
Certificateholders from and against any loss, liability or expense incurred by
reason of the Depositor's willful misfeasance, bad faith or negligence in the
performance of its duties under this Agreement, or by reason of reckless
disregard of its obligations and duties under this Agreement.
The Depositor shall indemnify, defend and hold harmless the Trustee from
and against all costs, expenses, losses, claims, damages and liabilities arising
out of or incurred in connection with the acceptance or performance of the
trusts and duties herein, except to the extent that such cost, expense, loss,
claim, damage or liability shall be due to the willful misfeasance, bad faith or
negligence of the Trustee or shall arise from the breach by the Trustee of any
of its representations or warranties set forth herein.
Indemnification under this Section shall include, without limitation,
reasonable fees and expenses of counsel and expenses of litigation. If the
Depositor shall have made any indemnity payments pursuant to this Section and
the Person to or on behalf of whom such payments are made thereafter shall
collect any of such amounts from others, such Person shall promptly repay such
amounts to the Depositor without interest.
SECTION 6.03. MERGER OR CONSOLIDATION OF, OR ASSUMPTION OF THE OBLIGATIONS
OF, DEPOSITOR; CERTAIN LIMITATIONS.
Notwithstanding any other provision in this Section and any provision of
law, the Depositor shall not do any of the following:
(i) engage in any business or activity other than as set forth in
its Articles of Incorporation;
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(ii) without the affirmative vote of a majority of the members of the
Board of Directors of the Depositor (which must include the affirmative
vote of at least one duly appointed Independent director) (A) dissolve or
liquidate, in whole or in part, or institute proceedings to be adjudicated
bankrupt or insolvent, (B) consent to the institution of bankruptcy or
insolvency proceedings against it, (C) file a petition seeking or consent
to reorganization or relief under any applicable federal or state law
relating to bankruptcy, (D) consent to the appointment of a receiver,
liquidator, assignee, trustee, sequestrator (or other similar official) of
the corporation or a substantial part of its property, (E) make a general
assignment for the benefit of creditors, (F) admit in writing its inability
to pay its debts generally as they become due, or (G) take any corporate
action in furtherance of the actions set forth in clauses (A) through (F)
above; PROVIDED, HOWEVER, that no director may be required by any
shareholder of the Depositor to consent to the institution of bankruptcy or
insolvency proceedings against the Depositor so long as it is solvent; or
(iii) merge or consolidate with any other corporation, company or
entity or sell all or substantially all of its assets or acquire all or
substantially all of the assets or capital stock or other ownership
interest of any other corporation, company or entity.
SECTION 6.04. LIMITATION ON LIABILITY OF DEPOSITOR AND OTHERS. The
Depositor and any director or officer or employee or agent of the Depositor may
rely in good faith on any document of any kind, prima facie properly executed
and submitted by any Person respecting any matters arising hereunder. The
Depositor and any director or officer or employee or agent of the Depositor
shall be reimbursed by the Trustee for any contractual damages, liability or
expense incurred by reason of the Trustee's willful misfeasance, bad faith or
negligence (except errors in judgment) in the performance of their respective
duties hereunder, or by reason of reckless disregard of their respective
obligations and duties hereunder. The Depositor shall not be under any
obligation to appear in, prosecute or defend any legal action that shall not be
incidental to its obligations under this Agreement, and that in its opinion may
involve it in any expense or liability.
SECTION 6.05. DEPOSITOR NOT TO RESIGN. Subject to the provisions of
SECTION 6.03, the Depositor shall not resign from the obligations and duties
hereby imposed on it as Depositor hereunder.
SECTION 6.06. DEPOSITOR MAY OWN CERTIFICATES. The Depositor and any
Affiliate thereof may in its individual or any other capacity become the owner
or pledgee of Certificates with the same rights as it would have if it were not
the Depositor or an Affiliate thereof, except as expressly provided herein or in
any Transaction Document. Certificates so owned by or pledged to the Depositor
or such Affiliate shall have an equal and proportionate benefit under the
provisions of this Agreement, without preference, priority or distinction as
among all of the Certificates, as the case may be.
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ARTICLE SEVEN
REPORTS
SECTION 7.01. MONTHLY REPORTS. No later than 10:00 a.m. Chicago, Illinois
time on each Determination Date, the Servicer shall cause the Trustee and each
Rating Agency to receive a "MONTHLY REPORT" substantially in the form of EXHIBIT
I hereto.
SECTION 7.02. OFFICER'S CERTIFICATE. On or before [ _____________ ] of each
year, the Servicer shall deliver the Trustee and Rating Agency a certificate of
a Servicing Officer substantially in the form of EXHIBIT F, certifying the
accuracy of the Monthly Reports delivered during the preceding year and that no
Servicer Default or event that with notice or lapse of time or both would become
an Servicer Default has occurred, or if such event has occurred and is
continuing, specifying the event and its status.
SECTION 7.03. OTHER DATA. In addition, the Depositor and the Servicer
shall, on request of the Trustee, Moody's or Standard & Poor's, furnish the
Trustee, Moody's or Standard & Poor's, as the case may be, such underlying data
as may be reasonably requested.
SECTION 7.04. ANNUAL REPORT OF ACCOUNTANTS.
(a) The Servicer shall cause a firm of nationally recognized
independent certified public accountants (the "INDEPENDENT ACCOUNTANTS"),
who may also render other services to the Servicer or to the Depositor, to
deliver to the Trustee and each Rating Agency, on or before March 31 (or 90
days after the end of the Servicer's fiscal year, if other than December
31) of each year, beginning on __________, 2000, with respect to the twelve
months ended the immediately preceding December 31 (or other applicable
date), a statement (the "ACCOUNTANT'S REPORT") addressed to the Board of
Directors of the Servicer to the Trustee to the effect that such firm has
audited the financial statements of the direct or indirect parent of the
Servicer and issued its report thereon and that such audit
(1) was made in accordance with generally accepted auditing
standards, and accordingly included such tests of the accounting
records and such other auditing procedures as such firm considered
necessary in the circumstances;
(2) included an examination of documents and records relating to
the servicing of motor vehicle retail installment sales contracts
under pooling and servicing agreements substantially similar to one
another (such statement to have attached thereto a schedule setting
forth the pooling and servicing agreements covered thereby, including
this Agreement);
(3) included an examination of the delinquency and loss
statistics relating to Servicer's portfolio of motor vehicle retail
installment sales contracts; and
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(4) except as described in the statement, disclosed no exceptions
or errors in the records relating to motor vehicle loans serviced for
others that, in the firm's opinion, generally accepted auditing
standards requires such firm to report.
The Accountant's Report shall further state that
(1) a review in accordance with agreed upon procedures was made of one
randomly selected Monthly Report; and
(2) except as disclosed in the Report, no exceptions or errors in the
Monthly Report so examined were found.
(b) The Accountant's Report shall also indicate that the firm is
independent of the Seller and the Servicer and the Servicer's direct or
indirect parent within the meaning of the Code of Professional Ethics of
the American Institute of Certified Public Accountants.
SECTION 7.05. ANNUAL STATEMENT OF COMPLIANCE FROM SERVICER. The Servicer
will deliver to the Trustee and each of the Rating Agencies, on or before
January 31 of each year commencing January 31, 2001, an Officer's Certificate
stating that (a) a review of the activities of the Servicer during the prior
calendar year and of its performance under this Agreement was made under the
supervision of the officer signing such certificate and (b) to such officer's
knowledge, based on such review, the Servicer has fully performed all its
obligations under this Agreement, or, if there has been a default in the
performance of any such obligation, specifying each such default known to such
officer and the nature and status thereof. A copy of such certificate may be
obtained by any Certificateholder by a request in writing to the Trustee.
SECTION 7.06. MONTHLY STATEMENTS TO CERTIFICATEHOLDERS. (a) On or before
each Determination Date, the Servicer shall prepare and, concurrently with each
distribution to Certificateholders, deliver to the Trustee and the Trustee shall
cause to be delivered and mailed to each Certificateholder at the address
appearing on the Certificate Register a statement as of the related Distribution
Date setting forth (the "MONTHLY REPORT"):
(i) the Class A Principal Distributable Amount and the Class
B Principal Distributable Amount;
(ii) the Class A Interest Distributable Amount and the Class B
Interest Distributable Amount;
(iii) the amount of the Class A and Class B Principal and
Interest Carryover Shortfalls, if any, for the next succeeding
Distribution Date and the change in the Class A and Class B Principal
and Interest Carryover Shortfalls from such Distribution Date;
(iv) the amount distributable on such date and allocable to the
Yield Supplement Deposit;
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(v) the Pool Balance as of the close of business on the last day
of the related Due Period;
(vi) the amount of fees payable on such Distribution Date,
separately identifying the Monthly Servicing Fee and the Trustee Fee;
(vii) the amount otherwise distributable to the Class B
Certificateholders that will be distributed to the Class A
Certificateholders on such Distribution Date;
(viii) the remaining Class A Certificate Balance and Class B
Certificate Balance after giving effect to the distribution of
principal to be made on such Distribution Date;
(ix) the Class A Pool Factor, the Class A Certificate Factor, the
Class B Pool Factor and the Class B Certificate Factor immediately
before and immediately after such Distribution Date;
(x) the amount of Advances made by the Servicer in respect of the
related Contracts and the related Due Period and the amount of
unreimbursed Advances in respect of the related Contracts determined
by the Servicer to be a Defaulted Contract;
(xi) the amounts on deposit in the Yield Supplement Account;
(xii) the Reserve Fund Requisite Amount; and
(xiii) the amount of the distributions described in (i) or (ii)
above payable with funds withdrawn from the Reserve Fund and the
amount remaining in the Reserve Fund after giving effect to all
deposits and withdrawals from the Reserve Fund on such date.
(b) Within the prescribed period of time for tax reporting purposes
after the end of each calendar year, the Servicer shall prepare and the
Trustee shall mail to each Certificateholder of record at any time during
such year a report as to the aggregate amounts reported pursuant to
subsections (a)(i), (ii) and (viii) of this SECTION 7.06, attributable to
such Certificateholder.
ARTICLE EIGHT
SERVICER DEFAULT; SERVICE TRANSFER
SECTION 8.01. SERVICER DEFAULT. "SERVICER DEFAULT" means the occurrence
of any of the following:
(a) Any failure by the Servicer (i) to make any payment or deposit
required to be made hereunder or (ii) to direct the Trustee to make any
payment or distribution required to be made hereunder and the continuance
of such failure for a period of five (5)
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Business Days after receipt of written notice from the Trustee or discovery
by the Servicer thereof;
(b) Failure on the Servicer's part to observe or perform in any
material respect any covenant or agreement set forth herein (other than a
covenant or agreement, the breach of which is specifically addressed
elsewhere in this Agreement) which (i) materially and adversely affects the
rights of the Certificateholders and (ii) continues unremedied for thirty
(30) days after receipt of written notice from the Trustee or by
Certificateholders with aggregate Fractional Interests representing 25% or
more of the Issuer;
(c) An involuntary case under any applicable bankruptcy, insolvency or
other similar law shall have been commenced in respect of the Servicer and
shall not have been dismissed within 60 days, or a court having
jurisdiction in the premises shall have entered a decree or order for
relief in respect of the Servicer in an involuntary case under any
applicable bankruptcy, insolvency or other similar law now or hereafter in
effect, or appointing a receiver, liquidator, assignee, custodian, trustee,
sequestrator (or similar official) of the Servicer, or for any substantial
liquidation or winding up of its affairs;
(d) The Servicer shall have commenced a voluntary case under any
applicable bankruptcy, insolvency or other similar law now or hereafter in
effect, or shall have consented to the entry of an order for relief in an
involuntary case under any such law, or shall have consented to the
appointment of or taking possession by a receiver, liquidator, assignee,
trustee, custodian or sequestrator (or other similar official) of the
Servicer or for any substantial part of its property, or shall have made
any general assignment for the benefit of its creditors, or shall have
failed to, or admitted in writing its inability to, pay its debts as they
become due, or shall have taken any corporate action in furtherance of the
foregoing;
(e) Any representation, warranty or statement of the Servicer made in
this Agreement, or any certificate, report or other writing delivered
pursuant hereto shall prove to be incorrect in any material respect as of
the time when the same shall have been made and the incorrectness of such
representation, warranty or statement has a material adverse effect on the
Certificateholders and, within 30 days after written notice thereof shall
have been given to the Servicer by either the Trustee or by the
Certificateholders with aggregate Fractional Interests representing 25% or
more of the Issuer, the circumstances or condition in respect of which such
representation, warranty or statement was incorrect shall not have been
eliminated or otherwise cured.
SECTION 8.02. WAIVER OF SERVICER DEFAULT. Certificateholders with aggregate
Fractional Interests representing more than 50% or more of the Issuer, may, by
written notice delivered to the parties hereto, waive any Servicer Default other
than a Servicer Default described in SECTION 8.01(a).
SECTION 8.03. SERVICE TRANSFER. (a) If a Servicer Default has occurred
and is continuing and has not been waived pursuant to SECTION 8.02, (x)
Certificateholders with aggregate Fractional Interests representing more than
50% of the Issuer or (y) the Trustee may, by written
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notice delivered to the parties hereto, terminate all (but not less than all) of
the Servicer's management, administrative, servicing, custodial and collection
functions (such termination being herein called a "SERVICE TRANSFER").
(b) Upon receipt of the notice required by SECTION 8.03(a) (or, if
later, on a date designated therein), all rights, benefits, fees,
indemnities, authority and power of the Servicer under this Agreement,
whether with respect to the Contracts, the Contract Files or otherwise,
shall pass to and be vested in the Trustee (the "SUCCESSOR SERVICER")
pursuant to and under this SECTION 8.03; and, without limitation, the
Successor Servicer is authorized and empowered to execute and deliver on
behalf of the Servicer, as attorney-in-fact or otherwise, any and all
documents and other instruments, and to do any and all acts or things
necessary or appropriate to effect the purposes of such notice of
termination. The Servicer agrees to cooperate with the Successor Servicer
in effecting the termination of the responsibilities and rights of the
Servicer hereunder, including, without limitation, the transfer to the
Successor Servicer for administration by it of all cash amounts which shall
at the time be held by the Servicer for deposit, or have been deposited by
the Servicer, in the Collection Account, or for its own account in
connection with its services hereafter or thereafter received with respect
to the Contracts. The Servicer shall transfer to the Successor Servicer (i)
all records held by the Servicer relating to the Contracts in such
electronic form as the Successor Servicer may reasonably request and (ii)
any Contract Files in the Servicer's possession. In addition, the Servicer
shall permit access to its premises (including all computer records and
programs) to the Successor Servicer or its designee, and shall pay the
reasonable transition expenses of the Successor Servicer. Upon a Service
Transfer, the Successor Servicer shall also be entitled to receive the
Monthly Servicing Fee for performing the obligations of the Servicer.
SECTION 8.04. SUCCESSOR SERVICER TO ACT; APPOINTMENT OF SUCCESSOR SERVICER.
On and after a Service Transfer pursuant to SECTION 8.03, the Successor Servicer
shall be the successor in all respects to the Servicer in its capacity as
servicer under this Agreement and the transactions set forth or provided for
herein and shall be subject to all the responsibilities, duties and liabilities
relating thereto placed on the Servicer by the terms and provisions hereof, and
the terminated Servicer shall be relieved of such responsibilities, duties and
liabilities arising after such Service Transfer; PROVIDED, HOWEVER, that (i) the
Successor Servicer will not assume any obligations of the Servicer described in
SECTION 8.08 and (ii) the Successor Servicer shall not be liable for any acts or
omissions of the Servicer occurring prior to such Service Transfer or for any
breach by the Servicer of any of its representations and warranties contained
herein or in any related document or agreement. Notwithstanding the above, if
the Successor Servicer is legally unable or unwilling to act as Servicer, it may
appoint or petition a court of competent jurisdiction to appoint an established
financial institution (x) having a net worth of not less than $100,000,000 as of
the last day of the most recent fiscal quarter for such institution and (y)
whose regular business shall include the servicing of automobile receivables, to
act as Servicer. As compensation therefor, the Successor Servicer shall be
entitled to receive reasonable compensation equal to the Monthly Servicing Fee.
The Trustee and such Successor Servicer shall take such action, consistent with
this Agreement, as shall be necessary to effectuate any such succession. To the
extent the terminated Servicer has made Advances, it shall be entitled to
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reimbursement of the same notwithstanding its termination hereunder, to the same
extent as if it had continued to service the Contracts hereunder.
SECTION 8.05. NOTIFICATION TO CERTIFICATEHOLDERS. (a) Promptly following
the occurrence of any Servicer Default, the Servicer shall give written notice
thereof to the Trustee, the Depositor, and each Rating Agency at the addresses
described in SECTION 13.08. The Trustee shall give written notice thereof to the
Certificateholders at their respective addresses appearing on the Certificate
Register.
(b) Within 10 days following any termination or appointment of a
Successor Servicer pursuant to this ARTICLE VIII, the Trustee shall give
written notice thereof to each Rating Agency and the Depositor at the
addresses described in SECTION 13.08, and to the Certificateholders at
their addresses appearing on the Certificate Register.
SECTION 8.06. EFFECT OF TRANSFER. (a) After a Service Transfer, the
terminated Servicer shall have no further obligations with respect to the
management, administration, servicing, custody or collection of the Contracts
and the Successor Servicer appointed pursuant to SECTION 8.04 shall have all of
such obligations, except that the terminated Servicer will transmit or cause to
be transmitted directly to the Successor Servicer for its own account, promptly
on receipt and in the same form in which received, any amounts (properly
endorsed where required for the Successor Servicer to collect them) received as
payments upon or otherwise in connection with the Contracts.
(b) A Service Transfer shall not affect the rights and duties of the
parties hereunder (including but not limited to the indemnities of the
Servicer), other than those relating to the management, administration,
servicing, custody or collection of the Contracts.
SECTION 8.07. DATABASE FILE. The Servicer will provide the Successor
Servicer with a magnetic tape containing the database file for each Contract (i)
as of the Cutoff Date, (ii) thereafter, as of the last day of the preceding Due
Period on each Determination Date prior to a Servicer Default and (iii) on and
as of the Business Day before the actual commencement of servicing functions by
the Successor Servicer following the occurrence of a Servicer Default.
SECTION 8.08. SUCCESSOR SERVICER INDEMNIFICATION. The Servicer shall
defend, indemnify and hold the Successor Servicer and any officers, directors,
employees or agents of the Successor Servicer harmless against any and all
claims, losses, penalties, fines, forfeitures, legal fees and related costs,
judgments and any other costs, fees, and expenses that the Successor Servicer
may sustain in connection with the claims asserted at any time by third parties
against the Successor Servicer which result from (i) any willful or grossly
negligent act taken or omission by the Servicer or (ii) a breach of any
representations of the Servicer in SECTION 3.02 hereof. The indemnification
provided by this SECTION 8.08 shall survive the termination of this Agreement.
SECTION 8.09. RESPONSIBILITIES OF THE SUCCESSOR SERVICER. The Successor
Servicer will not be responsible for delays attributable to the Servicer's
failure to deliver information, defects in the information supplied by the
Servicer or other circumstances beyond the control of the Successor Servicer.
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The Successor Servicer will make arrangements with the Servicer for the
prompt and safe transfer of, and the Servicer shall provide to the Successor
Servicer, all necessary servicing files and records, including (as deemed
necessary by the Successor Servicer at such time): (i) microfiche loan
documentation, (ii) servicing system tapes, (iii) Contract payment history, (iv)
collections history and (v) the trial balances, as of the close of business on
the day immediately preceding conversion to the Successor Servicer, reflecting
all applicable loan information.
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 under this Agreement 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
or 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 Servicer, the Depositor or the 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 Contract with applicable law or the breach or the
inaccuracy of any representation or warranty made with respect to any Contract.
SECTION 8.10. LIMITATION OF LIABILITY OF SERVICER.
