EXHIBIT 4.1
BAY VIEW SECURITIZATION CORPORATION
TRANSFEROR
BAY VIEW ACCEPTANCE CORPORATION
SERVICER
DEUTSCHE BANK TRUST COMPANY AMERICAS
INDENTURE TRUSTEE AND BACK-UP SERVICER
SYSTEMS & SERVICES TECHNOLOGIES, INC.
STANDBY SERVICER
AND
WILMINGTON TRUST COMPANY
OWNER TRUSTEE
TRUST AND SERVICING AGREEMENT
DATED AS OF SEPTEMBER 1, 2002
BAY VIEW 2002-LJ-1 OWNER TRUST
TABLE OF CONTENTS
ARTICLE I CREATION OF TRUST 1
SECTION 1.01. Name 1
SECTION 1.02. Office 1
SECTION 1.03. Purposes and Powers 1
SECTION 1.04. Appointment of Owner Trustee 2
SECTION 1.05. Initial Capital Contribution of Trust Estate 2
SECTION 1.06. Declaration of Trust 2
SECTION 1.07. Title to Trust Property 2
SECTION 1.08. Situs of Trust 2
ARTICLE II DEFINITIONS 2
SECTION 2.01. Definitions 2
SECTION 2.02. Usage of Terms 16
SECTION 2.03. Closing Date and Record Date 17
SECTION 2.04. Section References 17
SECTION 2.05. Compliance Certificates 17
SECTION 2.06. Directions 17
SECTION 2.07. Calculations 17
SECTION 2.08. Action by or Consent of Noteholders 17
SECTION 2.09. Material Adverse Effect 17
ARTICLE III CONVEYANCE OF RECEIVABLES 17
SECTION 3.01. Conveyance of Receivables 17
ARTICLE IV ACCEPTANCE BY TRUSTEE 18
SECTION 4.01. Acceptance by Trustee 18
ARTICLE V INFORMATION DELIVERED TO THE RATING AGENCIES 18
SECTION 5.01. Information Delivered to the Rating Agencies 18
ARTICLE VI AGENT FOR SERVICE 19
SECTION 6.01. Agent for Service 19
ARTICLE VII THE RECEIVABLES 19
SECTION 7.01. Representations and Warranties of Transferor 19
SECTION 7.02. Repurchase Upon Breach 20
SECTION 7.03. Custody of Receivable Files 20
SECTION 7.04. Duties of Servicer as Custodian 21
SECTION 7.05. Instructions; Authority to Act 21
ARTICLE VIII ADMINISTRATION AND SERVICING OF RECEIVABLES 21
SECTION 8.01. Duties of Servicer 21
SECTION 8.02. The Back-up Servicer 22
SECTION 8.03. The Standby Servicer 23
SECTION 8.04. Retention and Termination of Servicer 24
SECTION 8.05. Collection of Receivable Payments 24
SECTION 8.06. Realization Upon Receivables 25
SECTION 8.07. Physical Damage Insurance 26
SECTION 8.08. Maintenance of Security Interests in Financed Vehicles 26
SECTION 8.09. Covenants of Servicer 27
SECTION 8.10. Purchase of Receivables Upon Breach 28
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SECTION 8.11. Servicing Fee 28
SECTION 8.12. Servicer's Certificate 29
SECTION 8.13. Annual Statement as to Compliance; Notice of
Default 29
SECTION 8.14. Annual Independent Certified Public Accountant's
Report 29
SECTION 8.15. Access to Certain Documentation and Information
Regarding Receivables 30
SECTION 8.16. Servicer Expenses 30
SECTION 8.17. Reports to Noteholders 30
SECTION 8.18. Fidelity Bond 30
SECTION 8.19. Delegation of Duties 31
ARTICLE IX COLLECTIONS; DISTRIBUTIONS TO NOTEHOLDERS AND CERTIFICATEHOLDERS 31
SECTION 9.01. Lock-Box Account. 31
SECTION 9.02. Collection Account 32
SECTION 9.03. Collections 34
SECTION 9.04. Additional Deposits 34
SECTION 9.05. Application of Funds 34
SECTION 9.06. Spread Account 35
SECTION 9.07. Advances 35
SECTION 9.08. Intentionally Blank 35
SECTION 9.09. No Segregation of Moneys; No Interest 35
SECTION 9.10. Accounting and Reports to the Certificateholder,
the Internal Revenue Service and Others 35
SECTION 9.11. Payahead Account 36
SECTION 9.12. Certain Reimbursements to the Servicer 36
SECTION 9.13. Securities Accounts 36
ARTICLE X VOTING RIGHTS AND OTHER ACTIONS 37
SECTION 10.01. Prior Notice with Respect to Certain Matters 37
SECTION 10.02. Action with Respect to Certain Matters 37
SECTION 10.03. Reserved. 38
SECTION 10.04. Restrictions on Certificateholder's Power 38
SECTION 10.05. Control. 38
SECTION 10.06. Rights of Insurer 38
SECTION 10.07. Registration of Transfer and Exchange of the
Certificate 38
ARTICLE XI THE CERTIFICATE 39
SECTION 11.01. Initial Ownership 39
SECTION 11.02. The Certificate 39
SECTION 11.03. Authentication of Certificate 39
SECTION 11.04. Registration of Transfer and Exchange of
Certificate 39
SECTION 11.05. Mutilated, Destroyed, Lost, or Stolen Certificates 40
SECTION 11.06. Persons Deemed Certificateholder. 40
SECTION 11.07. Covenants of the Certificateholder 40
ARTICLE XII THE TRANSFEROR 41
SECTION 12.01. Representations and Undertakings of Transferor 41
SECTION 12.02. Liability of Transferor; Indemnities 43
SECTION 12.03. Merger or Consolidation of, or Assumption of the
Obligations of Transferor 44
SECTION 12.04. Limitation on Liability of Transferor and Others 44
SECTION 12.05. Transferor May Own Notes 45
ARTICLE XIII THE SERVICER; BACK-UP SERVICER; AND STANDBY SERVICER 45
SECTION 13.01. Representations and Warranties. 45
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SECTION 13.02. Indemnities of Servicer, Back-up Servicer,
Standby Servicer and BVAC. 49
SECTION 13.03. Merger or Consolidation of, or Assumption of the
Obligations of, the Servicer, Back-up Servicer
and Standby Servicer. 50
SECTION 13.04. Limitation on Liability of Servicer and Others 51
SECTION 13.05 Servicer, Back-up Servicer and Standby Servicer
Not to Resign. 52
SECTION 13.06. Delegation of Duties 52
ARTICLE XIV SERVICER AND STANDBY SERVICER DEFAULTS 52
SECTION 14.01. Events of Servicer Default 52
SECTION 14.04. Notice of Events of Servicer Default 59
SECTION 14.05. Waiver of Past Defaults 59
ARTICLE XV THE OWNER TRUSTEE 59
SECTION 15.01. Duties of Owner Trustee 59
SECTION 15.02. Action upon Instruction 60
SECTION 15.03. Accounting and Records to the Certificateholder,
the Internal Revenue Service and Others 62
SECTION 15.04. Signature on Returns; Tax Matters Partner 62
SECTION 15.05. Owner Trustee's Certificate 62
SECTION 15.06. Trust's Assignment of Purchased Receivables 62
SECTION 15.07. Certain Matters Affecting the Owner Trustee 63
SECTION 15.08. Owner Trustee Not Liable for Certificate or
Receivables 64
SECTION 15.09. Owner Trustee May Own Notes 64
SECTION 15.10. Owner Trustee's and Indenture Trustee's Fees and
Expenses; Indemnification 64
SECTION 15.11. Eligibility Requirements for Owner Trustee 65
SECTION 15.12. Resignation or Removal of Owner Trustee 65
SECTION 15.13. Successor Owner Trustee 65
SECTION 15.14. Merger or Consolidation of Owner Trustee 66
SECTION 15.15. Appointment of Co-Trustee or Separate Owner Trustee 66
SECTION 15.16. Representations and Warranties of Owner Trustee 67
ARTICLE XVI TERMINATION 67
SECTION 16.01. Termination of the Trust 67
SECTION 16.02. Optional Disposition of All Receivables 68
ARTICLE XVII MISCELLANEOUS PROVISIONS 69
SECTION 17.01. Amendment 69
SECTION 17.02. Protection of Title to Trust. 70
SECTION 17.03. Limitation on Rights of Noteholders and
Certificateholders 72
SECTION 17.04. Governing Law 72
SECTION 17.05. Notices 72
SECTION 17.06. Severability of Provisions 73
SECTION 17.07. Assignment 73
SECTION 17.08. Insurer 73
SECTION 17.09. No Petition 74
SECTION 17.10. No Recourse 74
SECTION 17.11. No Legal Title to Trust Property in
Certificateholder 74
SECTION 17.12. Further Assurances 74
SECTION 17.13. No Waiver; Cumulative Remedies 74
SECTION 17.14 Third-Party Beneficiaries 74
SECTION 17.15. Actions by Noteholders or Certificateholders 74
SECTION 17.16. Corporate Obligation 75
SECTION 17.17. Covenant Not File a Bankruptcy Petition 75
SECTION 17.18. Independence of the Servicer, Back-up Servicer and
Standby Servicer 75
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SECTION 17.19. No Joint Venture 75
SECTION 17.20. Headings 75
SECTION 17.21. Entire Agreement 75
SECTION 17.22. Limitation of Liability of Owner Trustee 75
SECTION 17.23. Effect of Policy Expiration Date 76
SECTION 17.24. Counterparts 76
SECTION 17.25. Consent to Jurisdiction 76
SECTION 17.26. Trial by Jury Waived 77
SECTION 17.27. Xxxxxxxx-Xxxxx Certifications. 77
EXHIBIT 1 - Owner Trustee's Certificate Pursuant to Section 15.02
EXHIBIT 2 - Owner Trustee's Certificate Pursuant to Section 15.02
EXHIBIT 3 - Servicer's Certificate
EXHIBIT A - Form of Certificate of Trust
EXHIBIT B - Form of Certificate
EXHIBIT C - Confirmation of Computer Tape (Back-up Servicer)
EXHIBIT D - Confirmation of Computer Tape (Standby Servicer)
EXHIBIT E - Exception List Under Section 8.08(b)
EXHIBIT F - Form of Certification of Indenture Trustee Pursuant to Section
8.08(b)(iv)
EXHIBIT G - Form of Instructional Letter of BVAC Pursuant to Section 8.08(b)(v)
SCHEDULE A - Schedule of Receivables
SCHEDULE B - Location of Receivables
SCHEDULE C - Standby Servicer Schedule
SCHEDULE D - Delivery Requirements
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This TRUST AND SERVICING AGREEMENT, dated as of September 1, 2002, is
made with respect to the formation of the Bay View 2002-LJ-1 Owner Trust, among
BAY VIEW SECURITIZATION CORPORATION, a Delaware corporation, as transferor (the
"Transferor"), BAY VIEW ACCEPTANCE CORPORATION, a Nevada corporation, as
servicer (the "Servicer"), DEUTSCHE BANK TRUST COMPANY AMERICAS, a New York
banking corporation (the "Indenture Trustee" and the "Back-up Servicer"),
SYSTEMS & SERVICES TECHNOLOGIES, INC. a Delaware corporation (the "Standby
Servicer") and Wilmington Trust Company, a Delaware banking corporation, as
owner trustee (in such capacity, the "Owner Trustee").
WITNESSETH THAT: In consideration of the premises and of the mutual
agreements herein contained, the parties hereto agree as follows:
ARTICLE I
CREATION OF TRUST
Upon the execution of this Agreement by the parties hereto and the
prompt filing thereafter of the Certificate of Trust in the State of Delaware,
there is hereby created the Bay View 2002-LJ-1 Owner Trust.
SECTION 1.01. NAME. The Trust created hereby shall be known as "Bay
View 2002-LJ-1 Owner Trust", in which name the Owner Trustee may conduct the
business and affairs of the Trust, make and execute contracts and other
instruments on behalf of the Trust and xxx and be sued on behalf of the Trust.
The Trust shall constitute a statutory trust within the meaning of Section
3801(a) of the Delaware Statutory Trust Act for which the Owner Trustee has
filed a certificate of trust with the Secretary of State of the State of
Delaware pursuant to Section 3810(a) of the Delaware Statutory Trust Act.
SECTION 1.02. OFFICE. The office of the Trust shall be in care of the
Owner Trustee at its Corporate Trust Office or at such other address as the
Owner Trustee may designate by written notice to the Certificateholder, the
Noteholders, the Servicer, the Transferor, the Insurer and the Indenture
Trustee.
SECTION 1.03. PURPOSES AND POWERS. The purpose of the Trust is to
engage in the following activities:
(i) to issue the Notes pursuant to the Indenture and the Certificate
pursuant to this Agreement and to sell or transfer the Notes and the Certificate
in one or more transactions;
(ii) with the proceeds of the sale of the Notes and the Certificate, to
fund the Spread Account pursuant to the terms of the Spread Account Agreement
and to purchase the Receivables pursuant to this Agreement;
(iii) to assign, grant, transfer, pledge, mortgage and convey the Trust
estate pursuant to the Indenture and to hold, manage and distribute to the
Certificateholder pursuant to the terms of this Agreement any portion of the
Trust estate released from the Lien of, and remitted to the Trust pursuant to,
the Indenture;
(iv) to enter into and perform its obligations under the related
documents to which it is to be a party;
(v) to engage in those activities, including entering into agreements,
that are necessary, suitable or convenient to accomplish the foregoing or are
incidental thereto or connected therewith; and
(vi) subject to compliance with the related documents, to engage in such
other activities as may be required in connection with conservation of the Trust
estate and the making of distributions to the Certificateholder, the
Noteholders, the Insurer and the others specified in this Agreement and the
Indenture.
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The Trust is hereby authorized to engage in the foregoing activities.
The Trust shall not engage in any activity other than in connection with the
foregoing or other than as required or authorized by the terms of this Agreement
or the other Basic Documents.
SECTION 1.04. APPOINTMENT OF OWNER TRUSTEE. The Transferor hereby
appoints the Owner Trustee as trustee of the Trust effective as of the date
hereof, to have all the rights, powers and duties set forth herein and in the
Delaware Statutory Trust Act.
SECTION 1.05. INITIAL CAPITAL CONTRIBUTION OF TRUST ESTATE. The
Transferor hereby sells, assigns, transfers, conveys and sets over to the Trust,
as of the date hereof, the Trust estate. The Owner Trustee on behalf of the
Trust hereby acknowledges receipt in trust from the Transferor, as of the date
hereof, of the foregoing contribution, which shall constitute the initial Trust
estate. The Transferor shall pay the organizational expenses of the Trust as
they may arise or shall, upon the request of the Owner Trustee, promptly
reimburse the Owner Trustee for any such expenses paid by the Owner Trustee.
SECTION 1.06. DECLARATION OF TRUST. The Owner Trustee hereby declares
that it will hold the Trust estate in trust upon and subject to the conditions
set forth herein for the use and benefit of the Certificateholder, subject to
the obligations of the Trust under the other related documents. It is the
intention of the parties hereto that the Trust constitute a statutory trust
under Delaware Statutory Trust Act and that this Agreement constitute the
governing instrument of the Trust. Furthermore, it is the intention of the
parties hereto that, solely for federal, state and local income and franchise
tax purposes (i) so long as there is a sole Certificateholder, the Trust shall
be disregarded as a separate entity, with the assets of the Trust being treated
as the assets of such sole Certificateholder, and the Notes being non-recourse
debt of the sole Certificateholder, and (ii) if there is more than one
Certificateholder, the Trust shall be treated as a partnership, with the assets
of the partnership being the Trust estate, the partners of the partnership being
the Certificateholders and the Notes being non-recourse debt of the partnership.
The Trust shall not elect to be treated as an association under Treasury
Regulations Section 301.7701-3(a) for federal income tax purposes. The parties
agree that unless otherwise required by appropriate tax authorities, the sole
Certificateholder or the Administrator on behalf of the Trust will file or cause
to be filed annual or other necessary returns, reports and other forms
consistent with the characterization of the Trust as provided in the second
preceding sentence for such tax purposes. The Owner Trustee, the Spread Account
Depositor as the initial Certificateholder and each successor Certificateholder
(as a condition to acquiring its Certificate) agree to disregard the trust as a
separate entity (if there is one Certificateholder) or to treat it as a
partnership (if there are two or more Certificateholders) and to treat the Notes
as indebtedness for purposes of federal, state, and local income or franchise
taxes.
SECTION 1.07. TITLE TO TRUST PROPERTY. Legal title to all of the Trust
estate shall be vested at all times in the Trust as a separate legal entity
except where applicable law in any jurisdiction requires title to any part of
the Trust estate to be vested in a trustee or trustees, in which case title
shall be deemed to be vested in the Owner Trustee, a co-trustee and/or a
separate trustee, as the case may be.
SECTION 1.08. SITUS OF TRUST. The Trust will be located and
administered in the State of Delaware. Any bank accounts maintained by the Owner
Trustee on behalf of the Trust shall be located in the State of Delaware. The
Trust shall not have any employees in any state other than Delaware; provided,
however, that nothing herein shall restrict or prohibit the Owner Trustee from
having employees within or without the State of Delaware. Payments, if any, will
be received by the Trust only in Delaware, and payments, if any, will be made by
the Trust only from Delaware. The only office of the Trust will be at the
Corporate Trust Office in Delaware.
ARTICLE II
DEFINITIONS
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SECTION 2.01. DEFINITIONS. Capitalized terms which are used in this
Agreement but are not defined herein shall have the meanings provided in the
Indenture. Whenever used in this Agreement, the following words and phrases,
unless the context otherwise requires, shall have the following meanings:
"Accrual Period" means, with respect to each Receivable and the related
due date, the immediately preceding calendar month. For purposes of making
calculations pursuant to this Agreement and the Indenture, interest shall be
computed on each Receivable on the basis of a 360-day year of twelve 30-day
months for purposes of this definition.
"Additional Funds Available" means, with respect to any Payment Date,
the sum of (i) the Deficiency Claim Amount, if any, received by the Indenture
Trustee with respect to that Payment Date plus (ii) the Insurer Optional
Deposit, if any, received by the Indenture Trustee with respect to that Payment
Date plus (iii) the payment of any amounts with respect to a Preference Claim
pursuant to the Policy.
"Administration Agreement" means the Administration Agreement dated as
of September 1, 2002, between the Trust and the Administrator and acknowledged
by the Indenture Trustee.
"Administrator" means the Administrator under the Administration
Agreement, which is initially BVAC, and its successors and assigns thereunder.
"Advance" means, with respect to a Receivable and with respect to a
Collection Period, the amount that the Servicer is required to advance pursuant
to Section 9.07.
"Affiliate" means, with respect to any specified Person, any other
Person who directly or indirectly controls, or is under direct or indirect
common control with such specified Person. For the purposes of this definition,
"control" when used with respect to any Person means the power to direct the
management and policies of such Person, directly or indirectly, whether through
the ownership of voting securities, by contract or otherwise; and the terms
"controlling" and "controlled" have meanings correlative to the foregoing.
"Agreement" means this Trust and Servicing Agreement executed by the
Transferor, the Servicer, the Indenture Trustee, the Back-Up Servicer, the
Standby Servicer and the Owner Trustee, and all amendments and supplements
hereto entered into from time to time in accordance with the terms hereof.
"Amount Available" means with respect to any Payment Date, the sum of
(x) Available Funds for such Payment Date and (y) Additional Funds Available, if
any, for such Payment Date.
"Amount Financed" means, with respect to a Receivable, the aggregate
amount originally advanced under the Receivable toward the purchase price of the
Financed Vehicle.
"Annual Percentage Rate" or "APR" of a Receivable means the annual rate
of finance charges stated in the Receivable exclusive of prepaid finance
charges. If after the Closing Date, the annual rate with respect to such
Receivable as of the Closing Date, is reduced as a result of (i) an insolvency
proceeding involving the related Obligor or (ii) pursuant to the Soldiers' and
Sailors' Civil Relief Act of 1940, as amended, the Annual Percentage Rate or APR
shall refer to such reduced rate.
"Assignment" means the assignment dated as of September 1, 2002 by BVAC
to the Transferor substantially in the form of Exhibit A to the Purchase
Agreement, pursuant to which the Receivables are conveyed to the Transferor.
"Authorized Newspaper" means a newspaper of general circulation in the
Borough of Manhattan, the City of New York, printed in the English language and
customarily published on each Business Day, whether or not published on
Saturdays, Sundays and holidays.
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"Available Funds" means with respect to any Payment Date, each of the
following then on deposit in any Trust Accounts with respect to the related
Collection Period, (i) Scheduled Receivable Payments (including Modified
Scheduled Receivable Payments) and prepayments on Receivables (other than
Payaheads) received by the Servicer; (ii) any net withdrawal from the Payahead
Account; (iii) interest earned on funds held in the Collection Account and the
Payahead Account; (iv) Liquidation Proceeds; (v) Advances; (vi) Purchase Amounts
and/or any indemnity payments made in lieu of or otherwise relating to such
Purchase Amounts in accordance with the terms of Sections 7.02, 8.08 and 8.10 of
this Agreement, (vii) proceeds from any insurance policies related to the
Receivables or Financed Vehicles, (viii) Recoveries with respect to Charged-off
Receivables and (ix) the Redemption Price if, the Servicer exercise its rights
pursuant to Section 16.02.
"Available Spread Amount" means, on any Payment Date, the amount on
deposit in the Spread Account, including any income or gain from any investment
of funds in the Spread Account, net of any losses from such investment before
giving effect to deposits into or withdrawals from the Spread Account pursuant
to the Indenture and the Spread Account Agreement on such Payment Date.
"Back-up Servicer" means Deutsche Bank Trust Company Americas, as the
back-up servicer of the Receivables, and each successor to Deutsche Bank Trust
Company Americas (in the same capacity) appointed hereunder.
"Bank" means Bay View Bank, N.A. and its successors and assigns.
"Bank Guarantee" means the Guarantee, dated as of September 1, 2002, by
the Bank in favor of the Indenture Trustee and the Insurer.
"Basic Documents" means this Agreement, the Indenture, the Purchase
Agreement, the Assignment, the Bank Guarantee, the Insurance Agreement, the
Indemnification Agreement, the Spread Account Depositor Trust Agreement, the
Spread Account Agreement, the Premium Letter, the Certificate Pledge Agreement,
the Stock Pledge Agreement, the Lock-Box Agreement, the Administration
Agreement, the Custodian Agreement, the Transfer and Contribution Agreement, the
organizational documents of the Transferor and other documents and certificates
delivered in connection therewith.
"Business Day" means, unless otherwise specified, any day other than a
Saturday, a Sunday or a day on which banking institutions in Wilmington,
Delaware, New York, New York, San Mateo, California or St. Xxxxxx, Missouri, or
any other location of the Servicer, any successor Servicer, successor Standby
Servicer, successor Owner Trustee, or successor Indenture Trustee, shall be
authorized or obligated by law, executive order, or governmental decree to be
closed.
"BVAC" means Bay View Acceptance Corporation, a Nevada corporation, and
its successors and assigns, other than in its capacity as Servicer.
"BVCC" means Bay View Capital Corporation, a Delaware corporation, and
its successors and assigns.
"Casualty" means, with respect to any Financed Vehicle, the total loss
or destruction of such Financed Vehicle.
"Certificate" means a certificate executed on behalf of the Trust and
authenticated by the Owner Trustee substantially in the form attached hereto as
Exhibit B, which represents ownership of a 100% interest in the Trust.
"Certificate of Trust" means the Certificate of Trust of the Trust in
substantially the form of Exhibit A hereto.
"Certificate Pledge Agreement" means the Certificate Pledge and
Collateral Agency Agreement, dated as of September 1, 2002, among the
Transferor, the Spread Account Depositor, the Insurer and
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Deutsche Bank Trust Company Americas, as collateral agent, as the same may be
amended, supplemented, or otherwise modified from time to time in accordance
with the terms thereof.
"Certificate Register" means the register maintained by the Owner
Trustee pursuant to Section 11.04.
"Certificateholder" or "Holder" means the Person in whose name the
Certificate shall be registered in the Certificate Register.
"Charged-Off Receivable" means, for any Collection Period, a Receivable
as to which any of the following has occurred: (i) any payment, or part thereof,
was delinquent 120 days or more as of the last day of such Collection Period
(without giving effect to any Advances), (ii) the Financed Vehicle that secures
the Receivable has been repossessed for at least 90 days, or (iii) the Servicer
has determined that the Receivable is uncollectible in accordance with the
Servicer's customary practices on or before the last day of such Collection
Period; provided, however, that "Charged-Off Receivable" shall not include any
Receivable that is to be repurchased pursuant to Section 7.02 or purchased
pursuant to Section 8.10; provided further, that any Advances made with respect
to a Receivable shall not be considered in the determination of the delinquency
status of such Receivable.
"Closing Date" means September 30, 2002.
"Code" shall mean the Internal Revenue Code of 1986, as amended from
time to time, and Treasury Regulations promulgated thereunder.
"Collateral Agent" shall mean Deutsche Bank Trust Company Americas, in
its capacity as collateral agent, including its successors-in-interest, until
and unless a successor Person shall become the Collateral Agent pursuant to the
Spread Account Agreement, and thereafter, "Collateral Agent" shall mean such
successor Person.
"Collected Interest" on a Receivable, as of the last day of a Collection
Period, means the portion of all payments received by the Servicer allocable to
interest relating to such Collection Period.
"Collection Account" means the account designated as such, established
and maintained pursuant to Section 9.02.
"Collection Period" means, with respect to a Payment Date or a
Redemption Date, the calendar month immediately preceding the calendar month in
which such Payment Date or Redemption Date occurs, until the Trust shall
terminate pursuant to Article XVI.
"Computer Tape" means a computer tape or diskette (or other means of
electronic transmission acceptable to the Back-up Servicer, the Standby Servicer
and the Insurer) in a format acceptable to the Back-up Servicer, the Standby
Servicer and the Insurer.
"Controlling Party" means the Insurer, so long as no Insurer Default
shall have occurred and be continuing and so long as the Insurance Agreement has
not terminated, and the Indenture Trustee, at the direction of the Majority
Noteholders, for so long as an Insurer Default shall have occurred and is
continuing or if the Insurance Agreement has terminated.
"Corporate Trust Office" means the office of the Owner Trustee at which
its corporate trust business shall, at any particular time, be administered,
which office at the date of the execution of this Agreement is located at Xxxxxx
Square North, 0000 Xxxxx Xxxxxx Xxxxxx, Xxxxxxxxxx, Xxxxxxxx 00000-0000;
Attention: Corporate Trust Department; Telecopy: 812-429-3995 or at such other
address as the Owner Trustee may designate from time to time by notice to the
Certificateholder, the Transferor, the Servicer, the Insurer and the Indenture
Trustee.
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"Custodian" means initially BVAC or any successor Custodian, in each
case, in accordance with the terms of the Custodian Agreement.
"Custodian Agreement" means the Custodian Agreement, dated as of
September 1, 2002, among BVAC, as custodian, the Trust, the Insurer and the
Indenture Trustee, as the same may be amended, supplemented or otherwise
modified from time to time in accordance with the terms thereof.
"Cut-off Date" means August 31, 2002.
"Dealer" means the seller of a Financed Vehicle, who originated and
assigned the related Receivable to BVAC or the Bank, as applicable.
"Deficiency Claim Amount" means, for any Payment Date, the amount, after
taking into account the application on such Payment Date of the Available Funds
on such Payment Date, equal to any shortfall in the full payment of amounts
described in clauses (i) through (vi) of Section 9.05(a) of the Indenture, to
the extent that such amount is available for the particular purpose on such
Payment Date in accordance with the provisions of the Spread Account Agreement.
"Deficiency Claim Date" means, with respect to any Payment Date, a date
no later than the fourth Business Day immediately preceding such Payment Date.
"Deficiency Notice" has the meaning ascribed thereto in Section 9.05(b).