(a) Neither the Servicer nor any of the directors, officers, employees
or agents of the Servicer shall be under any liability to the Trustee or
the Certificateholders, except as provided under this Agreement, for any
action taken or for refraining from the taking of any action pursuant to
this Agreement or for errors in judgment; PROVIDED, HOWEVER, that this
provision shall not protect the Servicer or any such person against any
liability that would otherwise be imposed by reason of willful misfeasance,
bad faith or negligence in the performance of duties or by reason of
reckless disregard of obligations and duties under this Agreement. The
Servicer and any director, officer, employee or agent of the Servicer may
rely in good faith on the advice of counsel or on any document of any kind,
prima facie properly executed and submitted by any Person respecting any
matters arising under this Agreement.
(b) Except as provided in this Agreement, the Servicer shall not be
under any obligation to appear in, prosecute or defend any legal action
that shall not be incidental to its duties to service the Contracts in
accordance with this Agreement, and that in its opinion may cause it to
incur any expense or liability; PROVIDED, HOWEVER, that the Servicer may
undertake any reasonable action that it may deem necessary or desirable in
respect of the Transaction Documents and the rights and duties of the
parties to the Transaction Documents and the interests of the
Certificateholders. In such event, the legal expenses and costs of such
action and any liability resulting therefrom shall be expenses, costs and
liabilities of the Servicer and the Servicer will not be entitled to be
reimbursed therefor.
SECTION 8.11. MERGER OR CONSOLIDATION OF SERVICER. Any Person into
which the Servicer may be merged or consolidated, or any corporation, or
other entity resulting from any merger
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conversion or consolidation to which the Servicer shall be a party, or any
Person succeeding to all or substantially of the business of the Servicer (which
Person assumes the obligations of the Servicer), shall be the successor of the
Servicer hereunder, without the execution or filing of any paper or any further
act on the part of any of the parties hereto, anything herein to the contrary
notwithstanding. The Servicer shall give prior written notice of any such merger
or consolidation to which it is a party to the Trustee and the Rating Agencies.
SECTION 8.12. SERVICER NOT TO RESIGN. Subject to the provisions of SECTION
8.03, Servicer shall not resign from the obligations and duties hereby imposed
on it as Servicer under this Agreement except upon determination that the
performance of its duties under this Agreement shall no longer be permissible
under applicable law. Notice of any such determination permitting the
resignation of Servicer shall be communicated to the Trustee at the earliest
practicable time (and, if such communication is not in writing, shall be
confirmed in writing at the earliest practicable time) and any such
determination shall be evidenced by an Opinion of Counsel to such effect
delivered to the Trustee concurrently with or promptly after such notice. No
such resignation shall become effective until the Trustee shall have assumed the
responsibilities and rights of the predecessor Servicer in accordance with
SECTION 8.04.
SECTION 8.13. APPOINTMENT OF SUBSERVICER. So long as Premier Auto Finance,
Inc. acts as the Servicer, the Servicer may at any time without notice or
consent (a) subcontract substantially all its duties under this Agreement to any
corporation more than 50% of the voting stock of which is owned, directly or
indirectly, by Aon Corporation or (b) perform specific duties as servicer under
this Agreement through other subcontractors; PROVIDED, HOWEVER, that, in each
case, no such delegation or subcontracting shall relieve the Servicer of its
responsibilities with respect to such duties as to which the Servicer shall
remain primarily responsible with respect thereto.
ARTICLE NINE
DISTRIBUTIONS, RESERVE FUND AND
YIELD SUPPLEMENT ACCOUNT
SECTION 9.01. Monthly Distributions. (a) Each Certificateholder as of the
related Record Date shall be paid on the next succeeding Distribution Date by
check mailed first-class, postage prepaid, to such Person's address as it
appears on the Certificate Register on such Record Date, except that, unless
Definitive Certificates have been issued pursuant to Section 10.09, with respect
to the Certificates registered on the Record Date in the name of the nominee of
the Clearing Agency (initially, such nominee to be Cede & Co.), payment will be
made by wire transfer in immediately available funds to the account designated
by such nominee, except for the final installment of principal payable with
respect to such Certificate on a Distribution Date or on the related Final
Scheduled Distribution Date, as the case may be, which shall be payable as
provided below.
(b) The Trustee shall serve as the paying agent hereunder (the "Paying
Agent") and shall make the distributions to the Certificateholders required
hereunder. The Trustee hereby agrees that all amounts held by it for
distribution hereunder will be held in trust for the benefit of the
Certificateholders.
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SECTION 9.02. FEES. The Trustee shall be paid the Trustee's Fee and the
Servicer shall be paid the Monthly Servicing Fee, each of which shall be paid
solely from the monies and in accordance with the priorities described in
SECTION 9.04(b). No recourse may be had to the Seller, Depositor, Trustee,
Servicer, or any of their respective Affiliates in the event that amounts
available under SECTION 9.04(b) are insufficient for payment of the Trustee Fee
and the Monthly Servicing Fee.
SECTION 9.03. ADVANCES. On each Determination Date, the Servicer shall
compute the amount of Delinquent Interest for the immediately preceding Due
Period. Not later than each Determination Date, the Servicer shall advance
(each, an "ADVANCE") Delinquent Interest for such Due Period by depositing such
amount in the Collection Account, PROVIDED, HOWEVER, that the Servicer shall be
obligated to advance in respect of a Contract only to the extent that the
Servicer, in its sole discretion, expects that such advance would not be an
Uncollectible Advance. The Servicer shall indicate on each Monthly Report (i)
the amount of Delinquent Interest, if any, for the related Due Period and (ii)
the amount of the Advance, if any, made by the Servicer in respect of the
Delinquent Interest pursuant to this SECTION 9.03. If the amount of such Advance
is less than the amount of the Delinquent Interest, the relevant Monthly Report
shall be accompanied by a certificate of a Servicing Officer setting forth in
reasonable detail the basis for the determination by the Servicer that the
portion of the Delinquent Interest not advanced would be an Uncollectible
Advance. By each Determination Date, the Servicer shall determine the amount of
prior unreimbursed Advances for which it shall be entitled to be reimbursed
(such amount, the "REIMBURSEMENT AMOUNT"). The Servicer shall be entitled to be
reimbursed for an Advance made in respect of a delinquent payment under a
Contract on the earlier of (i) the Distribution Date following the Due Period in
which that delinquent payment was paid and (ii) the Distribution Date following
the Due Period in which that Contract became a Defaulted Contract.
SECTION 9.04. DISTRIBUTIONS. (a) On each Distribution Date, the Servicer
shall determine the amount of the Available Amounts for the related Distribution
Date and shall calculate the Available Interest, the Available Principal, the
Class A Distributable Amount, the Class B Distributable Amount, and all other
distributions to be made on the related Distribution Date.
(b) On each Distribution Date, the Trustee will, based on the
information in the Monthly Report, distribute the following amounts in the
following order of priority:
(i) from Available Interest, the Reimbursement Amount to the
Servicer;
(ii) from Available Interest, the Servicing Fee for the related
Due Period to the Servicer;
(iii) from Available Interest, any accrued and unpaid Trustee Fee
with respect to one or more prior Due Periods;
(iv) to the Class A Certificateholders of record, from Available
Interest, an amount equal to the Class A Interest Distributable Amount
for such Distribution Date and, if such Available Interest is
insufficient, the Class A
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Certificateholders will receive such shortfall first, from monies on
deposit in the Reserve Fund and second, if such amounts are still
insufficient, from the Class B Percentage of Available Principal;
(v) to the Class B Certificateholders of record, from Available
Interest, an amount equal to the Class B Interest Distributable Amount
for such Distribution Date and, if such Available Interest is
insufficient, the Class B Certificateholders will receive such
shortfall from monies on deposit in the Reserve Fund;
(vi) to the Class A Certificateholders of record, from Available
Amounts, an amount equal to the Class A Principal Distributable Amount
for such Distribution Date and, if such Available Amounts are
insufficient, the Class A Certificateholders will receive such
shortfall from monies on deposit in the Reserve Fund;
(vii) to the Class B Certificateholders of record, from Available
Amounts, an amount equal to the Class B Principal Distributable Amount
for such Distribution Date and, if such Available Amounts are
insufficient, the Class B Certificateholders will receive such
shortfall from monies on deposit in the Reserve Fund; and
(viii) any remaining Available Amounts after the payments
described in clauses (i) through (vii) above shall be paid to the
Reserve Agent for deposit in the Reserve Fund.
Notwithstanding anything herein to the contrary, no amount shall be paid to
the Certificateholders in respect of any Yield Supplement Deposit with respect
to a Contract, except to the extent of amounts withdrawn from the Yield
Supplement Account and deposited in the Collection Account or paid to the
Collection Account by the Depositor pursuant to the Yield Supplement Agreement;
PROVIDED, HOWEVER, that, if an insufficiency of funds in the Yield Supplement
Account would result in a shortfall of interest, the amount of such shortfall
shall be withdrawn from the Reserve Fund and deposited in the Collection Account
prior to such Distribution Date.
Any monies intended for the payment of Class A Distributable Amounts or
Class B Distributable Amounts but which remain unclaimed by Certificateholders
for a period of two years after the Final Scheduled Distribution Date shall,
upon the written request of the Depositor, be paid to the Depositor, and such
Certificateholders shall thereafter look only to the Depositor for payment, and
then only to the extent of the amounts so received without interest thereon;
PROVIDED, HOWEVER, that within thirty days prior to the expiration of the
two-year period mentioned above, the Trustee, before being required to make any
such repayment, may, at the expense of the Depositor, cause to be published in a
financial journal a notice that after a date named therein said monies will be
returned to the Depositor.
SECTION 9.05. WITHDRAWAL FROM RESERVE FUND TO COVER A SHORTFALL. On the
Business Day immediately preceding each Distribution Date, the Servicer shall
instruct the Trustee in
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writing (based on the information contained in the Monthly Report delivered on
the related Determination Date pursuant to SECTION 7.06) on such Distribution
Date to withdraw from the Reserve Account an amount equal to the Shortfall with
respect to such Distribution Date and apply such funds in the following order of
priority: first, to the amount of such Shortfall relating to the Class A
Certificate Interest Distributable Amount, second, to the amount of such
Shortfall relating to the Class A Certificate Interest Distributable Amount;
third, to the amount of such Shortfall relating to the Class B Certificate
Principal Distributable Amount; and fourth, to the amount of such Shortfall
relating to the Class B Certificate Principal Distributable Amount. On each
Distribution Date, the Trustee shall withdraw funds from the Reserve Fund and
apply them in accordance with the Servicer's instructions.
SECTION 9.06. REPURCHASES OF CONTRACTS FOR BREACH OF REPRESENTATIONS AND
WARRANTIES. Upon a discovery by the Servicer, the Depositor or the Trustee of a
breach of a representation or warranty of the Depositor as set forth in SECTION
3.01(a) or of the Seller as set forth in EXHIBIT J hereto that materially
adversely affects the Certificateholder's interest in such Contract (without
regard to the benefits of the Reserve Fund), the party discovering the breach
shall give prompt written notice to the other parties PROVIDED, that the Trustee
shall have no duty or obligation to inquire or to investigate the breach by the
Seller of any of such representations or warranties. Unless the breach shall
have been cured by the last day of the Due Period following the Due Period in
which the Depositor becomes aware, or should have become aware, or receives
written notice from the Trustee or Servicer of such breach, the Depositor in
accordance with this SECTION 9.06, shall repurchase such Contract as of the last
day of such Due Period at its Repurchase Price, by depositing such Repurchase
Price in the Collection Account on the related Distribution Date. The repurchase
obligation described in this SECTION 9.06 is in no way to be satisfied with
monies in the Reserve Fund.
SECTION 9.07. SELLER'S REPURCHASE OPTION. As provided in the Transfer and
Sale Agreement, on written notice to the Indenture Trustee at least 20 days
prior to a Distribution Date, and provided that the aggregate unpaid principal
balance of the Class A Certificates and the Class B Certificates on such
Distribution Date is less than 10% of the aggregate Principal Balance as of the
Cutoff Date, the Seller, through the Depositor, may (but is not required to)
repurchase on that Distribution Date pursuant to the Transfer and Sale Agreement
all outstanding Contracts (and related Contract Assets) at a price equal to the
aggregate unpaid principal balance of the Class A Certificates and the Class B
Certificates as of that Distribution Date plus the aggregate of the Certificate
Interest Distributable Amount for the current Distribution Date, the
Reimbursement Amount (if any) as well as accrued and unpaid Monthly Servicing
Fees and the Trustee Fees to the date of such repurchase. Such price will be
deposited in the Collection Account not later than one (1) Business Day before
such Distribution Date, against the Trustee's release of the Contracts and the
Contract Files to the Seller.
SECTION 9.08. REASSIGNMENT OF REPURCHASED CONTRACTS. Upon receipt by the
Trustee for deposit in the Collection Account of the Repurchase Price as
described in SECTION 9.06 or SECTION 9.07, and upon receipt of a certificate of
a Servicing Officer in the form attached hereto as EXHIBIT G, the Trustee shall
assign to the Seller all of the Issuer's right, title and interest in the
repurchased Contract without recourse, representation or warranty, except as to
the absence of liens, charges or encumbrances created by or arising as a result
of actions of the Trustee.
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SECTION 9.09. YIELD SUPPLEMENT ACCOUNT. Pursuant to the Yield Supplement
Agreement, the Depositor shall establish and maintain with the Trustee for the
benefit of the Certificateholders a separate trust account in the name of the
Trustee (the "YIELD SUPPLEMENT ACCOUNT"), or such other account as may be
acceptable to the Rating Agencies. The Yield Supplement Account (or such other
account acceptable to the Rating Agencies) shall not be part of the Trust
Corpus. Subject to the limitations set forth in the Yield Supplement Agreement,
the Depositor hereby conveys and transfers to the Trustee the Yield Supplement
Account, all funds on deposit therein and all proceeds thereof.
ARTICLE TEN
THE CERTIFICATES
SECTION 10.01. THE CERTIFICATES. The Certificates shall be substantially in
the form of EXHIBIT A. Certificates shall be issued in denominations of $1,000
and any integral multiple of $1,000 in excess thereof, except that one
Certificate may be issued in a denomination representing the remainder of the
Class A Initial Certificate Balance and the remainder of the Class B Initial
Certificate Balance. Each Certificate shall be executed by the Trustee on behalf
of the Issuer by the manual or facsimile signature of a duly authorized
Responsible Officer or authorized signatory of the Trustee. Certificates bearing
the signatures of individuals who were at any time the proper officers or
authorized signatories of the Trustee shall bind the Issuer, notwithstanding
that such individuals or any of them have ceased to hold such offices or
positions prior to the authentication and delivery of such Certificates or did
not hold such offices or positions at the date of such Certificates. No
Certificate shall entitle the Certificateholder to any benefit under this
Agreement, or shall be valid for any purpose, unless there shall appear on such
Certificate an authentication substantially in the form set forth in Exhibit A-1
or A-2 hereto as applicable, executed by the Trustee by manual or facsimile
signature; such authentication shall constitute conclusive evidence that such
Certificate has been duly authenticated and delivered hereunder. All
Certificates shall be dated the date of their authentication.
SECTION 10.02. EXECUTION, AUTHENTICATION AND DELIVER OF CERTIFICATES. The
Trustee shall deliver to, or upon the order of, the Depositor, in exchange for
the Contract Assets, the other assets of the Issuer and the pledge of the
Reserve Fund and Yield Supplement Account and amounts on deposit therein,
simultaneously with the sale, assignment and transfer to the Trustee of the
Contracts, the constructive delivery to the Trustee of the Contract Files and
the delivery to the Trustee of the other components of the Issuer, Certificates
duly executed by the Trustee, on behalf of the Issuer, and authenticated by the
Trustee in authorized denominations equaling in the aggregate the Pool Balance
as of the Cutoff Date, and evidencing the entire ownership of the Issuer.
SECTION 10.03. REGISTRATION OF TRANSFER AND EXCHANGE OF CERTIFICATES. (a)
The Trustee shall keep at the office or agency to be maintained by it in
accordance with SECTION 13.03 a "CERTIFICATE REGISTER" in which the Trustee
shall provide for the registration of Certificates and of transfers and
exchanges of Certificates as herein provided. The Trustee initially appoints
itself to be the "CERTIFICATE REGISTRAR" and transfer agent for the purpose of
registering Certificates and transfers and exchanges of Certificates as provided
herein. The Trustee will
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give prompt written notice to Certificateholders and the Servicer of any change
in the Certificate Registrar.
(b) At the option of a Certificateholder, Certificates may be
exchanged for other Certificates of authorized denominations of a like
aggregate original denomination, upon surrender of the Certificates to be
exchanged at the office of the Trustee referred to in Subsection (a) above.
Whenever any Certificates are so surrendered for exchange, the Trustee
shall execute, authenticate and deliver the Certificates which the
Certificateholder making the exchange is entitled to receive. Every
Certificate presented or surrendered for transfer or exchange shall be duly
endorsed by, or shall be accompanied by a written instrument of transfer in
form satisfactory to the Trustee and the Certificate Registrar duly
executed by, the holder thereof or his or her attorney duly authorized in
writing, which signature on such assignment must be guaranteed by a
commercial bank or trust company or a member firm of a national securities
exchange.
SECTION 10.04. NO CHARGE; DISPOSITION OF VOID CERTIFICATES. No service
charge shall be made to a Certificateholder for any transfer or exchange of
Certificates, but the Certificate Registrar or the Trustee may require payment
of a sum sufficient to cover any tax or other governmental charge that may be
imposed in connection with any transfer or exchange of Certificates. All
Certificates surrendered for transfer and exchange shall be disposed of in a
manner approved by the Trustee.
SECTION 10.05. MUTILATED, DESTROYED, LOST OR STOLEN CERTIFICATES. If (a)
any mutilated Certificate is surrendered to the Certificate Registrar, or the
Certificate Registrar receives evidence to its satisfaction of the destruction,
loss or theft of any Certificate, and (b) the Certificateholder delivers to the
Certificate Registrar, the Depositor and the Trustee (at the expense of the
Certificateholder) such security or indemnity as may be required by each to save
it harmless, then in the absence of notice to the Certificate Registrar or the
Trustee that such Certificate has been acquired by a protected purchaser, within
the meaning of Section 8-303 of the UCC, the Trustee shall execute, authenticate
and deliver, in exchange for or in lieu of any such mutilated, destroyed, lost
or stolen Certificate, a new Certificate of like tenor and original
denomination. Upon the issuance of any new Certificate under this SECTION 10.05,
the Trustee may require the payment of a sum sufficient to cover any tax or
other governmental charge that may be imposed in relation thereto. Any duplicate
Certificate issued pursuant to this SECTION 10.04 shall constitute complete and
indefeasible evidence of ownership of the related Fractional Interest, as if
originally issued, whether or not the mutilated, destroyed, lost or stolen
Certificate shall be found at any later time.
SECTION 10.06. PERSONS DEEMED OWNERS. Prior to due presentation of a
Certificate for registration of transfer, the Trustee, the Paying Agent and the
Certificate Registrar may treat the person in whose name any Certificate is
registered on the Certificate Register as the owner of such Certificate for the
purpose of receiving remittances pursuant to SECTION 9.01 and for all other
purposes whatsoever, and none of the Trustee, the Certificate Registrar, the
Paying Agent or any agent of the Trustee or the Certificate Registrar shall be
affected by notice to the contrary.
SECTION 10.07. ACCESS TO LIST OF CERTIFICATEHOLDERS' NAMES AND ADDRESSES.
The Certificate Registrar will furnish to the Trustee, the Depositor and the
Servicer, within five days
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after receipt by the Certificate Registrar of a request therefor from the
Trustee or the Certificateholder in writing, a list, in such form as the Trustee
may reasonably require, of the names and addresses of the Certificateholders as
of the most recent Record Date. If, at such time, if any, as Definitive
Certificates have been issued, Certificateholders with aggregate Fractional
Interests representing 25% or more of the Issuer, (hereinafter referred to as
"APPLICANTS") apply in writing to the Trustee, and such application states that
the Applicants desire to communicate with other Certificateholders with respect
to their rights under this Agreement or under the Certificates and is
accompanied by a copy of the communication which such Applicants propose to
transmit, then the Trustee shall, within five Business Days after the receipt of
such application, afford such Applicants access during normal business hours to
the most recent list of Certificateholders held by the Trustee. If such list is
as of a date more than 90 days prior to the date of receipt of such Applicants'
request, the Trustee shall promptly request from the Certificate Registrar a
current list as provided above, and shall afford such Applicants access to such
list promptly upon receipt. Every Certificateholder, by receiving and holding a
Certificate, agrees with the Certificate Registrar and the Trustee that none of
the Depositor, the Certificate Registrar or the Trustee shall be held
accountable by reason of the disclosure of any such information as to the names
and addresses of the Certificateholders hereunder, regardless of the source from
which such information was derived.
SECTION 10.08. AUTHENTICATING AGENTS. By written instrument, the Trustee
may appoint one or more Authenticating Agents (each, an "AUTHENTICATING AGENT")
with power to act on its behalf and subject to its direction in the
authenticating of the Certificates. For all purposes of this Agreement, the
authentication of Certificates by an Authenticating Agent pursuant to this
SECTION 10.08 shall be deemed to be the authentication of Certificates "by the
Trustee."
SECTION 10.09. BOOK-ENTRY CERTIFICATES. The Class A Certificates and the
Class B Certificates, upon original issuance, will be issued in the form of
typewritten Certificates representing the Book-Entry Certificates, to be
delivered to The Depository Trust Company, the initial Clearing Agency (or a
custodian therefor), by, or on behalf of, the Depositor. The Class A
Certificates and the Class B Certificates delivered to The Depository Trust
Company, shall initially be registered on the Certificate Register in the name
of Cede & Co., the nominee of the initial Clearing Agency, and no
Certificateholder will receive a definitive certificate representing such
Certificate Owner's interest in the Class A Certificates or the Class B
Certificates, except as provided in SECTION 10.11. Unless and until definitive,
fully registered Certificates (the "DEFINITIVE CERTIFICATES") have been issued
to Certificateholders pursuant to SECTION 10.11:
(i) the provisions of this SECTION 10.09 shall be in full
force and effect;
(ii) the Depositor, the Servicer, the Certificate Registrar and the
Trustee may deal with the Clearing Agency for all purposes (including the
making of distributions on the Class A Certificates and the Class B
Certificates) as the authorized representative of the Certificateholders;
(iii) to the extent that the provisions of this SECTION 10.09 conflict
with any other provisions of this Agreement, the provisions of this SECTION
10.09 shall control;
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(iv) the rights of Certificateholders shall be exercised only through
the Clearing Agency and shall be limited to those established by law and
agreements between such Certificateholders and the Clearing Agency and/or
the Clearing Agency Participants and all references in this Agreement to
actions by Certificateholders shall refer to actions taken by the Clearing
Agency upon instructions from the Clearing Agency Participants, and all
references in this Agreement to distributions, notices, reports and
statements to Certificateholders shall refer to distributions, notices,
reports and statements to the Clearing Agency, as registered holder of the
Certificates, as the case may be, for distribution to the beneficial owners
of the Certificates in accordance with the procedures of the Clearing
Agency. Pursuant to the Depository Agreement, unless and until Definitive
Certificates are issued pursuant to SECTION 10.11, the initial Clearing
Agency will make book-entry transfers among the Clearing Agency
Participants and receive and transmit distributions of principal and
interest on the Class A Certificates and the Class B Certificates to such
Clearing Agency Participants; and
(v) whenever this Agreement requires or permits actions to be taken
based upon instructions or directions of Holders evidencing a Fractional
Interest, the Clearing Agency shall be deemed to represent such Fractional
Interest only to the extent that it has received instructions to such
effect from Certificateholders and/or Clearing Agency Participants owning
or representing, respectively, such required percentage of the Certificates
and has delivered such instructions to the Trustee. The Trustee shall have
no obligation to ascertain whether the Clearing Agency has in fact received
any such instructions.
SECTION 10.10. NOTICES TO CLEARING AGENCY. Whenever notice or other
communication to the Class A Certificateholders or the Class B
Certificateholders are required under this Agreement, unless and until
Definitive Certificates shall have been issued to Certificateholders pursuant to
SECTION 10.11, the Trustee and the Servicer shall give all such notices and
communications specified herein to be given to Holders of the Class A
Certificates and the Class B Certificates to the Clearing Agency.
SECTION 10.11. DEFINITIVE CERTIFICATES. If (i)(A) the Depositor advises the
Trustee in writing that the Clearing Agency is no longer willing or able
properly to discharge its responsibilities, and (B) the Trustee is unable to
locate a qualified successor, (ii) the Trustee, at its option, elects to
terminate the book-entry system through the Clearing Agency, or (iii) after the
occurrence of a Servicer Default, Certificateholders representing beneficial
interests aggregating not less than a majority of the Class A Certificate
Balance or Class B Certificate Balance, as applicable, advise the Trustee and
the Clearing Agency through the Clearing Agency Participants in writing that the
continuation of a book-entry system through the Clearing Agency is no longer in
the best interests of the Certificateholders of such class, then the Trustee
shall notify all Certificateholders of such class of the occurrence of any such
event and of the availability of Definitive Certificates to Certificateholders
of such class requesting the same. Upon surrender to the Trustee of the
Certificates of such class by the Clearing Agency, accompanied by registration
instructions from the Clearing Agency for registration, the Trustee shall
execute and authenticate the applicable Definitive Certificates of such class
and deliver
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such Definitive Certificates in accordance with the instructions of the Clearing
Agency. Neither the Depositor, the Certificate Registrar nor the Trustee shall
be liable for any delay in delivery of such instructions and each may
conclusively rely on, and shall be protected in relying on, such instructions.
Upon the issuance of Definitive Certificates, the Trustee shall recognize the
Holders of the Definitive Certificates as Certificateholders hereunder.
ARTICLE ELEVEN
INDEMNITIES
SECTION 11.01. SERVICER INDEMNIFICATION. The Servicer agrees to defend
and indemnify the Trustee, the Paying Agent, the Certificateholders and any
agents of the Trustee, and the Certificateholders against any and all costs,
expenses, losses, damages, claims and liabilities, including reasonable fees
and expenses of counsel and expenses of litigation arising out of or
resulting from this Agreement or any of the related Transaction Documents, or
the use, ownership or operation of any Financed Vehicle by the Servicer or
any Affiliate of the Servicer or any breach of the Servicer's covenants set
forth in clauses (i) through (iv) of SECTION 5.06(f) or in SECTION 5.06(e).
Notwithstanding any other provision of this Agreement, the obligation of the
Servicer described in this SECTION 11.01 shall not terminate or be deemed
released upon a Service Transfer pursuant to ARTICLE VIII and shall survive
any termination of this Agreement.
SECTION 11.02. LIABILITIES TO OBLIGORS. No obligation or liability to any
Obligor under any of the Contracts is intended to be assumed by the Issuer or
the Certificateholders under or as a result of this Agreement and the
transactions contemplated hereby and, to the maximum extent permitted and valid
under mandatory provisions of law, the Issuer and the Certificateholders
expressly disclaim any such assumption.
SECTION 11.03. TAX INDEMNIFICATION. As provided in the Transfer and Sale
Agreement, the Seller has agreed to pay, and to indemnify, defend and hold
harmless the Issuer, the Trustee and the Certificateholders from any taxes which
may at any time be asserted with respect to, and as of the date of, the transfer
of the Contracts to the Issuer, including, without limitation, any sales, gross
receipts, general corporation, personal property, privilege or license taxes
(but not including any federal, state or other taxes arising out of the creation
of the Issuer and the issuance of the Certificates) and costs, expenses and
reasonable counsel fees in defending against the same, whether arising by reason
of the acts to be performed by the Depositor, the Seller or the original
Servicer under this Agreement or imposed against a Certificateholder or
otherwise. Notwithstanding any other provision of this Agreement, the obligation
of the Seller described in this SECTION 11.03 shall not terminate or be deemed
released upon a Service Transfer pursuant to ARTICLE VIII and shall survive any
termination of this Agreement.
SECTION 11.04. SERVICER'S INDEMNITIES. The Servicer shall defend and
indemnify the Trustee and the Certificateholders against any and all costs,
expenses, losses, damages, claims and liabilities, including reasonable fees and
expenses of counsel and expenses of litigation, in respect of any action taken
by such Servicer with respect to any Contract or incurred by reason of the
Servicer's willful misfeasance, bad faith or gross negligence (other than errors
in judgement) in the performance of its duties under this Agreement, or by
reason of reckless disregard of its obligations and duties under this Agreement.
This indemnity shall survive any Service Transfer (but the original Servicer's
obligations under this SECTION 11.04 shall not relate
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to any actions of any subsequent Servicer after a Service Transfer) and any
payment of the amount owing under, or any repurchase by the Seller of, any such
Contract and shall survive any termination of this Agreement.
SECTION 11.05. OPERATION OF INDEMNITIES. Indemnification under this ARTICLE
XI shall include, without limitation, reasonable fees and expenses of counsel
and expenses of litigation. If the Servicer has made any indemnity payments to
the Trustee pursuant to this ARTICLE XI and the Trustee thereafter collects any
of such amounts from others, the Issuer will repay such amounts collected to the
Servicer, without interest.
ARTICLE TWELVE
THE TRUSTEE
SECTION 12.01. DUTIES OF TRUSTEE. The Trustee, prior to the occurrence of a
Servicer Default and after the curing of all Servicer Defaults which may have
occurred, undertakes to perform such duties and only such duties as are
specifically set forth in this Agreement. If a Servicer Default has occurred
(which has not been cured), the Trustee shall exercise such of the rights and
powers vested in it by this Agreement, and use the same degree of care and skill
in their exercise, as a prudent person would exercise or use under the
circumstances in the conduct of his own affairs; PROVIDED, HOWEVER, that if the
Trustee shall assume the duties of the Servicer pursuant to SECTION 8.04, the
Trustee in performing such duties shall use the degree of skill and attention
customarily exercised by a servicer with respect to automobile and light-duty
truck receivables that it services for itself.
The Trustee, upon receipt of all resolutions, certificates, statements,
opinions, reports, documents, orders or other instruments furnished to the
Trustee which are specifically required to be furnished pursuant to any
provision of this Agreement, shall examine them to determine whether they
conform as to form to the requirements of this Agreement and shall promptly
notify the Servicer and each Certificateholder of any failure of any of the
foregoing to so conform.
Subject to SECTION 12.03, no provision of this Agreement shall be construed
to relieve the Trustee from liability for its own negligent action, its own
negligent failure to act (including actions or omissions within its control
resulting in the failure of Certificateholders to receive timely payment of
either the Class A Distributable Amount or the Class B Distributable Amount) or
its own misconduct; PROVIDED, HOWEVER, that:
(a) Prior to the occurrence of a Servicer Default, and after the
curing of all such Servicer Defaults which may have occurred, the duties
and obligations of the Trustee shall be determined solely by the express
provisions of this Agreement, the Trustee shall not be liable except for
the performance of such duties and obligations as are specifically set
forth in this Agreement, no implied covenants or obligations shall be read
into this Agreement against the Trustee and, in the absence of bad faith on
the part of the Trustee, the Trustee may conclusively rely, as to the truth
of the statements and the correctness of the opinions expressed therein,
upon any certificates or opinions furnished to the Trustee and conforming
to the requirements of this Agreement;
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(b) The Trustee shall not be liable for an error of judgment made in
good faith by a Responsible Officer of the Trustee, unless it shall be
proved that the Trustee was negligent in ascertaining the pertinent facts;
(c) The Trustee shall not be personally liable with respect to any
action taken, suffered or omitted to be taken by it in good faith in
accordance with the direction of Certificateholders with aggregate
Fractional Interests representing 25% or more of the Issuer relating to the
time, method and place of conducting any proceeding for any remedy
available to the Trustee, or exercising any trust or power conferred upon
the Trustee, under this Agreement; and
(d) The Trustee shall not be charged with knowledge of any event
referred to in SECTION 8.01 unless a Responsible Officer of the Trustee at
the Corporate Trust Office obtains actual knowledge of such event or the
Trustee receives written notice of such event from the Seller, the
Depositor, the Servicer or the Certificateholders with aggregate Fractional
Interests representing 25% or more of the Issuer.
The Trustee shall not be required to expend or risk its own funds or
otherwise incur financial liability in the performance of any of its duties
hereunder, or in the exercise of any of its rights or powers, if there is
reasonable ground for believing that the repayment of such funds or adequate
indemnity against such risk or liability is not reasonably assured to it,
PROVIDED, HOWEVER, that nothing contained herein shall relieve the Trustee of
the obligations, upon the occurrence of a Servicer Default (which has not been
cured), to exercise such of the rights and powers vested in it by this
Agreement, and to use the same degree of care and skill in their exercise as a
prudent person would exercise or use under the circumstances in the conduct of
his own affairs.
None of the provisions contained in this Agreement shall in any event
require the Trustee to perform, or be responsible for the manner of performance
of, any of the obligations of the Seller, the Depositor or the Servicer under
this Agreement.
Without limiting the generality of this SECTION 12.01, the Trustee shall
have no duty (i) to see to any recording, filing or depositing of this Agreement
or any agreement referred to herein or any financing statement evidencing a
security interest in the Financed Vehicles or to see to the maintenance of any
such recording or filing or depositing or to any re-recording, refiling or
redepositing of any thereof, (ii) to see to any insurance of the Financed
Vehicles or Obligors or to effect or maintain any such insurance, (iii) to see
to the payment or discharge of any tax, assessment or other governmental charge
or any lien or encumbrance of any kind owing with respect to, assessed or levied
against any part of the Issuer, (iv) to confirm or verify the contents of any
reports or certificates delivered to the Trustee pursuant to this Agreement
believed by the Trustee to be genuine and to have been signed or presented by
the proper party or parties, or (v) to inspect the Financed Vehicles at any time
or ascertain or inquire as to the performance or observance of any of the
Seller's or the Servicer's representations, warranties or covenants or the
Servicer's duties and obligations as Servicer and as custodian of the Contract
Files under this Agreement.
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SECTION 12.02. CERTAIN MATTERS AFFECTING THE TRUSTEE. Except as otherwise
provided in SECTION 12.01 and provided the Paying Agent shall also benefit from
the provisions of this SECTION 12.02:
(a) The Trustee may rely and shall be protected in acting or
refraining from acting upon any resolution, Officer's Certificate,
certificate of a Servicing Officer, certificate of auditors or any other
certificate, statement, instrument, opinion, report, notice, request,
consent, order, appraisal, bond or other paper or document believed by it
to be genuine and to have been signed or presented by the proper party or
parties;
(b) The Trustee may consult with counsel and any opinion of any
counsel for the Seller, the Depositor or the Servicer shall be full and
complete authorization and protection in respect of any action taken or
suffered or omitted by the Trustee hereunder in good faith and in
accordance with such opinion of counsel;
(c) The Trustee shall be under no obligation to exercise any of the
rights or powers vested in it by this Agreement, or to institute, conduct
or defend any litigation hereunder or in relation hereto, at the request,
order or direction of any of the Certificateholders, pursuant to the
provisions of this Agreement, unless such Certificateholders shall have
offered to the Trustee reasonable security or indemnity against the costs,
expenses and liabilities which may be incurred therein or thereby;
PROVIDED, HOWEVER, that nothing contained herein shall relieve the Trustee
of the obligations, upon the occurrence of a Servicer Default (which has
not been cured), to exercise such of the rights and powers vested in it by
this Agreement, and to use the same degree of care and skill in their
exercise as a prudent man would exercise or use under the circumstances in
the conduct of his own affairs;
(d) Prior to the occurrence of a Servicer Default and after the curing
of all Servicer Defaults which may have occurred, the Trustee shall not be
bound to make any investigation into the facts or matters stated in any
resolution, certificate, statement, instrument, opinion, report, notice,
request, consent, order, approval, bond or other paper or document, unless
requested in writing so to do by Certificateholders with aggregate
Fractional Interests representing 25% or more of the Issuer; PROVIDED,
HOWEVER, that if the payment within a reasonable time to the Trustee of the
costs, expenses or liabilities likely to be incurred by it in the making of
such investigation is, in the opinion of the Trustee, not reasonably
assured to the Trustee by the security afforded to it by the terms of this
Agreement, the Trustee may require reasonable indemnity against such cost,
expense or liability as a condition to so proceeding. The reasonable
expense of every such examination shall be paid by the Servicer or, if paid
by the Trustee, shall be reimbursed by the Servicer upon demand; and
(e) The Trustee may execute any of the trusts or powers hereunder or
perform any duties hereunder either directly or by or through agents or
attorneys or co-trustees or a custodian and shall not be liable for any
acts or omissions of such agents, attorneys or co-trustees or custodians if
appointed by it with due care hereunder; PROVIDED, HOWEVER, if the Servicer
is acting as custodian, the Servicer is deemed by all parties to have been
appointed with due care.
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SECTION 12.03. TRUSTEE NOT LIABLE FOR CERTIFICATES OR CONTRACTS. The
Trustee assumes no responsibility for the correctness of the recitals contained
herein or in the Certificates (other than the Trustee's execution and
authentication thereof). The Trustee makes no representations as to the validity
or sufficiency of this Agreement, the Issuer or of the Certificates (other than
its execution and authentication thereof) or of any Contract, Contract File or
related document. The Trustee shall not be accountable for the use or
application by the Servicer or the Seller of funds paid to the Seller in
consideration of conveyance of the Contracts to the Depositor or deposited in or
withdrawn from the Collection Account by the Servicer.
SECTION 12.04. TRUSTEE MAY OWN CERTIFICATES. The Trustee in its individual
or other capacity may become the owner or pledgee of Certificates representing
less than all the beneficial interest in the Issuer with the same rights as it
would have if it were not Trustee.
SECTION 12.05. LIMITATION ON RIGHTS OF CERTIFICATEHOLDERS. The death or
incapacity of any Certificateholder shall not operate to terminate this
Agreement or the Issuer, nor entitle the Certificateholder's legal
representatives or heirs to claim an accounting or to take any action or
commence any proceeding in any court for a partition or winding up of the
Issuer, nor otherwise affect the rights, obligations, and liabilities of the
parties to this Agreement or any of them.
No Certificateholder shall have any right to vote (except as provided in
SECTION 8.01, SECTION 8.02, SECTION 8.03, SECTION 8.04, SECTION 10.08, SECTION
12.02, SECTION 12.05, SECTION 13.07 and this SECTION 12.05) or in any manner
otherwise control the operation and management of the Issuer, or the obligations
of the parties to this Agreement, nor shall anything set forth in this Agreement
or contained in the terms of the Certificates, be construed so as to constitute
the Holders as partners or members of an association; nor shall any
Certificateholder be under any liability to any third person by reason of any
action taken pursuant to any provision of this Agreement.
No Certificateholder shall have any right by virtue or by availing itself
of any provision of this Agreement to institute any suit, action, or proceeding
in equity or at law upon or under or with respect to this Agreement, unless such
Holder previously shall have given to the Trustee a written notice of default
and of the continuance thereof, as hereinbefore provided, and unless also
Certificateholders with aggregate Fractional Interests representing 25% or more
of the Issuer shall have made written request upon the Trustee to institute such
action, suit or proceeding in its own name as Trustee under this Agreement and
shall have offered to the Trustee such reasonable indemnity as it may require
against the costs, expenses and liabilities to be incurred therein or thereby,
and the Trustee, for 30 days after its receipt of such notice, request, and
offer of indemnity, shall have either neglected or refused to institute any such
action, suit or proceeding; no one or more Holders of Certificates shall have
any right in any manner whatever by virtue or by availing itself or themselves
of any provisions of this Agreement to affect, disturb, or prejudice the rights
of the Holders of any other of the Certificates, or to obtain or seek to obtain
priority over or preference to any other such Holder, or to enforce any right,
under this Agreement, except in the manner provided in this Agreement and for
the equal, ratable, and common benefit of all Certificateholders For the
protection and enforcement of the provisions of this SECTION 12.05, each
Certificateholder and the Trustee shall be entitled to such relief as can be
given either at law or in equity.