"Delaware Statutory Trust Act" means the Delaware Statutory Trust Act,
12 Del. C.ss.3801 et seq.
"Delivery" means with respect to assets held in the Trust Accounts:
(1)(a) with respect to bankers' acceptances, commercial paper,
negotiable certificates of deposit and other obligations that
constitute "instruments" within the meaning of Section
9-102(a)(47) of the UCC, transfer thereof:
(i) by physical delivery to the Indenture Trustee, indorsed by
an effective indorsement to, or registered in the name of,
the Indenture Trustee or its nominee or indorsed in blank
by an effective indorsement;
(ii) by the Indenture Trustee continuously maintaining
possession of such instrument; and
(iii) by the Indenture Trustee continuously indicating by
book-entry that such instrument is credited to the related
Trust Account;
(b) with respect to a "certificated security" (as defined in Section
8-102(a)(4) of the UCC), transfer thereof:
(i) by physical delivery of such certificated security to the
Indenture Trustee, provided that if the certificated
security is in registered form, it shall be indorsed by an
effective indorsement to, or registered in the name of,
the Indenture Trustee or indorsed in blank by an effective
indorsement;
(ii) by the Indenture Trustee continuously maintaining
possession of such certificated security; and
(iii) by the Indenture Trustee continuously indicating by
book-entry that such certificated security is credited to
the related Trust Account;
(c) with respect to any security issued by the U.S. Treasury, the
Federal Home Loan Mortgage Corporation, the Government National
Mortgage Association or the
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Federal National Mortgage Association that is a book-entry
security held through the Federal Reserve System pursuant to
Federal book entry regulations, the following procedures, all in
accordance with applicable law, including applicable federal
regulations and Articles 8 and 9 of the UCC, transfer thereof:
(i) by (x) book-entry registration of such property to an
appropriate book-entry account maintained with a Federal
Reserve Bank by a securities intermediary which is also a
"depositary" pursuant to applicable federal regulations
and issuance by such securities intermediary of a deposit
advice or other written confirmation of such book-entry
registration to the Indenture Trustee of the purchase by
the securities intermediary on behalf of the Indenture
Trustee of such book-entry security; the making by such
securities intermediary of entries in its books and
records identifying such book-entry security held through
the Federal Reserve System pursuant to Federal book-entry
regulations as belonging to the Indenture Trustee and
continuously indicating that such securities intermediary
holds such book-entry security solely as agent for the
Indenture Trustee or (y) continuous book-entry
registration of such property to a book-entry account
maintained by the Indenture Trustee with a Federal Reserve
Bank; and
(ii) by the Indenture Trustee continuously indicating by
book-entry that property is credited to the related Trust
Account;
(d) with respect to any asset in the Trust Accounts that is an
"uncertificated security" (as defined in Section 8-102(a)(18) of
the UCC) and that is not governed by clause (c) above or clause
(e) below:
(i) transfer thereof:
(A) by registration to the Indenture Trustee as the
registered owner thereof, on the books and records of
the issuer thereof; or
(B) by another Person (not a securities intermediary) who
either becomes the registered owner of the
uncertificated security on behalf of the Indenture
Trustee, or having become the registered owner,
acknowledges that it holds for the Indenture Trustee;
or
(ii) the issuer thereof has agreed that it will comply with
instructions originated by the Indenture Trustee with
respect to such uncertificated security without further
consent of the registered owner thereof; or
(e) in the case of each security in the custody of or maintained on
the books of a clearing corporation (as defined in Section
8-102(a)(5)) or its nominee, by causing:
(i) the relevant clearing corporation to credit such security
to a securities account of the Indenture Trustee at such
clearing corporation; and
(ii) the Indenture Trustee to continuously indicate by
book-entry that such security is credited to the related
Trust Account;
(f) with respect to a "security entitlement" (as defined in Section
8-102(a)(17) of the UCC) to be transferred to or for the benefit
of the Indenture Trustee and not governed by clauses (c) or (e)
above: if a securities intermediary (A) indicates by book entry
that the underlying "financial asset" (as defined in Section
8-102(a)(9) of the UCC) has been credited to be the Indenture
Trustee's "securities account" (as defined in Section 8-501(a)
of the UCC), (B) receives a financial asset from
7
the Indenture Trustee or acquires the underlying financial asset
for the Indenture Trustee, and in either case, accepts it for
credit to the Indenture Trustee's securities account or (C)
becomes obligated under other law, regulation or rule to credit
the underlying financial asset to the Indenture Trustee's
securities account, the making by the securities intermediary of
entries on its books and records continuously identifying such
security entitlement as belonging to the Indenture Trustee; and
continuously indicating by book-entry that such securities
entitlement is credited to the Indenture Trustee's securities
account; and by the Indenture Trustee continuously indicating by
book-entry that such security entitlement (or all rights and
property of the Indenture Trustee representing such securities
entitlement) is credited to the related Trust Account; and/or
(2) In the case of any such asset, such additional or alternative
procedures as are now or may hereafter become appropriate to
effect the complete transfer of ownership of, or control over,
any such assets in the Trust Accounts to the Indenture Trustee
free and clear of any adverse claims, consistent with changes in
applicable law or regulations or the interpretation thereof.
In each case of delivery contemplated herein, the Indenture Trustee shall make
appropriate notations on its records, and shall cause the same to be made on the
records of its nominees, indicating that securities are held in trust pursuant
to and as provided in this Agreement.
"Determination Date" means, for each Collection Period, the fifteenth
calendar day prior to the related Payment Date, or if the fifteenth day is not a
Business Day, the next following Business Day.
"Eligible Bank" means any depository institution with trust powers
(including the Owner Trustee and the Indenture Trustee), organized under the
laws of the United States or any State having a net worth in excess of
$50,000,000, the deposits of which are insured to the full extent permitted by
law by the Federal Deposit Insurance Corporation, which is subject to
supervision and examination by Federal or State authorities and which (i) has a
long-term unsecured debt rating of at least A2 from Moody's and A from Standard
& Poor's or (ii) is approved by the Insurer and each Rating Agency. The initial
Indenture Trustee is deemed an Eligible Bank.
"Eligible Account" shall mean a segregated non-interest bearing trust
account or accounts maintained with (A) an institution whose deposits are
insured by the FDIC, the unsecured and uncollateralized long term debt
obligations of which institution shall be rated AA- or higher by Standard &
Poor's and Aa3 or higher by Moody's and in the highest short term rating
category by each of the Rating Agencies, and which is (i) a federal savings and
loan association duly organized, validly existing and in good standing under the
federal banking laws, (ii) an institution duly organized, validly existing and
in good standing under the applicable banking laws of any state, (iii) a
national banking association duly organized, validly existing and in good
standing under the federal banking laws, (iv) a principal subsidiary of a bank
holding company, or (v) approved by the Insurer and each of the Rating Agencies
by written notice to the Indenture Trustee and the Collateral Agent, (B) a
chartered depository institution acceptable to each Rating Agency and the
Insurer, having capital and surplus of not less than $100,000,000, acting in its
fiduciary capacity or (c) the initial Indenture Trustee.
"Eligible Investment" means any of the following:
(a) (i) direct interest-bearing obligations of, and interest-bearing
obligations guaranteed as to timely payment of principal and interest by, the
United States or any agency or instrumentality of the United States the
obligations of which are backed by the full faith and credit of the United
States and (ii) direct interest-bearing obligations of, and interest-bearing
obligations guaranteed as to timely payment of principal and interest by, the
Federal National Mortgage Association or the Federal Home Loan Mortgage
Corporation, but only if, at the time of investment, such obligations are rated
AAA by Standard & Poor's and Aaa by Moody's;
(b) demand or time deposits in, certificates of deposit of, or bankers'
acceptances issued by any depository institution or trust company organized
under the laws of the United States or any State
8
and subject to supervision and examination by federal and/or State banking
authorities (including, if applicable, the Indenture Trustee or any agent of the
Indenture Trustee acting in their respective commercial capacities); provided
that the commercial paper or other short-term unsecured debt obligations of such
depository institution or trust company at the time of such investment, or
contractual commitment providing for such investment, are rated A-1+ by Standard
& Poor's and P-1 by Moody's;
(c) repurchase obligations pursuant to a written agreement (1) with
respect to any obligation described in clause (i) above, where the Indenture
Trustee has taken actual or constructive delivery of such obligation, and (2)
entered into with a depository institution or trust company organized under the
laws of the United States or any State thereof, the deposits of which are
insured by the Federal Deposit Insurance Corporation and the short-term
unsecured debt obligations of which are rated A-1+ by Standard & Poor's and P-1
by Moody's (including, if applicable, the Indenture Trustee or any agent of the
Indenture Trustee acting in its commercial capacity);
(d) securities bearing interest or sold at a discount issued by any
corporation incorporated under the laws of the United States or any State whose
long-term unsecured debt obligations are rated AAA by Standard & Poor's and Aaa
by Moody's at the time of such investment or contractual commitment providing
for such investment; provided, however, that securities issued by any particular
corporation will not be Eligible Investments to the extent that an investment
therein will cause the then outstanding principal amount of securities issued by
such corporation and held as part of the related Trust Account to exceed 10% of
the Eligible Investments held in the related Trust Account (with Eligible
Investments held in the related Trust Account valued at par);
(e) commercial paper that (1) is payable in United States dollars and
(2) is rated at least A-1+ by Standard & Poor's and P-1 by Moody's;
(f) any money market fund (including those owned, operated or managed by
the Indenture Trustee) that has been rated Aaa by Moody's and AAAm or AAAm-G
(without an "r" script) by Standard & Poor's and numerical gradations within
such rating category (or the equivalent long-term rating of such Rating Agency)
for such money market funds; and
(g) any other demand or time deposit, obligation, security or investment
as may be acceptable to the Rating Agencies and the Insurer (so long as the
Insurer is the Controlling Party) and has been rated Aaa by Moody's and AAA by
Standard & Poor's or rated P-1 by Moody's and A-1+ by Standard & Poor's).
Any of the foregoing Eligible Investments may be purchased from, by or
through the Owner Trustee or the Indenture Trustee, or any of their respective
Affiliates.
"Eligible Servicer" means BVAC, Deutsche Bank Trust Company Americas,
Systems and Services Technologies, Inc. or another Person which at the time of
its appointment as Servicer, (i) is servicing a portfolio of motor vehicle
retail installment sale contracts and/or motor vehicle installment loans, (ii)
is legally qualified and has the capacity to service the Receivables, (iii) has
demonstrated the ability professionally and competently to service a portfolio
of motor vehicle retail installment sale contracts and/or motor vehicle
installment loans similar to the Receivables with reasonable skill and care, and
(iv) is qualified and entitled to use, pursuant to a license or other written
agreement, and agrees to maintain the confidentiality of, the software which the
Servicer uses in connection with performing its duties and responsibilities
under the this Agreement or otherwise has available software which is adequate
to perform its duties and responsibilities under this Agreement.
"ERISA" means the Employee Retirement Income Security Act of 1974, as
amended.
"Event of Servicer Default" has the meaning ascribed thereto in Section
14.01 hereof.
"Financed Vehicle" means a new or used automobile, light-duty truck,
recreational vehicle, sport utility vehicle or van together with all accessions
thereto, securing an Obligor's indebtedness under the respective Receivable.
9
"GAAP" means generally accepted accounting principles set forth in the
opinions and pronouncements of the Accounting Principles Board of the American
Institute of Certified Public Accountants and statements and pronouncements of
the Financial Accounting Standards Board, or in such other statements that are
described in Statement on Auditing Standards No. 69 "The Meaning of Present
Fairly in Conformity With Generally Accepted Accounting Principles in the
Independent Auditor's Report" that are applicable to the circumstances as of the
date of determination, applied on a consistent basis.
"Guarantee" means the Guarantee, dated as of September 1, 2002, made by
the Bank, as guarantor, in favor of the Insurer, the Indenture Trustee and the
Back-up Servicer.
"Holder" -- see "Certificateholder."
"Indemnification Agreement" means the Indemnification Agreement, dated
as of September 30, 2002 among BVAC, the Underwriter and the Insurer, as the
same may be amended, supplemented or otherwise modified from time to time in
accordance with the terms thereof.
"Indenture" means the Indenture dated as of September 1, 2002 between
the Trust and the Indenture Trustee, which provides for the issuance of the
Notes, as the same may be amended, supplemented or otherwise modified from time
to time in accordance with the terms thereof.
"Indenture Trustee" means Deutsche Bank Trust Company Americas in its
role as Indenture Trustee under the Indenture and its permitted successors and
assigns.
"Indenture Trustee Fee" means the fees and expenses payable on each
Payment Date to the Indenture Trustee in consideration for the performance of
its duties as Indenture Trustee, Back-up Servicer and Collateral Agent as set
forth in the fee letter agreement dated September 30, 2002.
"Indenture Trustee Office" means the office of the Indenture Trustee at
which its business as Indenture Trustee under the Indenture shall be
administered, which office is presently located at 000 Xxxxx Xxx, XX JCY-03
0606, Xxxxxx Xxxx, XX 00000; telecopy (000) 000-0000 or at such other address as
the Indenture Trustee may designate from time to time by notice to the Owner
Trustee, the Servicer and the Noteholders.
"Independent Accountants" means a firm of certified public accountants
that is Independent and is acceptable to the Insurer.
"Initial Reserve Account Deposit" means $75,257,332.18.
"Insolvency Event" means, with respect to a specified Person, (a) the
filing of a petition against such Person or the entry of a decree or order for
relief by a court having jurisdiction in the premises in respect of such Person
or any substantial part of its property in an involuntary case under any
applicable federal or state bankruptcy, insolvency or other similar law now or
hereafter in effect, or appointing a receiver, liquidator, assignee, custodian,
trustee, sequestrator, or similar official for such Person or for any
substantial part of its property, or ordering the winding-up or liquidation of
such Person's affairs, and such petition, decree or order remaining unstayed and
in effect for a period of 60 consecutive days; or (b) the commencement by such
Person of a voluntary case under any applicable federal or state bankruptcy,
insolvency or other similar law now or hereafter in effect, or the consent by
such Person to the entry of an order for relief in an involuntary case under any
such law, or the consent by such Person to the appointment of or taking
possession by, a receiver, liquidator, assignee, custodian, trustee,
sequestrator, or similar official for such Person or for any substantial part of
its property, or the making by such person of any general assignment for the
benefit of creditors, or the failure by such person generally to pay its debts
as such debts become due, or the taking of action by such Person in furtherance
of any of the foregoing.
10
"Insolvency Proceeding" means the commencement, after the date hereof,
of any bankruptcy, insolvency, readjustment of debt, reorganization, marshaling
of assets and liabilities or similar proceedings by or against BVAC, the
Transferor or the Issuer, the commencement, after the date hereof, of any
proceedings by or against BVAC, the Transferor or the Issuer for the winding up
or liquidation of its affairs or the consent, after the date hereof, to the
appointment of a trustee, conservator, receiver, or liquidator in any
bankruptcy, insolvency, readjustment of debt, reorganization, marshaling of
assets and liabilities or similar proceedings of or relating to BVAC, the
Transferor or the Issuer.
"Insolvency Proceeds" means the proceeds, after all payments and
reserves from the sale of the assets of the Trust upon the dissolution of the
Trust because of an insolvency of the Transferor.
"Insurance Agreement" means the Insurance and Indemnity Agreement, dated
as of September 1, 2002, among the Insurer, the Transferor, the Issuer, BVAC and
the Spread Account Depositor, as the same may be amended, supplemented or
otherwise modified from time to time in accordance with the terms thereof.
"Insurance Agreement Event of Default" means an Event of Default (as
such term is defined in the Insurance Agreement).
"Insurance Agreement Indenture Cross Defaults" shall have the meaning
assigned to such term in the Insurance Agreement.
"Insurance Policies" means any physical damage, credit life and credit
accident and health insurance policies or certificates or any vendor's single
interest physical damage insurance policy relating to the Receivables, the
Financed Vehicles or the Obligors.
"Insurer" means Financial Security Assurance, Inc., a New York monoline
insurance company.
"Insurer Default" means the existence and continuance of any of the
following:
(a) the Insurer shall have failed to make a payment required under the
Policy in accordance with its terms; or
(b) the Insurer shall have (i) filed a petition or commenced any case or
proceeding under any provision or chapter of the United States Bankruptcy Code
or any other similar federal or state law relating to insolvency, bankruptcy,
rehabilitation, liquidation or reorganization, (ii) made a general assignment
for the benefit of its creditors, or (iii) had an order for relief entered
against it under the United States Bankruptcy Code or any other similar federal
or state law relating to insolvency, bankruptcy, rehabilitation, liquidation or
reorganization which is final and nonappealable; or
(c) a court of competent jurisdiction, the New York Department of
Insurance or other competent regulatory authority shall have entered a final and
nonappealable order, judgment or decree (i) appointing a custodian, trustee,
agent or receiver for the Insurer or for all or any material portion of its
property or (ii) authorizing the taking of possession by a custodian, trustee,
agent or receiver of the Insurer (or the taking of possession of all or any
material portion of the property of the Insurer).
"Insurer Optional Deposit" has the meaning ascribed thereto in Section
5.19 of the Indenture.
"Interest Advance Amount" with respect to a simple interest Receivable
as to which an Advance is required to be made on the last day of a Collection
Period, shall mean an amount equal to 30 days of interest upon the Principal
Balance of such Receivable as of such date; and, with respect to a Precomputed
Receivable as to which an Advance is required to be made on the last day of a
Collection Period, shall mean an amount equal to that portion of the earliest
delinquent Scheduled Payment allocable to interest (using the actuarial or
constant yield method).
"Interest Shortfall" means, as to any simple interest Receivable as of
the last day of any Collection Period, the amount, if any, by which (a) interest
due on such Receivable exceeds (b) the
11
Collected Interest on such Receivable. "Interest Shortfall" with respect to a
Precomputed Receivable as of the last day of any Collection Period means the
amount, if any, by which the portion of the Scheduled Payment due during such
Collection Period allocable to interest (using the actuarial or constant yield
method) exceeds the Collected Interest on such Receivable (computed using the
actuarial or constant yield method and after giving effect to the withdrawal of
any previously received Scheduled Payments in respect of such Receivable from
the Payahead Account in accordance with Section 8.05(b).
"Lien" means a security interest, lien, charge, pledge, equity, or
encumbrance of any kind other than tax liens, mechanics' liens, and any liens
which attach to the respective Receivable or related Financed Vehicle by
operation of law.
"Liquidation Proceeds" means the monies collected from whatever source
during a Collection Period on a Charged-Off Receivable, net of the sum of (i)
any out-of-pocket expenses reasonably incurred by the Servicer in enforcing such
Charged-Off Receivable plus (ii) any amounts required by law to be remitted to
the related Obligor.
"Lock-Box" means the post-office box or boxes, to be established by
BVAC, as the initial Servicer, and maintained pursuant to this Agreement and the
Lock-Box Agreement, into which the Servicer shall direct each Obligor under each
Receivable to forward all payments in respect of such Receivable.
"Lock-Box Account" means the segregated account or accounts designated
as such, established and maintained by the Servicer in accordance with this
Agreement and the Lock-Box Agreement (or if the Standby Servicer is acting as
Servicer hereunder any such replacement Lock-Box Account approved by the
Insurer, in its sole and absolute discretion).
"Lock-Box Agreement" means the agreement relating to the Lock-box
services to be dated no later than 20 days following the Closing Date and
entered into among BVAC, the Trust, the Lock-Box Processor and the Indenture
Trustee, as amended, modified or supplemented from time to time in accordance
with the terms thereof, unless such Agreement shall be terminated in accordance
with its terms or the terms hereof or unless a replacement Lock-Box Agreement
has been entered into in accordance with the terms hereof, in which event
"Lock-Box Agreement" shall mean such other agreement, in form and substance
acceptable to the Insurer, in its sole and absolute discretion, among BVAC, the
Trust, the Lock-Box Processor and the Indenture Trustee.
"Lock-Box Bank" means, initially, Commerce Bank, N.A., or any
replacement or additional depository institution named by the Servicer (or if
SST is then acting as Servicer, named by the Transferor) and acceptable to the
Insurer, in its sole discretion, at which a Lock-Box Account is established and
maintained in accordance with the terms of this Agreement and the Lock-Box
Agreement.
"Lock-Box Collection Percentage" has the meaning ascribed thereto in the
Spread Account Agreement.
"Lock-Box Processor" means, initially, Commerce Bank, N.A., or any
replacement or subcontracted Lock-Box Processor named by the Servicer (or if SST
is then acting as Servicer, named by the Transferor) and acceptable to the
Insurer, in its sole discretion, who acts as the processor of the payments
received in respect of the Receivables in the Lock-Box in accordance with the
Lock-Box Agreement.
"Majority Noteholders" means, as of any date of determination, the
Holders holding in the aggregate 66 2/3% or more of the outstanding Class A Note
Balance as of such date. When the term "Class A Note Balance" is used with
respect to an issue relating to the consent of or voting of Noteholders, such
term shall refer only to the classes of Class A Notes then Outstanding such that
the Class A Noteholders will vote as a single class.
"Modified Scheduled Receivable" means any Receivable which is not a
Charged-Off Receivable and as to which the related Obligor shall have been
declared bankrupt with the result that such Obligor's
12
periodic Scheduled Receivable Payment amount has been reduced pursuant to an
order of the bankruptcy court.
"Modified Scheduled Receivable Payment" means, with respect to any
Modified Scheduled Receivable, the amount of such reduced periodic Scheduled
Receivable Payment.
"Monthly Interest" has the meaning specified in the Indenture.
"Monthly Principal" has the meaning specified in the Indenture.
"Moody's" means Xxxxx'x Investors Service, Inc., and its successor and
assigns.
"Notes" mean the Notes issued by the Trust pursuant to the Indenture.
"Noteholders" has the meaning specified in the Indenture.
"Obligor" on a Receivable means the purchaser or the co-purchasers of
the Financed Vehicle or any other Person who owes payments under the Receivable.
The phrase "payment made on behalf of an Obligor" shall mean all payments made
with respect to a Receivable except payments made by BVAC, the Transferor or the
Servicer.
"Officers' Certificate" means a certificate signed by any two of the
chairman of the board, the president, any vice chairman of the board, any vice
president, the treasurer, or the controller of BVAC, the Transferor or the
Servicer, as the case may be; provided that no individual shall sign in a dual
capacity.
"Opinion of Counsel" means a written opinion of counsel, who may be
counsel to the Transferor and/or Servicer, which counsel shall be acceptable to
the Owner Trustee.
"Original Pool Balance" means $453,210,906.56.
"Outstanding Advances" as of any date, with respect to a Receivable,
means the total amount of Advances made on such Receivable for which the
Servicer has not been reimbursed.
"Owner Trustee" means Wilmington Trust Company, a banking corporation
organized under the laws of the State of Delaware and its successors or any
corporation resulting from or surviving any merger or consolidation to which it
or its successors may be a party or any successor trustee at the time serving as
successor trustee hereunder.
"Owner Trustee's Certificate" means a certificate completed and executed
by the Owner Trustee by a Responsible Officer pursuant to Section 15.05,
substantially in the form of, in the case of an assignment to BVAC, Exhibit 1,
and in the case of an assignment to the Servicer, Exhibit 2.
"Owner Trustee's Fee" means the fees and expenses payable on each
Payment Date to the Owner Trustee in consideration for the performance of its
duties as Owner Trustee as set forth in the fee letter agreement dated September
30, 2002.
"Payahead" on a Precomputed Receivable means the amount, as of the close
of business on the last day of a Collection Period, computed in accordance with
Section 8.05(b) with respect to such Receivable.
"Payahead Account" means the account designated as such, established and
maintained pursuant to Section 9.11.
"Payahead Balance" on a Precomputed Receivable means the sum, as of the
close of business on the last day of a Collection Period, of all Payaheads made
by or on behalf of the Obligor with respect to such Precomputed Receivable, as
reduced by applications of previous Payaheads with respect to such Precomputed
Receivable, pursuant to Sections 8.05(b) hereof and 9.10 of the Indenture.
13
"Payment Date" means, for each Collection Period, the twenty-fifth day
of the month or, if such day is not a Business Day, the first Business Day
thereafter. The first Payment Date shall be October 25, 2002.
"Person" means any individual, corporation, estate, partnership, joint
venture, association, joint stock company, trust, unincorporated organization,
or government or any agency or political subdivision thereof.
"Policy" means the financial guaranty insurance policy No. 51348-N
issued by the Insurer to the Indenture Trustee for the benefit of the
Noteholders pursuant to the Insurance Agreement, including any endorsements
thereto.
"Policy Claim Amount" shall have the meaning set forth in Section 10.03
of the Indenture.
"Policy Expiration Date" means the date on which the Notes have been
paid in full and all outstanding Reimbursement Obligations and other amounts due
to the Insurer have been paid in full and the Term Of This Policy (as defined in
the Policy) has expired.
"Pool Balance" as of any date means the aggregate Principal Balance of
the Receivables as of such date; provided, however, that for purposes of
determining Monthly Principal, the Principal Balance of a Charged-Off Receivable
or a Purchased Receivable (if actually purchased by the Servicer or repurchased
by BVAC) shall be deemed to be zero on and after the close of business on the
last day of the Collection Period in which the Receivable becomes a Charged-Off
Receivable or a Purchased Receivable that is actually purchased or repurchased.
"Precomputed Receivable" means any Receivable under which the portion of
a payment allocable to earned interest (which may be referred to in the related
contract as an add-on finance charge) and the portion allocable to the Amount
Financed is determined according to the sum of periodic balances, the sum of
monthly balances, the rule of 78's or any equivalent method.
"Premium" has the meaning ascribed thereto in the Premium Letter.
"Premium Letter" means the premium letter, dated September 30, 2002
among the Insurer, BVAC, the Transferor, the Trust and the Indenture Trustee.
"Prepayment Charges," means with respect to a Precomputed Receivable
that is prepaid in full, the difference between the Principal Balance of such
Receivable (plus accrued interest to the date of prepayment) and the Principal
Balance of such Receivable computed in accordance with the actuarial or constant
yield method.
"Purchase Agreement" means the Purchase Agreement dated as of the date
hereof by and between the Transferor and BVAC, as amended, supplemented or
modified from time to time in accordance with the terms thereof.
"Purchase Amount" of any Receivable, as of the close of business on the
last day of any Collection Period, means the amount equal to the sum of the
Principal Balance of such Receivable plus any unpaid interest accrued and due
during or prior to such Collection Period on such Receivable.
"Purchased Receivable" means a Receivable purchased by the Servicer
pursuant to Section 8.10 or repurchased by BVAC pursuant to Section 7.02 or
Section 8.08 not later than the respective dates required thereby.
"Rating Agency" means each of Moody's and Standard & Poor's and their
successors and assigns.
"Receivable" means any simple interest or pre-computed (add-on) interest
installment sales contract or installment loan and security agreement which
shall appear on Schedule A to this Agreement.
14
"Receivable Files" means the documents specified in the Custodian
Agreement
"Receivables" means those Receivables conveyed to the Trust by the
Transferor listed as of the Cut-off Date in Schedule A.
"Recoveries" means, with respect to a Charged-off Receivable and for any
Collection Period occurring after the Collection Period during which such
Receivable becomes a Charged-off Receivable, all payments, including insurance
proceeds, that the Servicer received from or on behalf of an Obligor regarding
such Charged-off Receivable, or from liquidation of the related Financed
Vehicle, net of any reasonably incurred out-of-pocket expenses incurred by the
Servicer in enforcing such Charged-off Receivable.
"Reimbursement Obligations" means, with respect to each Payment Date,
any amounts due to the Insurer under the terms hereof, the Indenture, the
Insurance Agreement or the Premium Letter and with respect to which the Insurer
has not been previously paid whether or not BVAC is obligated to pay such
amounts.
"Requisite Amount" has the meaning ascribed thereto in the Spread
Account Agreement.
"Reserve Account" means the account designated as such, established and
maintained pursuant to Section 8.08.
"Responsible Officer" means, when used with respect to the Owner
Trustee, any officer within the Corporate Trust Office (or any successor group
of the Owner Trustee) including any managing director, director, vice president,
assistant vice president, assistant treasurer, assistant secretary or any other
officer of the Owner Trustee customarily performing functions similar to those
performed by the persons who at the time shall be such officers, respectively,
or to whom any corporate trust matter is referred because of his knowledge of
and familiarity with the particular subject.
"Scheduled Receivable Payment" on any Receivable (other than a Modified
Scheduled Receivable) means that portion of the payment required to be made by
the Obligor during the respective Collection Period sufficient to amortize the
Principal Balance over the term of the Receivable and to provide interest at the
APR based on a 360-day year of twelve 30-day months, and with respect to a
Modified Scheduled Receivable, the applicable Modified Scheduled Receivable
Payment; provided, however, that with respect to a Precomputed Receivable such
interest amount shall be determined on the basis of the actuarial or constant
yield method.
"Secured Parties" means each of the Indenture Trustee, the Noteholders
and the Insurer pursuant to the Indenture.
"Securities" means the Notes and the Certificate.
"Servicer" means Bay View Acceptance Corporation, a Nevada corporation,
in its capacity as the servicer of the Receivables and each successor to Bay
View Acceptance Corporation (in the same capacity) pursuant to Section 13.03 or
14.03; provided that, if the Servicer has been removed pursuant to Section 8.04
or Section 14.03 hereof, "Servicer" shall mean the Standby Servicer or such
other Person appointed as the successor Servicer pursuant to Section 14.03
hereof. If the Standby Servicer has been removed as Servicer pursuant to Section
14.03 hereof, "Servicer" shall mean the Back-up Servicer, acting through an
agent, or such other Person appointed as the successor Servicer pursuant to
Section 14.03 hereof.
"Servicer Extension Notice" means the notice delivered pursuant to
Section 8.04 hereof.
"Servicer Fee" means the sum of the Servicing Fee and the Supplemental
Servicing Fee and all reasonable out-of-pocket expenses of the Servicer (which
expenses shall not exceed the sum of $50,000 per Servicer in the aggregate over
the term of the Notes).
"Servicer Fee Rate" shall be 1/12th of 1.0% payable monthly.