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SECTION 12.06. THE SERVICER TO PAY TRUSTEE'S EXPENSES. The Servicer agrees
to indemnify the Trustee for, and to hold it harmless against, any loss,
liability or expense incurred without negligence or bad faith on the Trustee's
part, arising out of or in connection with the acceptance or administration of
this trust and its duties hereunder, including the costs and expenses of
defending itself against any claim or liability in connection with the exercise
or performance of any of its powers or duties hereunder.
This SECTION 12.06 shall be for the benefit of the Trustee in its
capacities as Trustee, Paying Agent, and Certificate Registrar hereunder, and
shall not terminate or be deemed released upon a Service Transfer pursuant to
ARTICLE VIII and shall survive the termination of this Agreement.
SECTION 12.07. ELIGIBILITY REQUIREMENTS FOR TRUSTEE. The Trustee hereunder
shall at all times be a financial institution organized and doing business under
the laws of the United States of America or any state, authorized under such
laws to exercise corporate trust powers, whose long term unsecured debt is rated
at least Baa3 by Xxxxx'x and shall have a combined capital and surplus of at
least $50,000,000 or shall be a member of a bank holding system the aggregate
combined capital and surplus of which is $50,000,000 and subject to supervision
or examination by Federal or state authority, PROVIDED that the Trustee's
separate capital and surplus shall at all times be at least the amount required
by SECTION 310(a)(2) of the Trust Indenture Act of 1939, as amended. If such
Person publishes reports of condition at least annually, pursuant to law or to
the requirements of a supervising or examining authority, then for the purposes
of this SECTION 12.07, the combined capital and surplus of such Person shall be
deemed to be its combined capital and surplus as set forth in its most recent
report of condition so published. In case at any time the Trustee shall cease to
be eligible in accordance with the provisions of this SECTION 12.07, the Trustee
shall resign immediately in the manner and with the effect specified in SECTION
12.08.
SECTION 12.08. RESIGNATION OR REMOVAL OF TRUSTEE. The Trustee may at any
time resign and be discharged from the trusts hereby created by giving written
notice thereof to the Servicer with a copy to the Depositor, the Seller, and the
Certificateholders. Upon receiving such notice of resignation, the Depositor
shall promptly appoint a successor Trustee by written instrument, in duplicate,
one copy of which instrument shall be delivered to each of the Servicer and the
Seller and one copy to the successor Trustee. If no successor Trustee shall have
been so appointed and shall have accepted such appointment within 30 days after
the giving of such notice of resignation, the resigning Trustee may petition any
court of competent jurisdiction for the appointment of a successor Trustee.
If at any time the Trustee shall cease to be eligible in accordance with
the provisions of SECTION 12.07 and shall fail to resign after written request
therefor by the Depositor, or if at any time the Trustee shall be legally unable
to act, or shall be adjudged a bankrupt or insolvent, or a receiver of the
Trustee or of its property shall be appointed, or any public officer shall take
charge or control of the Trustee or of its property or affairs for the purpose
of rehabilitation, conservation or liquidation, then the Depositor may remove
the Trustee. If the Depositor shall have removed the Trustee under the authority
of the immediately preceding sentence, the Depositor shall promptly appoint a
successor Trustee by written instrument one copy of which
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instrument shall be delivered to the Trustee so removed, the Depositor and the
Seller and one copy to the successor trustee.
Any resignation or removal of the Trustee and appointment of a successor
Trustee pursuant to any of the provisions of this SECTION 12.08 shall not become
effective until acceptance of appointment by the successor Trustee as provided
in SECTION 12.09.
Any resigning or removed Trustee shall be entitled to payment of all
Trustee's Fees earned and reimbursement for all expenses incurred by it up to
the date of resignation. All indemnification obligations of the Servicer and the
Seller shall survive such resignation or removal.
SECTION 12.09. SUCCESSOR TRUSTEE. Any successor Trustee appointed as
provided in SECTION 12.08 shall execute, acknowledge and deliver to the
Servicer, the Depositor and to its predecessor Trustee, an instrument accepting
such appointment hereunder, and thereupon the resignation or removal of the
predecessor Trustee shall become effective and such successor trustee, without
any further act, deed or conveyance, shall become fully vested with all the
rights, powers, duties and obligations of its predecessor hereunder, with like
effect as if originally named as Trustee. The predecessor Trustee shall deliver
or cause to be delivered to the successor Trustee the Contracts and the Contract
Files (if any such Contracts and Contract Files are in the Trustee's possession)
and any related documents and statements held by it hereunder; and, if the
Contracts are then held by a custodian pursuant to a custodial agreement, the
predecessor Trustee and the custodian shall amend such custodial agreement to
make the successor Trustee the successor to the predecessor Trustee thereunder;
and the Servicer, the Depositor and the predecessor Trustee shall execute and
deliver such instruments and do such other things as may reasonably be required
for fully and certainly vesting and confirming in the successor Trustee all such
rights, powers, duties and obligations.
No successor Trustee shall accept appointment as provided in this SECTION
12.09 unless at the time of such acceptance such successor Trustee shall be
eligible under the provisions of SECTION 12.07.
Upon acceptance of appointment by a successor Trustee as provided in this
SECTION 12.09, the Servicer shall cause notice of the succession of such Trustee
hereunder to be mailed to each Rating Agency and to each Certificateholder at
their addresses as shown in the Certificate Register. If the Servicer fails to
mail such notice within ten days after acceptance of appointment by the
successor Trustee, the successor Trustee shall cause such notice to be mailed at
the expense of the Servicer.
SECTION 12.10. MERGER OR CONSOLIDATION OF TRUSTEE. Any Person into which
the Trustee may be merged or converted or with which it may be consolidated, or
any Person resulting from any merger, conversion or consolidation to which the
Trustee shall be a party, or any Person succeeding to the corporate trust
business of the Trustee, shall be the successor of the Trustee hereunder,
provided such Person shall be eligible under the provisions of SECTION 12.07,
without the execution or filing of any paper or any further act on the part of
any of the parties hereto, anything herein to the contrary notwithstanding. Upon
such occasion, the Servicer shall cause notice thereof to be mailed to each
Rating Agency and each Certificateholder. If the Servicer
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fails to mail such notice within ten days after such succession, the successor
Trustee shall cause such notice to be mailed at the expense of the Servicer with
a copy to each Certificateholder.
SECTION 12.11. TAX RETURNS.
(a) The Servicer, on behalf of the Issuer, shall request that the
Trustee furnish the Servicer with all such information in the Trustee's
possession as may be reasonably required in connection with the preparation
of all tax returns of the Issuer and the Trustee shall, upon such request,
furnish such information and execute such returns; and
(b) As directed by the Servicer in writing, the Trustee shall take all
action specified in such writing relating to (i) certain withholding
requirements applicable to non-U.S. persons; (ii) backup withholding
requirements; and (iii) certain taxpayer certification requirements
relating to clauses (i) and (ii) above.
SECTION 12.12. OBLIGOR CLAIMS. In connection with any offset defenses, or
affirmative claims for recovery, asserted in legal actions brought by Obligors
under one or more Contracts based upon provisions therein complying with, or
upon other rights or remedies arising from, any legal requirements applicable to
the Contracts, including, without limitation, the Federal Trade Commission's
Trade Regulation Rule Concerning Preservation of Consumers' Claims and Defenses
(16 C.F.R. Section 433) as amended from time to time:
(a) The Trustee is not, and shall not be deemed to be, either in any
individual capacity, as trustee hereunder or otherwise, a creditor, or a
joint venturer with or an Affiliate of, or acting in concert or cooperation
with, any seller of motor vehicles, in the arrangement, origination or
making of Contracts. The Trustee is the holder of the Contracts only as
trustee on behalf of the Certificateholders, and not as a principal or in
any individual or personal capacity;
(b) The Trustee shall not be personally liable for or obligated to pay
Obligors any affirmative claims asserted thereby, or responsible to
Certificateholders for any offset defense amounts applied against Contract
payments pursuant to such legal actions;
(c) The Trustee will pay, solely from available monies of the Issuer,
affirmative claims for recovery by Obligors only pursuant to final judicial
orders or judgments, or judicially approved settlement agreements,
resulting from such legal actions; and
(d) The Servicer has agreed to indemnify, hold harmless and defend the
Trustee and Certificateholders from and against any and all liability,
loss, costs and expenses of the Trustee and Certificateholders resulting
from any affirmative claims for recovery asserted or collected by Obligors
under the Contracts. Notwithstanding any other provision of this Agreement,
the obligation of the Servicer described in this SECTION 12.12(d) shall not
terminate or be deemed released upon a Service Transfer pursuant to ARTICLE
VIII and shall survive termination of this Agreement.
SECTION 12.13. APPOINTMENT OF CO-TRUSTEE OR SEPARATE TRUSTEE.
Notwithstanding any other provisions hereof, at any time, for the purpose of
meeting any legal requirements of any
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jurisdiction having authority over the Issuer, the Contracts or the Obligors,
the Servicer and Trustee acting jointly shall have the power and shall execute
and deliver all instruments to appoint one or more Persons approved by the
Trustee to act as co-trustee or co-trustees, jointly with the Trustee, or
separate trustee or separate trustees, of all or any part of the Issuer, and to
vest in such Person or Persons, in such capacity, such title to the Issuer, or
any part thereof, and, subject to the other provisions of this SECTION 12.13,
such powers, duties, obligations, rights and trusts as the Servicer and the
Trustee may consider necessary or desirable. If the Servicer shall not have
joined in such appointment within 15 days after the receipt by it of a request
to do so, or in case an Servicer Default shall have occurred and be continuing,
the Trustee alone shall have the power to make such appointment. No co-trustee
or separate trustee hereunder shall be required to meet the terms of eligibility
as a successor trustee under SECTION 12.07 hereunder and no notice to
Certificateholders of the appointment of co-trustee(s) or separate trustee(s)
shall be required under SECTION 12.09 hereof.
In the case of any appointment of a co-trustee or separate trustee pursuant
to this SECTION 12.13, all rights, powers, duties and obligations conferred or
imposed upon the Trustee shall be conferred or imposed upon and exercised or
performed by the Trustee and such co-trustee or separate trustee jointly, except
to the extent that under any law of any jurisdiction in which any particular act
or acts are to be performed (whether as Trustee hereunder or as successor to the
Servicer hereunder), the Trustee shall be incompetent or unqualified to perform
such act or acts, in which event such rights, powers, duties and obligations
(including the holding of title to the Issuer or any portion thereof in any such
jurisdiction) shall be exercised and performed by such co-trustee or separate
trustee at the direction of the Trustee.
Any notice, request or other writing given to the Trustee shall be deemed
to have been given to each of the then co-trustees and separate trustees, as
effectively as if given to each of them. Every instrument appointing any
co-trustee or separate trustee shall refer to this Agreement and the conditions
of this ARTICLE XII. Each co-trustee and separate trustee, upon its acceptance
of the trusts conferred, shall be vested with the estates or property specified
in its instrument of appointment, either jointly with the Trustee or separately,
as may be provided therein, subject to all the provisions of this Agreement,
specifically including every provision of this Agreement relating to the conduct
of, affecting the liability of, or affording protection to, the Trustee. Every
such instrument shall be filed with the Trustee.
Any co-trustee or separate trustee may, at any time, constitute the
Trustee, its agent or attorney-in-fact, with full power and authority, to the
extent not prohibited by law, to do any lawful act under or in respect of this
Agreement on its behalf and in its name. If any co-trustee or separate trustee
shall die, become incapable of acting, resign or be removed, all of its estates,
properties, rights, remedies and trusts shall vest in and be exercised by the
Trustee, to the extent permitted by law, without the appointment of a new or
successor trustee.
SECTION 12.14. REPRESENTATIONS AND WARRANTIES OF TRUSTEE. The Trustee,
solely in its capacity as Trustee, makes the following representations and
warranties:
(a) The Trustee is duly organized and validly existing as a(n)
__________ banking corporation in good standing under the laws of the State
of __________, with trust powers and with power and authority to own its
properties and to conduct its
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business as such properties shall be currently owned and such business is
presently conducted.
(b) The Trustee has the power and authority to execute and deliver
this Agreement and to carry out its terms; and the execution, delivery, and
performance of this Agreement has been duly authorized by the Trustee by
all necessary corporate action.
(c) This Agreement constitutes a legal, valid, and binding obligation
of the Trustee, enforceable in accordance with its terms, except as
enforceability may be limited by bankruptcy, insolvency, reorganization, or
other similar laws affecting the enforcement of creditors' rights in
general and by general principles of equity, regardless of whether such
enforceability shall be considered in a proceeding in equity or at law.
(d) The consummation of the transactions contemplated by this
Agreement, and the fulfillment of the terms hereof, do not conflict with,
result in any breach of any of the terms and provisions of, nor constitute
(with or without notice or lapse of time) a default under, the charter or
by-laws of the Trustee or any indenture, agreement, or other instrument to
which the Trustee is a party or by which it is bound; nor result in the
creation or imposition of any lien upon any of its properties pursuant to
terms of any such indenture, agreement, or other instrument; nor violate
any law or any order, rule, or regulation applicable to the Trustee of any
court or of any Federal or state regulatory body, administrative agency, or
other governmental instrumentality having jurisdiction over the Trustee or
its properties.
(e) There are no proceedings or investigations pending or, to the best
knowledge of the Trustee, threatened before any court, regulatory body,
administrative agency, or other governmental instrumentality having
jurisdiction over the Trustee or its properties (i) asserting the
invalidity of this Agreement, or (ii) seeking to prevent the consummation
of any of the transactions contemplated by this Agreement, or (iii) seeking
any determination or ruling that might materially and adversely affect the
performance by the Trustee of its obligations under, or the validity or
enforceability of, this Agreement.
(f) In no event shall the Trustee be required to perform, or be
responsible for the manner of performance of, any of the obligations of the
Servicer, or any other party, under this Agreement except that Trustee
solely in its capacity as Successor Servicer shall perform and be
responsible for such obligations during such time, if any, as the Successor
Servicer shall be the successor to, and be vested with the rights, powers,
duties and privileges of the Servicer in accordance with the terms of the
Agreement.
(g) The Trustee shall not be responsible for and makes no
representation as to the validity or adequacy of this Agreement, the Trust
Corpus or the Certificates, it shall not be accountable for the Depositor's
use of the proceeds from the Certificates, and it shall not be responsible
for any statement of the Depositor in the Agreement or in any document
issued in connection with the sale of the Certificates or in the
Certificates other than the Trustee's certificate of authentication.
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SECTION 12.15. PROTECTION OF TITLE.
(a) The Servicer shall execute and file such financing statements and
cause to be executed and filed such continuation statements, all in such
manner and in such places as may be required by law fully to preserve,
maintain and protect the interest of the Certificateholders and the Trustee
in the Contracts and in the proceeds thereof. The Servicer shall deliver
(or cause to be delivered) to the Trustee file-stamped copies of, or filing
receipts for, any document filed as provided above, as soon as available
following such filing.
(b) Neither the Seller, the Depositor nor the Servicer shall change
its name, identity or corporate structure in any manner that would, could
or might make any financing statement or continuation statement filed in
accordance with SECTION 4.02 seriously misleading within the meaning of
Section 9-402(7) of the UCC, unless it shall have given the Trustee at
least 30 days' prior written notice thereof and shall have promptly filed
appropriate amendments to all previously filed financing statements or
continuation statements.
(c) The Seller, the Depositor and the Servicer shall give the Trustee
at least 30 days' prior written notice of any relocation of the principal
executive office of Premier Auto Finance, Inc., the Depositor and the
Servicer (in the case of notice provided by the Servicer) if, as a result
of such relocation, the applicable provisions of the UCC would require
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 Contracts, and its
principal executive office, within the United States.
(d) The Servicer shall maintain or cause to be maintained accounts and
records as to each Contract accurately and in sufficient detail to permit
(i) the reader thereof to know at any time the status of such Contract,
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 Contract and the amounts from time to time deposited in or
credited to the Collection Account in respect of each Contract.
(e) The Servicer shall maintain or cause to be maintained its computer
systems so that, from and after the time of sale under this Agreement of
the Contracts, the Servicer's master computer records (including any backup
archives) that shall refer to a Contract indicate clearly that such
Contract is owned by the Issuer. Indication of the Issuer's ownership of a
Contract shall be deleted from or modified on the Servicer's computer
systems when, and only when, the related Contract shall have been
paid in full or repurchased or shall have become a Defaulted Contract.
(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 retail installment
- 56 -
sale contracts to any prospective purchaser, lender or other transferee,
the Servicer shall give or cause to be given to such prospective purchaser,
lender or other transferee computer tapes, records or print-outs (including
any restored from back-up archives) that, if they shall refer in any manner
whatsoever to any Contract, shall indicate clearly that such Contract has
been sold and is owned by the Issuer.
(g) The Servicer shall permit the Trustee and its agents, at any time
during normal business hours, to inspect, audit and make copies of and
abstracts from the Servicer's records regarding any Contract.
(h) Upon request, the Servicer shall furnish to the Trustee, within
five Business Days, a list of all Contracts then held as part of the Trust
Estate, together with a reconciliation of such list to the List of
Contracts and to each of the Monthly Reports furnished before such request
indicating removal of Contracts from the Issuer.
(i) The Servicer shall deliver to the Trustee and each Rating Agency
upon the execution and delivery of this Agreement and promptly after the
execution and delivery of each amendment hereto, an Opinion of Counsel
either (A) stating that, in the opinion of such counsel, all financing
statements and continuation statements have been executed and filed that
are necessary fully to preserve and protect the interest of the Trustee and
reciting the details of each filings or referring to prior Opinions of
Counsel in which such details are given, or (B) stating that, in the
opinion of such counsel, no such action shall be necessary to preserve and
protect such interest.
ARTICLE THIRTEEN
MISCELLANEOUS
SECTION 13.01. SERVICER NOT TO RESIGN. The Servicer shall not resign from
the obligations and duties hereby imposed on it except upon a determination that
the performance of its duties hereunder is no longer permissible under
applicable law. Any such determination permitting the resignation of the
Servicer shall be evidenced by an opinion of counsel for the Servicer to such
effect delivered to the Trustee. No such resignation shall become effective
until a Successor Servicer shall have assumed the responsibilities and
obligations of the Servicer in accordance with SECTION 8.03.
SECTION 13.02. PROHIBITED TRANSACTIONS WITH RESPECT TO THE ISSUER. Neither
the Servicer nor the Depositor shall:
(a) Provide credit to any Certificateholder for the purpose of
enabling such Certificateholder to purchase Certificates;
(b) Purchase any Certificates in an agency or trustee capacity; or
(c) Except as provided herein, lend any money to the Issuer.
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SECTION 13.03. MAINTENANCE OF OFFICE OR AGENCY. The Trustee shall maintain
an office or agency in [New York, New York] where Certificates may be
surrendered for registration of transfer or exchange and where notices and
demands to or upon the Trustee in respect of the Certificates and this Agreement
may be served. On the date hereof the Trustee's office for such purposes is
located at the address set forth in SECTION 13.08. The Trustee will give prompt
written notice to Certificateholders of any change in the location of the
Certificate Register or any such office or agency.
SECTION 13.04. TERMINATION. This Agreement shall terminate (after
distribution of all Class A Distributable Amounts and Class B Distributable
Amounts due to Certificateholders pursuant to SECTIONS 9.01 and 9.04) on the
Distribution Date on which the Class A Certificate Balance and Class B
Certificate Balance is reduced to zero; PROVIDED, that in no event shall the
trust created hereby continue beyond the expiration of 21 years from the death
of the last survivor of the descendants of Xxxxxx X. Xxxxxxx, the late
Ambassador of the United States to the Court of St. Xxxxx, living on the date
hereof, and PROVIDED, FURTHER, that the Servicer's and the Depositor's
representations and warranties and the indemnities by the Seller and Servicer
shall survive termination. Upon such termination, the Trustee shall provide each
Rating Agency written notice of such termination. Additionally, upon such
termination any amounts remaining in the Collection Account after distribution
of all amounts payable to the Certificateholders in respect of Class A
Distributable Amounts and Class B Distributable Amounts and payment of all other
amounts owed to the Certificateholders shall be paid to the Depositor.
SECTION 13.05. ACTS OF CERTIFICATEHOLDERS. (a) Except as otherwise
specifically provided herein, whenever Certificateholder approval,
authorization, direction, notice, consent, waiver or other action is required
hereunder, such approval, authorization, direction, notice, consent, waiver or
other action shall be deemed to have been given or taken on behalf of, and shall
be binding upon, all Certificateholders if agreed to by Certificateholders with
aggregate Fractional Interests representing more than a majority of the Issuer.
(b) Any request, demand, authorization, direction, notice, consent,
waiver or other action provided by this Agreement to be given or taken by
Certificateholders may be embodied in and evidenced by one or more
instruments of substantially similar tenor signed by such
Certificateholders in person or by an agent duly appointed in writing; and
except as herein otherwise expressly provided, such action shall become
effective when such instrument or instruments are delivered to the Trustee
and, where required, to the Servicer. Proof of execution of any such
instrument or of a writing appointing any such agent shall be sufficient
for any purpose of this Agreement and (subject to SECTION 12.01) conclusive
in favor of the Trustee, the Servicer, the Depositor and the Seller if made
in the manner provided in this SECTION 13.05.
(c) The fact and date of the execution by any Certificateholder of any
such instrument or writing may be proved in any reasonable manner which the
Trustee deems sufficient.
(d) The ownership of Certificates shall be proved by the Certificate
Register, absent manifest error.
- 58 -
(e) Any request, demand, authorization, direction, notice, consent,
waiver or other act by a Certificateholder shall bind every holder of every
Certificate issued upon the registration of transfer thereof or in exchange
therefor or in lieu thereof, in respect of anything done, or omitted to be
done by the Trustee, the Servicer or the Depositor in reliance thereon,
whether or not notation of such action is made upon such security.
(f) The Trustee may require such additional proof of any matter
referred to in this SECTION 13.05 as it shall deem necessary.
SECTION 13.06. CALCULATIONS. Except as otherwise provided in this
Agreement, all interest rate and basis point calculations under this Agreement
will be made on the basis of a 360-day year comprised of twelve 30-day months
and will be carried out to at least three decimal places.
SECTION 13.07. AMENDMENT. (a) This Agreement may be amended from time to
time by the Servicer, the Depositor and the Trustee, collectively, with notice
to each Rating Agency, but without the consent of any of the Certificateholders,
to correct manifest error, to cure any ambiguity, to correct or supplement any
provisions herein which may be inconsistent with any other provisions herein or
in any other Transaction Document, as the case may be, or to add, modify or
eliminate any other provisions with respect to matters or questions arising
under this Agreement; PROVIDED, HOWEVER, that such action shall not, as
evidenced by an Opinion of Counsel for the Depositor, have a material adverse
effect on the Certificateholders.
(b) This Agreement may also be amended from time to time by the Servicer,
the Depositor and the Trustee, with the consent of Certificateholders with
aggregate Fractional Interests representing more than 50% of the Issuer, for the
purpose of adding any provisions to or changing in any manner or eliminating any
of the provisions of this Agreement or of modifying in any manner the rights of
the Certificateholders; PROVIDED, HOWEVER, that no such amendment or waiver
described above shall (x) increase or reduce in any manner the amount of, or
accelerate or delay the timing of, collections of payments on the Contracts or
distributions which are required to be made on any Certificate, (y) change the
Pass Through Rate on any Certificates which such change adversely affects the
priority of payments of principal or interest made to the Certificateholders,
(z) reduce the aforesaid percentage required to consent to any such amendment,
without the consent of the holders of all Certificates then outstanding (c)
modify the manner of application of collections of payments on the Contracts or
distributions which are required to be made on any Certificate, (d) impair the
right of any Certificateholder to xxx to enforce the obligation to make the
distributions which are required to be made on any Certificate, (e) permit the
creation of any lien on Collateral that ranks prior to or on a parity with the
lien on Collateral granted hereunder, (f) adversely affect the manner of
determining outstanding Certificates for voting purposes and PROVIDED, FURTHER,
that no such amendment or consent shall be effective unless each Rating Agency
delivers written confirmation that such amendment or consent will not cause its
then-current rating on any Class of Certificates to be qualified, reduced or
withdrawn.
(c) Promptly after the execution of any amendment or consent pursuant to
this SECTION 13.07, the Trustee shall furnish written notification of the
substance of such amendment or consent, together with a copy thereof, to each
Rating Agency.
- 59 -
(d) Promptly after the execution of any such amendment or consent, the
Trustee shall furnish written notification of the substance of such amendment or
consent to each Certificateholder. It shall not be necessary for the consent of
Certificateholders pursuant to SECTION 13.07(b) to approve the particular form
of any proposed amendment or consent, but it shall be sufficient if such consent
shall approve the substance thereof. The manner of obtaining such consents and
of evidencing the authorization by Certificateholders of the execution thereof
shall be subject to such reasonable requirements as the Trustees may prescribe.
(e) Prior to the execution of any amendment to this Agreement, the Trustee
shall be entitled to receive and rely upon an Opinion of Counsel stating that
the execution of such amendment is authorized or permitted by this Agreement.
The Trustee may, but shall not be obligated to, enter into any such amendment
which affects the Trustee's own rights, duties or immunities under this
Agreement or otherwise.
(f) Upon the execution of any amendment or consent pursuant to this SECTION
13.07, this Agreement shall be modified in accordance therewith, and such
amendment or consent shall form a part of this Agreement for all purposes, and
every Certificateholder theretofore or thereafter issued hereunder shall be
bound thereby.
SECTION 13.08. NOTICES. All communications and notices pursuant hereto to
the Servicer, the Depositor, the Servicer, the Trustee, the Seller, Standard &
Poor's and Moody's shall be in writing and delivered or mailed to it at the
appropriate following address:
If to the Servicer: Premier Auto Finance, Inc.
000 Xxxx Xxxxxx Xxxxxx
Xxxxxxx, Xxxxxxxx 00000
Attention: Xxxxxxx Xxxxxxxx Xxxxx
If to the Depositor: Dealer Auto Receivables Corp.
000 Xxxx Xxxxxx Xxxxxx
Xxxxxxx, Xxxxxxxx 00000
Attention: Xxxxxxx Xxxxxxxx Xxxxx
If to the Trustee: [_______________________]
[_______________________]
[_______________________]
Attention: [_________________]
If to the Seller: Premier Auto Finance, L.P.
000 Xxxx Xxxxxx Xxxxxx
Xxxxxxx, Xxxxxxxx 00000
Attention: Xxxxxxx Xxxxxxxx Xxxxx
If to Moody's: Xxxxx'x Investors Service
00 Xxxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: ABS Monitoring Department
- 60 -
If to Standard & Poor's: Standard & Poor's Ratings Services, a
division of The McGraw Hill Company, 00 Xxxxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Asset Backed Securities Surveillance
or at such other address as the party may designate by notice to the other
parties hereto, which notice shall be effective when received.
All communications and notices pursuant hereto to a Certificateholder shall
be in writing and delivered or mailed at the address shown in the Certificate
Register.
SECTION 13.09. MERGER AND INTEGRATION. Except as specifically stated
otherwise herein, this Agreement sets forth the entire understanding of the
parties relating to the subject matter hereof, and all prior understandings,
written or oral, are superseded by this Agreement. This Agreement may not be
modified, amended, waived, or supplemented except as provided herein.
SECTION 13.10. HEADINGS. The headings herein are for purposes of reference
only and shall not otherwise affect the meaning or interpretation of any
provision hereof.
SECTION 13.11. GOVERNING LAW. This Agreement shall be governed by, and
construed and enforced in accordance with, the laws of the State of Illinois.
SECTION 13.12. NO INSOLVENCY PETITION. The Trustee and the Servicer hereby
covenant and agree that, prior to the date which is one year and one day after
the payment in full of the Certificates, they will not institute against, or
join with any other Person in instituting against the Depositor or the Issuer
any involuntary insolvency proceedings under any applicable bankruptcy,
insolvency or other similar law now or hereafter in effect, or requesting the
appointment of a receiver, liquidator, assignee, custodian, trustee,
sequestrator (or similar official), or for the substantial liquidation of their
respective affairs. This SECTION 13.12 shall survive the termination of this
Agreement.
SECTION 13.13. THIRD PARTY BENEFICIARY. This Agreement shall inure to the
benefit of and be binding upon the parties hereto and the Certificateholders and
their respective successors and permitted assigns. Except as otherwise provided
in this ARTICLE XIII, no other Person shall have any right or obligation
hereunder.
SECTION 13.14. NO ADDITIONAL SECURITIES. Notwithstanding anything to the
contrary contained herein, the Issuer shall not issue any additional
Certificates or issue any other form of securities. Moreover, except as provided
for in SECTION 5.05(c), the Issuer will not purchase, or otherwise obtain any
assets after the Closing Date or reinvest amounts received with respect to the
assets of the Issuer.
SECTION 13.15. NO ADDITIONAL INDEBTEDNESS BY THE DEPOSITOR. The Depositor
hereby covenants that it shall not incur any indebtedness other than
indebtedness necessary to meet its obligations under the Transaction Documents
or any other similar documentation relating to any future grantor trusts in
which the Depositor participates.
- 61 -
SECTION 13.16. CERTIFICATES NONASSESSABLE AND FULLY PAID. The interests
represented by the Certificates shall be nonassessable for any losses or
expenses of the Issuer or for any reason whatsoever, and, upon authentication
thereof by the Trustee pursuant to SECTION 10.02, each Certificate shall be
deemed fully paid.
[signature pages follow]
- 62 -
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed by their respective officers thereunto duly authorized as of the date
first above written.
DEALER AUTO RECEIVABLES CORP.,
as Depositor
By
---------------------------------------
Name:
----------------------------------
Title:
---------------------------------
PREMIER AUTO FINANCE, INC., as Servicer
By
---------------------------------------
Name:
----------------------------------
Title:
---------------------------------
[---------------------------------------]
a(n) ________________ banking corporation,
not in its individual capacity but solely
as Trustee
By
---------------------------------------
Name:
----------------------------------
Title:
- 63 -
EXHIBIT A-1
[Form of Class A Certificate]
Dealer Auto Receivables Grantor Trust 2000-1
_____% Certificate, Class A
UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE
DEPOSITORY TRUST COMPANY, A NEW YORK CORPORATION ("DTC"), TO THE TRUSTEE OR ITS
AGENT FOR REGISTRATION OF TRANSFER, EXCHANGE OR PAYMENT, AND ANY CERTIFICATE
ISSUED IS REGISTERED IN THE NAME OF CEDE & CO. OR IN SUCH OTHER NAME AS IS
REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC (AND ANY PAYMENT IS MADE TO
CEDE & CO. OR TO SUCH OTHER ENTITY AS IS REQUESTED BY AN AUTHORIZED
REPRESENTATIVE OF DTC), ANY TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR
OTHERWISE BY OR TO ANY PERSON IS WRONGFUL INASMUCH AS THE REGISTERED OWNER
HEREOF, CEDE & CO., HAS AN INTEREST HEREIN.
This Class A Certificate does not represent an obligation of or an interest
in Dealer Auto Receivables Corp., Premier Auto Finance, Inc. or any affiliate
thereof, except to the extent set forth in the Agreement.
The principal represented by this Class A Certificate is payable in
installments, as described herein and in the Agreement. Accordingly, the unpaid
Class A Certificate Balance of this Class A Certificate may be less than that
set forth below. Anyone acquiring this Class A Certificate may ascertain the
current unpaid Class A Certificate Balance represented by this certificate by
inquiry of the Trustee.
No. Class A Initial Certificate Principal Balance: $_________
Fractional Interest: ______%
This certifies that ____________________________ is the registered owner of the
undivided Fractional Interest represented by the Class A Initial Certificate
Principal Balance set forth above in Dealer Auto Receivables Grantor Trust
2000-1 (the "TRUST"), which includes among its assets a pool of motor vehicle
retail installment sale contracts (including, without limitation, all security
interests and any and all rights to receive payments which are collected
pursuant thereto on or after the Cutoff Date) (the "CONTRACTS"). The Issuer has
been created pursuant to a Pooling and Servicing Agreement (the "AGREEMENT"),
dated as of _________, 2000, by and among Dealer Auto Receivables Corp., as
depositor (the "DEPOSITOR"), Premier Auto Finance, Inc., as servicer (in such
capacity, the "SERVICER") and _____________, as Trustee of the Trust (in such
capacity, the "TRUSTEE"). This Class A Certificate is one of the Class A
Certificates described in the Agreement and is issued, together with the Class B
Certificates, pursuant and subject to the Agreement. By acceptance of this Class
A Certificate the holder assents to and becomes bound by the Agreement. The
Agreement provides that the holder of a Class A Certificate agrees to report the
income on the Class A Certificate in a manner consistent with the intended
characterization of the Issuer as a grantor trust. To the extent not defined
herein, all capitalized
A-1-1
terms have the meanings assigned to such terms in the Agreement and all Section
references, unless otherwise specified, are to Sections of the Agreement.
It is contemplated by the Transaction Documents that the proceeds from the
issuance of the Certificates will be used in their entirety by the Depositor to
purchase Contracts.
The Agreement contemplates, subject to its terms, payment on the [_______]
day (or if such day is not a Business Day, the next succeeding Business Day)
(each, a "DISTRIBUTION DATE") of each calendar month commencing _________, 2000,
so long as the Agreement has not been terminated, by check from funds drawn from
the Collection Account to the registered Class A Certificateholder at the
address appearing on the Certificate Register (or by wire transfer if the Class
A Certificateholder delivers written instructions to the Trustee at least ten
days prior to such Distribution Date) as of the last Business Day of the
immediately preceding calendar month (each such month during the term of the
Agreement constituting a "DUE PERIOD"), an amount equal to the Class A
Certificateholder's Fractional Interest of the Class A Principal Distributable
Amount and the Class A Interest Distributable Amount. The final scheduled
Distribution Date of this Certificate is __________, _____.
This Class A Certificate does not represent an obligation of or an interest
in the Depositor, the Servicer or the Trustee and the Trustee in its individual
capacity is not personally liable to the Class A Certificateholder for any
amounts payable under this Class A Certificate or the Agreement, or except as
expressly provided in the Agreement, subject to any liability under the
Agreement.
Reference is hereby made to the further provisions of this Class A
Certificate set forth on the reverse hereof, which further provisions shall for
all purposes have the same effect as if set forth at this place.
Unless the authentication hereon shall have been executed by an authorized
officer of the Trustee or an authenticating agent acting on behalf of the
Trustee, by manual signature, this Class A Certificate shall not entitle the
holder hereof to any benefit under the Agreement or be valid for any purpose.
A-1-2
IN WITNESS WHEREOF, the Trustee, on behalf of the Dealer Auto Receivables
Grantor Trust 200__ has caused this Certificate to be duly executed.
DEALER AUTO RECEIVABLES
GRANTOR TRUST 20____
By: [NAME OF TRUSTEE],
By:
Authorized Officer
This is one of the Class A Certificates referred to in the within-mentioned
Agreement.
[NAME OF TRUSTEE]
By:
Authorized Officer
or
as Authenticating Agent
for the Trustee
By:
Authorized Officer
A-1-3
ASSIGNMENT
FOR VALUE RECEIVED, the undersigned hereby sells, assigns and transfers unto
_____________________________________________ the within ____% Certificate,
Class A for Dealer Auto Receivables Grantor Trust 2000-1, and does hereby
irrevocably constitute and appoint _____________________________________
Attorney to transfer the said certificate on the Certificate Register maintained
by the Trustee, with full power of substitution in the premises.
--------------------------------
Signature
Signature Guaranteed:
*
--------------------------------
*NOTICE: The signature to this assignment must correspond with the name as
it appears upon the face of the within Certificate in every particular, without
alteration, enlargement or any change whatever. Such signature must be
guaranteed by a commercial bank or trust company or a member firm of a national
securities exchange.
A-1-4
The Agreement permits, with certain exceptions therein provided, the
amendment thereof and the modification of the rights of the Certificateholders
under the Agreement at any time by the Servicer, the Depositor, and the Trustee
with the consent of the Certificateholders with Fractional Interests
representing more than 50% of the Trust. Any such consent by the holder of this
Class A Certificate shall be conclusive and binding on such holder and upon all
future holders of this Class A Certificate and of any Class A Certificate issued
upon the transfer hereof or in exchange herefore or in lieu hereof whether or
not notation of such consent is made upon this Class A Certificate. The
Agreement also permits the amendment thereof, in certain limited circumstances,
without the consent of any of the Certificateholders.
As provided in the Agreement and subject to the limitations set forth
therein, the transfer of this Class A Certificate is registrable in the
Certificate Register of the Certificate Registrar upon surrender of this Class A
Certificate for registration of transfer at the office or agency maintained by
the Trustee in [New York, New York] as previously described, accompanied by a
written instrument of transfer in form satisfactory to the Trustee and the
Certificate Registrar duly executed by the holder thereof or his or her attorney
duly authorized in writing, which signature on such assignment must be
guaranteed by a commercial bank or trust company or a member firm of a national
securities exchange, and thereupon one or more new Class A Certificates
evidencing the same aggregate Fractional Interest will be issued to the
designated transferee or transferees.
As provided in the Agreement and subject to certain limitations therein set
forth, Class A Certificates are exchangeable for new Class A Certificates of
authorized denominations evidencing the same aggregate Fractional Interest as
requested by the holder surrendering the same. No service charge will be made
for any such registration of transfer or exchange, but the Certificate Registrar
may require payment of a sum sufficient to cover any tax or other governmental
charge payable in connection therewith.
The Depositor, the Servicer, the Trustee, the Paying Agent and the
Certificate Registrar and any agent of the Depositor, the Servicer, the Trustee,
the Paying Agent or the Certificate Registrar may treat the person in whose name
this Certificate is registered as the owner hereof for all purposes, and neither
the Depositor, the Servicer, the Trustee, the Paying Agent, the Certificate
Registrar nor any such agent shall be affected by any notice to the contrary.
The obligations and responsibilities created by the Agreement and the
Issuer created thereby shall terminate (after distribution of all Class A
Distributable Amounts and Class B Distributable Amounts) on the Distribution
Date on which the Class A Certificate Balance and Class B Certificate Balance is
reduced to zero; PROVIDED, that in no event shall the trust created thereby
continue beyond the expiration of 21 years from the death of the last survivor
of the descendants of Xxxxxx X. Xxxxxxx, the late Ambassador of the United
States to the Court of St. Xxxxx, living on the date hereof.
X-0-0
XXXXXXX X-0
[Form of Class B Certificate]
Dealer Auto Receivables Grantor Trust 2000-1
_____% Certificate, Class B
UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE
DEPOSITORY TRUST COMPANY, A NEW YORK CORPORATION ("DTC"), TO THE TRUSTEE OR ITS
AGENT FOR REGISTRATION OF TRANSFER, EXCHANGE OR PAYMENT, AND ANY CERTIFICATE
ISSUED IS REGISTERED IN THE NAME OF CEDE & CO. OR IN SUCH OTHER NAME AS IS
REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC (AND ANY PAYMENT IS MADE TO
CEDE & CO. OR TO SUCH OTHER ENTITY AS IS REQUESTED BY AN AUTHORIZED
REPRESENTATIVE OF DTC), ANY TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR
OTHERWISE BY OR TO ANY PERSON IS WRONGFUL INASMUCH AS THE REGISTERED OWNER
HEREOF, CEDE & CO., HAS AN INTEREST HEREIN.
This Class B Certificate is subordinated in right of payment to the Class A
Certificates as described in the Agreement (as described herein).
This Class B Certificate does not represent an obligation of or an interest
in Dealer Auto Receivables Corp., Premier Auto Finance, Inc. or any affiliate
thereof, except to the extent set forth in the Agreement.
The principal represented by this Class B Certificate is payable in
installments, as described herein and in the Agreement. Accordingly, the unpaid
Class B Certificate Balance of this Class B Certificate may be less than that
set forth below. Anyone acquiring this Class B Certificate may ascertain the
current unpaid Class B Certificate Balance represented by this certificate by
inquiry of the Trustee.