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"Servicer's Certificate" means a certificate completed and executed by
the Servicer by the chairman of the board, the vice chairman, the president, any
vice president, the treasurer, any assistant treasurer, the chief financial
officer, the secretary, any assistant secretary, the controller, or any
assistant controller of the Servicer pursuant to Section 8.12 hereof.
"Servicing Fee" means, for any Collection Period, a fee payable to the
Servicer for services rendered during such Collection Period, which shall be the
product of (i) the Servicer Fee Rate and (ii) the aggregate Principal Balance of
the Receivables as of the first day of such Collection Period.
"Simple Interest Receivables" means any Receivable which provides for
equal monthly payments, pursuant to which the portion of such payment that is
allocated to interest is equal to the product of the fixed rate of interest on
such obligation multiplied by the period of time on the basis of a 360-day year
of twelve 30-day months.
"Spread Account" means the account designated as such, established and
maintained pursuant to Section 3.01 of the Spread Account Agreement.
"Spread Account Agreement" means the Master Spread Account Agreement
dated as of September 1, 2002 among the Insurer, the Spread Account Depositor,
the Indenture Trustee and Collateral Agent, as the same may be amended,
supplemented or otherwise modified from time to time in accordance with the
terms thereof.
"Spread Account Depositor" means Bay View 2002-LJ-1 Funding Trust, a
Delaware statutory trust, and its successors.
"Spread Account Depositor Owner Trustee" means Wilmington Trust Company,
a Delaware banking corporation, not in its individual capacity but solely as
owner trustee under the Spread Account Depositor Trust Agreement, its successors
in interest or any successor owner trustee thereunder.
"Spread Account Depositor Trust Agreement" means the trust agreement
dated as of September 1, 2002, between the Transferor and the Spread Account
Depositor Owner Trustee, as the same may be amended, supplemented or otherwise
modified from time to time in accordance with the terms thereof.
"Spread Account Initial Deposit" is equal to $8,036,191.
"SST" means Systems & Services Technologies, Inc., and its successors
and assigns.
"Standard & Poor's" means Standard & Poor's Ratings Services, a division
of The XxXxxx-Xxxx Company, Inc.
"Standby Servicer" means SST in its capacity as Standby Servicer or such
Person as shall have been appointed Standby Servicer pursuant to Section 8.03
hereof.
"Standby Servicer Default" has the meaning ascribed thereto in Section
14.02 hereof.
"Standby Servicer Fee" means, for any Collection Period, the fee payable
to the Standby Servicer for services rendered during such Collection Period,
which shall be equal to the amount determined in accordance with Schedule C
attached hereto. If the Standby Servicer shall have taken on the role as
Servicer hereunder, its compensation shall be equal to the amount determined in
accordance with Schedule C attached hereto as successor Servicer, and it shall
not be entitled to a Standby Servicer Fee.
"Standby Servicer Fee Rate" means, with respect to any Payment Date, the
amount, expressed as a percentage, determined by dividing (i) the Standby
Servicer Fee for such Payment Date and (ii) the Outstanding Principal Balance of
the Receivables as of the first day of the immediately preceding Collection
Period.
"State" means (i) any state of the United States of America or (ii) the
District of Columbia.
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"Stock Pledge Agreement" means the Stock Pledge and Collateral Agency
Agreement, dated as of September 1, 2002, among BVCC, as pledgor, BVAC, the
Insurer and the Collateral Agent.
"Supplemental Servicing Fee" has the meaning set forth in Section
8.11(a) hereof.
"Transfer and Contribution Agreement" means the Transfer and
Contribution Agreement, dated as of September 1, 2002, between the Bank and BVAC
pursuant to which the Bank contributed and transferred all of its right, title
and interest, if any, in, to and under the Receivables and the related
Transferred Property.
"Transferor" means Bay View Securitization Corporation, a Delaware
corporation, in its capacity as the transferor of the Receivables under this
Agreement, and each successor to Bay View Securitization Corporation (in the
same capacity) pursuant to Section 12.03.
"Transition Costs" means reasonable costs and expenses (including
attorneys' fees) incurred by and payable by the predecessor Servicer, or to the
extent not so paid, by the Issuer, to the extent of Available Funds, pursuant to
Section 9.05(a) of the Indenture, to the successor Servicer in connection with
the transfer of servicing (whether due to termination, resignation or otherwise)
from the Servicer to such successor Servicer, including, without limitation,
costs and expenses incurred in connection with transferring the Receivable Files
and amending this Agreement to reflect the transfer of servicing, which shall be
approved in writing by the Insurer; provided, however, that in no event shall
the Transition Costs exceed $200,000 without the prior written consent of the
Controlling Party.
"Treasury Regulations" shall mean regulations, including proposed or
temporary regulations, promulgated under the Code. References herein to specific
provisions of proposed or temporary regulations shall include analogous
provisions of final Treasury Regulations or other successor Treasury
Regulations.
"Trigger Event" has the meaning set forth in the Spread Account
Agreement.
"Trust" means the Delaware statutory trust created by this Agreement,
the estate of which shall generally comprise the Trust Property.
"Trust Accounts" means the Collection Account, the Lock-Box Account, the
Payahead Account and the Reserve Account.
"Trust Property" has the meaning set forth in Section 3.01 hereof.
"UCC" means the Uniform Commercial Code as in effect in the applicable
jurisdiction.
SECTION 2.02. USAGE OF TERMS. With respect to all terms in this
Agreement, the singular includes the plural and the plural the singular; words
importing any gender include the other genders; references to "writing" include
printing, typing, lithography and other means of reproducing words in a visible
form; references to agreements and other contractual instruments include all
subsequent amendments thereto or changes therein entered into in accordance with
their respective terms and not prohibited by this Agreement; references to
Persons include their permitted successors and assigns; and the term "including"
means "including without limitation."
SECTION 2.03. CLOSING DATE AND RECORD DATE. All references to the
Record Date prior to the first Record Date in the life of the Trust shall be to
the Closing Date.
SECTION 2.04. SECTION REFERENCES. All section references in this
Agreement shall be to Sections in this Agreement unless otherwise specified.
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SECTION 2.05. COMPLIANCE CERTIFICATES. Upon any application or request
by the Transferor, the Servicer, the Back-up Servicer or the Standby Servicer to
the Indenture Trustee to take any action under any provision herein, such
requesting party shall furnish to the Indenture Trustee and the Insurer (so long
as the Insurance Agreement has not terminated), an Officer's Certificate stating
that all conditions precedent, if any, provided for herein relating to the
proposed action have been complied with, except that in the case of any other
such application or request as to which the furnishing of such documents is
specifically required by any provision of this Agreement relating to such
particular application or request, no additional certificate need be furnished.
Every certificate with respect to compliance with a condition or
covenant provided herein shall include a statement that each individual signing
such certificate has read such covenant or condition and the definitions and
other provisions herein relating thereto.
SECTION 2.06. DIRECTIONS. Any direction required to be given by the
Noteholders shall be given hereunder by the Insurer, unless an Insurer Default
shall have occurred and be continuing or the Policy shall have expired in
accordance with its terms, in which case the Indenture Trustee, acting at the
direction of the Majority Noteholders, shall be entitled to give such direction.
SECTION 2.07. CALCULATIONS. All calculations of the amount of the
Servicing Fee, the Standby Servicer Fee, the Indenture Trustee Fee and the Owner
Trustee Fee shall be made on the basis of a 360-day year consisting of twelve
30-day months. All references to the Principal Balance of a Receivable as of the
last day of a Collection Period shall refer to the close of business on such
day.
SECTION 2.08. ACTION BY OR CONSENT OF NOTEHOLDERS. Whenever any
provision of this Agreement refers to action to be taken, or consented to, by
Noteholders, such provision shall be deemed to refer to Noteholders of record as
of the Record Date immediately preceding the date on which such action is to be
taken, or consent given, by Noteholders. Solely for the purposes of any action
to be taken or consented to by Noteholders, any Note registered in the name of
the Issuer, Transferor, the Servicer or any Affiliate thereof shall be deemed
not to be outstanding and shall not be taken into account in determining whether
the requisite interest necessary to effect any such action or consent has been
obtained; provided, however, that, solely for the purpose of determining whether
the Indenture Trustee is entitled to rely upon any such action or consent, only
Notes which the Indenture Trustee actually knows to be so owned shall be so
disregarded.
SECTION 2.09. MATERIAL ADVERSE EFFECT. Whenever a determination is to
be made under this Agreement as to whether a given event, action, course of
conduct or set of facts or circumstances could or would have a material adverse
effect on the Issuer or Noteholders (or any similar or analogous determination),
such determination shall be made without taking into account the insurance
provided by the Policy. Whenever a determination is to be made under this
Agreement whether a breach of a representation, warranty or covenant has or
could have a material adverse effect on a Receivable or the interest therein of
the Issuer, the Noteholders or the Insurer (or any similar or analogous
determination), such determination shall be made by the Controlling Party in its
sole discretion.
ARTICLE III
CONVEYANCE OF RECEIVABLES
SECTION 3.01. CONVEYANCE OF RECEIVABLES. In consideration of the
Trust's issuance of, and the Owner Trustee's delivery of, the Certificate to, or
at the direction of, the Transferor and the proceeds to be realized by the Trust
from the issuance of the Notes pursuant to the Indenture to the Transferor, the
Transferor does hereby sell, transfer, assign, and otherwise convey to the Trust
without recourse (subject to the obligations herein):
(i) all right, title, and interest of the Transferor in and to the
Receivables listed in Schedule A hereto;
(ii) the security interests in the Financed Vehicles granted by
Obligors pursuant to the Receivables;
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(iii) any proceeds from claims and other amounts relating to
Insurance Policies and other items financed under the Receivables or
otherwise covering an Obligor or a Financed Vehicle;
(iv) any Liquidation Proceeds;
(v) all property (including the right to receive future Liquidation
Proceeds) that secures a Receivable and that has been or may be acquired
pursuant to the liquidation of the Receivable;
(vi) the interest of the Transferor in any proceeds from recourse to
Dealers relating to the Receivables;
(vii) all documents contained in the Receivable Files for the
Receivables;
(viii) all monies paid on the Receivables and all monies due
thereon, including accrued interest after the Cut-off Date;
(ix) all right, title and interest of the Transferor under the
Purchase Agreement including, without limitation, a direct right to
cause BVAC to purchase Receivables from the Trust upon the occurrence of
a breach of any of the representations and warranties contained in
Section 3.02(b) of the Purchase Agreement or the failure of BVAC to
timely comply with its obligations pursuant to Section 5.05 of the
Purchase Agreement;
(x) all rights of the Transferor pursuant to the Transfer and
Contribution Agreement; and
(xi) all proceeds of the foregoing.
The Transferor does hereby further assign, convey, pledge and grant a
security interest in (i) any and all other right, title and interest, including
any beneficial interest the Transferor may have in the Trust Accounts and the
funds deposited therein, and (ii) any proceeds of any of the foregoing, to the
Owner Trustee and for the benefit of the Noteholders to secure amounts payable
to Noteholders as provided under this Agreement. The Transferor acknowledges
that all of the foregoing shall constitute the "Trust Property" and the
Transferor hereby consents to the pledge by the Trust of all of such assets to
the Indenture Trustee for the benefit of the Secured Parties pursuant to the
Indenture.
ARTICLE IV
ACCEPTANCE BY TRUSTEE
SECTION 4.01. ACCEPTANCE BY TRUSTEE. The Owner Trustee does hereby
accept on behalf of the Trust all consideration conveyed by the Transferor
pursuant to Article III, and declares that the Owner Trustee shall hold such
consideration upon the trusts herein set forth for the benefit of all present
and future Certificateholders, subject to the terms and provisions of this
Agreement.
ARTICLE V
INFORMATION DELIVERED TO THE RATING AGENCIES
SECTION 5.01. INFORMATION DELIVERED TO THE RATING AGENCIES.
(a) The Servicer hereby expresses its intention to deliver promptly to
each Rating Agency (i) a copy of each Servicer's Certificate that it delivers to
the Owner Trustee, the Indenture Trustee and the Insurer pursuant to Section
8.12, (ii) a copy of each annual Officers' Certificate as to compliance and any
notice of default that it delivers to the Indenture Trustee or the Owner Trustee
pursuant to Section 8.13, (iii) delinquency and loss information for the
Receivables, written notice of any merger, consolidation, or other succession of
the Servicer pursuant to Section 13.03, or the Transferor, pursuant to Section
12.03, (iv) a copy of each amendment to this Agreement and (v) any Opinion of
Counsel delivered to the Owner Trustee pursuant to Section 17.02(i).
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(b) The Owner Trustee hereby expresses its intention to deliver promptly
to each Rating Agency (i) a copy of each annual certified public accountant's
report received by the Owner Trustee pursuant to Section 8.14, (ii) a copy of
each amendment to this Agreement and (iii) a copy of the notice of termination
of the Trust provided to the Owner Trustee pursuant to Section 16.01.
(c) For purposes of delivery pursuant to paragraphs (a) and (b) of this
Article V, the addresses for the Rating Agencies are:
Structured Finance/Asset Backed Surveillance Group
Standard & Poor's Rating Services, a Division of
The XxXxxx-Xxxx Companies, Inc.
00 Xxxxx Xxxxxx, 00xx Xxxxx
Xxx Xxxx, Xxx Xxxx 10041-0003
Xxxxx'x Investors Services, Inc.
Attention: ABS Monitoring Department
4th Floor
00 Xxxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
(d) The provisions of this Article V are included herein for convenience
of reference only and shall not be construed to be contractual undertakings or
obligations. The failure of the Servicer or the Owner Trustee to comply with any
or all of the provisions of this Article V shall not constitute an Event of
Servicer Default or a default of any kind under this Agreement or make any
remedy available to any Person.
ARTICLE VI
AGENT FOR SERVICE
SECTION 6.01. AGENT FOR SERVICE. The agent for service for the
Transferor shall be Xxxxxx Xxxxxxxx, Vice President of the Transferor. Any and
all service on the agent for service of the Transferor shall be sent to Bay View
Securitization Corporation, 0000 Xxxxx Xx Xxxxxx Xxxx, Xxx Xxxxx, Xxxxxxxxxx
00000 or such other address as the Transferor shall provide notice thereof
pursuant to Sections 17.02(c), 17.05 or 17.25.
The agent for service for BVAC shall be Xxxxxx Xxxxxxxx, Vice President
of the BVAC. Any and all service on the agent for service of BVAC shall be sent
to Bay View Acceptance Corporation, 000 Xxxxxxx Xxxxx, Xxxxxx, Xxxxxxxxxx 00000
or such other address as BVAC shall provide notice thereof pursuant to Sections
17.02(c), 17.05 or 17.25.
A copy of any service of process served on the Transferor or BVAC
hereunder shall also be sent to the Indenture Trustee, the Insurer and the
parties to receive notices on behalf of the Transferor or BVAC, as the case may
be, under Section 17.05 of this Agreement.
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ARTICLE VII
THE RECEIVABLES
SECTION 7.01. REPRESENTATIONS AND WARRANTIES OF TRANSFEROR.
(a) Pursuant to Article III, the Transferor has assigned to the Trust
the benefit of, and its rights respecting, the representations and warranties
made to the Transferor in the Purchase Agreement as to the Receivables on which
the Trust relies in accepting the Receivables in trust and executing and
authenticating the Notes and executing and delivering the Indenture and on which
the Insurer will rely in issuing the Policy. The Transferor agrees that the
representations shall also be for the benefit of the Secured Parties to the same
extent as if each of such representations and warranties were fully set forth
herein, including, without limitation, the representations and warranties set
forth in Sections 3.01 and 3.02 of the Purchase Agreement. Such representations
and warranties speak as of the execution and delivery of the Purchase Agreement
but shall survive the sale, transfer, and assignment of the Receivables to the
Trust and the pledge of the Receivables to the Indenture Trustee.
(b) The Transferor hereby represents and warrants to the Trust that it
has entered into the Purchase Agreement with BVAC, that BVAC has made the
representations and warranties set forth therein, that such representations and
warranties run to and are for the benefit of the Transferor, and that pursuant
to Article III of this Agreement the Transferor has transferred and assigned to
the Trust all rights of the Transferor to cause BVAC under the Purchase
Agreement to repurchase Receivables in the event of a breach of such
representations and warranties.
(c) The foregoing provisions of this Section 7.01 are intended to grant
the Trust and its assignees a direct right against BVAC to demand performance of
its obligations under the Purchase Agreement.
(d) It is the intention of the Transferor that the transfer and
assignment herein contemplated, taken as a whole, constitute a sale of the
Receivables and the other Trust Property from the Transferor to the Trust and
that the Receivables and the other Trust Property not be part of the bankruptcy
estate in the event of the bankruptcy of the Transferor. In the event that a
court of competent jurisdiction were to conclude that the transfer of
Receivables or the other Trust Property constitutes a grant of a security
interest rather than a sale of the Receivables, the other Trust Property and the
proceeds thereof, this Agreement and the transactions provided for herein shall
be deemed to constitute a grant by the Transferor to the Trust of a valid
continuing first priority security interest in the Receivables, the other Trust
Property and the proceeds thereof. No Receivable or other item of Trust Property
has been sold, transferred, assigned, or pledged by the Transferor to any Person
other than the Trust. Immediately prior to the transfer and assignment herein
contemplated, the Transferor had good and marketable title to each Receivable
and the other Trust Property, free and clear of all Liens, and, immediately upon
the transfer thereof, the Trust (for the benefit of the Certificateholder and
the Secured Parties pursuant to the Indenture) shall have good and marketable
title to each Receivable and the other Trust Property, free and clear of all
Liens and rights of others, except for the rights of the Certificateholder, the
Noteholders and the Insurer; and the transfer has been perfected under the UCC.
On or prior to the Closing Date, all filings (including, without limitation UCC
filings) necessary in any jurisdiction to give the Trust and its assignees a
first priority perfected ownership interest in the Receivables and the other
Trust Property shall have been made.
SECTION 7.02. REPURCHASE UPON BREACH. Each party hereto shall inform
the other parties and the Insurer promptly, in writing, upon the discovery of
any breach of the representations and warranties under Section 3.02 of the
Purchase Agreement and assigned to the Trust hereunder or upon the discovery
that any Receivable has been materially and adversely affected because a court
has determined that a Receivable is not perfected by a first priority perfected
security interest in the related Financed Vehicle in favor of the Indenture
Trustee. Unless the breach or failure to so perfect shall have been cured by the
last day of the first full Collection Period, following the discovery, the
Transferor shall cause BVAC, pursuant to its obligations under the Purchase
Agreement to repurchase any such Receivable if such Receivable or the interest
therein of the Issuer, the Noteholders, the Certificateholder or the Insurer is
materially and adversely affected by any such breach or failure to perfect as of
the last day of the first full Collection Period. In consideration of the
purchase of the Receivable, BVAC shall
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remit the Purchase Amount to the Indenture Trustee for deposit in the Collection
Account. As required under Section 3.03 of the Purchase Agreement, the
Transferor shall cause the Seller to indemnify the Owner Trustee, the Issuer,
the Indenture Trustee, the Insurer, the Backup Servicer, the Collateral Agent,
the Standby Servicer, the Servicer, the Noteholders, the Certificateholder and
their respective officers, directors and employees against all costs, expenses,
losses, damages, claims and liabilities, including reasonable fees and expenses
of counsel, which may be asserted against or incurred by any of them, as a
result of claims arising out of the events or facts giving rise to such
repurchase. Notwithstanding the foregoing, BVAC shall not be required to remit
the Purchase Amount in the manner specified in this Section 7.02 with respect to
any Receivable repurchased or subject to repurchase by BVAC pursuant to Section
8.08 for the reasons specified in Section 8.08.
SECTION 7.03. CUSTODY OF RECEIVABLE FILES. To assure uniform quality in
servicing the Receivables and to reduce administrative costs, the Trust, upon
the execution and delivery of this Agreement, hereby revocably appoints the
Servicer, and the Servicer hereby accepts such appointment, for the benefit of
the Trust and the Indenture Trustee, to act as the agent of the Trust as
custodian in accordance with the Custodian Agreement.
SECTION 7.04. DUTIES OF SERVICER AS CUSTODIAN.
(a) Safekeeping. In accordance with the Custodian Agreement, the
Servicer, in its capacity as custodian, shall segregate and hold the Receivable
Files on behalf of the Trust for the use and benefit of the Trust, and maintain
such accurate and complete accounts, records, and computer systems pertaining to
each Receivable File as shall enable the Trust to comply with this Agreement and
the other Basic Documents to which it is a party. In performing its duties as
custodian the Servicer shall act with reasonable care, using that degree of
skill and attention that the Servicer exercises with respect to the receivable
files relating to all comparable automobile receivables that the Servicer
services for itself. The Servicer shall conduct, or cause to be conducted,
periodic audits of the Receivable Files held by it under this Agreement, and of
the related accounts, records, and computer systems, in such a manner as shall
enable the Trust to verify the accuracy of the Servicer's record keeping. The
Servicer shall promptly report to the Insurer, Owner Trustee and the Indenture
Trustee any failure on its part to hold the Receivable Files and maintain its
accounts, records, and computer systems as herein provided and promptly take
appropriate action to remedy any such failure.
(b) Maintenance of and Access to Records. The Servicer shall maintain
each Receivable File at 000 Xxx Xxxx Xxxx, Xxxxxx, Xxxxxxxxxx 00000. The
Servicer shall make available to the Insurer, the Owner Trustee and the
Indenture Trustee and their duly authorized representatives, attorneys, or
auditors a list of locations of the Receivable Files, the Receivables, and the
related accounts, records, and computer systems maintained by the Servicer at
such times as the Insurer, the Owner Trustee or the Indenture Trustee, as
applicable, shall instruct.
(c) To the extent that there is a conflict between this Agreement and
the Custodian Agreement with respect to the duties and obligations of the
Custodian, the terms of the Custodian Agreement shall control.
SECTION 7.05. INSTRUCTIONS; AUTHORITY TO ACT. The Servicer shall be
deemed to have received proper instructions with respect to the Receivable Files
upon its receipt of written instructions signed by a Responsible Officer of the
Owner Trustee on behalf of the Trust, the Indenture Trustee or the Insurer as
set forth in the Custodian Agreement.
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ARTICLE VIII
ADMINISTRATION AND SERVICING OF RECEIVABLES
SECTION 8.01. DUTIES OF SERVICER.
(a) The Servicer (and any successor Servicer), for the benefit of the
Trust and the Secured Parties, shall manage, service, administer, and make
collections on the Receivables with reasonable care, using that degree of skill
and attention that servicers in the retail automotive financing industry
customarily exercise with respect to all comparable receivables that they
service for themselves or others and, to the extent more exacting, that the
Servicer (or successor Servicer) exercises with respect to all comparable
automobile receivables that it services for itself or others. The Servicer's
duties shall include collection and posting of all payments, making Advances in
accordance with the terms hereof, responding to inquiries of Obligors or of
federal, state or local governmental authorities with respect to the
Receivables, investigating delinquencies, sending payment coupons to Obligors,
accounting for collections, and furnishing monthly and annual statements to the
Owner Trustee, the Indenture Trustee and the Insurer with respect to
distributions. The Servicer shall follow its customary standards, policies, and
procedures in performing its duties as Servicer; provided, however, that the
Servicer shall not materially change its servicing standards and procedures
without the prior written consent of the Controlling Party. Without limiting the
generality of the foregoing, the Servicer is authorized and empowered by the
Trust to execute and deliver, on behalf of itself, the Trust, the Owner Trustee,
the Indenture Trustee or any of them, any and all instruments of satisfaction or
cancellation, or partial or full release or discharge, and all other comparable
instruments, with respect to such Receivables or to the Financed Vehicles
securing such Receivables; provided, however, that notwithstanding the
foregoing, the Servicer shall not release an Obligor from payment of any unpaid
amount under any Receivable or waive the right to collect the unpaid balance of
any Receivable from the Obligor, except (i) pursuant to an order from a court of
competent jurisdiction, (ii) in accordance with its customary procedures or
(iii) in accordance with Section 8.05. If the Servicer shall commence a legal
proceeding to enforce a Receivable or a Charged-Off Receivable, the Trust and
the Indenture Trustee shall thereupon be deemed to have automatically assigned,
solely for the purpose of collection, such Receivable to the Servicer. If in any
enforcement suit or legal proceeding it shall be held that the Servicer may not
enforce a Receivable on the ground that it shall not be a real party in interest
or a holder entitled to enforce the Receivable, the Indenture Trustee shall be
deemed to have automatically assigned such Receivable to the Servicer, solely
for the purpose of collection. The Owner Trustee and the Indenture Trustee shall
execute any documents prepared by the Servicer and delivered to the Trust for
execution that are necessary or appropriate to enable the Servicer to carry out
its servicing and administrative duties hereunder.
(b) The Servicer, unless the Standby Servicer is then acting as
Servicer, in which case the Back-up Servicer (if BVAC is acting as the Servicer,
at its expense, otherwise at the expense of the Trust), shall obtain on behalf
of the Trust all licenses, if any, required by the laws of any jurisdiction to
be held by the Trust in connection with ownership of the Receivables, and shall
make all filings and pay all fees as may be required in connection therewith
during the term hereof.
(c) The Servicer shall furnish to the Owner Trustee, the Indenture
Trustee, the Collateral Agent and the Insurer from time to time such additional
information regarding the Trust or the Basic Documents as the Owner Trustee, the
Indenture Trustee, the Collateral Agent or the Insurer shall reasonably request.
SECTION 8.02. THE BACK-UP SERVICER.
(a) Prior to assuming any of the Servicer's rights and obligations and
acting as successor Servicer hereunder, the Back-up Servicer shall only be
responsible to perform those duties specifically imposed upon it by the
provisions hereof, and shall have no obligations or duties under any agreement
to which it is not a party, including, but not limited to, the other Basic
Documents.
(b) Subject to the Back-up Servicer's obligations pursuant to this
Section 8.02, prior to assuming any of the Servicer's rights and obligations
hereunder, the Back-up Servicer 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 the
repayment of such funds or
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adequate written indemnity against such risk or liability is not reasonably
assured to it in writing prior to the expenditure or risk of such funds or
incurrence of financial liability. Notwithstanding any provision to the
contrary, the Back-up Servicer, in its capacity as such, and not in its capacity
as successor Servicer, shall not be liable for any obligation of the Servicer
contained in this Agreement so long as the Back-up Servicer performs in such
capacity, and the parties shall look only to the Servicer to perform such
obligations. The Back-up Servicer shall have no responsibility or liability in
connection with the perfection or maintenance of a security interest in the
Receivables.
(c) The Servicer shall have no liability, direct or indirect, to any
party, for the acts or omissions of the Back-up Servicer, whenever such acts or
omissions occur or whenever such liability is imposed.
(d) Notwithstanding anything to the contrary herein, the Controlling
Party shall have the right in its sole and absolute discretion to remove and
replace the Back-up Servicer in accordance with Section 14.03. In the event that
the Controlling Party exercises its right to remove and replace Deutsche Bank
Trust Company Americas as Back-up Servicer, Deutsche Bank Trust Company Americas
shall have no further obligation to perform the duties of the Back-up Servicer
under this Agreement except as set forth in Section 13.02.
(e) On or before the fifth Business Day of each month, the Servicer will
deliver to the Back-up Servicer a Computer Tape containing such information with
respect to the Receivables as of the close of business on the last day of the
immediately preceding Collection Period as is necessary for preparation of the
Servicer's Certificate. In addition, the Servicer shall, if so requested by the
Insurer (unless an Insurer Default shall have occurred and be continuing)
deliver to the Back-up Servicer (i) within five (5) Business Days of demand
therefore a Computer Tape containing as of the close of business on the date of
demand all of the data maintained by the Servicer in a format acceptable to the
Back-up Servicer in connection with servicing the Receivables and (ii) within
fifteen (15) Business Days of demand therefore a copy of such other information
as is reasonably requested by the Insurer for the purpose of reconciling such
discrepancies.
(f) The Back-up Servicer shall load the initial Computer Tape received
from the Servicer pursuant to Section 8.02(e) hereof and confirm that such
Computer Tape is in a readable form, and deliver to the Servicer and the Insurer
a notice in substantially the form set forth as Exhibit C attached hereto. All
other Computer Tapes will be stored by the Back-up Servicer in accordance with
its customary practices.
(g) To the extent the Back-up Servicer and the Indenture Trustee are the
same party, the Back-up Servicer may resign under this Agreement upon 90 days
prior written notice to the Servicer, the Insurer and the Standby Servicer, and
only to the extent such party is also resigning or being removed as Indenture
Trustee hereunder or under the Indenture.
SECTION 8.03. THE STANDBY SERVICER.
(a) Prior to assuming any of the Servicer's rights and obligations
hereunder, the Standby Servicer shall only be responsible to perform those
duties specifically imposed upon it by the provisions hereof, and shall have no
obligations or duties under any agreement to which it is not a party, including
but not limited to any other Basic Document to which it is not a party.