No. Class B Initial Certificate Principal Balance: $_________
Fractional Interest: ______%
This certifies that ____________________________ is the registered owner of the
undivided Fractional Interest represented by the Class B Initial Certificate
Principal Balance set forth above in Dealer Auto Receivables Grantor Trust
2000-1 (the "TRUST"), which includes among its assets a pool of motor vehicle
retail installment sale contracts (including, without limitation, all security
interests and any and all rights to receive payments which are collected
pursuant thereto on or after the Cutoff Date) (the "CONTRACTS"). The Issuer has
been created pursuant to a Pooling and Servicing Agreement (the "AGREEMENT"),
dated as of _________, 2000, by and among Dealer Auto Receivables Corp., as
depositor (the "DEPOSITOR"), Premier Auto Finance, Inc., as servicer (in such
capacity, the "SERVICER") and _____________, as Trustee of the Trust (in such
capacity, the "TRUSTEE"). This Class B Certificate is one of the Class B
Certificates described in the Agreement and is issued, together with the Class A
Certificates, pursuant and subject to the Agreement. By acceptance of this Class
B Certificate the holder assents to and becomes bound by the Agreement. The
Agreement provides that the holder of a Class B Certificate agrees to
A-2-1
report the income on the Class B Certificate in a manner consistent with the
intended characterization of the Issuer as a grantor trust. To the extent not
defined herein, all capitalized terms have the meanings assigned to such terms
in the Agreement and all Section references, unless otherwise specified, are to
Sections of the Agreement.
It is contemplated by the Transaction Documents that the proceeds from the
issuance of the Certificates will be used in their entirety by the Depositor to
purchase Contracts.
The Agreement contemplates, subject to its terms, payment on the [_______]
day (or if such day is not a Business Day, the next succeeding Business Day)
(each, a "DISTRIBUTION DATE") of each calendar month commencing _________, 2000,
so long as the Agreement has not been terminated, by check from funds drawn from
the Collection Account to the registered Class B Certificateholder at the
address appearing on the Certificate Register (or by wire transfer if the Class
B Certificateholder delivers written instructions to the Trustee at least ten
days prior to such Distribution Date) as of the last Business Day of the
immediately preceding calendar month (each such month during the term of the
Agreement constituting a "DUE PERIOD"), an amount equal to the Class B
Certificateholder's Fractional Interest of the Class B Principal Distributable
Amount and the Class B Interest Distributable Amount. The final scheduled
Distribution Date of this Certificate is __________, _____.
Pursuant to the Agreement distributions of interest and principal on the
Class B Certificates will be subordinated in priority of payment to interest and
principal due on the Class A Certificates in the event of defaults and
delinquencies on the Contracts. The Class B Certificateholders will not receive
any distributions of interest on any Distribution Date until the full amount of
interest on the Class A Certificates on such Distribution Date has been set
aside to pay interest on the Class A Certificates, and the Class B
Certificateholders will not receive any distributions of principal on any
Distribution Date until the full amount of interest on and principal of the
Class A Certificates on such Distribution Date has been set aside as set forth
in the Agreement.
This Class B Certificate does not represent an obligation of or an interest
in the Depositor, the Servicer or the Trustee and the Trustee in its individual
capacity is not personally liable to the Class B Certificateholder for any
amounts payable under this Class B Certificate or the Agreement or, except as
expressly provided in the Agreement, subject to any liability under the
Agreement.
Reference is hereby made to the further provisions of this Class B
Certificate set forth on the reverse hereof, which further provisions shall for
all purposes have the same effect as if set forth at this place.
Unless the authentication hereon shall have been executed by an authorized
officer of the Trustee or an authenticating agent acting on behalf of the
Trustee, by manual signature, this Class B Certificate shall not entitle the
holder hereof to any benefit under the Agreement or be valid for any purpose.
A-2-2
IN WITNESS WHEREOF, the Trustee, on behalf of the Dealer Auto Receivables
Grantor Trust 20__ has canceled this Certificate to be duly executed.
DEALER AUTO RECEIVABLES
GRANTOR TRUST 20____
By: [NAME OF TRUSTEE],
By:
Authorized Officer
This is one of the Class B Certificates referred to in the within-mentioned
Agreement.
[NAME OF TRUSTEE]
By:
Authorized Officer
or
as Authenticating Agent
for the Trustee
By:
Authorized Officer
A-2-3
ASSIGNMENT
FOR VALUE RECEIVED, the undersigned hereby sells, assigns and transfers unto
_____________________________________________ the within ____% Certificate,
Class B for Dealer Auto Receivables Grantor Trust 2000-1, and does hereby
irrevocably constitute and appoint _____________________________________
Attorney to transfer the said certificate on the Certificate Register maintained
by the Trustee, with full power of substitution in the premises.
--------------------------------
Signature
Signature Guaranteed:
*
--------------------------------
*NOTICE: The signature to this assignment must correspond with the name as
it appears upon the face of the within Certificate in every particular, without
alteration, enlargement or any change whatever. Such signature must be
guaranteed by a commercial bank or trust company or a member firm of a national
securities exchange.
A-2-4
The Agreement permits, with certain exceptions therein provided, the
amendment thereof and the modification of the rights of the Certificateholders
under the Agreement at any time by the Servicer, the Depositor, and the Trustee
with the consent of the Certificateholders with Fractional Interests
representing more than 50% of the Trust. Any such consent by the holder of this
Class B Certificate shall be conclusive and binding on such holder and upon all
future holders of this Class B Certificate and of any Class B Certificate issued
upon the transfer hereof or in exchange herefore or in lieu hereof whether or
not notation of such consent is made upon this Class B Certificate. The
Agreement also permits the amendment thereof, in certain limited circumstances,
without the consent of any of the Certificateholders.
As provided in the Agreement and subject to the limitations set forth
therein, the transfer of this Class B Certificate is registrable in the
Certificate Register of the Certificate Registrar upon surrender of this Class B
Certificate for registration of transfer at the office or agency maintained by
the Trustee in [New York, New York] as previously described, accompanied by a
written instrument of transfer in form satisfactory to the Trustee and the
Certificate Registrar duly executed by the holder thereof or his or her attorney
duly authorized in writing, which signature on such assignment must be
guaranteed by a commercial bank or trust company or a member firm of a national
securities exchange, and thereupon one or more new Class B Certificates
evidencing the same aggregate Fractional Interest will be issued to the
designated transferee or transferees.
As provided in the Agreement and subject to certain limitations therein set
forth, Class B Certificates are exchangeable for new Class B Certificates of
authorized denominations evidencing the same aggregate Fractional Interest as
requested by the holder surrendering the same. No service charge will be made
for any such registration of transfer or exchange, but the Certificate Registrar
may require payment of a sum sufficient to cover any tax or other governmental
charge payable in connection therewith.
The Depositor, the Servicer, the Trustee, the Paying Agent and the
Certificate Registrar and any agent of the Depositor, the Servicer, the Trustee,
the Paying Agent or the Certificate Registrar may treat the person in whose name
this Certificate is registered as the owner hereof for all purposes, and neither
the Depositor, the Servicer, the Trustee, the Paying Agent, the Certificate
Registrar nor any such agent shall be affected by any notice to the contrary.
The obligations and responsibilities created by the Agreement and the
Issuer created thereby shall terminate (after distribution of all Class B
Distributable Amounts and Class B Distributable Amounts) on the Distribution
Date on which the Class B Certificate Balance and Class B Certificate Balance is
reduced to zero; PROVIDED, that in no event shall the trust created thereby
continue beyond the expiration of 21 years from the death of the last survivor
of the descendants of Xxxxxx X. Xxxxxxx, the late Ambassador of the United
States to the Court of St. Xxxxx, living on the date hereof.
A-2-5
EXHIBIT B
[Form of Assignment]
In accordance with the Pooling and Servicing Agreement (the "POOLING AND
SERVICING AGREEMENT") dated as of [ ], 2000 made by and between the
undersigned, as Depositor ("DEPOSITOR"), Premier Auto Finance, Inc., as
Servicer and [ ], as Trustee, the undersigned does hereby sell, transfer,
convey and assign, set over and otherwise convey to Dealer Auto Receivables
Grantor Trust 2000-1 (the "TRUST") (i) all the right, title and interest of
the Depositor in and to the Contracts listed on the List of Contracts in
effect on the Closing Date (including, without limitation, all security
interests and all rights to receive scheduled payments and prepayments which
are collected pursuant thereto on or after the Cutoff Date, including any
liquidation proceeds therefrom, but excluding any rights to receive scheduled
payments due on or after, but received prior to, the Cutoff Date), (ii) all
security interests in each Financed Vehicle, (iii) all rights of the
Depositor to proceeds from any claims on theft, physical damage, credit life
or disability insurance or other individual insurance policy relating to any
such Contract, an Obligor or a Financed Vehicle securing such Contract, (iv)
all documents contained in the related Contract Files, (v) all rights (but
not the obligations) of the Depositor against any originating dealer or third
party (i.e. the originators of the Contracts) under any agreements between
the Seller and such originating dealers or other third party, (vi) all rights
of the Depositor in the Lockbox, the Lockbox Account and related Lockbox
Agreement to the extent they relate to such Contracts, (viii) any rebates of
premiums and other amounts relating to insurance policies, extended service
contracts, other repair agreements or any other items financed under such
Contract, (vii) all rights (but not the obligations) of the Depositor under
the Transfer and Sale Agreement, including but not limited to the Depositor's
rights under ARTICLE V thereof, (ix) all rights of Depositor under the
Performance Guarantee, (x) the remittances, deposits and payments made into
the Trust Accounts from time to time and amounts in the Trust Accounts (other
than the Reserve Fund) from time to time (and any investments of such
amounts), and (xi) all proceeds and products of the foregoing.
This Assignment is made pursuant to and in reliance upon the representation
and warranties on the part of the undersigned contained in ARTICLE III of the
Pooling and Servicing Agreement and no others.
Capitalized terms used herein but not otherwise defined shall have the
meanings assigned to such terms in the Pooling and Servicing Agreement.
IN WITNESS WHEREOF, the undersigned has caused this Assignment to be duly
executed this _____ day of [___________], 2000.
DEALER AUTO RECEIVABLES CORP.
By:
-----------------------------------------------
Printed Name:
Title:
B-1
EXHIBIT C-1
[Form of Closing Certificate of Depositor]
DEALER AUTO RECEIVABLES CORP.
PRESIDENT'S CERTIFICATE
[Reserved]
EXHIBIT C-2
[Form of Closing Certificate of Servicer/Seller]
PREMIER AUTO FINANCE, INC.
PRESIDENT'S CERTIFICATE
[Reserved]
X-0-0
XXXXXXX X-0
[Form of Opinion of Counsel for Depositor
Regarding General Corporate Matters
(Including Perfection Opinion)]
[Reserved]
X-0-0
XXXXXXX X-0
[Form of Opinion of Counsel for Trust
Depositor Regarding the "TRUE SALE" Nature
of the Transaction]
[Reserved]
X-0-0
XXXXXXX X-0
[Form of Opinion of Counsel for Trust
Depositor Regarding Non-consolidation]
[Reserved]
D-3-1
EXHIBIT E
[Form of Reserve Account Agreement]
This Reserve Fund Agreement is dated as of __________, 2000 by and among
Dealer Auto Receivables Corp. (the "DEPOSITOR"), _________________, as Reserve
Agent for the benefit of the Trustee and the Issuer (as defined below) (together
with its permitted successors hereunder, the "RESERVE AGENT"), and
_____________, not in its individual capacity but as Trustee (the "TRUSTEE") of
Dealer Auto Receivables Grantor Trust 2000-1 (the "TRUST").
The Depositor, a wholly owned subsidiary of Premier Auto Finance, Inc.
("PREMIER") has purchased from Premier Auto Finance, L.P. (the "SELLER") a pool
of installment sale contracts and certain related assets and property rights
(the "CONTRACT ASSETS") pursuant to a Transfer and Sale Agreement dated as of
________, 2000, and has concurrently established the Issuer by transferring and
conveying the Contract Assets and certain other rights and assets to the Issuer
pursuant to a Pooling and Servicing Agreement (the "POOLING AND SERVICING
AGREEMENT") dated as of ________, 2000 by and among the Depositor, Premier, as
Servicer and the Trustee. Upon the establishment of the Issuer in accordance
with the terms of the Pooling and Servicing Agreement, the Trustee will issue
to, or upon the order of, the Depositor, certificates (the "CERTIFICATES")
representing undivided fractional interests in the Trust. In order to facilitate
the sale of the Certificates by the Depositor to investor(s), as well as the
Depositor's simultaneous purchase of the Contract Assets from the Seller, and in
consideration of its ongoing right to receive the Excess Amounts, the Depositor
is entering into this Agreement relating to the establishment and maintenance of
a Reserve Fund for the benefit of the Certificateholders. In connection
therewith, the Depositor is transferring to the Reserve Agent, concurrently with
the execution and delivery of this Agreement by the parties hereto, the Reserve
Fund Initial Deposit for deposit into the Reserve Fund established hereunder.
SECTION 1. DEFINITIONS. All capitalized terms used herein (including in the
preamble above) and not otherwise defined herein shall have the meanings
assigned to them in the Pooling and Servicing Agreement and, in addition, the
following terms shall have the following meanings:
"ELIGIBLE INVESTMENTS" has the meaning given such term in the Pooling and
Servicing Agreement, but with references, respectively, to the Trustee and the
Issuer in the definition thereof contained therein being deemed, for purposes of
this Agreement, to be references to, respectively, the Reserve Agent and the
Reserve Fund.
"EXCESS AMOUNTS" means as of any Distribution Date those Reserve Fund
Deposits in the Reserve Fund in excess of the Reserve Fund Requisite Amount
(after giving effect to any additions to and withdrawals from the Reserve Fund
on such Distribution Date).
"RESERVE FUND" shall have the meaning ascribed to it in SECTION 3(a).
"RESERVE FUND DEPOSITS" shall mean all moneys deposited in the Reserve Fund
from time to time including, but not limited to, the Reserve Fund Initial
Deposit and the Reserve Fund Additional Deposits as well as any monies deposited
therein pursuant to SECTION 9.04(b)(vii) of
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the Pooling and Servicing Agreement; all investments and reinvestments thereof;
earnings thereon; and proceeds of the foregoing, whether now or hereafter
existing.
"RESERVE FUND ELIGIBLE INVESTMENTS" means Eligible Investments acquired by
the Reserve Agent in its name and in the capacity of Reserve Agent hereunder,
which are held by the Reserve Agent in the Reserve Fund and with respect to
which (a) the Reserve Agent has noted the Certificateholder's interest therein
on its books and records, and (b) the Reserve Agent has purchased such
investments for value without notice of any adverse claim thereto (and, if such
investments are securities or other financial assets or interests therein,
within the meaning of Section 8-102 of the UCC as enacted in Illinois, without
acting in collusion with a securities intermediary in violating such securities
intermediary's obligations to entitlement holders in such assets, under Section
8-504 of such UCC, to maintain a sufficient quantity of such assets in favor of
such entitlement holders), and (c) either (i) such investments are in the
possession of the Reserve Agent, or (ii) such investments, (A) if certificated
securities and in bearer form, have been delivered to the Reserve Agent, or in
registered form, have been delivered to the Reserve Agent and either registered
by the issuer in the name of the Reserve Agent or endorsed by effective
endorsement to the Reserve Agent or in blank; (B) if uncertificated securities,
the ownership of which has been registered to the Reserve Agent on the books of
the issuer thereof (or another person, other than a securities intermediary,
either becomes the registered owner of the uncertified security on behalf of the
Reserve Agent or, having previously become the registered owner, acknowledges
that it holds for the Reserve Agent); or (C) if securities entitlements (within
the meaning of Section 8-102 of the UCC as enacted in Illinois) representing
interests in securities or other financial assets (or interests therein) held by
a securities intermediary (within the meaning of said Section 8-102), a
securities intermediary indicates by book entry that a security or other
financial asset has been credited to the Reserve Agent's securities account with
such securities intermediary. Any such Reserve Fund Eligible Investment may be
purchased by or through the Reserve Agent or any of its affiliates.
SECTION 2. REPRESENTATIONS AND WARRANTIES OF THE DEPOSITOR. The Depositor
represents and warrants that as of the Closing Date:
(a) ORGANIZATION AND GOOD STANDING. The Depositor is a corporation
duly organized, validly existing and in good standing under the laws of the
State of Illinois and has the corporate power to own its assets and to
transact the business in which it is currently engaged. The Depositor is
duly qualified to do business as a foreign corporation and is in good
standing in each jurisdiction in which the character of the business
transacted by it or properties owned or leased by it requires such
qualification and in which the failure so to qualify would have a material
adverse effect on the business, properties, assets, or condition (financial
or other) of the Depositor.
(b) AUTHORIZATION; BINDING OBLIGATIONS. The Depositor has the power
and authority to make, execute, deliver and perform this Agreement and all
of the transactions contemplated under this Agreement, and has taken all
necessary corporate action to authorize the execution, delivery and
performance of this Agreement. This Agreement constitutes the legal, valid
and binding obligation of the Depositor enforceable in accordance with its
terms, except as enforcement of such terms may be limited by
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bankruptcy, insolvency or similar laws affecting the enforcement of
creditors' rights generally and by the availability of equitable remedies.
(c) NO CONSENT REQUIRED. The Depositor is not required to obtain the
consent of any other party or any consent, license, approval or
authorization from, or registration or declaration with, any governmental
authority, bureau or agency in connection with the execution, delivery,
performance, validity or enforceability of this Agreement.
(d) NO VIOLATIONS. The execution, delivery and performance of this
Agreement by the Depositor will not violate any provision of any existing
law or regulation or any order or decree of any court or the Articles of
Incorporation or Bylaws of the Depositor, or constitute a material breach
of any mortgage, indenture, contract or other agreement to which the
Depositor is a party or by which the Depositor or any of the Depositor's
properties may be bound.
(e) LITIGATION. No litigation or administrative proceeding of or
before any court, tribunal or governmental body is currently pending, or to
the knowledge of the Depositor, threatened against the Depositor or any of
its properties or with respect to this Agreement which, if adversely
determined, would have a material adverse effect on the transactions
contemplated by this Agreement.
(f) PLACE OF BUSINESS; NO CHANGES. The Depositor's sole "place of
business" (within the meaning of Section 9-103 of the Uniform Commercial
Code) is at the location set forth in Section 6(c) below. The Depositor has
not changed its name, whether by amendment of its Articles of
Incorporation, by reorganization or otherwise, and has not changed the
location of its place of business, within the four months preceding the
Closing Date.
SECTION 3. ESTABLISHMENT OF RESERVE FUND AND PLEDGE OF RESERVE FUND
DEPOSITS. (a) ESTABLISHMENT OF RESERVE FUND. On or prior to the Closing Date,
the Depositor shall direct the Reserve Agent to establish, and the Reserve Agent
shall establish, in its name and at its office, a segregated trust account
referred to herein as the "RESERVE FUND," (which shall be an Eligible Account)
and deposit into the Reserve Fund the Reserve Fund Initial Deposit as and when
received from the Depositor, in immediately Available Amounts. The Reserve Fund
is separate from the Issuer and any amount on deposit therein will not
constitute a part of the property of the Trust. Any amounts held on deposit in
the Reserve Fund and any investment earnings thereon are owned by, and will be
taxable to, the Depositor for federal income tax purposes. The Reserve Fund
shall be maintained by the Reserve Agent at all times separate and apart from
any other account of the Depositor or the Trust. Amounts shall be withdrawn from
the Reserve Fund only in accordance with the provisions of this SECTION 3 and
SECTION 9.05 of the Pooling and Servicing Agreement. No passbook, certificate of
deposit or other similar instrument evidencing the Reserve Fund shall be issued,
and all contracts, receipts and other papers governing or evidencing the Reserve
Fund or any of the Reserve Fund Deposits shall be maintained and held by the
Reserve Agent for the benefit of the Certificateholders. On termination of this
Agreement, as provided in SECTION 3(g), any amount remaining in the Reserve Fund
shall be released to the Depositor.
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(b) GRANT OF SECURITY INTEREST BY DEPOSITOR. The Depositor hereby pledges,
assigns, hypothecates, transfers and delivers to the Reserve Agent, and hereby
grants to the Reserve Agent, for the benefit of the Certificateholders, a
security interest in all of the Depositor's right, title, interest and power,
free and clear of any other interest, in, to and with respect to, the Reserve
Fund, the Reserve Fund Deposits and the Reserve Fund Eligible Investments and
the proceeds thereof, up to the Reserve Fund Requisite Amount. Such grant is
made in trust, to secure the obligation and agreement of the Depositor to make
the payments provided for in SECTION 3(e) below as contemplated in SECTION 9.04
of the Pooling and Servicing Agreement from time to time, subject to the limit
of the amount available in the Reserve Fund.
The Reserve Agent acknowledges and accepts the grant of the security
interest in the Reserve Fund, the Reserve Fund Deposits and the Reserve Fund
Eligible Investments and the proceeds thereof under this SECTION 3(b), for the
benefit of the Certificateholders in accordance with the terms hereof.
The Depositor shall maintain, at all times during the term of this
Agreement, the lien on, or security interest in, the Reserve Fund, the Reserve
Fund Deposits and the Reserve Fund Eligible Investments and the proceeds
thereof, as a valid and perfected security interest of first priority under
applicable law (including without limitation the Uniform Commercial Code) in
order to secure the full and timely performance of the obligations of the
Depositor pursuant to this Agreement. Amounts representing Excess Amounts
properly paid to the Depositor pursuant to SECTION 3(c) below, and amounts
properly withdrawn by the Reserve Agent and paid to the Depositor pursuant to
SECTION 3(f), shall be deemed released from the provisions of this SECTION 3(b)
and the security interest established by this SECTION 3(b), and the Depositor
shall in no event be required to refund any such distributed amount. The
Depositor agrees and acknowledges that the Reserve Agent is to have "control"
(within the meaning of Section 8-102 of the UCC as enacted in Illinois) of any
of the above-described collateral comprised of "Investment Property" (within the
meaning of Section 9-115 of the UCC as enacted in Illinois) for all purposes of
this Agreement.
(c) APPLICATION OF RESERVE FUND DEPOSITS. On each Distribution Date to the
extent monies are available pursuant to SECTION 9.04(b)(vii) of the Pooling and
Servicing Agreement, the Trustee shall pay the entire amount of such monies to
the Reserve Agent. The Reserve Agent shall deposit such amount into the Reserve
Fund; PROVIDED, HOWEVER, that on the Distribution Date, if any, on which Reserve
Fund Deposits would cause the amount held in the Reserve Fund to exceed the
Reserve Fund Requisite Amount (after giving effect to all withdrawals from the
Reserve Fund on such Date), the Reserve Agent shall deposit into the Reserve
Fund only that amount necessary to cause the amount held in the Reserve Fund to
equal the Reserve Fund Requisite Amount (after giving effect to all withdrawals
from the Reserve Fund on such Date); any excess monies shall be paid by the
Reserve Agent to the Depositor ("EXCESS AMOUNTS").
(d) INVESTMENT OF RESERVE FUND DEPOSITS. The Reserve Agent shall at the
written direction of the Servicer invest the funds in the Reserve Fund in
Reserve Fund Eligible Investments. Funds in the Reserve Fund shall be invested
in investments that mature on or before the Business Day prior to each
Distribution Date. Once such funds are invested, the Reserve Agent shall not
change the investment of such funds prior to maturity. Upon any such investment,
the Reserve Agent shall (i) consistent with the definition of Reserve Fund
Eligible Investment herein, make an appropriate notation of the
Certificateholders' security interest in such Reserve Fund Eligible
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Investment on the Reserve Agent's records, by book entry or otherwise, and (ii)
send the Trustee a written confirmation of the Certificateholders' security
interest in such Reserve Fund Eligible Investment. All income and gain realized
from any such investments as well as any interest earned on Reserve Fund
Deposits shall be deposited and retained in the Reserve Fund (subject to SECTION
3(f) below). Losses, if any, realized on amounts in the Reserve Fund invested
pursuant to this paragraph shall first be credited against undistributed
investment earnings on amounts in the Reserve Fund invested pursuant to this
paragraph, and shall thereafter be deemed to reduce the amount on deposit in the
Reserve Fund. The Depositor and the Reserve Agent shall not be liable for the
amount of any loss incurred in respect of any investment, or lack of investment,
of funds held in the Reserve Fund. All income or loss on funds held in the
Reserve Fund shall be taxable to the Depositor.
(e) PAYMENT OF SHORTFALL. If the Monthly Report delivered pursuant to
SECTION 7.01 of the Pooling and Servicing Agreement indicates a Shortfall, on
the instruction of the Trustee pursuant to SECTION 9.05 of the Pooling and
Servicing Agreement, the Reserve Agent, subject to the limit of the amount
available in the Reserve Fund, shall transfer the amount of the Shortfall from
the Reserve Fund Deposits in accordance with SECTION 9.04 of the Pooling and
Servicing Agreement. The Depositor hereby agrees and authorizes that such
transfer is to be made as described above.
(f) RELEASE OF THE RESERVE FUND DEPOSITS. If on any Distribution Date, the
amount of the Reserve Fund Deposits exceeds the Reserve Fund Requisite Amount
immediately following the payment to Certificateholders on such Distribution
Date, the Reserve Agent shall withdraw the amount of such excess from the
Reserve Fund and distribute such amount to the Depositor.
(g) TERMINATION. This Agreement shall terminate (after distribution of any
Reserve Fund Deposits remaining in the Reserve Fund pursuant to the following
sentence) on the termination of the Pooling and Servicing Agreement in
accordance with SECTION 13.04 thereof. On the final Distribution Date, any
Reserve Fund Deposits remaining in the Reserve Fund, after payment of any
amounts into the Collection Account pursuant to SECTION 3(e) shall be
distributed to the Depositor.
(h) NATURE OF OBLIGATIONS. The obligations of the Depositor to make, or
cause or permit to be made, the payments in respect of Shortfalls provided for
in SECTION 3(e) above shall be unconditional, irrevocable and shall not
terminate upon, or otherwise be affected by, a Service Transfer pursuant to
ARTICLE VIII of the Pooling and Servicing Agreement.
SECTION 4. APPOINTMENT OF RESERVE AGENT. (a) Subject to the terms and
conditions herein, the Trustee on behalf of the Certificateholders hereby
appoints the Reserve Agent and the Reserve Agent hereby accepts such
appointment, as its agent to maintain, and to act on the Certificateholders'
behalf with respect to, the Reserve Fund, moneys deposited therein, and the
Reserve Fund Eligible Investments and proceeds thereof, and the Reserve Agent in
accepting such appointment affirms that it is not acting as an agent for Premier
or the Depositor for such purposes.
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(b) The Reserve Agent shall maintain records that accurately reflect the
funds on deposit in the Reserve Fund. On each Determination Date, the Reserve
Agent shall advise the Servicer as to the amount of funds on deposit in the
Reserve Fund.
(c) For its services under this Agreement, the Reserve Agent shall be
entitled to a fee on each Distribution Date, payable by the Trustee from the
Trustee Fee.
(d) The Reserve Agent may at any time resign from its obligations and
duties under this Agreement by giving written notice thereof to the Trustee with
a copy to the Depositor and the Servicer. Upon receiving such notice of
resignation, the Trustee shall promptly appoint a successor Reserve Agent by
written instrument, in duplicate, one copy of which instrument shall be
delivered to the successor Reserve Agent and one copy to each of the Depositor
and Servicer. Notwithstanding anything in this SECTION 4 to the contrary, in no
event shall a Reserve Agent resignation be effective until a replacement Reserve
Agent shall be in place. If no successor Reserve Agent shall have been so
appointed and shall have accepted such appointment within 30 days after the
giving of such notice of resignation, the resigning Reserve Agent may petition
any court of competent jurisdiction for the appointment of a successor Reserve
Agent.
A replacement Reserve Agent shall meet the eligibility requirements for a
trustee described in SECTION 12.07 of the Pooling and Servicing Agreement.
If at any time the Reserve Agent shall cease to be an institution which
meets the conditions provided in the provisions of SECTION 12.07 of the Pooling
and Servicing Agreement and shall fail to resign after written request therefor
by the Trustee, or if at any time the Reserve Agent shall be legally unable to
act, or shall be adjudged a bankrupt or insolvent, or a receiver of the Reserve
Agent or of its property shall be appointed, or any public officer shall take
charge or control of the Reserve Agent or of its property or affairs for the
purpose of rehabilitation, conservation or liquidation, then the Trustee may
remove the Reserve Agent. If the Trustee shall have removed the Reserve Agent
under the authority of the immediately preceding sentence, the Trustee shall
promptly appoint a successor Reserve Agent by written instrument, in duplicate,
one copy of which instrument shall be delivered to the Reserve Agent so removed,
the Depositor and the Servicer, and one copy to the successor Reserve Agent.
Any resigning or removed Reserve Agent shall be entitled to payment of all
fees earned by it up to the effective date of resignation or removal. All
indemnification obligations of the Servicer and the Seller shall survive such
resignation or removal.
SECTION 5. COVENANTS OF DEPOSITOR. The Depositor covenants and agrees as
follows:
(a) FILING. On or prior to the Closing Date, Depositor shall cause
appropriate UCC financing statement(s) to be filed and from time to time
Depositor shall take and cause to be taken such actions and execute such
documents as are necessary or desirable or as the Reserve Agent may
reasonably request to perfect and protect the Reserve Agent's security
interest in the Reserve Fund Deposits and other collateral against all
other persons, including, without limitation, the filing of financing
statements, amendments thereto and continuation statements, the execution
of transfer instruments and the making of notations on or taking possession
of all records or documents of title.
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(b) NAME CHANGE OR RELOCATION. (i) During the term of this Agreement,
Depositor shall not change its name, identity or structure or relocate its
place of business or chief executive office without first giving at least
30 days' prior written notice to the Trustee. (ii) If any change in
Depositor's name, identity or structure or other action would make any
financing or continuation statement or notice of ownership interest or lien
filed under this Agreement seriously misleading within the meaning of
applicable provisions of the UCC or any title statute, Depositor, no later
than five days after the effective date of such change, shall file such
amendments as may be required to preserve and protect the Reserve Agent's
interests in the Reserve Fund, Reserve Fund Deposits, and the Reserve Fund
Eligible Investments and proceeds thereof. In addition, Depositor shall not
change its place of business (if it has only one place of business) or its
chief executive office (if it has more than one place of business) (within
the meaning of Article 9 of the UCC) from the location specified in SECTION
6(c) below unless it has first taken such action as is advisable or
necessary to preserve and protect the Reserve Agent's interest in the
Reserve Fund, the Reserve Fund Deposits, and the Reserve Fund Eligible
Investments. Promptly after taking any of the foregoing actions, Depositor
shall deliver to the Reserve Agent and Trustee an opinion of counsel
stating that, in the opinion of such counsel, all financing statements or
amendments necessary to preserve and protect the interests of the Reserve
Agent in the Reserve Fund, the Reserve Fund Deposits and Reserve Fund
Eligible Investments have been filed, and reciting the details of such
filing.
(c) CHIEF EXECUTIVE OFFICE. During the term of this Agreement,
Depositor will maintain its chief executive office in one of the States of
the United States, except Louisiana, Tennessee, Colorado, Kansas, New
Mexico, Oklahoma, Utah or Wyoming.
(d) COSTS AND EXPENSES. Depositor agrees to pay all reasonable costs
and disbursements in connection with the perfection and the maintenance of
perfection, as against all third parties, of the Reserve Agent's right,
title and interest in and to the Reserve Fund, the Reserve Fund Deposits,
and the Reserve Fund Eligible Investments.
SECTION 6. MISCELLANEOUS. (a) AMENDMENT. (i) This Agreement may be amended
from time to time by the Reserve Agent, the Depositor and the Trustee,
collectively, with notice to each Rating Agency, but without the consent of any
of the Certificateholders, to correct manifest error, to cure any ambiguity, to
correct or supplement any provisions herein which may be inconsistent with any
other provisions herein or in any other Transaction Document, as the case may
be, or to add any other provisions with respect to matters or questions arising
under this Agreement which shall not be inconsistent with the provisions of this
Agreement; PROVIDED, HOWEVER, that such action shall not, as evidenced by an
Opinion of Counsel for the Depositor, have a material adverse effect on the
Certificateholders.
(ii) This Agreement may also be amended from time to time by the Reserve
Agent, the Depositor and the Trustee, with the consent of Certificateholders
with aggregate Fractional Interests representing more than 50% of the Trust, for
the purpose of adding any provisions to or changing in any manner or eliminating
any of the provisions of this Agreement or of modifying in any manner the rights
of the Certificateholders; PROVIDED, HOWEVER, that no such amendment or waiver
described above shall (A) reduce in any manner the amount of, or delay the
timing of, distributions which are required to be made on any Certificate or (B)
reduce the aforesaid
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percentage required to consent to any such amendment, without the consent of the
holders of all Certificates then outstanding and PROVIDED, FURTHER, that no such
amendment or consent shall be effective unless each Rating Agency delivers
written confirmation that such amendment or consent will not cause its
then-current rating on any Class of Certificates to be qualified, reduced or
withdrawn.
(b) NOTICES. All communications and notices pursuant hereto to the
Depositor, the Reserve Agent and the Trustee shall be in writing and delivered
or mailed to it at the appropriate following address:
If to the Servicer: Premier Auto Finance, Inc.
000 Xxxx Xxxxxx Xxxxxx
Xxxxxxx, Xxxxxxxx 00000
Attention: Xxxxxxx Xxxxxxxx Xxxxx
If to the Depositor: Dealer Auto Receivables Corp.
000 Xxxx Xxxxxx Xxxxxx
Xxxxxxx, Xxxxxxxx 00000
Attention: Xxxxxxx Xxxxxxxx Xxxxx
If to the Trustee: [_______________________]
[_______________________]
[_______________________]
Attention: [___________________]
If to the Reserve Agent: [_______________________]
[_______________________]
[_______________________]
Attention: [___________________]
If to the Seller: Premier Auto Finance, L.P.
000 Xxxx Xxxxxx Xxxxxx
Xxxxxxx, Xxxxxxxx 00000
Attention: Xxxxxxx Xxxxxxxx Xxxxx
If to Moody's: Xxxxx'x Investors Service
00 Xxxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: ABS Monitoring Department
If to Standard & Poor's: Standard & Poor's Ratings Services, a
division of The McGraw Hill Company,
00 Xxxxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Asset Backed Securities Surveillance
or at such other address as the party may designate by notice to the other
parties hereto, which notice shall be effective when received.
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All communications and notices pursuant hereto to a Certificateholder shall
be in writing and delivered or mailed at the address shown in the Certificate
Register.
(d) MERGER AND INTEGRATION. Except as specifically stated otherwise herein,
this Agreement, together with the Pooling and Servicing Agreement, sets forth
the entire understanding of the parties relating to the subject matter hereof,
and all prior understandings, written or oral, are superseded by this Agreement
together with the Pooling and Servicing Agreement. This Agreement may not be
modified, amended, waived or supplemented except as provided herein.
(e) BENEFIT OF THE AGREEMENT. The Agreement shall be binding upon the
parties hereto and their permitted successors and shall be for the direct
benefit of each present and future Certificateholder without any further action
on the part of any such Certificateholder.
(f) NONPETITION COVENANT. Notwithstanding any prior termination of this
Agreement, each of the parties hereto agrees that it shall not, prior to one
year and one day after the Final Scheduled Distribution Date, acquiesce,
petition or otherwise invoke or cause the Depositor to invoke the process of the
United States of America, any State or other political subdivision thereof or
any entity exercising executive, legislative, judicial, regulatory or
administrative functions of or pertaining to government for the purpose of
commencing or sustaining a case by or against the Depositor or the Issuer under
a Federal or state bankruptcy, insolvency or similar law or appointing a
receiver, liquidator, assignee, trustee, custodian, sequestrator or other
similar official of the Depositor or the Issuer or all or any part of its
property or assets or ordering the winding up or liquidation of the affairs of
the Depositor or the Trust. The parties agree that damages will be an inadequate
remedy for breach of this covenant and that this covenant may be specifically
enforced.
(g) HEADINGS. The headings herein are for purposes of reference only and
shall not otherwise affect the meaning or interpretation of any provision
hereof.
(h) GOVERNING LAW. This Agreement shall be governed by, and construed and
enforced in accordance with, the laws of the State of Illinois.
(i) COUNTERPARTS. This Agreement may be executed in two or more
counterparts, each of which shall be an original, but all of which together
shall constitute one and the same instrument.
[signature page follows]
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IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed by their respective officers thereunto duly authorized as of the date
first written above.
_______________________, as Trustee
By
-------------------------------------------
Printed Name:
-------------------------------
Title:
---------------------------------------
DEALER AUTO RECEIVABLES CORP.
By
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Printed Name:
-------------------------------
Title:
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_______________________, as Reserve Agent
By
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Printed Name:
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Title:
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EXHIBIT F
[Form of Certificate of Servicing Officer]
The undersigned certifies that s/he is a ___________________ of Premier
Auto Finance, Inc., a Delaware corporation (the "SERVICER"), and that as such is
duly authorized to execute and deliver this certificate on behalf of the
Servicer pursuant to SECTION 7.02 of the Pooling and Servicing Agreement (the
"AGREEMENT") dated as of _______ [ ], 2000 by and among Dealer Auto Receivables
Corp., as Depositor, the Servicer and ___________, as Trustee of Dealer Auto
Receivables Grantor Trust 2000-1 (all capitalized terms used herein without
definition having the respective meanings specified in the Agreement), and
further certifies that:
1. The Monthly Report for the period from ____________ to ___________
attached to this certificate is complete and accurate in accordance with
the requirements of SECTIONS 7.01 and 7.02 of the Agreement; and
2. As of the date hereof, no Servicer Default or event that with
notice or lapse of time or both would become a Servicer Default has
occurred.
In Witness Whereof, I have affixed hereunto my signature this ______ day of
_____________, 20__.
Premier Auto Finance, Inc.
By
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Name:
-----------------------------------
Title:
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F-1
Exhibit G
[Form of Certificate Regarding Repurchased Contracts]
Premier Auto Finance, Inc.
Certificate Regarding Repurchased Contracts
The undersigned certifies that he is the [______________] of Premier Auto
Finance, Inc., a Delaware corporation (the "SERVICER"), and that as such is duly
authorized to execute and deliver this certificate on behalf of the Servicer
pursuant to SECTION 9.07 of the Pooling and Servicing Agreement (the
"AGREEMENT") dated as of [______________], 2000 by and among Dealer Auto
Receivables Corp., as Depositor, the Servicer, [______________], as Trustee of
Dealer Auto Receivables Grantor Trust 2000-1 (all capitalized terms used herein
without definition having the respective meanings specified in the Agreement),
and further certifies that:
1. The Contracts on the attached schedule are to be repurchased by the
[Depositor/Seller] on the date hereof pursuant to [SECTION 9.05 or
SECTION 9.07] of the Agreement and [SECTION 5.01 or SECTION 5.02] of
the Transfer and Sale Agreement.
2. Upon deposit of the Repurchase Price for such Contracts, such
Contracts may, pursuant to [SECTION 9.06 or SECTION 9.07] of the
Agreement, be assigned by the Issuer to the Seller.
IN WITNESS WHEREOF, I have affixed hereunto my signature this ______ day of
-------------.
Premier Auto Finance, Inc.