(b) Prior to assuming any of the Servicer's rights and obligations
hereunder, the Standby Servicer 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 the
repayment of such funds or adequate written indemnity against such risk or
liability is not reasonably assured to it in writing prior to the expenditure or
risk of such funds or incurrence of financial liability. Notwithstanding any
provision to the contrary, the Standby Servicer, in its capacity as such, and
not in its capacity as successor Servicer, shall not be liable for any
obligation of the Back-up Servicer or the Servicer contained in this Agreement
so long as the Standby Servicer performs in such capacity, and the parties shall
look only to the Servicer and the Back-up Servicer to perform such obligations.
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(c) The Servicer shall have no liability, direct or indirect, to any
party, for the acts or omissions of the Standby Servicer, whenever such acts or
omissions occur or whenever such liability is imposed.
(d) Notwithstanding anything to the contrary herein, the Controlling
Party shall have the right, with or without cause, to remove the Standby
Servicer in its sole discretion and replace the Standby Servicer. In the event
that the Controlling Party exercises its right to remove and replace the Standby
Servicer, such Person shall have no further obligation to perform the duties of
the Standby Servicer under this Agreement except as set forth in Section 13.02.
(e) On or before the fifth Business Day of each month, the Servicer will
deliver to the Standby Servicer a Computer Tape containing such information with
respect to the Receivables as of the close of business on the last day of the
immediately preceding Collection Period as is necessary for preparation of the
Servicer's Certificate. The Standby Servicer shall use the Computer Tape to
verify the information specified in Section 8.03(f)(ii) and (iii) contained in
the Servicer's Certificate delivered by the Servicer, and the Standby Servicer
shall certify to the Insurer that it has verified the Servicer's Certificate in
accordance with this Section 8.03 and shall notify the Servicer, the Insurer and
the Indenture Trustee of any discrepancies, in each case, on or before the
related Deficiency Claim Date. Such notice shall be substantially in the form of
Exhibit D attached hereto. In the event that the Standby Servicer reports any
discrepancies, the Servicer and the Standby Servicer shall attempt to reconcile
such discrepancies prior to the related Payment Date, but in the absence of a
reconciliation, the Servicer's Certificate shall control for the purpose of
calculations and payments with respect to the related Payment Date. In the event
that the Standby Servicer and the Servicer are unable to reconcile discrepancies
with respect to a Servicer's Certificate by the related Payment Date, (i) the
Standby Servicer will notify the Insurer and the Indenture Trustee, and (ii) the
Servicer shall cause a firm of independent certified public accountants, at the
Servicer's expense, to audit the Servicer's Certificate and, prior to the fifth
calendar day of the following month, reconcile the discrepancies. The effect, if
any, of such reconciliation shall be reflected in the Servicer's Certificate for
such next succeeding Determination Date. In addition, the Servicer shall, if so
requested by the Insurer (unless an Insurer Default shall have occurred and be
continuing) deliver to the Standby Servicer (i) within five (5) Business Days of
demand therefore a Computer Tape containing as of the close of business on the
date of demand all of the data maintained by the Servicer in a format acceptable
to the Standby Servicer in connection with servicing the Receivables and (ii)
within fifteen (15) Business Days of demand therefore a copy of such other
information as is reasonably requested by the Insurer for the purpose of
reconciling such discrepancies.
(f) The Standby Servicer shall review each Servicer's Certificate
delivered pursuant to Section 8.03(e) and shall, based upon the information
provided from the Servicer under Section 8.03(e):
(i) confirm that such Servicer's Certificate is complete on its face;
(ii) load the Computer Tape received from the Servicer pursuant to
Section 8.03(e) hereof, confirm that such Computer Tape is in a readable
form, and calculate the Principal Balance of the Receivables based on
the aggregate Principal Balance of the Receivables as of the preceding
Payment Date (as set forth in such Servicer's Certificate) and the
principal portion of the Scheduled Receivable Payment or Modified
Scheduled Receivable Payment for the Receivables (as set forth in such
Servicer's Certificate) and compare such calculation to that set forth
in the Servicer's Certificate (and give notice of any discrepancy to the
Insurer); and
(iii) recalculate the Available Funds, the Class A-1 Monthly
Interest, the Class A-2 Monthly Interest, the Class A-3 Monthly
Interest, the Class A-4 Monthly Interest, the Class I Monthly Interest,
the Monthly Principal, the Servicing Fee, the Standby Servicer Fee, the
Indenture Trustee Fee, the Owner Trustee Fee, the amounts on deposit in
the Spread Account, the Collection Account and the Payahead Account, the
Premium, the Lock-Box Collection Percentage, the Average Delinquency
Ratio, the Cumulative Default Rate and the Cumulative Net Loss Rate (as
such percentage, ratio and such rates are defined in the Spread Account
Agreement) in the Servicer's Certificate for such Determination Date,
based solely on the balances and calculations specifically set forth in
the Servicer's Certificate, and compare such
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recalculations to those set forth in the Servicer's Certificate. To the
extent of any discrepancy, the Standby Servicer shall give notice
thereof to the Insurer. The Standby Servicer's obligation shall be
limited to the mathematical recalculation of the amounts set forth in
this Section 8.03(f)(ii) and (iii) based on the Servicer's Certificate
and Computer Tape.
SECTION 8.04. RETENTION AND TERMINATION OF SERVICER.
The Servicer hereby covenants and agrees to act as such under this
Agreement for an initial term, commencing on the Closing Date and ending on
December 31, 2002, which term may be extended by written notice delivered by the
Insurer, so long as the Insurer is the Controlling Party, for successive three
month periods ending on each successive three month period (or, pursuant to
revocable written standing instructions from time to time to the Servicer and
the Indenture Trustee, extended for any specified number of terms greater than
one), until the termination of the Issuer. If an Insurer Default shall have
occurred and be continuing, such term will automatically be renewed unless the
Majority Noteholders vote to remove the Servicer. Any such notice (including
each notice pursuant to standing instructions, which, if delivered, shall be
deemed delivered at the end of successive monthly terms for so long as such
instructions are in effect) (a "Servicer Extension Notice") shall be delivered
by the Insurer to the Indenture Trustee and the Servicer. The Servicer hereby
agrees that, as of the date hereof and upon its receipt of any such Servicer
Extension Notice, the Servicer shall become bound, for the initial term
beginning on the date hereof and for the duration of the term covered by such
Servicer Extension Notice, to continue as the Servicer subject to and in
accordance with the other provisions of this Agreement. The Servicer's terms
shall not be extended unless a Servicer Extension Notice is received on or
before the last day of such term. This Section shall not apply to the Back-up
Servicer or the Standby Servicer.
SECTION 8.05. COLLECTION OF RECEIVABLE PAYMENTS.
(a) Consistent with the standards, policies and procedures required by
this Agreement, the Servicer shall make reasonable efforts to collect all
payments called for under the terms and provisions of the Receivables as and
when the same shall become due and shall follow such collection procedures as it
follows with respect to all comparable automobile receivables that it services
for itself or others and, in any event, with no less degree of skill and care
than would be exercised by a prudent servicer of similar motor vehicle retail
installment sales contracts and installment sale loan and security agreements.
At all times after 30 days following the establishment of the Lock-Box Account
pursuant to Section 9.01(a) (but in any event the Lock-Box must be established
within 20 Business Days after the Closing Date), the Servicer will provide each
Obligor with a monthly statement in order to notify such Obligors to make
payments directly to the Lock-Box. If payments are modified or adjusted on a
Receivable (provided that no such modification or adjustment may be made to the
APR or the number or amounts of the Scheduled Receivable Payments) or are
extended in the ordinary course of the Servicer's collection procedures
(provided, that no extensions may be granted by the Servicer until at least six
Scheduled Receivable Payments have been received by the Servicer under the
related Receivable and thereafter only one extension not to exceed one month may
be granted each twelve months; provided, further, that no more than three
extensions shall be permitted on any Receivable; and provided, further, that not
more than 1% (by Principal Balance of the Receivables as a percentage of the
Pool Balance) may be extended during any Collection Period), and, as a result,
any Receivable would be outstanding after the month immediately preceding the
Final Maturity Date for the Class A-4 Notes or any such modification, adjustment
or extension is in violation of the foregoing prohibitions, then the Servicer
shall be obligated to purchase such Receivable pursuant to Section 8.10 (unless
such Receivable is otherwise being purchased pursuant to Section 16.02). The
Servicer may in its discretion waive any late payment charge or any other fees
that it is entitled to retain under Section 8.11, or other fee (to the extent
consistent with its credit and collection policy) that may be collected in the
ordinary course of servicing a Receivable.
(b) All allocations of payments with respect to a Simple Interest
Receivable to principal and interest and determinations of periodic charges and
the like shall be made using the simple interest method, based on either the
actual number of days elapsed and the actual number of days in the calendar year
or on the basis of a thirty-day month and a 360-day calendar year, as specified
in the related installment sales contract or installment loan and security
agreement. Each payment on a Simple Interest Receivable shall be applied first,
in connection with the redemption of a Charged-off Receivable, to reimburse the
Servicer for reasonable and customary out-of-pocket expenses incurred by the
Servicer
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in connection with such Receivable, second, to late charges and other fees,
third, to the extent necessary to bring such Receivable current, to interest in
accordance with the simple interest method and fourth, to principal in
accordance with the simple interest method. All allocations of payments with
respect to a Precomputed Receivable to principal or interest shall be made using
the actuarial or constant yield method. Payments made by or on behalf of an
Obligor on a Precomputed Receivable including any Payaheads previously made and
added to the Payahead Balance with respect to such Precomputed Receivable shall
be applied first, in connection with the redemption of a Charged-off Receivable,
to reimburse the Servicer for reasonable and customary out-of-pocket expenses
incurred by the Servicer in connection with such Receivable, second, to late
charges and other fees, third, to overdue Scheduled Receivable Payments. Next,
any excess shall be applied to the Scheduled Receivable Payment and any
remaining excess shall be added to the Payahead Balance, and shall be applied to
prepay the Precomputed Receivable, but only if such Payahead Balance shall be
sufficient to prepay the Receivable in full, otherwise, any such remaining
excess payments shall constitute a Payahead and shall increase the Payahead
Balance. Notwithstanding the foregoing, no allocation pursuant to Section
8.05(b) shall in any way alter or modify the payment priorities and rights and
restrictions on Servicer reimbursement and compensation set forth in the
Indenture.
SECTION 8.06. REALIZATION UPON RECEIVABLES.
(a) On behalf of the Trust and the Secured Parties, the Servicer shall
use its best efforts, consistent with its customary servicing procedures, to
repossess or otherwise convert the ownership of the Financed Vehicle securing
any Receivable as to which the Servicer shall have determined that eventual
payment in full is unlikely. The Servicer shall follow such customary and usual
practices and procedures as it shall deem necessary or advisable in its
servicing of automobile receivables, which may include reasonable efforts to
realize upon any recourse to Dealers (provided, that if SST is performing the
duties of Servicer hereunder, BVAC agrees to use commercially reasonable efforts
to cooperate with SST in realizing upon such Dealer recourse) and selling the
Financed Vehicle at public or private sale. The foregoing shall be subject to
the provision that, in any case in which the Financed Vehicle shall have
suffered damage, the Servicer shall not expend funds in connection with the
repair or the repossession of such Financed Vehicle unless it shall determine in
its discretion that such repair and/or repossession will increase the
Liquidation Proceeds of the related Receivable by an amount equal to or greater
than the amount of such expenses. After appropriate disposition of the Financed
Vehicle, the Servicer shall also take such measures as it deems reasonable and
appropriate to realize value in respect of any deficiency balance of the
Receivable including pursuit of action on behalf of the Trust and/or the Secured
Parties against the Obligor or public or private sale of the remaining interest
of the Trust and/or the Secured Parties in such Receivable.
(b) BVAC, as initial Servicer, agrees that within 45 days from the
Closing Date, it shall make such filings and effect such notices as are
necessary under Section 9-324(B) of the New York UCC (or comparable section of
the UCC of any applicable state) to preserve the Trust's ownership interest (or
security interest, as the case may be) and the security interest of the
Indenture Trustee in any repossessed Financed Vehicles delivered for sale to
Dealers.
(c) The Servicer agrees that at any time after the Closing Date there
will be (i) no more than 10 repossessed Financed Vehicles in the aggregate
delivered for sale to any Dealer and (ii) no more than 35 repossessed Financed
Vehicles in the aggregate delivered for the sale to all Dealers with respect to
which the actions referred to in paragraph (b) above have not been effected. The
Servicer agrees that prior to delivering additional Financed Vehicles for sale
to any such Dealer in excess of the limits sets forth in (i) and (ii) above, it
shall make such filings and effect such notices as are necessary under Section
9-324(B) of the New York UCC (or comparable section of the applicable UCC) to
preserve its ownership interest (or security interest, as the case may be) in
any such repossessed Financed Vehicle.
(d) Unless otherwise stated in this Agreement, the Servicer shall either
purchase or liquidate each Financed Vehicle that has not previously been
liquidated and that secures, or previously secured, a Charged-Off Receivable
either (i) by the end of the Collection Period preceding the Final Maturity Date
for the Class A-4 Notes or (ii) if earlier, by the end of the Collection Period
following the Collection Period during which such Receivable became a
Charged-Off Receivable. Any purchase of a Financed Vehicle by the Servicer shall
be made at a price equal to the fair market value of the Financed Vehicle as
27
determined by the Servicer in accordance with the Servicer's normal servicing
standards. This purchase obligation shall not apply to any successor Servicer.
SECTION 8.07. PHYSICAL DAMAGE INSURANCE.
(a) The Servicer, in accordance with its customary servicing procedures
and underwriting standards, shall require that (i) each Obligor shall have
obtained insurance covering the Financed Vehicle as of the date of execution of
the Receivable insuring against loss and damage due to fire, theft,
transportation, collision and other risks generally covered by comprehensive and
collision coverage, (ii) each Receivable that finances the cost of premiums for
credit life and credit accident and health insurance is covered by an insurance
policy or certificate naming BVAC or the Bank as policyholder (creditor) or loss
payee and (iii) as to each Receivable that finances the cost of an extended
service contract, the respective Financed Vehicle which secures the Receivable
is covered by such extended service contract. The Servicer shall, in accordance
with its customary servicing procedures, monitor such insurance coverage.
(b) To the extent applicable, the Servicer shall not take any action
which would result in noncoverage under the insurance policy referred to in
Section 8.07(a) which, but for the actions of the Servicer, would have been
covered thereunder. The Servicer, on behalf of the Indenture Trustee, shall take
such reasonable action as shall be necessary to permit recovery under any of the
foregoing insurance policies. Any amounts collected by the Servicer under any of
the foregoing insurance policies shall be deposited in the Collection Account
pursuant to Section 9.03. In the event of the cancellation or non-renewal of the
insurance referred to in Section 8.07(a)(i) above with respect to any Financed
Vehicle, the Servicer will endeavor, in accordance with its customary servicing
standards and procedures, to cause the related Obligor to obtain a replacement
insurance policy. In no event shall the Servicer force place insurance on a
Financed Vehicle.
SECTION 8.08. MAINTENANCE OF SECURITY INTERESTS IN FINANCED VEHICLES.
(a) The Servicer shall, in accordance with its customary servicing
procedures, take such steps as are necessary to ensure that perfection of the
security interest created by each Receivable in the related Financed Vehicle has
been obtained, and to maintain such security interest. The Trust hereby
authorizes the Servicer to take such steps as are necessary to re-perfect such
security interest on behalf of the Trust in the event of the relocation of a
Financed Vehicle or for any other reason. Any out-of-pocket expenses incurred by
any successor Servicer in connection with any such re-perfection shall be
reimbursable in accordance with the priorities set forth in Section 9.05(a) of
the Indenture.
(b)(i) In accordance with the Custodian Agreement, by the third Business
Day following the date (the "180 day notice date ") which is 180 days following
the Closing Date or, if such date is not a Business Day, on the next succeeding
Business Day, the Indenture Trustee shall inform BVAC and the other parties to
this Agreement and the Insurer of any Receivable listed on the exception list
attached as Exhibit B to the Custodian Agreement provided to the Indenture
Trustee on the Closing Date for which the related Receivable File on the 180 day
notice date does not include a Certificate of Title (or such evidence of title
as may be issued in any applicable jurisdiction as of the close of business on
the date which is 180 days after closing). BVAC shall repurchase any such
Receivable as of the last day of the Collection Period in which the date, which
is 180 days following the Closing Date occurs, if the related Receivable File
does not include a Certificate of Title as of the close of business on such
180th day (or such evidence of title as may be issued in any applicable
jurisdiction) to the extent any such Receivable was not otherwise released or
repurchased pursuant to Section 8.08(b)(v) below. In consideration of the
purchase of such Receivable, BVAC shall remit the Purchase Amount in the manner
specified in Section 8.10.
(ii) In accordance with the Custodian Agreement, by the third Business
Day following the date (the "30 day notice date") which is 30 days following the
Closing Date or, if such date is not a Business Day, on the next succeeding
Business Day, the Indenture Trustee shall inform BVAC and the other parties to
this Agreement and the Insurer of any Receivable listed on the exception list
attached as Exhibit B to the Custodian Agreement provided to the Indenture
Trustee on the Closing Date due to a Receivable File which is missing a fully
executed original of the related retail installment contract or retail
28
installment loan contract, as applicable, which remains uncured by the close of
business on the date which is 30 days following the Closing Date. BVAC shall
repurchase any such Receivable within two Business Days after the date on which
the Indenture Trustee delivers its report pursuant to this Section 8.08(b)(ii)
to the extent any such Receivable was not otherwise released or repurchased
pursuant to Section 8.08(b)(v) below. In consideration of the purchase of such
Receivable, BVAC shall remit the Purchase Amount in the manner specified in
Section 8.10.
(iii) On or before the Closing Date, the Indenture Trustee shall
establish the Reserve Account at the direction of BVAC as a segregated
non-interest bearing trust account in the name of the Trust for the benefit of
the Secured Parties with the Indenture Trustee (at the Indenture Trustee Office)
or another Eligible Bank. On the Closing Date, BVAC shall deposit the Initial
Reserve Account Deposit into the Reserve Account. The Indenture Trustee shall,
at the direction of BVAC, invest the amounts in the Reserve Account in Eligible
Investments that mature not later than the Business Day prior to the next
succeeding Reserve Release Date (as defined below) and shall hold such Eligible
Investments to maturity; provided, however, it is understood and agreed that the
Indenture Trustee shall not be liable for any loss arising from such investment
in Eligible Investments unless the Eligible Investment was a direct obligation
of the Indenture Trustee or unless such loss was caused by the Indenture
Trustee's negligence or willful misconduct (it being understood and acknowledged
that no loss on any such Eligible Investment which was made in conformity with
this Agreement and the instructions of the Transferor, shall be considered
"caused by the Indenture Trustee's negligence or willful misconduct"). No
investment may be sold prior to its maturity. All such Eligible Investments
shall be held by or on behalf of the Indenture Trustee for the benefit of the
Indenture Trustee on behalf of the Noteholders, the Insurer and
Certificateholder; as their interests may appear. The Indenture Trustee (or its
custodian) shall at all times (i) maintain possession of any negotiable
instruments or securities evidencing Eligible Investments until the time of sale
or maturity and each certificated security or negotiable instrument evidencing
an Eligible Investment shall be endorsed in blank or to the Indenture Trustee
(or its custodian) or registered in the name of the Indenture Trustee and (ii)
cause any Eligible Investment represented by an uncertificated security to be
registered in the name of the Indenture Trustee (or its custodian).
(iv) On or before the initial Reserve Release Date, the Indenture
Trustee shall review the Receivables listed on the exception list attached as
Exhibit E to this Agreement (the "Exception List") (in the manner required under
the terms of the Custodian Agreement, as applicable) provided to the Indenture
Trustee on the Closing Date and prepare an updated list, under cover of a
certificate in substantially the form attached hereto as Exhibit F, as the same
may be further updated as described below, (the "Updated Exception List")
deleting those Receivable with respect to which the Indenture Trustee has
reviewed the fully executed original of the Receivable with the fully executed
assignment from the related Dealer and (a) a Certificate of Title (or such
evidence of title as may be issued in any applicable jurisdiction) as required
under the terms of the Custodian Agreement or (b) a copy of a duly completed
application of title with which has been filed in the appropriate jurisdiction.
Thereafter, the Indenture Trustee shall continue to review the related Updated
Exception List and prepare and certify a new Updated Exception List on or prior
to the immediately succeeding Reserve Release Date. As used herein, the "Reserve
Release Date" means, initially, the fourth Business Day following the Closing
Date, and thereafter, each succeeding date occurring one week thereafter
(provided, if such date is not a Business Day, the related Reserve Release Date
shall be the Business Day immediately succeeding such date), or such earlier
date or dates on which the Indenture Trustee may be prepared to release
additional amounts from the Reserve Account (as evidenced by the preparation and
certification by the Indenture Trustee of a new Updated Exception List with
respect to such Reserve Release Date(s) and the delivery by BVAC of an
instructional letter, acknowledged by the Insurer, with respect to such Reserve
Release Date(s) in substantially the form attached hereto as Exhibit G), ending
on and including the Final Reserve Date.
(v) On each Reserve Release Date, the Indenture Trustee shall release to
BVAC (by wire transfer in immediate available funds) from the Reserve Account,
the Reserve Release Amount relating to any Receivable which has been deleted
from the Updated Exception List (or in the case of the first Reserve Release
Date, the Exception List) with respect to such Reserve Release Date, as
specified in an instructional letter from BVAC, acknowledged by the Insurer, in
substantially the form attached hereto as Exhibit G. With respect to any Reserve
Release Date and any Receivable, the "Reserve Release Amount" will be an amount
equal to the Principal Balance of such Receivable as of the Cut-off Date as
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set forth on Exhibit E to this Agreement and the pro rata portion (based on the
Principal Balance of the Receivables included on such list) of investment
interest earned on the portion of the Reserve Account relating to such
Receivable. To the extent a Receivable becomes a Charged-Off Receivable during a
Collection Period while on the Exception List or an Updated Exception List or
otherwise must be repurchased pursuant to Section 8.08(b)(i) or Section
8.08(b)(ii), the Indenture Trustee shall withdraw the Purchase Amount related to
such Receivable from the Reserve Account on behalf of BVAC, in consideration of
the purchase of such Receivable, and deposit such amount in the Collection
Account not later than 11:00 a.m. (New York City time) on the related
Determination Date. With respect to any Receivable described in the preceding
sentence, neither the Transferor nor BVAC shall otherwise be required to remit
the Purchase Amount in the manner specified in Section 7.02 or Section 8.10 with
respect to any such Receivable so repurchased or otherwise removed from the
Exception List or Updated Exception List.
(vi) Notwithstanding the foregoing, in the event that the conditions for
release of funds set forth in Section 8.08(b)(v) have not been satisfied with
respect to any Receivable on or before the date which is 180 days following the
Closing Date as determined by the Indenture Trustee by the third Business Day
following such 180th day (the "Final Reserve Date") or, if such date is not a
Business Day, on the next succeeding Business Day, BVAC shall repurchase such
Receivable in the manner specified in Section 8.08(b)(v) at the Purchase Amount
related to such Receivable utilizing funds in the Reserve Account by withdrawing
the aggregate Purchase Amount then due and depositing such amount in the
Collection Account. BVAC shall promptly remit any deficiency in the aggregate
Purchase Amount in the manner specified in Section 8.10. Any amounts remaining
in the Reserve Account after the payment of the aggregate Purchase Amount for
such Receivables pursuant to this Section 8.08(b)(vi) shall be distributed to
BVAC (by wire transfer in immediate available funds).
(vii) Notwithstanding any other provision in the Purchase Agreement or
Trust Agreement, until the Final Reserve Date, the provisions of this Section
8.08(b) shall be the sole remedy with respect to Receivables set forth on
Exhibit E to this Agreement and neither the Transferor nor BVAC shall otherwise
be required to remit the Purchase Amount in the manner specified in Section 7.02
or Section 8.10 with respect to such Receivables, solely due to any such
Receivable having a deficiency in its Receivable File.
(c) Upon the occurrence of an Insurance Agreement Event of Default, the
Servicer, at the written direction of the Insurer (if no Insurer Default shall
have occurred and be continuing and the Insurance Agreement has not terminated),
shall take or cause to be taken such action as may, in the opinion of counsel to
the Insurer (which opinion shall not be an expense of the Insurer), be necessary
or desirable to perfect or re-perfect the security interests in the Financed
Vehicles securing the Receivables in the name of the Indenture Trustee on behalf
of the Issuer, the Noteholders and the Insurer by amending the title documents
of such Financed Vehicles or by such other reasonable means as may, in the
opinion of counsel to the Insurer, which opinion shall not be an expense of the
Insurer, be necessary or prudent and shall deliver to the Indenture Trustee any
Receivable File or portion thereof that has been released by the Indenture
Trustee to the Servicer and is then in the possession of the Servicer, including
any original certificates of title. The Servicer (so long as the Servicer is
BVAC) shall, and if the Servicer has been removed, BVAC shall pay all costs and
expenses related to such perfection or re-perfection (the "Reliening Expenses").
In addition, prior to the occurrence of an Insurance Agreement Event of Default,
the Insurer may (so long as it is the Controlling Party) instruct the Indenture
Trustee and the Servicer to take or cause to be taken such action as may, in the
opinion of counsel to the Insurer, be necessary to perfect or reperfect the
security interest in the Financed Vehicles securing the Receivables in the name
of the Indenture Trustee on behalf of the Issuer, including by amending the
title documents of such Financed Vehicles to reflect the security interest of
the Indenture Trustee in the related Financed Vehicle or by such other
reasonable means as may, in the opinion of counsel to the Insurer, be necessary
or prudent; provided, however, that if the Insurer requests (so long as it is
the Controlling Party) that the title documents be amended prior to the
occurrence of an Insurance Agreement Event of Default, the out-of-pocket
expenses of the Servicer or the Indenture Trustee in connection with such action
shall be reimbursed to the Servicer or the Indenture Trustee, as applicable, by
the Insurer.
The Servicer hereby makes, constitutes and appoints the Indenture
Trustee acting through its duly appointed officers or any of them, its true and
lawful attorney, for it and in its name and on its behalf, for the sole and
exclusive purpose of authorizing said attorney to execute and deliver as
attorney-in-fact
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or otherwise, any and all documents and other instruments and to do or
accomplish all other acts or things necessary or appropriate to show the
Indenture Trustee as lienholder or secured party on the certificate of title
relating to a Financed Vehicle. BVAC, as initial Servicer, shall cause the Bank
to deliver a power of attorney to the Indenture Trustee in accordance with the
foregoing with respect to the Bank.
SECTION 8.09. COVENANTS OF SERVICER. The Servicer hereby makes the
following covenants to the other parties hereto and the Insurer on which the
Indenture Trustee shall rely in accepting the Receivables in trust and on which
the Insurer shall rely in issuing the Policy, except for a release to an insurer
in exchange for insurance proceeds paid by such insurer resulting from a claim
for the total insured value of a vehicle, the Servicer shall not (i) release the
Financed Vehicle securing each such Receivable from the security interest
granted by such Receivable in whole or in part except in the event of payment in
full by or on behalf of the Obligor thereunder or repossession, (ii) impair the
rights of the Noteholders or the Insurer in the Receivables, (iii) change the
Annual Percentage Rate with respect to any Receivable, except as may be required
by applicable law and (iv) otherwise modify any contract except as permitted by
this Agreement. In addition, the Servicer shall service the Receivables as
required by the terms of this Agreement and in material compliance with its
current servicing procedures for servicing all of its comparable motor vehicle
contracts. No successor Servicer shall incur any liability for the
representations, warranties or covenants of any predecessor Servicer hereunder.
SECTION 8.10. PURCHASE OF RECEIVABLES UPON BREACH. The Servicer, the
Transferor, the Indenture Trustee or the Owner Trustee shall inform the other
party and the Indenture Trustee and the Insurer promptly, in writing, upon the
discovery of (i) any breach by the Servicer of its obligations under Sections
8.01, 8.05, 8.06, 8.07, 8.08 or 8.09 or (ii) the existence of the Servicer's
obligation to purchase a Receivable pursuant to Section 8.05(a); provided,
however, that the failure to give such notice shall not affect any obligation of
the Servicer hereunder. Unless such breach shall have been cured by the last day
of the first full Collection Period following the discovery or notice of such
breach, the Servicer shall on such day purchase any Receivable materially and
adversely affected by such breach or which materially and adversely affects the
interests of the Insurer or the Noteholders (which shall include any Receivable
as to which a breach of Section 8.06 has occurred). In consideration of the
purchase of a Receivable, the Servicer shall remit the Purchase Amount with
respect to such Receivable in the manner specified in Section 9.04.
Notwithstanding the foregoing, if SST shall have become the Servicer, it will
not be so obligated to purchase such nonconforming Receivables. SST's only
obligation to the Trust shall be to make the indemnity in Section 13.02 hereof.
The Indenture Trustee and Owner Trustee shall have no duty to conduct any
affirmative investigation as to the occurrence of any condition requiring the
repurchase of any Receivable pursuant to this Section. The sole remedy of the
Owner Trustee, the Trust, or the Secured Parties with respect to the
aforementioned breaches shall be to require the Servicer to purchase Receivables
pursuant to this Section 8.10; provided, however, that the Servicer shall
indemnify the Insurer, the Issuer and the Noteholders and each of their
respective officers, employees, directors, agents and representatives against
all costs, expenses, losses, damages, claims and liabilities, including
reasonable fees and expenses of counsel, which may be asserted against or
incurred by any of them as a result of third party claims arising out of the
events or facts giving rise to such breach. No predecessor nor successor
Servicer shall be responsible for the acts or omissions of any other Servicer.
Upon receipt of the Purchase Amount and any related indemnity payments, the
Indenture Trustee shall release to the Servicer or its designee the related
Receivable File and shall execute and deliver all instruments of transfer or
assignment, without recourse, as are prepared by the Servicer and delivered to
the Indenture Trustee and are necessary to vest in the Servicer or such designee
the Issuer's right, title and interest in the Receivable. Notwithstanding the
foregoing, BVAC shall not be required to remit the Purchase Amount in the manner
specified in this Section 8.10 with respect to any Receivable repurchased or
subject to repurchase by BVAC pursuant to Section 8.08 for the reasons specified
in Section 8.08.
SECTION 8.11. SERVICING FEE.
(a) The Servicer shall be entitled to a Servicing Fee as defined herein.
The Servicer shall be entitled to all late fees, prepayment charges and other
administrative fees and expenses or similar charges allowed by applicable law
with respect to the Receivables, collected (from whatever source) on the
Receivables during such Collection Period (the "Supplemental Servicing Fee").
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(b) So long as it has not become the Servicer, the Back-up Servicer
shall be entitled to the Back-up Servicing Fee. If it becomes the Servicer, the
Back-up Servicer will be entitled to the Servicing Fee.
(c) So long as it has not become the Servicer, the Standby Servicer will
be entitled to the Standby Servicer Fee. If it becomes the Servicer, the Standby
Servicer will be entitled to the fee set forth in Schedule C in its capacity as
successor Servicer.
(d) Neither the Indenture Trustee, Back-up Servicer or Standby Servicer
shall be liable for any differential between the Servicing Fee and the amount
necessary to induce a successor Servicer to accept its appointment as such
pursuant to this Agreement.
(e) Each of the Servicer, the Back-up Servicer and the Standby Servicer
acknowledge and agree that any fees, expenses, costs, indemnities and other
amounts, including without limitation, Transition Costs, payable to the
Servicer, the Back-up Servicer and the Standby Servicer shall not be payable
from amounts owed or paid under the Policy.
SECTION 8.12. SERVICER'S CERTIFICATE. On or before the Determination
Date following each Collection Period, the Servicer shall deliver to the Owner
Trustee, the Indenture Trustee, the Standby Servicer, the Back-up Servicer, the
Collateral Agent and the Insurer a Servicer's Certificate in substantially the
form of Exhibit 3 attached hereto containing all information necessary to make
the distributions pursuant to Section 9.05 of the Indenture (so long as the
Notes remain outstanding) for the Collection Period preceding the date of such
Servicer's Certificate and all information necessary for the Indenture Trustee
to send statements to the Noteholders and the Owner Trustee to send statements
to the Certificateholder, including (A) the amount of aggregate collections on
the Receivables, (B) the aggregate Purchase Amount of the Receivables
repurchased by BVAC and purchased by the Servicer, (C) with respect to
Precomputed Receivables the net deposit from the Collection Account to the
Payahead Account or the net withdrawal from the Payahead Account to the
Collection Account required for the Collection Period in accordance with Section
9.10 of the Indenture, and in the case of a net withdrawal, the Monthly Interest
and Monthly Principal reported on such Servicer's Certificate shall reflect the
portions of such withdrawal allocable to interest and principal, respectively,
in accordance with this Agreement, (D) the amount, if any, to be withdrawn from
the Spread Account and the amount, if any, to be drawn on the Policy, (E)
information respecting (i) delinquent Receivables that are 30, 60 and 90 days
past due, (ii) the number of repossessions of Financed Vehicles during the
preceding Collection Period, number of unliquidated repossessed Financed
Vehicles, gross and net losses on the Receivables, and recoveries on charged off
Receivables, and (iii) adjusted, modified or extended Receivables as necessary
or requested by the Indenture Trustee or the Insurer to confirm compliance with
Section 8.05(a); (F) (for so long as BVAC is the Servicer) calculations of the
financial covenants required to be maintained pursuant to Section 5.1 of the
Insurance Agreement and whether BVAC is in compliance therewith; and (G) each
other item listed in Section 9.05 of the Indenture reasonably requested by a
Rating Agency, the Indenture Trustee or the Insurer (so long as it is the
Controlling Party) in order to monitor the performance of the Receivables.
Receivables purchased by BVAC as of the last day of such Collection Period shall
be identified by the BVAC account number with respect to such Receivable (as
specified in Schedule A to this Agreement). In addition to the information set
forth in the preceding sentence, the Servicer's Certificate shall also contain
the following information: (a) the Average Delinquency Ratio, Cumulative Default
Rate, Cumulative Net Loss Rate and Lock-Box Percentage (as such terms are
defined in the Insurance Agreement) for such Determination Date; (b) whether any
Trigger Event has occurred as of such Determination Date; (c) whether any
Trigger Event that may have occurred as of a prior Determination Date is Deemed
Cured (as such term is defined in the Spread Account) as of such Determination
Date; and (d) whether to the knowledge of the Servicer an Insurance Agreement
Event of Default has occurred.
SECTION 8.13. ANNUAL STATEMENT AS TO COMPLIANCE; NOTICE OF DEFAULT.
(a) The Servicer shall deliver to, the Indenture Trustee, the Owner
Trustee, the Rating Agencies, the Insurer, the Back-up Servicer, the Standby
Servicer, and the Noteholders, on or before March 15 of each year beginning in
the year 2003, an Officer's Certificate, dated as of the preceding December
31st, stating that (i) a review of the activities of the Servicer during the
preceding 12-month
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period (or for the initial certificate, for such shorter period as may have
elapsed from the Closing Date to such December 31st) period and of its
performance under this Agreement has been made under such officer's supervision
and (ii) to the best of such officer's knowledge, based on such review, the
Servicer has fulfilled all its obligations under this Agreement throughout such
year, or, if there has been a default in the fulfillment of any such obligation,
specifying each such default known to such officer and the nature and status
thereof.
(b) The Servicer shall deliver to, without duplication, the Indenture
Trustee, the Owner Trustee, the Insurer, the Back-up Servicer, the Standby
Servicer, and to the Rating Agencies, promptly after having obtained knowledge
thereof, but in no event later than 2 Business Days thereafter, written notice
in an Officer's Certificate of any event which with the giving of notice or
lapse of time, or both, would become an Event of Servicer Default (if BVAC is
the Servicer) under Section 14.01 or Standby Servicer Default (if the Standby
Servicer is the Servicer) under Section 14.02. The Transferor shall deliver to
the Indenture Trustee, the Insurer and to the Rating Agencies, promptly after
having obtained knowledge thereof, but in no event later than 2 Business Days
thereafter, written notice in an Officer's Certificate of any event which with
the giving of notice or lapse of time, or both, would become an Event of
Servicer Default under clause (ii) of Section 14.01. The Indenture Trustee shall
forward a copy of each Officer's Certificate so received to each Noteholder.
SECTION 8.14. ANNUAL INDEPENDENT CERTIFIED PUBLIC ACCOUNTANT'S REPORT.
The Servicer will deliver to, without duplication, the Indenture Trustee, the
Owner Trustee, the Insurer, the Standby Servicer, the Back-up Servicer and the
Rating Agencies, on or before March 15 of each year beginning in the year 2003,
a report prepared by Independent Accountants, who may also render other services
to the Servicer or any of its Affiliates or to the Transferor addressed to the
Board of Directors of the Servicer or any of its Affiliates, the Indenture
Trustee and the Insurer and dated during the current year, to the effect that
such firm has audited the financial statements of the Servicer and issued its
report therefor and that such audit (a) 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; (b) included tests relating to automotive loans
serviced for others in accordance with the requirements of the Uniform Single
Attestation Program for Mortgage Bankers (the "Program"), to the extent the
procedures in the Program are applicable to the servicing obligations set forth
in this Agreement; (c) included an examination of the delinquency and loss
statistics relating to the Servicer's portfolio of automobile, sport utility
vehicle, light duty truck and van sale contracts and loan and security
agreements; and (d) except as described in the report, disclosed no exceptions
or errors in the records relating to automobile, sport utility vehicle, light
duty truck and van loans serviced for others that, in the firm's opinion, the
Program 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
three randomly selected Servicer's Certificates; (2) except as disclosed in the
report, no exceptions or errors in the Servicer's Certificates were found; and
(3) the delinquency and loss information relating to the Receivables contained
in the Servicer's Certificates were found to be accurate.
Such report shall also indicate that the firm is independent of the
Servicer and its Affiliates within the meaning of the Code of Professional
Ethics of the American Institute of Certified Public Accountants.
In the event such firm requires the Indenture Trustee to agree to the
procedures performed by such firm, the Servicer shall direct each such Person in
writing to so agree; it being understood and agreed that each such Person will
deliver such letter of agreement in conclusive reliance upon the direction of
the of the Servicer, and neither such Person shall make any independent inquiry
or investigation as to, and shall have no obligation or liability in respect of,
the sufficiency, validity or correctness of such procedures. Delivery of such
reports, information and documents to the Indenture Trustee is for informational
purposes only, and the Indenture Trustee's receipt of such shall not constitute
constructive notice of any information contained therein or determinable from
information contained therein, including the Servicer's compliance with any of
its covenants hereunder.
If the Standby Servicer is then acting as the successor Servicer, it
shall only be required to provide a copy of its annual SAS 70 report and its
audited financial statements.
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SECTION 8.15. ACCESS TO CERTAIN DOCUMENTATION AND INFORMATION REGARDING
RECEIVABLES. The Servicer shall provide to the Owner Trustee, the Indenture
Trustee, the Back-up Servicer, the Standby Servicer and the Insurer access to
the Receivables Files in such cases where such parties shall be required by
applicable statutes or regulations to review such documentation. Access shall be
afforded without charge, but only upon reasonable request and during the normal
business hours at the respective offices of the Servicer. Nothing in this
Section shall affect the obligation of the Servicer to observe any applicable
law prohibiting disclosure of information regarding the Obligors, and the
failure of the Servicer to provide access to information as a result of such
obligation shall not constitute a breach of this Section 8.15.
SECTION 8.16. SERVICER EXPENSES. The Servicer shall be required to pay
all expenses incurred by it in connection with its activities hereunder,
including fees and disbursements of independent accountants, taxes imposed on
the Servicer and expenses incurred in connection with distributions and reports
to Noteholders, the Indenture Trustee and the Insurer; provided, however, that
any successor Servicer shall be entitled to be reimbursed for any Transition
Costs, and with respect to SST, such costs as set forth on Schedule C attached
hereto.
SECTION 8.17. REPORTS TO NOTEHOLDERS. The Indenture Trustee shall
provide to any Noteholder who so requests in writing (addressed to the Corporate
Trust Office of the Indenture Trustee) a copy of any certificate described in
Section 8.12, the annual statement described in Section 8.13, or the annual
report described in Section 8.14. The Indenture Trustee may require the
requesting party to pay a reasonable sum to cover the cost of the Indenture
Trustee's complying with such request.
SECTION 8.18. FIDELITY BOND. Each of the Servicer, the Stand-by
Servicer and any successor Servicer (other than Deutsche Bank Trust Company
Americas) hereby represent and covenant that it has obtained, and shall continue
to maintain in full force and effect, a fidelity bond and errors and omissions
policy covering it of a type and in such amount as is customary for prudent
servicers engaged in the business of servicing motor vehicle retail installment
sales contracts similar to the Receivables.
SECTION 8.19. DELEGATION OF DUTIES. The Servicer may at any time
delegate duties under this Agreement to sub-contractors who are in the business
of servicing motor vehicle contracts with the prior written consent of the
Controlling Party; provided, however, that no such delegation or sub-contracting
of duties by the Servicer shall relieve the Servicer of its responsibility with
respect to such duties. In the event the Servicer shall for any reason no longer
be the servicer of the Receivables (including by reason of an Event of Servicer
Default), the successor Servicer shall assume all of the rights and obligations
of the predecessor Servicer under one or more subservicing agreements that may
have been entered into by the predecessor Servicer by giving notice of such
assumption to the related Servicer or Servicers within ten (10) Business Days of
the termination of such Servicer as servicer of the Receivables; provided,
however, that a successor Servicer may elect to terminate a subservicing
agreement with the prior written consent of the Insurer, so long as no Insurer
Default is then continuing and the Insurance Agreement has not terminated. If
the successor Servicer does not elect to assume any subservicing agreement, any
and all costs of termination shall be at the predecessor Servicer's expense.
Upon the giving of such notice, the successor Servicer shall be deemed to have
assumed all of the predecessor Servicer's interest therein and to have replaced
the predecessor Servicer as a party to the subservicing agreement to the same
extent as if the subservicing agreement had been assigned to the assuming party
except that the predecessor Servicer and the Servicer, if any, shall not thereby
be relieved of any liability or obligations accrued up to the date of the
replacement of the Servicer under the subservicing agreement and the Servicer,
if any, shall not be relieved of any liability or obligation to the predecessor
Servicer that survives the assignment or termination of the subservicing
agreement. The successor Servicer shall notify each Rating Agency and the
Insurer (so long as the Insurance Agreement has not terminated) if any
subservicing agreement is assumed by such successor Servicer. The predecessor
Servicer shall, upon request of the Indenture Trustee or any successor Servicer,
but at the expense of the predecessor Servicer, deliver to the assuming party
all documents and records relating to the subservicing agreement and the
Receivables then being serviced and an accounting of amounts collected and held
by it and otherwise use its reasonable best efforts to effect the orderly and
efficient transfer of the subservicing agreement to the assuming party.
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ARTICLE IX
COLLECTIONS; DISTRIBUTIONS TO NOTEHOLDERS AND CERTIFICATEHOLDERS
SECTION 9.01. LOCK-BOX ACCOUNT.
(a) No later than twenty (20) Business Days after the Closing Date,
BVAC, as initial Servicer, shall establish the Lock-Box Account as an Eligible
Account with the Lock-Box Bank, all in accordance with the terms of the Lock-Box
Agreement; provided that the Servicer, with the prior written consent of the
Insurer (so long as it is the Controlling Party), may from time to time (a)
establish additional or substitute Lock-Box Accounts, each of which shall be an
Eligible Account, and (b) close or terminate the use of such account or any
subsequently established accounts, each of which accounts, at such time, shall
no longer be deemed to be a Lock-Box Account; provided, further, that pursuant
to the Lock-Box Agreement, the Lock-Box Processor and no other person, save the
Indenture Trustee or the Servicer, shall have authority to direct disposition of
funds related to the Receivables on deposit in the Lock-Box Account consistent
with the provisions of this Agreement and the Lock-Box Agreement. The Indenture
Trustee shall have no liability or responsibility with respect to the Lock-Box
Processor's or the Servicer's directions or activities as set forth in the
preceding sentence. The Lock-Box Account shall be established pursuant to and
maintained in accordance with the Lock-Box Agreement and shall at all times be
an Eligible Account. In conjunction with the establishment of the Lock-Box
Account, BVAC, as initial Servicer, shall establish and maintain the Lock-Box at
a United States Post Office Branch. Notwithstanding the Lock-Box Agreement or
any of the provisions of this Agreement relating to the Lock-Box and the
Lock-Box Agreement, the Servicer shall remain obligated and liable to the
Indenture Trustee and the Noteholders for servicing and administering the
Receivables and the other Trust Property in accordance with provisions of this
Agreement without diminution of such obligation or liability by virtue thereof.
(b) In the event the Servicer shall for any reason no longer be acting
as such, the Lock-Box Agreement shall terminate in accordance with its terms and
funds on deposit in the Lock-Box Account shall be distributed by the Lock-Box
Bank, as agent for the beneficial owners of funds in the Lock-Box Account at
such time (including the Issuer), and the Lock-Box Bank shall deposit any such
funds relating to the Receivables to such other account as shall be identified
by the successor Servicer for deposit therein; provided, however, that the
outgoing Servicer shall not thereby be relieved of any liability or obligations
on the part of the outgoing Servicer to the Lock-Box Bank under such Lock-Box
Agreement. The outgoing Servicer shall, upon request of the Indenture Trustee,
but at the expense of the outgoing Servicer, deliver to the successor Servicer
all documents and records relating to the Lock-Box Agreement and an accounting
of amounts collected and held in the Lock-Box Account or held by the Lock-Box
Processor in respect of the Receivables and otherwise use its best efforts to
effect the orderly and efficient transfer of any Lock-Box Agreement to the
successor Servicer. In the event that the Lock-Box Account fails at any time to
qualify as an Eligible Account, the Servicer, at its expense, shall cause the
Lock-Box Bank to deliver, at the direction of the Controlling Party to the
Indenture Trustee or a successor Lock-Box Bank, all documents and records
relating to the Receivables and all amounts held (or thereafter received) on
deposit in the Lock Box Account or held by the Lock-Box Processor in respect of
the Receivables (together with an accounting of such amounts) and shall
otherwise use its best efforts to effect the orderly and efficient transfer of
the Lock-Box arrangements, and the Servicer shall promptly notify the Obligors
to make payments to any new Lock-Box.
(c) Upon establishment of the Lock-Box Account in accordance with
Section 9.01(a) hereof, the Servicer shall use reasonable efforts to cause the
Lock-Box Processor to transfer any payments in respect of the Receivables from
or on behalf of Obligors received in the Lock-Box to the Lock-Box Account on the
Business Day on which such payments are received, pursuant to the Lock-Box
Agreement. Within two Business Days of receipt of such funds into the Lock-Box
Account, the Servicer shall cause the Lock-Box Bank to transfer available funds
related to the Receivables from the Lock-Box Account to the Collection Account,
and if such funds are not available funds, as soon thereafter as they clear
(i.e., become available for withdrawal from the Lock-Box Account). In addition,
the Servicer shall remit all payments by or on behalf of the Obligors received
by the Servicer with respect to the Receivables (other than Purchased
Receivables), and all Liquidation Proceeds, insurance proceeds and other
collections from whatever source, no later than the second Business Day
following receipt into the Lock-Box Account or the Collection Account, as
applicable.
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(d) Until such time as the Lock-Box Collection Percentage with
respect to any Determination Date equals or exceeds 85%, the Servicer (i) shall
on or prior to the Closing Date, obtain and maintain an employee dishonesty bond
in the amount of $3,000,000 covering each employee of the Servicer responsible
for opening, processing and depositing Scheduled Receivable Payments received
directly by the Servicer, and (ii) shall cause Deloitte & Touche LLP or another
firm of accountants acceptable to the Insurer, in its sole and absolute
discretion, to prepare a weekly reconciliation of Scheduled Receivable Payments
which have been received by the Servicer during the prior calendar week and
confirming that such payments have been deposited to the Lock-Box Account or the
Collection Account (the "Reconciliation Report"), which Reconciliation Report
shall be delivered to the Insurer (so long as the Insurance Agreement has not
terminated) and the Indenture Trustee on Tuesday of each week (or if such day is
not a Business Day, the next succeeding Business Day), with respect to
collections received during the immediately preceding calendar week. In
addition, following satisfaction of such Lock-Box Collection Percentage, upon
the request of the Insurer (so long as it is the Controlling Party), the
Servicer shall provide the Insurer and the Indenture Trustee with the
Reconciliation Report on a monthly or less frequent basis, as so requested. The
provisions of this Section 9.01(d) shall not apply to the Back-up Servicer or
the Standby Servicer.
SECTION 9.02. COLLECTION ACCOUNT.
(a) BVAC, as initial Servicer, shall establish the Collection Account as
a segregated non-interest bearing trust account in the name of the Trust for the
benefit of the Secured Parties with the Indenture Trustee (at the Indenture
Trustee Office) or another Eligible Bank. The Servicer shall direct the
Indenture Trustee to invest the amounts in the Collection Account in Eligible
Investments that mature not later than the Business Day prior to the next
succeeding Payment Date and to hold such Eligible Investments to maturity
(provided that, if the Standby Servicer is then acting as Servicer, such
direction shall be made by the Transferor). The Indenture Trustee (or its
custodian) shall at all times (i) maintain possession of any negotiable
instruments or securities evidencing Eligible Investments until the time of sale
or maturity and each certificated security or negotiable instrument evidencing
an Eligible Investment shall be endorsed in blank or to the Indenture Trustee
(or its custodian) or registered in the name of the Indenture Trustee and (ii)
cause any Eligible Investment represented by an uncertificated security to be
registered in the name of the Indenture Trustee (or its custodian).
(b) Funds on deposit in the Collection Account and the Payahead Account
shall each be invested by the Indenture Trustee (or any custodian with respect
to funds on deposit in any such account) in Eligible Investments selected in
writing by the Servicer (pursuant to standing instructions or otherwise)
(provided that, if the Standby Servicer is then acting as Servicer, such
selection shall be made by the Transferor), bearing interest or sold at a
discount, and maturing, unless payable on demand, (i) no later than the Business
Day immediately preceding the next Payment Date if a Person other than the
Indenture Trustee is the obligor thereon, and (ii) no later than the next
Payment Date, if the Indenture Trustee is the obligor thereon; provided,
however, it is understood and agreed that the Indenture Trustee shall not be
liable for any loss arising from such investment in Eligible Investments unless
the Eligible Investment was a direct obligation of the Indenture Trustee or
unless such loss was caused by the Indenture Trustee's negligence or willful
misconduct (it being understood and acknowledged that no loss on any such
Eligible Investment which was made in conformity with this Agreement and the
instructions of the Servicer, or Transferor, shall be considered "caused by the
Indenture Trustee's negligence or willful misconduct"). No investment may be
sold prior to its maturity. All such Eligible Investments shall be held by or on
behalf of the Indenture Trustee for the benefit of the Indenture Trustee on
behalf of the Noteholders, the Insurer and Certificateholders as their interests
may appear. Funds deposited in the Collection Account or the Payahead Account on
the day immediately preceding a Payment Date upon the maturity of any Eligible
Investments are not required to be invested overnight. On each Payment Date, all
interest income (net of investment losses and expenses) on funds on deposit in
the Collection Account and the Payahead Account, as of the end of the Collection
Period shall be included in Available Funds. For purposes of this paragraph, the
Indenture Trustee will take delivery of the Eligible Investments in accordance
with Schedule D.
(c) If (i) the Servicer shall have failed to give investment directions
for any funds on deposit in the Collection Account or the Payahead Account to
the Indenture Trustee by 2:00 p.m. Eastern Time (or such other time as may be
agreed by the Issuer and Indenture Trustee) on any Business Day; or (ii)
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an Event of Default shall have occurred and be continuing with respect to the
Notes but the Notes shall not have been declared due and payable, or, if such
Notes shall have been declared due and payable following an Indenture Event of
Default, amounts collected or receivable from the Pledged Assets are being
applied as if there had not been such a declaration; then the Indenture Trustee
shall, to the fullest extent practicable, invest and reinvest funds in the
Collection Account and the Payahead Account in one or more investments within
the categories of Eligible Investments as specified in an investment instruction
letter delivered by the Servicer (provided that, if the Standby Servicer is then
acting as Servicer, such direction shall be made by the Transferor).
(d) (1) The Trust shall possess all right, title and interest in all
funds from time to time on deposit in, and assets credited to, the Trust
Accounts and in all proceeds thereof and all such funds, assets, investments,
proceeds and income shall be part of the Trust Property. Except as otherwise
provided herein, the Trust Accounts shall be under the sole dominion and control
of the Indenture Trustee for the benefit of the Noteholders, to the extent
expressly set forth herein or in the other Basic Documents, the Insurer and the
Certificateholders as their interests may appear.
(2) With respect to any Eligible Investments held from time to time
in any Trust Account, the Indenture Trustee agrees that:
(A) any Eligible Investment that is held in deposit accounts
shall be, except as otherwise provided herein, subject to the
exclusive custody and control of the Indenture Trustee, and the
Indenture Trustee shall have sole signature authority with respect
thereto; and
(B) any other Eligible Investment shall be held, pending
maturity or disposition by the Indenture Trustee in accordance with
the terms of the definition of "Delivery".
(e) No Trust Account shall be maintained with an institution other than
the Indenture Trustee unless such institution agrees in writing to the
provisions of Section 9.02(d)(2) and Section 9.13 hereof as if such institution
were the Indenture Trustee, except that pursuant to the first sentence of
Section 9.13 of the Indenture, the Indenture Trustee shall continue to be the
"entitlement holder" of the related Trust Account.
In no event shall the Indenture Trustee be liable for the selection of
investments or for investment losses incurred thereon. The Indenture Trustee
shall have no liability in respect of losses incurred as a result of the
liquidation of any investment prior to its stated maturity or the failure of the
Servicer to provide timely written investment direction. Subject to the
provisions of 9.02 and the Indenture Trustee's standard of care set forth in
Section 6.01 of the Indenture, in no event shall the Indenture Trustee be liable
for special, indirect, or consequential loss or damage of any kind whatsoever
(including but not limited to lost profits), even if the Indenture Trustee has
been advised of the likelihood of such loss or damage and regardless of the form
of action.
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SECTION 9.03. COLLECTIONS.
(a) Upon establishment of the Lock-Box Account in accordance with
Section 9.01(a), the Servicer shall use reasonable efforts to cause the Lock-Box
Processor to transfer any payments in respect of the Receivables from or on
behalf of Obligors received in the Lock-Box to the Lock-Box Account on the
Business Day on which such payments are received, pursuant to the Lock-Box
Agreement. Within two Business Days of receipt of such funds into the Lock-Box
Account, the Servicer shall cause the Lock-Box Bank to transfer available funds
related to the Receivables from the Lock-Box Account to the Collection Account,
and if such funds are not available funds, as soon thereafter as they clear
(i.e., become available for withdrawal from the Lock-Box Account). In addition,
the Servicer shall remit all payments by or on behalf of the Obligors received
by the Servicer with respect to the Receivables (other than Purchased
Receivables), and all Liquidation Proceeds, insurance proceeds and other
collections from whatever source, no later than the second Business Day
following receipt into the Lock-Box Account or the Collection Account, as
applicable. On the Closing Date, the Servicer shall deposit in the Collection
Account the foregoing amounts received with respect to the Receivables during
the first Collection Period.
(b) The Indenture Trustee shall deposit in the Collection Account any
funds received from the Collateral Agent, from the Spread Account or in respect
of funds drawn under the Policy from the Insurer; provided that such funds may
only be applied to cover Deficiency Claim Amounts and Scheduled Payments (as
defined in the Policy) on the related Payment Date.
SECTION 9.04. ADDITIONAL DEPOSITS.
(a) Not later than the Determination Date, the Servicer or BVAC shall
remit to the Collection Account the aggregate Purchase Amount for such
Collection Period pursuant to Sections 7.02, 8.08 and 8.10 and (b) not later
than 11:00 a.m. (New York City time) on the related Payment Date, the Servicer
shall remit to the Collection Account the Redemption Price for Receivables on
such Payment Date pursuant to Section 16.02.
(b) Following the acceleration of the Notes pursuant to Section 5.02 of
the Indenture, any proceeds of the Pledged Assets shall be deposited in the
Collection Account to be distributed by the Indenture Trustee in accordance with
Section 5.02(c) of the Indenture.
(c) On or before each Payment Date, the Indenture Trustee shall transfer
to the Collection Account any amounts transferred to the Indenture Trustee by
the Collateral Agent from the Spread Account in accordance with the Spread
Account Agreement.
(d) On or before the Redemption Date, the Indenture Trustee shall
deposit in the Collection Account the Redemption Price paid by or on behalf of
the Issuer pursuant to Article XII of the Indenture.
SECTION 9.05. APPLICATION OF FUNDS.
(a) On each Determination Date, the Servicer shall determine the amount
of Available Funds and the amount of funds necessary to make the distributions
required pursuant to Section 9.05(a) of the Indenture on the next Payment Date.
The Servicer shall by a Servicer's Certificate on or before the Determination
Date notify the Owner Trustee, the Indenture Trustee and the Insurer of such
amounts by telecopy to the Corporate Trust Office, the Indenture Trustee Office
and the address of the Insurer set forth in Section 17.05 or to such numbers as
the Owner Trustee, Indenture Trustee or the Insurer may from time to time
provide, followed promptly by mailing such notice to the Owner Trustee, the
Indenture Trustee and the Insurer.