By:
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Printed Name:
Title:
G-1
EXHIBIT H
[List of Contracts]
H-1
EXHIBIT I
[Form of Monthly Report to Certificateholders]
Dealer Auto Receivables Grantor Trust 2000-1
$[______________] [______]% Dealer Auto Receivables Asset- Backed Certificates
Class A
$[______________] [______]% Dealer Auto Receivables Asset- Backed Certificates
Class B
Monthly Report
For the [ ] Distribution Date
A. Calculation of Available Amounts
1. Available Principal (as defined in Article I of the Pooling
and Servicing Agreement) $___________
2. Available Interest (as defined in Article I of the Pooling
and Servicing Agreement) $___________
3. Available Amounts (l. plus 2.) $___________
B. Calculation of Class A Principal Distributable Amount
1. Monthly Principal for such Distribution Date multiplied by
the Class A Percentage $___________
2. Class A Principal Carryover Shortfall for such Distribution
Date $___________
3. Class A Principal Distributable Amount (the sum of 1 and 2) $___________
C. Calculation of Class B Principal Distributable Amount
1. Monthly Principal for such Distribution Date multiplied by
the Class B Percentage $___________
2. Class B Principal Carryover Shortfall for such Distribution
Date $___________
3. Class B Principal Distributable Amount (the sum of 1 and 2) $___________
D. Calculation of Class A Interest Distributable Amount
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1. Class A Pass-Through Rate ___%
2(a). One-twelfth of the Class A Pass-Through Rate times the
Class A Certificate Balance on the immediately preceding
Distribution Date, after giving effect to all payments of
principal to the Class A Certificateholders and such
preceding Distribution Date (or in case of the first
Distribution Date on the Class A Initial Certificate
Balance) based on a 360-day year of 12 months of 30 days
each. $___________
2(b). Class A Interest Carryover Shortfall $___________
3. for such Distribution Date Class A Interest Distributable
Amount (sum of 2(a) and 2(b)) $___________
E. Calculation of Class B Interest Distributable Amount
1. Class B Pass-Through Rate ___%
2(a). One-twelfth of the Class B Pass- Through Rate times the
Class B Certificate Balance on the immediately preceding
Distribution Date, after giving effect to all payments of
principal to the Class B Certificateholders and such
preceding Distribution Date (or in case of the first
Distribution Date on the Class B Initial Certificate
Balance) based on a 360-day year of 12 months of 30 days
each. $___________
2(b). Class B Interest Carryover Shortfall for such Distribution
Date $___________
3. Class B Interest Distributable Amount (sum of 2(a) and
2(b)) $___________
F. Calculation of Class A Distributable Amount (sum of B.4 and D.3) $___________
G. Calculation of Class B Distributable Amount (sum of C.4 and E.3) $___________
H. Fees
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1. The Monthly Servicing Fee for such Distribution Date (1/12
of the product of 1% and the Principal Balance of the
Contracts as of the beginning of the related Due Period) $___________
2. Late Payment Penalty Fees for such Distribution Date $___________
3. Extension Fees for such Distribution Date $___________
4. Trustee Fee for such Distribution Date excluding expense
component [___] of the product of .[ ]% and the Principal
Balance of the Contracts as of the beginning of the related
Due Period $___________
I. Calculation of the Available Reserve Monies for such Distribution
Date $___________
1. The amount of funds deposited into the Collection Account
pursuant to SECTION 5.05(b) of the Pooling and Servicing
Agreement with respect to the related Due Period $___________
a. All amounts received by the Trustee or the
Servicer with respect to principal and interest on the
Contracts, as well as Late Payment Penalty Fees and
Extension Fees for the related Due Period $___________
b. All Net Liquidation Proceeds $___________
c. The aggregate of the Repurchase Prices for
Contracts required to be repurchased by the Depositor as
described in SECTION 9.06 of the Pooling and Servicing
Agreement $___________
d. The aggregate of the Repurchase Prices for
Contracts required to be repurchased by the Servicer as
described in SECTION 5.06(f) of the Pooling and
Servicing Agreement $___________
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e. All Advances made by Servicer pursuant to
SECTION 9.03 of the Pooling and Servicing Agreement $___________
f. All amounts paid by the Seller in connection
with an optional repurchase of the Contracts described
in SECTION 9.07 of the Pooling and Servicing Agreement $___________
g. All amounts received in respect of interest,
dividends, gains, income and earnings on investments of
funds in the Trust Accounts as contemplated in SECTION
5.05 of the Pooling and Servicing Agreement $___________
h. Total amount of funds deposited into the
Collection Account pursuant to SECTION 5.05 (the sum of
a. through f.) $___________
2. The amount of funds permitted to be withdrawn from the
Collection Account pursuant to clauses (i) through (iii) of
SECTION 9.04(b) of the Pooling and Servicing Agreement with
respect to the related Due Period
a. Amounts to be paid to the Servicer as the
Reimbursement Amount in accordance with SECTION
9.04(b)(i) of the Pooling and Servicing Agreement $___________
b. Amounts to be paid to the Servicer in respect
to the Servicing Fee for the related Due Period $___________
c. Amounts to be paid to the Trustee in respect
of the Trustee Fee for the related Due Period $___________
d. Total amount of funds permitted to be
withdrawn from the Collection Account pursuant to
clauses (i) through (iii) of SECTION 9.04(b) of the
Pooling and Servicing Agreement with respect to the
related Due Period (sum of a. through c.) $___________
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3. The Available Interest (not including amounts from Reserve
Fund Account) for such Distribution Date available to pay
the Class A Certificate Interest Distributable Amount and
the Class B Certificate Interest Distributable Amount $___________
4. Available Interest and Available Principal (not including
amounts from Reserve Fund Account) for such Distribution
Date available to pay the Class A Certificate Principal
Distributable Amount and the Class B Certificate Principal
Distributable Amount $___________
J. 1. The shortfall of Available Interest for such Distribution
Date to pay the Class A Certificate Interest Distributable
Amount and the Class B Certificate Interest Distributable
Amount $___________
2. The shortfall of Available Principal for such Distribution
Date to pay the Certificate Principal Distributable Amount
(the Available Principal for such Distribution Date minus the
Certificate Principal Distributable Amounts as set forth in
B and C.) $___________
K. The amount to be withdrawn from the Reserve Fund on such Distribution
Date to cover the Class A Certificate Interest Distributable Amount $___________
L. The amount to be withdrawn from the Reserve Fund on such Distribution
Date to cover the Class B Certificate Interest Distributable Amount $___________
M. The amount to be withdrawn from the Reserve Fund on such Distribution
Date to cover the Class A Certificate Principal Distributable Amount $___________
N. The amount to be withdrawn from the Reserve Fund on such Distribution
Date to cover the Class B Certificate Principal Distributable Amount $___________
O. Interest Earnings on the Reserve Fund. $___________
P. The amount on deposit in the Reserve Fund after giving effect to
deposits and withdrawals therefrom on such Distribution Date $___________
Q. The Specified Reserve Fund Amount for such Distribution Date will be
an amount equal to [______________] $___________
R. The Pool Factor
1. The Class A Certificate Factor immediately before such
Distribution Date $___________
2. The Class B Certificate Factor immediately before such
Distribution Date $___________
3. The Class A Certificate Factor immediately after such
Distribution Date $___________
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4. The Class B Certificate Factor immediately after such
Distribution Date $___________
5. The Class A Pool Factor immediately before such Distribution
Date $___________
6. The Class B Pool Factor immediately before such Distribution
Date $___________
7. The Class A Pool Factor immediately after such Distribution
Date $___________
8. The Class B Pool Factor immediately after such Distribution
Date $___________
S. Delinquent Contracts
1. 31-59 Days #______ $___________
2. 60-89 Days #______ $___________
3. 90 or More Days #______ $___________
T. Defaulted Contracts
1. Total Defaulted Contracts #______ $___________
2. Identity (attach)
3. Liquidation proceeds for the Due Period $___________
4. Liquidation expenses for the Due Period $___________
5. Net Liquidation Proceeds for the Due Period $___________
6. Net Liquidation Losses for the Due Period $___________
U. Advances
1. Unreimbursed Advances prior to such Distribution Date $___________
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2. Amount paid to Servicer on such Distribution Date to
reimburse Servicer for such unreimbursed Advances $___________
3. Amount of Delinquent Interest for such Distribution Date $___________
4. Amount of new Advances on such Distribution Date (if such
amount is less than the amount of Delinquent Interest,
attach the certificate required by SECTION 8.03 of the
Pooling and Servicing Agreement) $___________
5. Total of unreimbursed Advances after new Advances on such
Distribution Date $___________
V. Repurchased Contracts
1. Number of Contracts to be repurchased by the Seller pursuant
to SECTIONS 9.06 and 9.07 of the Pooling and Servicing
Agreement $___________
2. Principal Amount of such Contracts $___________
3. Related Repurchase Price of such Contracts $___________
W. Contracts
1. Number of Contracts as of beginning of Due Period $___________
2. Principal Balance of Contracts as of beginning of Due
Period $___________
3. The weighted average Contract Rate of the Contracts as of
the beginning of the Due Period $___________
4. The weighted average remaining term to maturity of the
Contracts as of the beginning of the Due Period $___________
5. Number of Contracts as of end of Due Period $___________
6. Principal Balance of Contracts as of end of Due Period $___________
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7. The weighted average Contract Rate of the Contracts as
of the end of the Due Period $___________
8. The weighted average remaining term to maturity of the
Contracts as of the end of the Due Period $___________
I-8
EXHIBIT J
[Seller's Representations and Warranties]
REPRESENTATIONS AND WARRANTIES REGARDING EACH CONTRACT. The Seller
represents and warrants as to each Contract as of the Closing Date that:
(a) LIST OF CONTRACTS. The information set forth in the List of
Contracts is true, complete and correct in all material respects as of the
Cutoff Date.
(b) PAYMENTS. As of the Cutoff Date, the most recent scheduled payment
with respect to any Contract either had been made or was not delinquent for
more than 30 days. To the best of the Seller's knowledge, all payments made
on each Contract were made by or on behalf of the respective Obligor.
(c) NO WAIVERS. As of the Closing Date, the terms of the Contracts
have not been waived, altered or modified in any respect, except by
instruments or documents included in the related Contract File.
(d) BINDING OBLIGATION. Each Contract is a valid and binding payment
obligation of the Obligor thereunder and is enforceable in accordance with
its terms, except as such enforceability may be limited by insolvency,
bankruptcy, moratorium, reorganization, or other similar laws affecting the
enforcement of creditors' rights generally.
(e) NO DEFENSES. No Contract is subject to any right of rescission,
setoff, counterclaim or defense, including the defense of usury, and the
operation of any of the terms of such Contract or the exercise of any right
thereunder will not render the Contract unenforceable in whole or in part
or subject to any right of rescission, setoff, counterclaim or defense,
including the defense of usury, and no such right of rescission, setoff,
counterclaim or defense has been asserted or threatened with respect
thereto.
(f) INSURANCE. Each Contract requires the related Obligor to maintain
physical damage insurance (i) in an amount not less than the value of the
Financed Vehicle at the time of origination of the Contract, (ii) naming
the Seller as a loss payee and (iii) insuring against loss and damage due
to fire, theft, transportation, collision and other risks covered by
comprehensive coverage, and all premiums due on such insurance have been
paid in full from the date of the Contract's origination.
(g) ORIGINATION. Each Contract was originated by a retailer of new or
used automobiles or other third party that finances the sale of new or used
motor vehicles in the ordinary course of its business which dealer or third
party had all necessary licenses and permits to originate the Contracts in
the state where such dealer or third party was located, was fully and
properly executed by the parties thereto, and has been purchased by the
Seller in the regular course of its business or directly originated by the
Seller in the ordinary course of its business. To the best of the Seller's
knowledge, each Contract was sold by such dealer or other third party to
the Seller without any fraud on the part of such dealer or third party.
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(h) LAWFUL ASSIGNMENT. No Contract was originated in or is subject to
the laws of any jurisdiction whose laws would make the sale, transfer and
assignment of the Contract under this Agreement or under the Pooling and
Servicing Agreement unlawful, void or voidable.
(i) COMPLIANCE WITH LAW. None of the Contracts, the origination of the
Contracts by the dealers or other third parties, the purchase of the
Contracts by the Seller, the sale of the Contracts by the Seller to the
Depositor or by the Depositor to the Issuer, or any combination of the
foregoing, violated at the time of origination or as of the Closing Date
any requirement of any federal, state or local law and regulations
thereunder, including, without limitation, usury, truth in lending, motor
vehicle installment loan and equal credit opportunity laws, applicable to
the Contracts and the sale of the Financed Vehicles. The Seller shall, for
at least the period of this Agreement, maintain in its possession,
available for the Depositor's and the Trustees' inspection, and shall
deliver to the Depositor or the Trustee upon demand, evidence of compliance
with all such requirements.
(j) CONTRACT IN FORCE. As of the Closing Date, no Contract has been
satisfied or subordinated in whole or in part or rescinded, and the related
Financed Vehicle securing any Contract has not been released from the lien
of the Contract in whole or in part.
(k) VALID SECURITY INTEREST. Each Contract creates a valid, subsisting
and enforceable first priority perfected security interest in favor of the
Seller in the Financed Vehicle covered thereby, and such security interest
has been assigned by the Seller to the Depositor. The original certificate
of title, certificate of lien or other notification (the "LIEN
CERTIFICATE") issued by the body responsible for the registration of, and
the issuance of certificates of title relating to, motor vehicles and liens
thereon (the "REGISTRAR OF TITLES") of the applicable state to a secured
party which indicates the lien of the secured party on the Financed Vehicle
is recorded on the original certificate of title, and the original
certificate of title for each Financed Vehicle, show, or if a new or
replacement Lien Certificate is being applied for with respect to such
Financed Vehicle the Lien Certificate will be received within 180 days of
the Closing Date and will show, the Seller as original secured party under
each Contract as the holder of a first priority security interest in such
Financed Vehicle. With respect to each Contract for which the Lien
Certificate has not yet been returned from the Registrar of Titles, the
Seller has received written evidence from the related dealer or other third
party that such Lien Certificate showing the Seller as lienholder has been
applied for.
(l) CAPACITY OF PARTIES. All parties to any Contract had capacity to
execute such Contract and all other documents related thereto and to grant
the security interest purported to be granted thereby.
(m) GOOD TITLE. Each Contract was originated by the Seller or
purchased by the Seller for value and taken into possession prior to the
Cutoff Date in the ordinary course of its business, without knowledge that
the Contract was subject to a security interest. No Contract has been sold,
assigned or pledged to any person other than the
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Depositor and the Issuer as the transferee of the Depositor, and prior to
the transfer of the Contract to the Depositor, the Seller had good and
marketable title to each Contract free and clear of any encumbrance,
equity, loan, pledge, charge, claim or security interest and was the sole
owner thereof and had full right to transfer the Contract to the Depositor
and to permit the Depositor to transfer the same to the Issuer, and, as of
the Closing Date, the Issuer will have a first priority perfected security
interest therein.
(n) NO DEFAULTS. As of the Cutoff Date, no default, breach, violation
or event permitting acceleration existed with respect to any Contract and
no event had occurred which, with notice and the expiration of any grace or
cure period, would constitute such a default, breach, violation or event
permitting acceleration under such Contract. The Seller has not waived any
such default, breach, violation or event permitting acceleration. As of the
Cutoff Date, no Financed Vehicle had been repossessed.
(o) NO LIENS. As of the Closing Date there are no liens or claims
which have been filed for work, labor, materials or unpaid taxes affecting
the Financed Vehicle securing any Contract which are or may be liens prior
to, or equal with, the lien of such Contract.
(p) ENFORCEABILITY. Each Contract contains customary and enforceable
provisions such as to render the rights and remedies of the holder thereof
adequate for the realization against the Financed Vehicle of the benefits
of the security.
(q) ONE ORIGINAL. Each Contract is evidenced by only one original
executed Contract, which original is being held by the Servicer as
custodian.
(r) NO GOVERNMENT CONTRACTS. No Obligor is the United States or any
State government or an agency, authority, instrumentality or other
political subdivision of the United States government or any state
government or municipality.
(s) OBLIGOR BANKRUPTCY. At the Cutoff Date, no Obligor was subject to
a bankruptcy proceeding or other insolvency proceeding.
(t) CHATTEL PAPER. The Contracts constitute chattel paper within the
meaning of the UCC as in effect in the State of Illinois.
(u) NO IMPAIRMENT. Neither the Seller nor the Depositor has done
anything to convey any right to any Person that would result in such Person
having a right to payments due under the Contract or otherwise to impair
the rights of the Issuer in any Contract or the proceeds thereof.
(v) CONTRACT NOT ASSUMABLE. No Contract is assumable by another Person
in a manner which would release the Obligor thereof from such Obligor's
obligations to the Depositor with respect to such Contract.
(w) OBLIGOR LOCATION. Each Contract is a U.S. dollar-denominated
obligation and each Obligor's billing address is located in one of the
states of the United States, the District of Columbia or Puerto Rico.
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(x) LOCKBOX BANK. The Lockbox Bank is the only institution holding any
Lockbox Account for receipt of payments from Obligors, and all Obligors,
and only such Obligors, have been instructed to make payments to the
Lockbox Account, and no person claiming through or under Seller has any
claim or interest in the Lockbox or the Lockbox Account other than the
Lockbox Bank; provided, however, _______________, shall have an interest in
certain other collections therein not related to the Contracts.
REPRESENTATIONS AND WARRANTIES REGARDING THE CONTRACTS IN THE AGGREGATE.
The Seller represents and warrants as of the Closing Date that:
(a) AMOUNTS. The sum of the aggregate Principal Balances payable by
Obligors under the Contracts as of the Cutoff Date equals the sum of the
principal balance of the Certificates on the Closing Date.
(b) CHARACTERISTICS. The Contracts have the following characteristics:
(i) all the Contracts are secured by Financed Vehicles; (ii) no Contract
has a remaining maturity of less than ___ months or more than __ months;
(iii) no Contract had an original term to maturity of less than ___ months
or more than ___ months; (iv) the final scheduled payment on the Contract
with the latest maturity is due no later than ____________ 20__; (v) each
Contract is a fully-amortizing fixed rate Simple Interest Contract; and
(vi) each Contract had a remaining Principal Balance of no less than
$______ and no more than $______. Approximately _____% of the Principal
Balance of the Contracts as of the Cutoff Date is attributable to loans for
purchases of new Financed Vehicles and approximately _____% is attributable
to loans for purchases of used Financed Vehicles. No Contract has a
Contract Rate of less than ___%. No Contract was originated after the
Cutoff Date. No Contract has a Contract Rate less than ____%. The first
scheduled Distribution Date of the Contracts is due no later than
_____________.
(c) MARKING RECORDS. As of the Closing Date, the Seller has caused the
Computer Disk relating to the Contracts sold under the Transfer and Sale
Agreement and concurrently reconveyed by the Depositor to the Issuer to be
clearly and unambiguously marked to indicate that such Contracts constitute
part of the Trust Corpus, are owned by the Issuer.
(d) NO ADVERSE SELECTION. No selection procedures adverse to
Certificateholders have been employed in selecting the Contracts.
(e) TRUE SALE. The transaction contemplated by this Agreement
constitutes a valid sale, transfer and assignment from the Seller to the
Depositor and from the Depositor to the Issuer of all of the Seller's
right, title and interest in the Contract Assets as of the Closing Date or
creates a first priority security interest in the Contract Assets for the
benefit of the Issuer as of the Closing Date.
(f) ALL FILINGS MADE. All filings (including, without limitation, UCC
filings) required to be made by any Person and actions required to be taken
or performed by any Person in any jurisdiction to give the Trustees a first
priority perfected lien on, or
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ownership interest in, the Contracts and the proceeds thereof have been
made, taken or performed.
REPRESENTATIONS AND WARRANTIES REGARDING THE CONTRACT FILES. The Seller
represents and warrants as of the Closing Date that:
(a) POSSESSION. Immediately prior to the Closing Date, the Servicer
will have possession of each original Contract and the related complete
Contract File, and there are and there will be no custodial agreements
relating to the same in effect. Each of such documents which is required to
be signed by the Obligor has been signed by the Obligor in the appropriate
spaces. All blanks on any form have been properly filled in and each form
has otherwise been correctly prepared. The complete Contract File for each
Contract currently is in the possession of the Servicer.
(b) BULK TRANSFER LAWS. The transfer, assignment and conveyance of the
Contracts and the Contract Files by the Seller pursuant to the Transfer and
Sale Agreement and by the Depositor pursuant to the Pooling and Servicing
Agreement is not subject to the bulk transfer or any similar statutory
provisions in effect in any applicable jurisdiction.
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EXHIBIT K
[Form of Yield Supplement Agreement]
K-1
EXHIBIT L
[Lockbox Bank and Lockbox Account]
LOCKBOX
LOCKBOX BANK