(b) For any Payment Date on which there will not be sufficient Available
Funds to make the distributions required pursuant to Sections 9.05(a)(i) through
(vi) of the Indenture, the Indenture Trustee shall deliver to the Collateral
Agent, the Insurer, the Fiscal Agent (as such term is defined in the Insurance
Agreement) and the Servicer, by hand delivery or facsimile transmission, a
written notice (a "Deficiency Notice") specifying the Deficiency Claim Amount
for such Payment Date. Any Deficiency Notice shall be delivered on the
Determination Date and in no event later than 10:00 a.m., Eastern time,
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on the fourth Business Day preceding such Payment Date. Such Deficiency Notice
shall direct the Collateral Agent to remit such Deficiency Claim Amount (to the
extent of the funds available to be distributed pursuant to the Spread Account
Agreement) to the Indenture Trustee for deposit of such amount in the Collection
Account. If such deficiency exceeds the Available Spread Amount, the Indenture
Trustee on the Determination Date shall submit a claim under the Policy to the
Insurer pursuant to Section 10.03 of the Indenture. All amounts paid under the
Policy shall be applied by the Indenture Trustee pursuant to Section 9.05 of the
Indenture.
(c) On each Payment Date, the Owner Trustee shall send to the
Certificateholder the Servicer's Certificate provided to the Owner Trustee by
the Servicer for such Payment Date.
SECTION 9.06. SPREAD ACCOUNT. The Transferor agrees, simultaneously with
the execution and delivery of this Agreement, to cause the Spread Account
Depositor to execute and deliver the Spread Account Agreement and, pursuant to
the terms thereof, to deposit the Spread Account Initial Deposit in the Spread
Account on the Closing Date. Although the Spread Account Depositor, as
Certificateholder, has pledged the Spread Account to the Collateral Agent and
the Insurer pursuant to the Spread Account Agreement, the Spread Account shall
not under any circumstances be deemed to be a part of or otherwise includible in
the Issuer or the Trust Property.
SECTION 9.07. ADVANCES. (a) As of the last day of the initial Collection
Period, the Servicer shall advance funds equal to the excess, if any, of Monthly
Interest due in respect of the initial Collection Period, over the Collected
Interest for such Collection Period; and (b) as of the last day of each
subsequent Collection Period, the Servicer shall advance funds in the amount of
the Interest Advance Amount (or such other amount as the Servicer shall
reasonably determine to cover an Interest Shortfall) with respect to each
Receivable that is delinquent for more than 30 days, in each such case, to the
extent that the Servicer, in its sole discretion, determines that the Advance
will be recoverable from payments by or on behalf of the Obligor, the Purchase
Amount, or Liquidation Proceeds. With respect to each Receivable, the Advance
paid pursuant to this Section 9.07 shall increase Outstanding Advances.
Outstanding Advances shall be reduced by subsequent payments by or on behalf of
the Obligor, collections of Liquidation Proceeds, or payments of the Purchase
Amount in accordance with the priorities set forth in Section 9.05 of the
Indenture. The Servicer shall remit any Advances with respect to a Collection
Period to the Collection Account by the related Determination Date.
If the Servicer shall determine that an Outstanding Advance with respect
to any Receivable shall not be recoverable, the Servicer shall be reimbursed
from any collections made on other Receivables in the Trust in accordance with
the priorities set forth in Section 9.05 of the Indenture, and Outstanding
Advances with respect to such Receivable shall be reduced accordingly.
No successor Servicer shall be obligated to make Advances under this
Agreement and shall not be liable for Advances incurred by the Servicer before
the commencement of performance by such successor Servicer.
SECTION 9.08. INTENTIONALLY BLANK.
SECTION 9.09. NO SEGREGATION OF MONEYS; NO INTEREST. Subject to Section
9.05, moneys received by the Owner Trustee hereunder need not be segregated in
any manner except to the extent required by law or this Agreement and may be
deposited under such general conditions as may be prescribed by law, and the
Owner Trustee shall not be liable for any interest thereon.
SECTION 9.10. ACCOUNTING AND REPORTS TO THE CERTIFICATEHOLDER, THE
INTERNAL REVENUE SERVICE AND OTHERS. The Owner Trustee shall deliver to the
Certificateholder, as may be required by the Code and applicable Treasury
Regulations, or as may be requested by such Certificateholder, such information,
reports or statements as may be necessary to enable the Certificateholder to
prepare its federal and state income tax returns. Consistent with the Trust's
characterization for tax purposes as a disregarded entity so long as the
Transferor or any other Person is the sole beneficial owner of the Trust, no
federal income tax return shall be filed on behalf of the Trust unless either
(i) the Owner Trustee shall receive an Opinion of Counsel that, based on a
change in applicable law occurring after the date hereof, or as a result of a
transfer by a selling Certificateholder permitted by Section 11.04, the Code
requires
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such a filing or (ii) the Internal Revenue Service shall determine that the
Trust is required to file such a return. In the event that there shall be two or
more beneficial owners of the Trust (including the treatment of any class of
Notes as a beneficial ownership in the Trust pursuant to a final determination
of the Internal Revenue Service or a court), the Owner Trustee shall inform the
Indenture Trustee in writing of such event, (x) the Administrator, on behalf of
the Trust shall prepare or shall cause to be prepared federal and, if
applicable, state or local partnership tax returns required to be filed by the
Trust (using the calendar year or its fiscal year, or such other taxable year as
may be required by the Code) and shall remit such returns to the Transferor for
signature (or if the Transferor no longer owns the Certificate, to the
Transferor to the extent its tax liability is affected thereby and otherwise to
the successor Certificateholder owning the largest percentage interest in the
Certificates) at least (5) days before such returns are due to be filed, and (y)
capital accounts shall be maintained for each beneficial owner in accordance
with the Treasury Regulations under Section 704(b) of the Code reflecting each
such beneficial owner's share of the income, gains, deductions, and losses of
the Trust and/or guaranteed payments made by the Trust and contributions to, and
distributions from, the Trust. The Transferor (or such successor
Certificateholder, as applicable) shall promptly sign such returns and deliver
such returns after signature to the Administrator, on behalf of the Trust and
such returns shall be filed by the Administrator, on behalf of the Trust with
the appropriate tax authorities. In the event that a "tax matters partner"
(within the meaning of Code Section 6231(a)(7)) is required to be appointed with
respect to the Trust, the Transferor is hereby designated as tax matters partner
or, if the Transferor is not the Certificateholder, the Transferor to the extent
its tax liability is affected thereby and otherwise the successor
Certificateholder owning the largest percentage interest in the Certificates,
shall be designated as tax matters partner. In no event shall the Owner Trustee,
the Administrator or the Transferor (or such designee Certificateholder, as
applicable) be liable for any liabilities, costs or expenses of the Trust or the
Noteholders arising out of the application of any tax law, including federal,
state, foreign or local income or excise taxes or any other tax imposed on or
measured by income (or any interest, penalty or addition with respect thereto or
arising from a failure to comply therewith) except for any such liability, cost
or expense attributable to any act or omission by the Owner Trustee, the
Administrator or the Transferor (or such designee Certificateholder as
applicable), as the case may be, in breach of its obligations under this
Agreement. Unless otherwise instructed by a majority in interest of the
Certificateholders, none of the Owner Trustee, the Administrator, or the
Transferor shall elect, or shall cause an election to be made on behalf of the
Trust, under (i) Section 1278 of the Code to accrue its market discount income
currently or (ii) Section 754 of the Code.
SECTION 9.11. PAYAHEAD ACCOUNT. The Servicer shall establish the
Payahead Account in the name of the Trust on behalf of the Obligors, the
Noteholders and the Insurer as their interests may appear. The Servicer shall
maintain the Payahead Account pursuant to Section 9.10 of the Indenture.
SECTION 9.12. CERTAIN REIMBURSEMENTS TO THE SERVICER. The Servicer will
be entitled to be reimbursed from amounts on deposit in the Collection Account
with respect to a Collection Period for amounts previously deposited in the
Collection Account but later determined by the Servicer to have resulted from
mistaken deposits or postings or checks returned for insufficient funds;
provided, however, that such reimbursement must be requested by the Servicer
within six months of the related mistaken deposit into the Collection Account,
otherwise such right to reimbursement shall be forfeited. The amount to be
reimbursed hereunder shall be paid to the Servicer on the related Payment Date
pursuant to Section 9.05(a) of the Indenture upon certification by the Servicer
of such amounts and the provision of such information to the Indenture Trustee
and the Insurer as may be necessary in the opinion of the Insurer to verify the
accuracy of such certification. In the event that the Insurer has not received
evidence satisfactory to it of the Servicer's entitlement to reimbursement
pursuant to this Section, the Insurer shall (unless an Insurer Default shall
have occurred and be continuing) give the Indenture Trustee notice to such
effect, following receipt of which the Indenture Trustee shall not make a
distribution to the Servicer in respect of such amount pursuant to Section
9.05(a) of the Indenture, or if the Servicer prior thereto has been reimbursed
pursuant to Section 9.05(a) of the Indenture, the Indenture Trustee shall
withhold such amounts from amounts otherwise distributable to the Servicer
pursuant to Section 9.05(a) of the Indenture on the next succeeding Payment
Date.
SECTION 9.13. SECURITIES ACCOUNTS.
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The Indenture Trustee agrees that any Trust Account held by it hereunder
shall be maintained a "securities account" as defined in the Uniform Commercial
Code as in effect in New York (the "New York UCC"), and that it shall be acting
as a "securities intermediary" for the Indenture Trustee itself as the
"entitlement holder" (as defined in Section 8-102(a)(7) of the New York UCC)
with respect to each such Trust Account. The parties hereto agree that each
Trust Account shall be governed by the laws of the State of New York, and
regardless of any provision in any other agreement, the "securities
intermediary's jurisdiction" (within the meaning of Section 8-110 of the New
York UCC) shall be the State of New York. The Indenture Trustee acknowledges and
agrees that (a) each item of property (whether investment property, financial
asset, security, instrument or cash) credited to the Accounts shall be treated
as a "financial asset" within the meaning of Section 8-102(a)(9) of the New York
UCC and (b) notwithstanding anything to the contrary, if at any time the
Indenture Trustee shall receive any order from the Indenture Trustee directing
transfer or redemption of any financial asset relating to the Trust Accounts,
the Indenture Trustee shall comply with such entitlement order without further
consent by the Transferor or any other person. In the event of any conflict of
any provision of this Section 9.13 with any other provision of this Agreement or
any other agreement or document, the provisions of this Section 9.13 shall
prevail.
ARTICLE X
VOTING RIGHTS AND OTHER ACTIONS
SECTION 10.01. PRIOR NOTICE WITH RESPECT TO CERTAIN MATTERS.
The Owner Trustee shall not take any of the actions set forth below
unless the Owner Trustee shall have notified the Certificateholder and the
Insurer (so long as the Insurance Agreement has not terminated) of the proposed
action and the Certificateholder, with the prior written consent of the Insurer
(so long as it is the Controlling Party), has approved such action in writing,
which approval has been received by the Owner Trustee by the 30th day after such
notice has been given:
(i) the election by the Trust to file an amendment to the
Certificate of Trust (unless such amendment is required to be filed under the
Delaware Statutory Trust Statute);
(ii) the amendment of the Indenture by a supplemental indenture in
circumstances where the consent of any Noteholder or the Insurer is required;
(iii) the amendment of the Indenture by a supplemental indenture in
circumstances where the consent of any Noteholder is not required and such
amendment materially adversely affects the interest of the Certificateholders;
(iv) except pursuant to Section 17.01 of this Agreement, the
amendment, change or modification of this Agreement;
(v) except as provided in Article XVI hereof, dissolve, terminate or
liquidate the Trust in whole or in part;
(vi) do any act which would make it impossible to carry on the
ordinary business of the Trust;
(vii) confess a judgment against the Trust;
(viii) possess Trust assets, or assign the Trust's right to
property, for other than a Trust purpose;
(ix) cause the Trust to lend any funds to any entity;
(x) change the Trust's purpose and powers from those set forth in
this Agreement; or
(xi) cause the Trust to incur, assume or guaranty any indebtedness
except as set forth in this Agreement.
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SECTION 10.02. ACTION WITH RESPECT TO CERTAIN MATTERS.
The Owner Trustee shall not have the power, except upon the written
direction of the Controlling Party, or after the Notes and Reimbursement
Obligations have been paid in full and the expiration of the Policy in
accordance with its terms and written notice thereof has been delivered by the
Indenture Trustee to the Owner Trustee, the Certificateholder (such directing
party, the "Instructing Party"), and in accordance with the Basic Documents, to
(a) remove the Standby Servicer, the Servicer, or the Back-up Servicer hereunder
or (b) except as expressly provided in the Basic Documents, sell the Receivables
after the termination of the Indenture. The Owner Trustee shall take the actions
referred to in the preceding sentence only upon written instructions signed by
the Instructing Party and the furnishing of indemnification satisfactory to the
Owner Trustee by the Certificateholder. Notwithstanding anything to the contrary
set forth in this Agreement, any instruction, direction or consent to be given
by the Controlling Party or Instructing Party under this Agreement or any other
Basic Document to the Owner Trustee shall include a certification by such
Controlling Party or Instructing Party that such Person is the Controlling Party
or Instructing Party in accordance with the provisions of the Basic Documents,
and the Owner Trustee shall have no liability to the extent it relies in good
faith thereon.
SECTION 10.03. RESERVED.
SECTION 10.04. RESTRICTIONS ON CERTIFICATEHOLDER'S POWER.
(a) The Certificateholder shall not direct the Owner Trustee to take or
refrain from taking any action if such action or inaction would be contrary to
any obligation of the Trust or the Owner Trustee under this Agreement or any of
the Basic Documents or would be contrary to Section 1.03 nor shall the Owner
Trustee follow any direction to the extent the Owner Trustee has actual
knowledge that such direction is in violation hereof.
(b) No Certificateholder shall have any right by virtue or by availing
itself of any provisions of this Agreement to institute any suit, action, or
proceeding in equity or at law upon or under or with respect to this Agreement
or any Basic Document, unless the Certificateholder is the Instructing Party
pursuant to Section 10.02 and unless the Certificateholder previously shall have
given to the Owner Trustee a written notice of default and of the continuance
thereof, as provided in this Agreement, and also unless the Certificateholder
shall have made written request upon the Owner Trustee to institute such action,
suit or proceeding in its own name as Owner Trustee under this Agreement and
shall have offered to the Owner Trustee such reasonable indemnity as it may
require against the costs, expenses and liabilities to be incurred therein or
thereby, and the Owner Trustee, for 30 days after its receipt of such notice,
request, and offer of indemnity, shall have neglected or refused to institute
any such action, suit, or proceeding, and during such 30-day period no request
or waiver inconsistent with such written request has been given to the Owner
Trustee pursuant to and in compliance with this Section or Section 10.02. For
the protection and enforcement of the provisions of this Section, the Owner
Trustee shall be entitled to such relief as can be given either at law or in
equity.
SECTION 10.05. CONTROL.
No Certificateholder shall have any right to vote or in any manner
otherwise control the operation and management of the Trust except as expressly
provided in this Agreement.
SECTION 10.06. RIGHTS OF INSURER. Notwithstanding anything to the
contrary in the Basic Documents, without the prior written consent of the
Insurer (so long as an Insurer Default shall not have occurred and be continuing
and the Insurance Agreement has not terminated), the Owner Trustee shall not (i)
remove the Servicer, the Standby Servicer or the Back-up Servicer, (ii) initiate
any claim, suit or proceeding by the Trust or compromise any claim, suit or
proceeding brought by or against the Trust, other than with respect to the
enforcement of any Receivable or any rights of the Trust thereunder, (iii)
authorize the merger or consolidation of the Trust with or into any other
statutory trust or other entity (other than in accordance with Section 3.10 of
the Indenture) or (iv) amend the Certificate of Trust (except as may be required
by the Delaware Statutory Trust Statute).
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SECTION 10.07. REGISTRATION OF TRANSFER AND EXCHANGE OF THE CERTIFICATE.
Upon the formation of the Trust by the contribution by the Transferor pursuant
to Article III and until the issuance of the Certificate to the initial
Certificateholder, the Transferor shall be the sole beneficiary of the Trust.
ARTICLE XI
THE CERTIFICATE
SECTION 11.01. INITIAL OWNERSHIP. Upon the formation of the Trust by the
contribution by the Transferor pursuant to Article III and until the issuance of
the Certificate to the initial Certificateholder, the Transferor shall be the
sole beneficiary of the Trust.
SECTION 11.02. THE CERTIFICATE. The Certificate shall be issued in the
form of one or more certificates and shall initially be issued to the
Transferor. The Certificate shall be executed on behalf of the Trust by manual
or facsimile signature of a Responsible Officer of the Owner Trustee. A
Certificate bearing the manual or facsimile signatures of individuals who were,
at the time when such signatures shall have been affixed, authorized to sign on
behalf of the Trust, shall be a valid and binding obligation of the Trust,
notwithstanding that such individuals or any of them shall have ceased to be so
authorized prior to the authentication and delivery of such Certificate or did
not hold such offices at the date of such Certificate.
SECTION 11.03. AUTHENTICATION OF CERTIFICATE. The Owner Trustee shall
cause one Certificate to be executed on behalf of the Trust, authenticated, and
delivered to or upon the written order of the Transferor, signed by its chairman
of the board, its president, or any vice president, without further corporate
action by the Transferor, in authorized denominations, pursuant to this
Agreement. No Certificate shall entitle its holder to any benefit under this
Agreement, or shall be valid for any purpose, unless there shall appear on such
Certificate a certificate of authentication, substantially as set forth in the
form of Certificate attached as Exhibit B to this Agreement, executed by a
Responsible Officer of the Owner Trustee by manual signature; such
authentication shall constitute conclusive evidence that such Certificate shall
have been duly authenticated and delivered hereunder. Each Certificate shall be
dated the date of their authentication.
SECTION 11.04. REGISTRATION OF TRANSFER AND EXCHANGE OF CERTIFICATE.
(a) The Owner Trustee is hereby directed by the Transferor to issue on
behalf of the Trust to Bay View 2002-LJ-1 Funding Trust, a Certificate, duly
executed and delivered in exchange therefor, evidencing ownership of 100% of the
beneficial ownership in the assets of the Trust.
(b) Neither the registered nor the beneficial interest in any
Certificate may be transferred, assigned, hypothecated or pledged (other than in
accordance with the Spread Account Depositor Trust Agreement) in any manner by
any direct or indirect owner thereof (including any transferee thereof
subsequent to the date hereof) without the prior written notice by such owner to
each of the Insurer and the Owner Trustee. Any purported transfer, assignment,
hypothecation or pledge in any manner of any such registered or beneficial
interest in any Certificate in the Trust in violation of this Section 11.04(b)
shall be null and void and shall not cause any rights to inure to the benefit of
the purported transferee.
(c)(i) The Owner Trustee shall keep or cause to be kept, at the
Corporate Trust Office, a Certificate Register in which, subject to such
reasonable regulations as it may prescribe, the Owner Trustee shall provide for
the registration of Certificates and of transfers and exchanges of Certificates
subject to the restrictions provided herein.
(ii) The Certificate Registrar shall provide the Indenture
Trustee and the Insurer with the name and address of the
Certificateholder on the Closing Date, to the extent such information
has been provided to the Certificate Registrar and in the form provided
to the Certificate Registrar on such date. Upon any transfers of the
Certificate, the Certificate Registrar shall notify the Indenture
Trustee and the Insurer of the name and address of the transferee in
writing, by facsimile, on the day of such transfer, or promptly
thereafter.
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(d) Upon surrender for registration of transfer of any Certificate at
the Corporate Trust Office, the Owner Trustee shall execute, authenticate, and
deliver, in the name of the designated transferee or transferees, one or more
new Certificates in authorized denominations of a like aggregate amount dated
the date of authentication by the Owner Trustee, provided, however, that
registration of transfer of the Certificate may not be effected unless (A) the
Owner Trustee receives an Opinion of Counsel, satisfactory to it, to the effect
that (i) such transfer may be made in reliance upon an exemption from the
registration requirements of the Securities Act of 1933, as amended, and (ii)
such transfer will not adversely affect the tax treatment of the Trust or the
Notes; (B) the Insurer has consented to such transfer and (C) the Rating Agency
Condition shall have been satisfied with respect to such transfer.
(e) Every Certificate presented or surrendered for registration of
transfer or exchange shall be accompanied by a written instrument of transfer in
form satisfactory to the Owner Trustee duly executed by the Holder or his
attorney duly authorized in writing. Each Certificate surrendered for
registration of transfer and exchange shall be canceled and subsequently
destroyed by the Owner Trustee.
(f) No service charge shall be made for any registration of transfer or
exchange of a Certificate, but the Owner Trustee may require payment of a sum
sufficient to cover any tax or governmental charge that may be imposed in
connection with any transfer or exchange of a Certificate.
SECTION 11.05. MUTILATED, DESTROYED, LOST, OR STOLEN CERTIFICATES. If
(a) any mutilated Certificate shall be surrendered to the Owner Trustee, or if
the Owner Trustee shall receive evidence to its satisfaction of the destruction,
loss, or theft of any Certificate and (b) there shall be delivered to the Owner
Trustee such security or indemnity as may be required by it to save it harmless,
then in the absence of notice that such Certificate shall have been acquired by
a bona fide purchaser, the Owner Trustee on behalf of the Trust shall execute
and the Owner Trustee shall authenticate and deliver, in exchange for or in lieu
of any such mutilated, destroyed, lost, or stolen Certificate, a new Certificate
of like tenor and denomination. In connection with the issuance of any new
Certificate under this Section 11.05, the Owner Trustee may require the payment
of a sum sufficient to cover any tax or other governmental charge that may be
imposed in connection therewith. Any duplicate Certificate issued pursuant to
this Section 11.05 shall constitute conclusive evidence of ownership in the
Trust, as if originally issued, whether or not the lost, stolen, or destroyed
Certificate shall be found at any time.
SECTION 11.06. PERSONS DEEMED CERTIFICATEHOLDER. Every Person by virtue
of becoming a Certificateholder in accordance with this Agreement shall be
deemed to be bound by the terms of this Agreement. Prior to due presentation of
a Certificate for registration of transfer, the Owner Trustee, the Certificate
Registrar, the Insurer and any agent of the Owner Trustee, the Insurer and the
Certificate Registrar, may treat the Person in whose name any Certificate shall
be registered in the Certificate Register as the owner of such Certificate for
the purpose of receiving distributions pursuant to this Agreement and the Spread
Account Agreement and for all other purposes whatsoever, and none of the Owner
Trustee, the Insurer or the Certificate Registrar nor any agent of the Owner
Trustee, the Insurer or the Certificate Registrar shall be bound by any notice
to the contrary.
SECTION 11.07. COVENANTS OF THE CERTIFICATEHOLDER. The Certificateholder
by becoming a beneficial owner of a Certificate or by its acceptance of a
Certificate agrees:
(a) to be bound by the terms and conditions of the Certificates of which
such Certificateholder is the beneficial owner and of this Agreement and the
other Basic Documents, including any supplements or amendments hereto and
thereto and to perform the obligations of a Certificateholder as set forth
therein or herein, in all respects as if it were a signatory hereto. This
undertaking is made for the benefit of the Trust, the Owner Trustee, the
Insurer, the Indenture Trustee, the Collateral Agent, the Transferor, the
Noteholders and any other Certificateholder, present and future;
(b) to the appointment of the Owner Trustee as such Certificateholder's
agent and attorney-in-fact to sign any federal income tax information return
filed on behalf of the Trust and, if requested by the Trust, to sign such
federal income tax information return in its capacity as holder of an interest
in the Trust;
44
(c) not to take any position in such Certificateholder's tax returns
inconsistent with those taken in any tax returns filed by the Trust;
(d) if such Certificateholder is other than an individual or other
entity holding its Certificate through a broker who reports securities sales on
Form 1099-B, to notify the Owner Trustee in writing of any transfer by it of a
Certificate in a taxable sale or exchange, within 30 days of the date of the
transfer; and
(e) until one year and one day after the completion of the events
specified in Section 16.01(a), not, for any reason, to institute proceedings for
the Trust or the Transferor to be adjudicated a bankrupt or insolvent, or
consent to the institution of bankruptcy or insolvency proceedings against the
Trust or the Transferor, or file a petition seeking or consenting to
reorganization or relief under any applicable federal or state law relating to
bankruptcy, or consent to the appointment of a receiver, liquidator, assignee,
trustee, sequestrator (or other similar official) of the Trust or the Transferor
or a substantial part of its property, or cause or permit the Trust or the
Transferor to make any assignment for the benefit of its creditors or to admit
in writing its inability to pay its debts generally as they become due, or
declare or effect a moratorium on its debt or take any action in furtherance of
any such action.
ARTICLE XII
THE TRANSFEROR
SECTION 12.01. REPRESENTATIONS AND UNDERTAKINGS OF TRANSFEROR.
(a) The Transferor makes the following representations on which the
Trust relies in accepting the Receivables in trust and executing and
authenticating the Certificate and undertaking its obligations under the
Indenture and on which the Insurer will rely in issuing the Policy. The
Transferor agrees that the representations shall also be for the benefit of the
Secured Parties. The representations speak as of the execution and delivery of
this Agreement and shall survive the sale of the Receivables to the Trust and
the subsequent pledge of the Receivables to the Indenture Trustee.
(i) Organization and Good Standing. The Transferor is duly organized
and validly existing as a corporation in good standing under the laws of
the State of Delaware, with the corporate power and authority to own its
properties and to conduct its business as such properties are currently
owned and such business is presently conducted, and had at all relevant
times, and has, the corporate power, authority and legal right to
acquire and own the Receivables and the other Transferred Property
transferred to it under the Purchase Agreement and to convey the
Receivables and the other Trust Property to the Trust pursuant to this
Agreement, and to perform its other obligations under this Agreement and
any other Basic Documents to which it is a party. The Transferor is, and
for the preceding one year has been, organized exclusively under the
laws of the State of Delaware.
(ii) Due Qualification. The Transferor is duly qualified to do
business as a foreign corporation in good standing, and has obtained all
necessary licenses and approvals, in all jurisdictions in which the
ownership or lease of its property or the conduct of its business
(including, without limitation, the purchase of the Receivables from
BVAC under the Purchase Agreement, the conveyance of the Receivables by
the Transferor pursuant to this Agreement, and the performance of its
other obligations under this Agreement and the other Basic Documents to
which it is a party) shall require such qualifications, licenses and/or
approvals, other than where the failure to obtain such license or
approval would not have a material adverse effect on the ability of the
Transferor to perform its obligations under this Agreement or any other
Basic Document to which it is a party, on any Receivable or on the
interest therein of the Issuer, the Noteholders or the Insurer.
(iii) Power and Authority. The Transferor has the power and
authority to execute and deliver this Agreement and the other Basic
Documents to which it is a party and to carry out their respective terms
and the execution, delivery and performance of this Agreement and the
other Basic Documents to which it is a party have been duly authorized
by the Transferor by all necessary corporate action.
45
(iv) Binding Obligation. Each of this Agreement and each other Basic
Document to which the Transferor is a party shall constitute a legal,
valid and binding obligation of the Transferor enforceable in accordance
with its terms, except only as such enforcement may be limited by
bankruptcy, insolvency or similar laws affecting the enforcement of
creditors' rights generally.
(v) No Violation. The execution, delivery and performance by the
Transferor of this Agreement and the other Basic Documents to which it
is a party and the consummation of the transactions contemplated hereby
and thereby and the fulfillment of the terms hereof and thereof do not
conflict with, result in a breach of any of the terms and provisions of,
nor constitute (with or without notice or lapse of time) a default
under, the certificate of incorporation or by-laws of the Transferor, or
any indenture, agreement, mortgage, deed of trust, or other instrument
to which the Transferor is a party or by which it is bound or to which
any of its properties are subject; nor result in the creation or
imposition of any Lien upon any of its properties pursuant to the terms
of any indenture, agreement, mortgage, deed of trust, or other
instrument (other than the Basic Documents); nor violate any law, order,
rule or regulation applicable to the Transferor of any court or of any
federal or state regulatory body, administrative agency or other
governmental instrumentality having jurisdiction over the Transferor or
its properties.
(vi) No Proceedings. There are no proceedings or investigations
pending, or to the Transferor's best knowledge, threatened, before any
court, regulatory body, administrative agency or other governmental
instrumentality having jurisdiction over the Transferor or its
properties: (A) asserting the invalidity of this Agreement, the Notes,
the Certificate, or any other Basic Document; (B) seeking to prevent the
issuance of the Notes or the consummation of any of the transactions
contemplated by this Agreement or any other Basic Document to which it
is a party; (C) seeking any determination or ruling that might
materially and adversely affect the performance by the Transferor of its
obligations under, or the validity or enforceability of, the Notes or
any other Basic Document to which it is a party; or (D) relating to the
Transferor and which might adversely affect the federal or state income,
excise, franchise or similar tax attributes of the Notes.
(vii) No Consents. No consent, approval, authorization or order of
or declaration or filing with any governmental authority is required to
be obtained by the Transferor for the issuance or sale of the Notes or
the consummation of the other transactions contemplated by this
Agreement or any other Basic Document to which it is a party, except
such as have been duly made or obtained or where the failure to obtain
such consent, approval, authorization, order or declaration, or to make
such filing, would not have a material adverse effect on the ability of
the Transferor to perform its obligations under this Agreement or any
other Basic Document to which it is a party or on any Receivable or the
interest therein of the Issuer, the Noteholders or the Insurer.
(viii) Valid Assignment. Each Receivable has been validly assigned
by the Transferor to the Issuer on the Closing Date pursuant to this
Agreement and no Receivable has been sold, transferred, assigned or
pledged by the Transferor to any Person other than the Issuer.
(ix) The Transferor's exact legal name is and for the preceding four
months has been Bay View Securitization Corporation.
(x) The Transferor's chief executive office is located in San Mateo,
California.
(b) The Transferor further covenants that, prior to termination of the
Trust:
(i) It will not engage at any time in any business or business
activity other than such activities expressly set forth in its
Certificate of Incorporation delivered to the Insurer on or prior to the
Closing Date, and will not amend its Certificate of Incorporation
without the prior written consent of the Insurer (so long as the
Insurance Agreement has not terminated).
46
(ii) It will not, without the consent of the Insurer (so long as the
Insurance Agreement has not terminated), sell, assign, pledge or
otherwise transfer, in whole, or in part or in any series of related or
unrelated transactions any of its right, title or interest in or to the
Spread Account Depositor Certificate, except pursuant to the Certificate
Pledge Agreement.
(iii) It will not:
(A) Fail to do all things necessary to maintain its corporate
existence separate and apart from the Bank, BVAC, BVCC, the Trust
and any other Person, including, without limitation, holding regular
meetings of its stockholders and board of directors and maintaining
appropriate corporate books and records (including a current minute
book);
(B) Suffer any limitation on the authority of its own
directors and officers to conduct its business and affairs in
accordance with their independent business judgment or authorize or
suffer any Person other than its own officers and directors to
customarily delegated to others under powers of attorney) for which
a corporation's own officers and directors would customarily be
responsible;
(C) Fail to (i) maintain or cause to be maintained by an agent
of the Transferor under the Transferor's control physical possession
of all its books and records, (ii) maintain capitalization adequate
for the conduct of its business, (iii) account for and manage all
its liabilities separately from those of any other Person, including
payment by it of all payroll, administrative expenses and taxes, if
any, from its own assets, (iv) segregate and identify separately all
of its assets from those of any other Person, (v) to the extent any
such payments are made, pay its employees, officers and agents for
services performed for the Transferor or (vi) maintain a separate
office address with a separate telephone number from those of the
Bank, BVAC, BVCC, the Trust or any other affiliate thereof; or
(D) Except as may be provided in this Agreement, or a similar
agreement relating to other securitizations in which the Transferor
has similar rights and/or obligations, commingle its funds with
those of BVAC or any affiliate thereof or use its funds for other
than the Transferor's uses.
(c) It shall not create, incur or suffer to exist any indebtedness or
engage in any business, except, in each case, as permitted by its articles of
incorporation, bylaws and the Basic Documents;
(d) It shall not, for any reason, institute proceedings for the Trust to
be adjudicated bankrupt or insolvent, or consent to or join in the institution
of bankruptcy or insolvency proceedings against the Trust, or file a petition
seeking or consenting to reorganization or relief under any applicable federal
or state law relating to the bankruptcy of the Trust, or consent to the
appointment of a receiver, liquidator, assignee, trustee, sequestrator (or other
similar official) of the Trust or a substantial part of the property of the
Trust or cause or permit the Trust to make any assignment for the benefit of
creditors, or admit in writing the inability of the Trust to pay its debts
generally as they become due, or declare or effect a moratorium on the debt of
the Trust or take any action in furtherance of any such action;
(e) It shall obtain from each counterparty to each Basic Document to
which it or the Trust is a party and each other agreement entered into on or
after the date hereof to which it or the Trust is a party, an agreement by each
such counterparty that prior to one year and one day after the completion of the
event specified in Section 16.01(a) such counterparty shall not institute
against, or join any other Person in instituting against, it or the Trust, any
bankruptcy, reorganization, arrangement, insolvency or liquidation proceedings
or other similar proceedings under the laws of the United States or any state of
the United States; and
(f) It shall not, for any reason, withdraw or attempt to withdraw from
this Agreement or any other Basic Document to which it is a party, dissolve,
institute proceedings for it to be adjudicated a bankrupt or insolvent, or
consent to the institution of bankruptcy or insolvency proceedings against it,
or
47
file a petition seeking or consenting to reorganization or relief under any
applicable federal or state law relating to bankruptcy, or consent to the
appointment of a receiver, liquidator, assignee, trustee, sequestrator (or other
similar official) of it or a substantial part of its property, or make any
assignment for the benefit of creditors, or admit in writing its inability to
pay its debts generally as they become due, or declare or effect a moratorium on
its debt or take any action in furtherance of any such action.
SECTION 12.02. LIABILITY OF TRANSFEROR; INDEMNITIES. The Transferor
shall be liable in accordance herewith only to the extent of the obligations
specifically undertaken by the Transferor under this Agreement.
(i) The Transferor shall indemnify, defend, and hold harmless the
Owner Trustee, the Indenture Trustee, the Insurer, their respective
officers, directors, employees and agents, the Trust and the Noteholders
from and against any taxes that may at any time be asserted against such
parties with respect to, and as of the date of, the sale of the
Receivables to the Trust or the issuance and original sale of the
Certificate and the Notes, including any sales, gross receipts, general
corporation, tangible or intangible personal property, privilege, or
license taxes (but, in the case of the Trust, not including any taxes
asserted with respect to ownership of the Receivables or federal or
other income taxes arising out of distributions on the Certificate or
the Notes) and costs and expenses in defending against the same.
(ii) The Transferor shall indemnify, defend, and hold harmless
the Owner Trustee, the Indenture Trustee, the Insurer, the Servicer, the
Back-up Servicer, the Standby Servicer, their officers, directors,
employees and agents and the Trust from and against any loss, liability,
or expense incurred by reason of (a) the Transferor's willful
misfeasance, bad faith, or gross negligence in the performance of its
duties under this Agreement, or by reason of reckless disregard of its
obligations and duties under this Agreement and (b) the Transferor's
violation of federal or State securities laws in connection with the
registration of the sale of the Certificates.
Indemnification under this Section 12.02 shall include, without
limitation, reasonable fees and expenses of counsel and expenses of litigation.
If the Transferor shall have made any indemnity payments to the Owner Trustee or
the Trust pursuant to this Section and the Owner Trustee or the Trust thereafter
shall collect any of such amounts from others, the Owner Trustee or the Trust,
as the case may be, shall repay such amounts to the Transferor, without
interest. This indemnification shall survive the termination of this Agreement
and the resignation or removal of the Owner Trustee or the Indenture Trustee.
Notwithstanding the foregoing, any amounts Transferor shall pay pursuant to this
Section 12.02 shall be paid solely from funds available for distribution to the
Certificateholder in accordance with the terms of the Basic Documents and shall
in any case be nonrecourse to the Transferor and to the Transferor's assets and,
to the extent funds are not so available to pay any amounts when due and owing,
the claims relating thereto shall not constitute a claim (as defined in Section
101 of Title 11 of the United States Bankruptcy Code) against the Transferor but
shall continue to accrue. Each party hereto agrees that the payment of any claim
of any such party pursuant to this Section 12.02 shall be subordinated to the
payment in full of all outstanding interest and principal due to the
Noteholders. The payment of any claim pursuant to this Section 12.02 shall in no
event be construed as a "fee" of the Indenture Trustee or the Owner Trustee as
such term is used in Section 9.05(a)(i) or (iii) of the Indenture.
SECTION 12.03. MERGER OR CONSOLIDATION OF, OR ASSUMPTION OF THE
OBLIGATIONS OF TRANSFEROR. Any Person (a) into which the Transferor may be
merged or consolidated, (b) which may result from any merger or consolidation to
which the Transferor shall be a party, or (c) which may succeed to all or
substantially all of the properties and assets of the Transferor's business,
which Person in any of the foregoing cases executes an agreement of assumption
to perform every obligation of the Transferor under this Agreement, shall be the
successor to the Transferor hereunder without the execution or filing of any
document or any further act by any of the parties to this Agreement; provided,
however, that (i) immediately after giving effect to such transaction, no
representation or warranty made pursuant to Section 7.01 shall have been
breached and no Event of Servicer Default, and no event that, after notice or
lapse of time, or both, would become an Event of Servicer Default shall have
happened and be continuing, (ii) the Transferor shall have delivered to the
Owner Trustee and the Indenture Trustee an Officers' Certificate and an Opinion
of Counsel each stating that such consolidation, merger, or succession and such
agreement of assumption comply with this Section 12.03 and that all conditions
48
precedent, if any, provided for in this Agreement relating to such transaction
have been complied with and (iii) the Transferor shall have delivered an Opinion
of Counsel to the Insurer, the Owner Trustee and the Indenture Trustee either
(A) stating that, in the opinion of such counsel, all financing statements and
continuation statements and amendments thereto have been executed or duly
authorized and filed that are necessary fully to preserve and protect the
interest of the Trust and the Indenture Trustee in the Receivables, and reciting
the details of such filings, or (B) stating that, in the opinion of such
counsel, no such action shall be necessary to preserve and protect such
interest. Notwithstanding the foregoing, the Transferor shall not engage in any
merger or consolidation with any Person, or a disposition of all or
substantially all of its assets without providing advance written notice thereof
to the Owner Trustee, the Indenture Trustee and the Rating Agencies and without
obtaining the prior written consent of the Insurer, so long as the Insurer is
the Controlling Party.
SECTION 12.04. LIMITATION ON LIABILITY OF TRANSFEROR AND OTHERS. The
Transferor and any director or officer or employee or agent of the Transferor
may rely in good faith on the advice of counsel or on any document of any kind,
prima facie properly executed and submitted by any Person respecting any matters
arising hereunder. The Transferor 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 12.05. TRANSFEROR MAY OWN NOTES. The Transferor and any Person
controlling, controlled by, or under common control with the Transferor may in
its individual or any other capacity become the owner or pledgee of Notes with
the same rights as it would have if it were not the Transferor or an affiliate
thereof, except as otherwise provided in the definition of "Noteholder," "Class
A Noteholder" and "Class I Noteholder." Certificates so owned by or pledged to
the Transferor or such controlling or commonly controlled Person shall have an
equal and proportionate benefit under the provisions of this Agreement, without
preference, priority, or distinction as among all of the Notes.
ARTICLE XIII
THE SERVICER; BACK-UP SERVICER; AND STANDBY SERVICER
SECTION 13.01. REPRESENTATIONS AND WARRANTIES.
(a) The Servicer. The Servicer makes the following representations and
warranties on which the Trust, the Owner Trustee and the Indenture Trustee rely
in accepting the Receivables in trust and in connection with the performance by
each of the Indenture Trustee and the Standby Servicer of its obligations
hereunder and the Insurer relies in issuing the Policy. The representations and
warranties speak as of the execution and delivery of this Agreement, on the
Closing Date, but shall survive each sale of the Receivables to the Trust and
the subsequent pledge thereof to the Indenture Trustee pursuant to the
Indenture:
(i) The Servicer is duly organized and validly existing in good
standing as a corporation under the laws of the State of Nevada with the
corporate power and authority to own its properties and to conduct its
business as such properties shall be currently owned and such business
is presently conducted, and had at all relevant times, and has, the
corporate power, authority and legal right to acquire, own, sell and
service the Receivables, and is duly qualified and has all necessary
licenses in all such jurisdictions as are required by it to conduct its
business (including the servicing of the Receivables as required by this
Agreement and the performance of its other obligations under this
Agreement) except when the failure to so qualify would not materially
and adequately affect the performance by the Servicer of its obligations
under, or the validity or enforceability of this Agreement or the Notes.
(ii) The Servicer has the power and authority to execute and deliver
this Agreement and to carry out the terms hereof. This Agreement and all
other instruments or documents to be delivered hereunder or pursuant
hereto, and the transactions contemplated hereby, have been duly
authorized by all necessary corporate proceedings of the Servicer. This
Agreement has been duly and validly executed and delivered by the
Servicer and, assuming due authorization, execution and delivery by each
other party hereto, this Agreement is a valid and legally binding
agreement of the Servicer enforceable in accordance with its terms,
subject to the effects of
49
bankruptcy, insolvency, reorganization, or other similar laws affecting
the enforcement of creditors' rights generally and to general principles
of equity.
(iii) The execution and delivery of this Agreement and performance
under this Agreement by the Servicer and the compliance by the Servicer
with all provisions of this Agreement do not conflict with or violate
any applicable law, regulation or order of any court or of any federal
or state regulatory body, administrative agency or other governmental
instrumentality and do not conflict with or result in a breach of or
(with or without notice or lapse of time) default under any of the terms
or provisions of any contract or agreement to which the Servicer is
subject or by which it or its property is bound, or result in the
creation or imposition of a Lien upon any of its properties pursuant to
the terms of any such contract or agreement, nor does such execution,
delivery or compliance violate the Certificate of Incorporation or
By-Laws of the Servicer except when the failure to so qualify would not
materially and adequately affect the performance by the Servicer of its
obligations under, or the validity or enforceability of this Agreement
or the Notes.
(iv) There are no proceedings or investigations pending or, to the
Servicer's knowledge, threatened against the Servicer before any court,
regulatory body, administrative agency or other tribunal or governmental
instrumentality having jurisdiction over the Servicer or its properties
(A) asserting the invalidity of this Agreement, the other Basic
Documents to which the Servicer is a party, the Notes or the
Certificate, (B) seeking to prevent the issuance of the Notes or the
Certificate or the consummation of any of the transactions contemplated
by this Agreement, the Notes or the Certificate, or (C) seeking any
determination or ruling that might materially and adversely affect the
performance by the Servicer of its obligations under, or the validity or
enforceability of, this Agreement, the Notes or the Certificate, or (D)
relating to the Servicer and which might adversely affect the federal or
state income, excise, franchise or similar tax attributes of the
Securities, or (E) that could have a material adverse effect on the
Receivables.
(v) No consent, approval, authorization or order of or declaration
or filing with any governmental authority is required for the issuance
or sale of the Notes or the consummation of the transactions
contemplated by this Agreement except such as have been duly made or
obtained.
(vi) The Servicer has filed on a timely basis all tax returns
required to be filed by it and paid all taxes to the extent that such
taxes have become due.
(vii) The Servicer hereby represents and warrants that the
Servicer's principal place of business and chief executive office is,
and for the four months preceding the date of this Agreement has been,
located at: 000 Xxxxxxx Xxxxx, Xxxxxx, Xxxxxxxxxx 00000.
(viii) The practices used or to be used by the Servicer to monitor
collections with respect to the Receivables and repossess and dispose of
the Financed Vehicles related to the Receivables will be, in all
material respects, legal, proper and in conformity with the requirements
of all applicable federal and state laws, rules and regulations, and
this Agreement. The Servicer is in possession of all state and local
licenses (including all debt collection licenses) required for it to
perform its services hereunder, and none of such licenses has been
suspended, revoked or terminated.
(ix) There are no existing injunctions, writs, restraining orders or
other similar orders which might adversely affect the performance by the
Servicer or its obligations under, or the validity and enforceability
of, this Agreement;
(x) The Servicer is in compliance with all requirements of federal
and state laws, rules, regulations and orders, except where the failure
so to comply would not have a material adverse effect on the Servicer,
its business or its properties, or the ability of the Servicer to
perform its obligations under this Agreement; and
50
The representations and warranties contained in this Section 13.01(a)
shall survive the execution and delivery of this Agreement, the transfer of the
Receivables on the Closing Date and the pledge of the Receivables to the
Indenture Trustee pursuant to the Indenture.
(b) The Back-up Servicer. The Back-up Servicer makes the following
representations and warranties on which the Trust, the Owner Trustee and the
Indenture Trustee rely in accepting the Receivables in trust and in connection
with the performance by the Standby Servicer of its obligations hereunder and
the Insurer relies in issuing the Policy. The representations and warranties
speak as of the execution and delivery of this Agreement, on the Closing Date,
and the subsequent pledge thereof to the Indenture Trustee pursuant to the
Indenture:
(i) Organization and Good Standing. The Back-up Servicer is duly
organized and is validly existing as a banking corporation in good
standing under the laws of the State of New York, with power and
authority and legal right to own its properties and to conduct its
business as such properties are currently owned and such business is
presently conducted, and has and had at all relevant times, full power,
authority, and legal right to acquire, own, sell, and service the
Receivables;
(ii) Due Qualification. The Back-up Servicer is duly qualified to
do business as a foreign corporation in good standing, and has obtained
all necessary licenses and approvals in all jurisdictions in which the
ownership or lease of property or the conduct of its business (including
the servicing of the Receivables as required by this Agreement and the
performance of its other obligations under this Agreement and the other
Basic Documents to which it is a party) requires such qualifications
except where such failure will not have a material adverse effect on the
Back-up Servicer, its business or its properties, or the ability of the
Back-up Servicer to perform its obligations under this Agreement or any
other Basic Document to which it is a party;
(iii) Power and Authority. The Back-up Servicer has the power and
authority to execute and deliver this Agreement and the other Basic
Documents to which it is a party and to carry out their respective
terms; and the execution, delivery, and performance of this Agreement
and the other Basic Documents to which it is a party have been duly
authorized by the Back-up Servicer by all necessary corporate action;
(iv) Binding Obligations. This Agreement and the other Basic
Documents to which it is a party constitute legal, valid, and binding
obligations of the Back-up Servicer enforceable in accordance with their
respective terms, subject to the effects of bankruptcy, insolvency,
reorganization, or other similar laws affecting the enforcement of
creditors' rights generally and to general principles of equity;
(v) No Violation. The execution, delivery and performance by the
Back-up Servicer of this Agreement and the other Basic Documents to
which the Back-up Servicer is a party, and the consummation of the
transactions contemplated by this Agreement and the other Basic
Documents to which it is a party and the fulfillment of the terms hereof
and thereof 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 documents of the Back-up Servicer.
The representations and warranties contained in this Section 13.01(b)
shall survive the execution and delivery of this Agreement, the transfer of the
Receivables on the Closing Date and the pledge of the Receivables to the
Indenture Trustee pursuant to the Indenture.
(c) The Standby Servicer. The Standby Servicer makes the following
representations and warranties on which the Trust, the Owner Trustee and the
Indenture Trustee rely in accepting the Receivables in trust and the Insurer
relies in issuing the Policy. The representations and warranties speak as of the
execution and delivery of this Agreement, on the Closing Date, and the
subsequent pledge thereof to the Indenture Trustee pursuant to the Indenture:
(i) Organization and Good Standing. The Standby Servicer is duly
organized and is validly existing as a corporation in good standing
under the laws of the State of Delaware, with
51
power and authority and legal right to own its properties and to conduct
its business as such properties are currently owned and such business is
presently conducted, and has and had at all relevant times, full power,
authority, and legal right to acquire, own, sell, and service the
Receivables;
(ii) Due Qualification. The Standby Servicer is duly qualified to
do business as a foreign corporation in good standing, and has obtained
all necessary licenses and approvals in all jurisdictions in which the
ownership or lease of property or the conduct of its business (including
the servicing of the Receivables as required by this Agreement and the
performance of its other obligations under this Agreement and the other
Basic Documents to which it is a party) requires such qualifications
except where such failure will not have a material adverse effect on the
Standby Servicer, its business or its properties, or the ability of the
Standby Servicer to perform its obligations under this Agreement or any
other Basic Document to which it is a party;
(iii) Power and Authority. The Standby Servicer has the power and
authority to execute and deliver this Agreement and the other Basic
Documents to which it is a party and to carry out their respective
terms; and the execution, delivery, and performance of this Agreement
and the other Basic Documents to which it is a party have been duly
authorized by the Standby Servicer by all necessary corporate action;
(iv) Binding Obligations. This Agreement and the other Basic
Documents to which it is a party constitute legal, valid, and binding
obligations of the Standby Servicer enforceable in accordance with their
respective terms, subject to the effects of bankruptcy, insolvency,
reorganization, or other similar laws affecting the enforcement of
creditors' rights generally and to general principles of equity;
(v) No Violation. The execution, delivery and performance by the
Standby Servicer of this Agreement and the other Basic Documents to
which the Standby Servicer is a party, and the consummation of the
transactions contemplated by this Agreement and the other Basic
Documents to which it is a party and the fulfillment of the terms hereof
and thereof 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 certificate of incorporation or bylaws of
the Standby Servicer, or any indenture, agreement, or other instrument
to which the Standby Servicer is a party or by which it may be bound;
nor result in the creation or imposition of any Lien upon any of its
properties pursuant to the terms of any such indenture, agreement, or
other instrument (other than this Agreement); nor, to the best of the
Standby Servicer's knowledge, violate any law applicable to the Standby
Servicer or any order, rule, or regulation applicable to the Standby
Servicer of any court or of any federal or state regulatory body,
administrative agency, or other governmental instrumentality having
jurisdiction over the Standby Servicer or its properties;
(vi) No Proceedings. There are no proceedings or investigations
pending, or, to the Standby Servicer's best knowledge, threatened,
before any court, regulatory body, administrative agency, or other
governmental instrumentality having jurisdiction over the Standby
Servicer or its properties: A) asserting the invalidity of this
Agreement, any of the Basic Documents, the Notes or the Certificate, B)
seeking to prevent the issuance of the Notes or the Certificate or the
consummation of any of the transactions contemplated by this Agreement
or any of the Basic Documents, C) seeking any determination or ruling
that might materially and adversely affect the performance by the
Standby Servicer of its obligations under, or the validity or
enforceability of, this Agreement, any of the Basic Documents to which
it is a party, the Notes or the Certificate, D) relating to the Standby
Servicer and which might adversely affect the federal income tax
attributes of the Notes or the Certificate or (E) that could have a
material adverse effect on the Receivables;
(vii) No Consents. No consent, license, approval, authorization or
order of, or registration declaration or filing with, any governmental
authority or other Person is required to be made in connection with the
issuance or sale of the Notes and the Certificate or the execution,
delivery or performance of the Basic Documents to which it is a party or
the consummation of the transactions contemplated thereby, except such
as have been duly made, effected or obtained;
52
(viii) Taxes. The Standby Servicer has filed on a timely basis all
tax returns required to be filed by it and paid all taxes, to the extent
that such taxes have become due;
(ix) Chief Executive Office. The principal place of business and
chief executive office of the Standby Servicer is, and for the four
months preceding the date of this Agreement has been, located at 0000
Xxxxxx Xxxx, Xx. Xxxxxx, Xxxxxxxx 00000;
(x) No Injunctions. There are no existing injunctions, writs,
restraining orders or other similar orders which might adversely affect
the performance by the Standby Servicer or its obligations under, or the
validity and enforceability of, this Agreement;
(xi) Compliance with Law. The Standby Servicer is in compliance
with all requirements of federal and state laws, rules, regulations and
orders, except where the failure so to comply would not have a material
adverse effect on the Standby Servicer, its business or its properties,
or the ability of the Standby Servicer to perform its obligations under
this Agreement; and
(xii) Practices. The practices used or to be used by the Standby
Servicer, to monitor collections with respect to the Receivables and
repossess and dispose of the Financed Vehicles related to the
Receivables will be, in all material respects, legal, proper and in
conformity with the requirements of all applicable federal and state
laws, rules and regulations, and this Agreement. The Standby Servicer is
in possession of all state and local licenses (including all debt
collection licenses) required for it to perform its services hereunder
(including as successor Servicer), and none of such licenses has been
suspended, revoked or terminated.
The representations and warranties contained in this Section 13.01(c)
shall survive the execution and delivery of this Agreement, the transfer of the
Receivables on the Closing Date and the pledge of the Receivables to the
Indenture Trustee pursuant to the Indenture.
SECTION 13.02. INDEMNITIES OF SERVICER, BACK-UP SERVICER, STANDBY
SERVICER AND BVAC.
(a) The Servicer shall be liable in accordance herewith only to the
extent of the obligations specifically undertaken by the Servicer under this
Agreement and no implied duties or obligations shall be read into this Agreement
against the Servicer.
(i) The Servicer shall defend, indemnify, and hold harmless the
Owner Trustee, the Indenture Trustee, the Collateral Agent, the Insurer,
the Standby Servicer, the Back-up Servicer, the Trust and their
officers, directors, employees and agents, the Trust, the
Certificateholder and the Noteholders from and against any and all
costs, expenses, losses, damages, claims, and liabilities, arising out
of or resulting from the use, ownership, or operation by the Servicer or
any affiliate thereof of a Financed Vehicle.
(ii) The Servicer shall indemnify, defend and hold harmless the
Owner Trustee, the Indenture Trustee, the Collateral Agent, the Insurer,
the Standby Servicer, the Back-up Servicer and the Trust from and
against any taxes that may at any time be asserted against such parties
with respect to the transactions contemplated herein, including, without
limitation, any sales, gross receipts, general corporation, tangible or
intangible personal property, privilege, or license taxes (but, in the
case of the Trust, not including any taxes asserted with respect to, and
as of the date of, the sale of the Receivables to the Trust or the
issuance and original sale of the Certificates, the Notes, or asserted
with respect to ownership of the Receivables, or federal or other income
taxes arising out of distributions on the Certificates or the Notes) and
costs and expenses in defending against the same.
(iii) The Servicer shall indemnify, defend, and hold harmless the
Owner Trustee, the Indenture Trustee, the Collateral Agent, the Insurer,
the Standby Servicer, the Back-up Servicer, the Trust, the
Certificateholder and the Noteholders from and against any and all
costs, expenses, losses, claims, damages, and liabilities to the extent
that such cost, expense, loss,
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claim, damage, or liability arose out of, or was imposed upon such
parties through, the negligence, willful misfeasance, or bad faith of
the Servicer in the performance of its duties under this Agreement, or
by reason of reckless disregard of its obligations and duties under this
Agreement; provided, however, that the Servicer shall not be liable to
the Owner Trustee or Indenture Trustee for any portion of any such
amount resulting from the willful misconduct, bad faith, or negligence
of the Owner Trustee or the Indenture Trustee, as applicable. This
indemnity shall survive the termination of this Agreement or the Trust
and the resignation or removal of the Owner Trustee.
(iv) The Servicer shall indemnify, defend, and hold harmless the
Owner Trustee, the Indenture Trustee, the Collateral Agent, the Insurer,
the Standby Servicer, their respective officers, directors, employees
and agents and the Trust from and against all costs, expenses, losses,
claims, damages, and liabilities arising out of or incurred in
connection with the acceptance or performance of the trusts and duties
herein contained, except to the extent that such cost, expense, loss,
claim, damage or liability: (a) shall be due to the willful misfeasance,
bad faith, or negligence of such indemnified party; (b) relates to any
tax other than the taxes with respect to which either the Transferor or
Servicer shall be required to indemnify the Owner Trustee or the
Indenture Trustee; (c) shall arise from the breach of any of
representations or warranties of such indemnified party; (d) shall be
one as to which the Transferor is required to indemnify the Owner
Trustee or the Indenture Trustee under the Agreement and the Transferor
has paid such indemnity claim; or (e) shall arise out of or be incurred
in connection with the acceptance or performance by the Indenture
Trustee of the duties of successor Servicer.
Notwithstanding the foregoing, clauses (ii) and (iv) shall not apply to
the Standby Servicer in the event the Standby Servicer becomes the successor
Servicer.
Indemnification by each of the Servicer, the Standby Servicer or the
Back-up Servicer (or any other successor Servicer), as Servicer, shall be made
only with respect to the period that it acts as Servicer and its acts and
omissions while acting as such. Indemnification under this Section by the
Servicer, with respect to the period such Person was (or was deemed to be) the
Servicer, shall survive the termination of such Person as Servicer or a
resignation by such Person as Servicer as well as the termination of this
Agreement and shall include reasonable fees and expenses of counsel and expenses
of litigation. If the Servicer shall have made any indemnity payments pursuant
to this Section and the recipient thereafter collects any of such amounts from
others, the recipient shall promptly repay such amounts to the Servicer, without
interest.
(b) The Back-up Servicer and the Standby Servicer shall each be liable
in accordance herewith only to the extent of the obligations specifically
undertaken by the Back-up Servicer in its capacity as Back-up Servicer under
this Agreement and the Standby Servicer in its capacity as Standby Servicer
under this Agreement, and no implied duties or obligations shall be read into
this Agreement against the Back-up Servicer or the Standby Servicer. The Back-up
Servicer may fulfill its obligations hereunder as Back-up Servicer through its
agents, nominees and custodians and shall not be liable for the acts or
omissions of such agents, nominees and custodians to the extent they are
appointed with due care by the Back-up Servicer. Neither the Back-up Servicer
nor its employees, directors, agents or officers shall be liable for any action
taken in good faith pursuant to this Agreement or for errors of judgment not
involving willful misconduct or negligence. The Standby Servicer shall
indemnify, defend, and hold harmless the Trust, the Indenture Trustee, the
Insurer, the Servicer and the Noteholders from and against any and all costs,
expenses, losses, claims, damages, and liabilities to the extent that such cost,
expense, loss, claim, damage, or liability arose out of, or was imposed upon the
Trust, the Indenture Trustee, the Servicer, the Insurer or the Noteholders
through the negligence, willful misconduct or bad faith of the Standby Servicer,
in the performance of its duties as Standby Servicer under this Agreement, or by
reason of reckless disregard of the Standby Servicer's obligations and duties as
Standby Servicer under this Agreement. In the event that the Standby Servicer
becomes the successor Servicer, the Standby Servicer in its capacity as
successor Servicer, shall be liable in accordance with, and to the extent set
forth in, Section 13.02(a).
(c) BVAC shall indemnify, defend, and hold harmless the Indenture
Trustee, the Owner Trustee, the Insurer, the Back-up Servicer, the Standby
Servicer, the Spread Account Depositor Owner
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Trustee and each of their officers, directors, employees and agents from and
against all costs, expenses (including reasonable legal fees and expenses),
losses, claims, damages, and liabilities arising out of, incurred or asserted
against any such indemnified party in connection with the acceptance or
performance of the trusts and duties contained in the this Agreement and the
Spread Account Depositor Trust Agreement, or any of the provisions contained in
any of the Basic Documents, or any of the transactions contemplated thereby,
except to the extent that such cost, expense, loss, claim, damage, or liability:
(i) shall be due to the willful misconduct, bad faith or gross negligence of
such indemnified party, (ii) shall arise from the Indenture Trustee's, Owner
Trustee's or the Spread Account Depositor Owner Trustee's breach of any of its
respective representations or warranties set forth in the Indenture, this
Agreement or the Spread Account Depositor Trust Agreement, as applicable; or
(iii) shall be one as to which BVSC has indemnified the Owner Trustee or the
Spread Account Depositor Owner Trustee.
(d) Indemnification under this Section 13.02 shall include reasonable
fees and expenses of counsel and expenses of litigation. If the Servicer shall
have made any indemnity payments pursuant to this Section and the recipient
thereafter collects any of such amounts from others, the recipient shall
promptly repay such amounts to the Servicer, without interest. This
indemnification shall survive the termination of this Agreement, the Spread
Account Depositor Trust Agreement and the removal of the Servicer.
SECTION 13.03. MERGER OR CONSOLIDATION OF, OR ASSUMPTION OF THE
OBLIGATIONS OF, THE SERVICER, BACK-UP SERVICER AND STANDBY SERVICER.
(a) The Servicer shall not merge or consolidate with any other Person,
convey, transfer or lease substantially all its assets as an entirety to another
Person, or permit any other Person to become the successor to the Servicer's
business unless, after the merger, consolidation, conveyance, transfer, lease or
succession, the successor or surviving entity shall be an Eligible Servicer and
shall be capable of fulfilling the duties of the Servicer contained in this
Agreement and the other Basic Documents to which the Servicer is a party. Any
Person (i) into which the Servicer may be merged or consolidated, (ii) resulting
from any merger, conversion, or consolidation to which the Servicer shall be a
party which may succeed to the properties and assets of the Servicer
substantially as a whole or (iii) succeeding to the business of the Servicer (or
to substantially all of the Servicer's business insofar as it relates to the
servicing of the Receivables), which Person in any of the foregoing cases
executes an agreement of assumption acceptable to the Insurer in its sole and
absolute discretion to perform every obligation of the Servicer under this
Agreement and the other Basic Documents to which it is a party, will be the
successor to the Servicer under this Agreement and the other Basic Documents to
which it is a party without the execution or filing of any paper or any further
act on the part of any of the parties to this Agreement; provided, however, that
(w) immediately after giving effect to such transaction, no representation or
warranty made pursuant to Section 13.01 hereof or made by BVAC in the Purchase
Agreement shall have been breached (for purposes hereof, such representations
and warranties shall speak as of the date of the consummation of such
transaction), no Event of Servicer Default or Insurance Agreement Event of
Default, and no event which, after notice or lapse of time, or both, would
become an Event of Servicer Default or Insurance Agreement Event of Default
shall have occurred and be continuing, (x) the Servicer shall have delivered to
the Insurer (so long as the Insurance Agreement has not terminated) and the
Indenture Trustee an Officer's Certificate and an Opinion of Counsel each
stating that such consolidation, conversion, merger or succession and such
agreement of assumption comply with this Section and that all conditions
precedent provided for in this Agreement and the other Basic Documents to which
it is a party relating to such transaction have been complied with and (y) the
Servicer shall have delivered to the Insurer (so long as the Insurance Agreement
has not terminated) and the Indenture Trustee an Opinion of Counsel either (A)
stating that, in the opinion of such counsel, all financing statements and
continuation statements and amendments thereto have been executed and filed that
are necessary fully to preserve and protect the interest of the Trust and the
Indenture Trustee in the Receivables, and reciting the details of such filings,
or (B) stating that, in the opinion of such counsel, no such action shall be
necessary to preserve and protect such interest and (z) the Rating Agencies
shall have confirmed the "shadow ratings" of the Notes without regard to the
Policy. The Servicer shall provide notice of any merger, conversion,
consolidation or succession pursuant to this Section to the Insurer and the
Rating Agencies then providing a rating for the Securities. The Indenture
Trustee shall forward a copy of each such notice to each Noteholder.
Notwithstanding anything herein to the contrary, the execution of the foregoing
agreement of assumption and compliance with clauses (w), (x), (y) and (z) above
shall be conditions to
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the consummation of the transactions referred to in clauses (i), (ii) or (iii)
above. The Opinion of Counsel required by this Section shall not be an expense
of the Indenture Trustee or the Insurer.
(b) Any Person (a) into which the Back-up Servicer may be merged or
consolidated, (b) which may result from any merger or consolidation to which the
Back-up Servicer shall be a party, (c) which may succeed to the properties and
assets of the Back-up Servicer substantially as a whole or (d) succeeding to the
business of the Back-up Servicer, shall execute an agreement of assumption to
perform every obligation of the Back-up Servicer hereunder, and whether or not
such assumption agreement is executed, shall be the successor to the Back-up
Servicer under this Agreement without further act on the part of any of the
parties to this Agreement; provided, however, that nothing herein shall be
deemed to release the Back-up Servicer from any obligation. In connection with
any transaction described above, the Back-up Servicer must comply with the
provisions of this Section 13.03 as if it were then acting as Servicer.
(c) Any Person (a) into which the Standby Servicer may be merged or
consolidated, (b) which may result from any merger or consolidation to which the
Standby Servicer shall be a party, (c) which may succeed to the properties and
assets of the Standby Servicer substantially as a whole or (d) succeeding to the
business of the Standby Servicer, shall execute an agreement of assumption to
perform every obligation of the Standby Servicer hereunder, and whether or not
such assumption agreement is executed, shall be the successor to the Standby
Servicer under this Agreement without further act on the part of any of the
parties to this Agreement; provided, however, that nothing herein shall be
deemed to release the Standby Servicer from any obligation. In connection with
any transaction described above, the Standby Servicer must comply with the
provisions of this Section 13.03 as if it were then acting as Servicer.
SECTION 13.04. LIMITATION ON LIABILITY OF SERVICER AND OTHERS. Neither
the Servicer nor any of the directors or officers or employees or agents of the
Servicer shall be under any liability to the Trust, the Indenture Trustee, the
Certificateholder or the Noteholders, except as provided under this Agreement,
for any action taken or for refraining from the taking of any action pursuant to
this Agreement; provided, however, that this provision shall not protect the
Servicer or any such person against any liability that would otherwise be
imposed by reason of willful misconduct, bad faith, or negligence in the
performance of duties or by reason of reckless disregard of obligations and
duties under this Agreement. The Servicer and any director or officer or
employee or agent of the Servicer may rely in good faith on any document of any
kind prima facie properly executed and submitted by any Person respecting any
matters arising under this Agreement.
Except as provided in this Agreement, the Servicer shall not be under
any obligation to appear in, prosecute, or defend any legal action that shall
not be incidental to its duties to service the Receivables in accordance with
this Agreement (collection actions with respect to Charged-Off Receivables are
understood to be incidental to the Servicer's duties to service the
Receivables), and that in its opinion may involve it in any expense or
liability.
SECTION 13.05 SERVICER, BACK-UP SERVICER AND STANDBY SERVICER NOT TO
RESIGN. Subject to the provisions of Sections 8.02(g), 14.01 and 14.02, as
applicable, none of the Servicer, Back-up Servicer, or the Standby Servicer
shall resign from the obligations and duties imposed on it by this Agreement as
Servicer, Back-up Servicer, or Standby Servicer, respectively, except upon a
determination that by reason of a change in legal requirements the performance
of its duties under this Agreement would cause it to be in violation of such
legal requirements in a manner which would result in a material adverse effect
on the Servicer, Back-up Servicer, or the Standby Servicer, as the case may be,
and the Insurer (so long as an Insurer Default shall not have occurred and be
continuing) does not or the Majority Noteholders (if an Insurer Default shall
have occurred and be continuing) do not (i) elect in its or their absolute
discretion to waive the obligations of the Servicer, Back-up Servicer, or the
Standby Servicer, as the case may be, to perform the duties that render it
legally unable to act or (ii) allow in its or their absolute discretion the
Servicer, Back-up Servicer, or the Standby Servicer, as the case may be, to
delegate those duties to another Person; provided, however, that notwithstanding
the foregoing, the Back-up Servicer may resign upon 90 days prior written notice
to the Servicer and the Insurer if it resigns as Indenture Trustee. Any such
determination permitting the resignation of the Servicer, Back-up Servicer, or
the Standby Servicer shall be evidenced by an Opinion of Counsel as to the legal
56
requirements that would be violated delivered to the Owner Trustee, the
Indenture Trustee and the Insurer. No resignation of the Servicer shall become
effective, so long as no Insurer Default shall have occurred and be continuing,
until the Back-up Servicer or an entity acceptable to the Insurer shall have
assumed the responsibilities and obligations of the Servicer or, if an Insurer
Default shall have occurred and be continuing, until the Back-up Servicer, the
Standby Servicer or a successor Servicer that is an Eligible Servicer shall have
assumed the responsibilities and obligations of the Servicer. No resignation of
the Servicer shall become effective, so long as no Insurer Default shall have
occurred and be continuing, until the Back-up Servicer, the Standby Servicer or
an entity acceptable to the Insurer shall have assumed the responsibilities and
obligations of the Servicer. No resignation of the Servicer, Back-up Servicer,
or the Standby Servicer shall relieve the Servicer, Back-up Servicer, or the
Standby Servicer, as the case may be, of any liability to which it has
previously become subject under this Agreement or any Basic Document.
SECTION 13.06. DELEGATION OF DUTIES. Except as provided in Section
13.03 hereof, it is understood and agreed by the parties hereto that the
Servicer or the Transferor may at any time delegate any duties including duties
as custodian to any Person willing to accept such delegation and acceptable to
the Controlling Party and to perform such duties (including any affiliate of the
Servicer) in accordance with the customary procedures of the Servicer. In
connection with such delegation, the Servicer or the Transferor may assign
rights to the delegee or direct the payment to the delegee of benefits or
amounts otherwise inuring to the benefit of, or payable to, the Transferor or
the Servicer hereunder. Any such delegation shall not relieve the Servicer or
the Transferor of their respective liability and responsibility with respect to
such duties, and shall not constitute a resignation within Section 13.05 hereof.
The Servicer shall give written notice to the Rating Agencies, the Owner
Trustee, the Indenture Trustee and the Insurer of any such delegation.
ARTICLE XIV
SERVICER AND STANDBY SERVICER DEFAULTS
SECTION 14.01. EVENTS OF SERVICER DEFAULT. While the Servicer, the
Back-up Servicer or any successor Servicer (other than the Standby Servicer) is
acting as the Servicer hereunder, any one of the following events shall
constitute an "Event of Servicer Default":
(i) Any failure by the Servicer (x) to deposit, or to deliver to
the Indenture Trustee for deposit, to any Trust Account any amount
required to be so delivered or deposited therein by the Servicer that
shall continue unremedied for a period of one Business Day or (y) to
deliver to the Indenture Trustee, the Back-up Servicer, the Standby
Servicer or the Insurer the Servicer's Certificate on the related
Determination Date that shall continue unremedied for a period of two
Business Days or the statement required by Section 8.13 or the report
required by Section 8.14 shall not have been delivered within five (5)
days after the date such statement or report, as the case may be, is
required to be delivered after, in either case, (A) after written notice
from either the Owner Trustee, the Indenture Trustee or the Insurer (so
long as the Insurer is not in default of its obligations under the
Policy) or by the holders of Notes evidencing not less than 25% of the
aggregate outstanding balance of the Notes is received by the Servicer
or BVAC as specified in this Agreement or (B) after discovery by an
officer of the Servicer; or
(ii) Failure on the part of the Servicer, and for so long as the
Servicer is obligated to perform as the Servicer, failure on the part of
the Transferor or BVAC, as the case may be, to repurchase a Receivable
in accordance with Section 7.02, Section 8.08 or Section 8.10 hereof
and, in the case of BVAC pursuant to Section 7.02 and Section 3.03 of
the Purchase Agreement, as the case may be, which failure shall continue
unremedied for a period of two Business Days after the same is required
to be delivered in accordance with such Sections after, in either case,
(A) after written notice from either the Owner Trustee, the Indenture
Trustee or the Insurer (so long as the Insurer is not in default of its
obligations under the Policy) or by the holders of Notes evidencing not
less than 25% of the aggregate outstanding balance of the Notes is
received by the Servicer or BVAC as specified in this Agreement or (B)
after discovery by an officer of the Servicer; or
57
(iii) Failure on the part of the Servicer to observe its
covenants and agreements set forth in Section 8.09 or, for so long as
the Servicer is obligated to perform as the Servicer, failure on the
part of the Transferor to observe its covenants and agreements in
Article V of the Purchase Agreement; or
(iv) Failure on the part of the Servicer, and for so long as the
Servicer is obligated to perform as the Servicer, failure on the part of
the Transferor or BVAC duly to observe or to perform any other covenants
or agreements of the Servicer, the Transferor or BVAC (as the case may
be) set forth in this Agreement or any other Basic Document, which
failure shall (a) materially and adversely affect the rights of
Noteholders or the Insurer and (b) continue unremedied for a period of
30 days after the date on which written notice of such failure requiring
the same to be remedied, shall have been given (1) to the Servicer, the
Transferor or BVAC (as the case may be) by the Insurer or the Indenture
Trustee, or (2) to the Servicer, the Transferor or BVAC (as the case may
be), and to the Indenture Trustee and the Insurer by the Noteholders
evidencing not less than 25% of the Class A Note Balance; or
(v) The entry of a decree or order for relief by a court or
regulatory authority having jurisdiction in respect of the Servicer (or,
so long as the Servicer is obligated to perform as the Servicer, the
Transferor or any of the Servicer's other Affiliates, if the Servicer's
ability to service the Receivables is adversely affected in a material
respect thereby) in an involuntary case under the federal bankruptcy
laws, as now or hereafter in effect, or another present or future,
federal or state, bankruptcy, insolvency or similar law, or appointing a
receiver, liquidator, assignee, trustee, custodian, sequestrator or
other similar official of BVAC, the Servicer (or the Transferor or any
other Affiliate of BVAC, if applicable) or of any substantial part of
their respective properties or ordering the winding up or liquidation of
the affairs of BVAC or the Servicer (or the Transferor or any other
Affiliate of BVAC, if applicable) or the commencement of an involuntary
case under the federal or state bankruptcy, insolvency or similar laws,
as now or hereafter in effect, or another present or future, federal or
state bankruptcy, insolvency or similar law with respect to BVAC or the
Servicer (or the Transferor or any other Affiliate of BVAC, if
applicable) and such case is not dismissed within 60 days; or
(vi) The commencement by BVAC or the Servicer (or, so long as the
Servicer is obligated to perform as the Servicer, the Transferor or any
of the Servicer's other Affiliates, if the Servicer's ability to service
the Receivables is adversely affected thereby) of a voluntary 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 the consent by BVAC or the Servicer (or the Transferor or any
other Affiliate of BVAC, if applicable) to the appointment of or taking
possession by a receiver, liquidator, assignee, trustee, custodian,
sequestrator or other similar official of BVAC or the Servicer (or the
Transferor or any other Affiliate of BVAC, if applicable) or of any
substantial part of its property or the making by BVAC or the Servicer
(or the Transferor or any other Affiliate of BVAC, if applicable) of an
assignment for the benefit of creditors or the failure by BVAC or the
Servicer (or the Transferor or any other Affiliate of BVAC, if
applicable) generally to pay its debts as such debts become due or the
taking of corporate action by BVAC or the Servicer (or the Transferor or
any other Affiliate of BVAC, if applicable) in furtherance of any of the
foregoing; or
(vii) Any representation, warranty or statement of the Servicer
or, for so long as the Servicer is obligated to perform as the Servicer,
BVAC or the Transferor made in this Agreement and, with respect to BVAC
and the Transferor, the Purchase Agreement, or in each case any
certificate, report or other writing delivered pursuant hereto or
thereto shall prove to be incorrect as of the time when the same shall
have been made (excluding, however, any representation or warranty set
forth in Section 3.02 of the Purchase Agreement), and the incorrectness
of such representation, warranty or statement has a material adverse
effect on the Issuer, the Insurer or the Noteholders and, within 60 days
after written notice thereof shall have been given (1) to BVAC, the
Servicer or the Transferor (as the case may be) by the Indenture Trustee
or the Insurer or (2) to BVAC, the Servicer or the Transferor (as the
case may be), and to the Indenture Trustee and the Insurer by the
Noteholders evidencing not less than 25% of the Class A Note
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Balance, the circumstances or condition in respect of which such
representation, warranty or statement was incorrect shall not have been
eliminated or otherwise cured; or
(viii) An Insurance Agreement Event of Default has occurred; or
(ix) A claim is made under the Policy; or
(x) So long as an Insurer Default shall not have occurred and be
continuing, the Insurer shall not have delivered a Servicer Extension
Notice pursuant to Section 8.04 hereof; or
(xi) the occurrence of a "Servicer Default" under and as defined
in any sale and servicing agreement, pooling and servicing agreement or
any similar agreement with respect to which (x) BVAC or any of its
Affiliates is designated as servicer, sub-servicer, back-up servicer or
any similar capacity (irrespective of whether it is then acting in such
capacity) and (y) the Insurer has issued a financial guaranty insurance
policy relating to one or more classes of securities issued under or
otherwise relating to such agreement.
If a Servicer Default shall occur and be continuing then, and in each
and every case, the Indenture Trustee shall, (x) at the direction of the Insurer
in its sole and absolute discretion, so long as the Insurer is the Controlling
Party, or (y) at the direction of the Indenture Trustee, at the direction of the
Majority Noteholders, if an Insurer Default has occurred and is continuing or
the Insurance Agreement has terminated, by notice then given in writing to the
Servicer (and to the Indenture Trustee if given by the Noteholders or the
Insurer) or (z) upon the Insurer's failure to deliver a Servicer Extension
Notice pursuant to Section 8.04 hereof (so long as the Insurance Agreement has
not terminated), terminate all of the rights and obligations of the Servicer
under this Agreement. Upon sending or receiving any such notice, the Indenture
Trustee shall promptly send a copy thereof to the Owner Trustee, the Rating
Agencies, the Insurer (so long as the Insurer is the Controlling Party), the
Back-up Servicer, the Standby Servicer and to each Noteholder. On or after the
receipt by the Servicer of such written notice (unless otherwise directed by the
Insurer and subject to Section 14.03(a)), all authority and power of the
Servicer as the Servicer under this Agreement, whether with respect to the
Securities or the Receivables or otherwise, shall, without further action, pass
to and be vested in the Standby Servicer or any such successor Servicer as may
be appointed under Section 14.03; and, without limitation, the Standby Servicer
any such successor Servicer and the Indenture Trustee are hereby authorized and
empowered to execute and deliver, on behalf of the predecessor Servicer, as
attorney-in-fact or otherwise, any and all documents and other instruments, and
to do or accomplish all other acts or things necessary or appropriate to effect
the purposes of such notice of termination, whether to complete the transfer and
endorsement of the Receivables and related documents, or otherwise. The
predecessor Servicer shall cooperate with the successor Servicer and the
Indenture Trustee in effecting the termination of the responsibilities and
rights of the predecessor Servicer under this Agreement, including the transfer
to the successor Servicer for administration by it of all cash amounts that
shall at the time be held or should have been held by the predecessor Servicer
for deposit, or shall thereafter be received with respect to a Receivable and
the delivery to the successor Servicer of all files and records concerning the
Receivable and a Computer Tape in readable form containing all information
necessary to enable the successor Servicer to service the Receivables and the
other property of the Issuer. All Transition Costs shall be paid by the
predecessor Servicer upon presentation of reasonable documentation of such costs
and expenses and, if not so paid, shall be reimbursable to the successor
Servicer, to the extent of Available Funds on each Payment Date, pursuant to the
priorities set forth in Section 9.05(a) of the Indenture; provided, that such
payment shall not relieve the predecessor Servicer from the responsibility for
making such payment and the Issuer shall be subrogated to the rights of the
successor Servicer with respect to such Transition Costs and shall have a direct
right to institute proceedings against the Servicer for such payment. The
predecessor Servicer shall grant the Transferor, the Indenture Trustee, the
Standby Servicer, the Back-up Servicer and the Insurer reasonable access to the
predecessor Servicer's premises, computer files, personnel, records and
equipment at the predecessor Servicer's expense. If requested by the Insurer (so
long as it is the Controlling Party), the Standby Servicer or any other
successor Servicer shall terminate any arrangements relating to (i) the Lock-Box
Account with the Lock-Box Bank, (ii) the Lock-Box or (iii) the Lock-Box
Agreement, and direct the Obligors to make all payments under the Receivables
directly to the Servicer at the predecessor Servicer's expense (in which event
the successor Servicer shall process such payments directly, or, through a
Lock-Box Account with a Xxxx-
00
Xxx Xxxx at the direction of the Insurer). The Indenture Trustee shall send
copies of all notices given pursuant to this Section 14.01 to the Insurer so
long as no Insurer Default shall have occurred and be continuing, and to the
Noteholders if an Insurer Default shall have occurred and be continuing.
SECTION 14.02 STANDBY SERVICER DEFAULT.
(a) Any one of the following events shall constitute a "Standby Servicer
Default" with respect to the Standby Servicer acting in its capacity as Standby
Servicer hereunder and in its capacity as successor Servicer hereunder (unless
specifically stated otherwise):
(i) Any failure by the Standby Servicer (so long as the Standby
Servicer is obligated to perform as the Servicer) (x) to deposit, or to
deliver to the Indenture Trustee for deposit, to any Trust Account or
the Spread Account any amount required to be so delivered or deposited
therein by the Servicer that shall continue unremedied for a period of
one Business Day or (y) to deliver to the Indenture Trustee, the Back-up
Servicer or the Insurer the Servicer's Certificate on the related
Determination Date that shall continue unremedied for a period of two
Business Days or the statement required by Section 8.13 or the report
required by Section 8.14 shall not have been delivered within five (5)
days after the date such statement or report, as the case may be, is
required to be delivered; or
(ii) Failure on the part of the Standby Servicer to observe its
covenants and agreements set forth in Section 8.09; or
(iii) Failure on the part of the Standby Servicer duly to observe
or to perform any other covenants or agreements of the Standby Servicer
set forth in the Securities or in this Agreement (except as otherwise
specifically referred to in this Section 14.02(a)), which failure shall
(a) materially and adversely affect the rights of Noteholders or the
Insurer and (b) continue unremedied for a period of 30 days after the
date on which written notice of such failure requiring the same to be
remedied, shall have been given (1) to the Standby Servicer by the
Insurer or the Indenture Trustee, or (2) to the Standby Servicer and to
the Indenture Trustee and the Insurer by the Noteholders evidencing not
less than 25% of the Class A Note Balance; or
(iv) The entry of a decree or order for relief by a court or
regulatory authority having jurisdiction in respect of the Standby
Servicer or any of the Standby Servicer's Affiliates, if the Standby
Servicer's ability to service the Receivables is adversely affected
thereby, in an involuntary case under the federal bankruptcy laws, as
now or hereafter in effect, or another present or future, federal or
state, bankruptcy, insolvency or similar law, or appointing a receiver,
liquidator, assignee, trustee, custodian, sequestrator or other similar
official of the Standby Servicer or any such Affiliate or of any
substantial part of their respective properties or ordering the winding
up or liquidation of the affairs of Standby Servicer or any such
Affiliate or the commencement of an involuntary case under the federal
or state bankruptcy, insolvency or similar laws, as now or hereafter in
effect, or another present or future, federal or state bankruptcy,
insolvency or similar law with respect to the Standby Servicer or any
such Affiliate and such case is not dismissed within 60 days; or
(v) The commencement by the Standby Servicer or any of the
Standby Servicer's Affiliates, if the Standby Servicer's ability to
service the Receivables is adversely affected thereby, of a voluntary
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 the consent by Standby Servicer or any such Affiliate
to the appointment of or taking possession by a receiver, liquidator,
assignee, trustee, custodian, sequestrator or other similar official of
the Standby Servicer or any such Affiliate or of any substantial part of
its property or the making by the Standby Servicer or any such Affiliate
of an assignment for the benefit of creditors or the failure by the
Standby Servicer or any such Affiliate generally to pay its debts as
such debts become due or the taking of corporate action by the Standby
Servicer or any such Affiliate in furtherance of any of the foregoing;
or
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(vi) Any representation, warranty or statement of the Standby
Servicer made in this Agreement or in any certificate, report or other
writing delivered pursuant hereto shall prove to be incorrect 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 Issuer, the Insurer or the Noteholders and, within 30 days after
written notice thereof shall have been given (1) to the Standby Servicer
by the Indenture Trustee or the Insurer or (2) to the Standby Servicer,
and to the Indenture Trustee and the Insurer by the Noteholders
evidencing not less than 25% of the Class A Note Balance, the
circumstances or condition in respect of which such representation,
warranty or statement was incorrect shall not have been eliminated or
otherwise cured; or
(vii) For so long as the Standby Servicer is acting as Standby
Servicer hereunder, the failure of the Standby Servicer to comply with
the duties and services set forth in Schedule C attached hereto, which
failure continues unremedied for a period of five Business Days; or
(viii) For so long as the Standby Servicer is obligated to
perform as the Servicer, the occurrence and continuance of a Trigger
Event (as such Trigger Events shall have been modified by the Standby
Servicer and the Insurer prior to the Standby Servicer assuming the
duties of Servicer hereunder);
then, and in each and every case, subject to the notice and cure
provisions of paragraph (b) below, the Indenture Trustee shall, at the
direction of the Controlling Party, by notice then given in writing to
the Standby Servicer (and to the Indenture Trustee if given by the
Noteholders) shall terminate all of the rights and obligations of the
Standby Servicer under this Agreement. Upon sending or receiving any
such notice, the Indenture Trustee shall promptly send a copy thereof to
the Indenture Trustee, the Owner Trustee, the Rating Agencies, the
Insurer, the Servicer, the Standby Servicer and to each Noteholder. On
or after the receipt by the Standby Servicer of such written notice
(unless otherwise directed by the Insurer and subject to Section
14.03(a)), all authority and power of the Standby Servicer as the
Servicer and as the Standby Servicer under this Agreement, whether with
respect to the Securities or the Receivables or otherwise, shall,
without further action, pass to and be vested in any such successor
Standby Servicer or successor Servicer, as applicable, as may be
appointed under Section 14.03; and, without limitation, any such
successor Standby Servicer or successor Servicer, is hereby authorized
and empowered to execute and deliver, on behalf of the predecessor
servicer, as attorney-in-fact or otherwise, any and all documents and
other instruments, and to do or accomplish all other acts or things
necessary or appropriate to effect the purposes of such notice of
termination, whether to complete the transfer and endorsement of the
Receivables and related documents, or otherwise.
The Standby Servicer shall cooperate with the successor Standby Servicer
or successor Servicer, as applicable, in effecting the termination of its
responsibilities and rights under this Agreement, including the transfer to the
successor Standby Servicer or successor Servicer, as applicable, for
administration by it of all cash amounts that shall at the time be held by it
for deposit, or shall thereafter be received by it with respect to any
Receivable, and the related accounts and records maintained by the Standby
Servicer.
(b) The Insurer (so long as it is the Controlling Party), the Majority
Noteholders or the Indenture Trustee shall provide the Standby Servicer with
written notice of any Standby Servicer Default, which notice must grant the
Standby Servicer an opportunity to cure any such event of termination as
follows: (i) in the case of any failure of the Standby Servicer to properly
administer or deliver any monies as required pursuant to this Agreement, for a
period of three (3) Business Days after receipt of the notice by the Standby
Servicer; or (ii) in the case of any failure pursuant to this Agreement that is
non-monetary in nature, for a period of thirty (30) days after receipt of the
notice by the Standby Servicer. Such notice must explicitly provide that if any
such failure by the Standby Servicer giving rise to the event of termination is
not cured within the applicable cure period, then the Controlling Party shall
have the right to terminate the appointment of the Standby Servicer effective as
of a date no sooner than the end of the applicable cure period.
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(c) The Standby Servicer may be released from its obligations under this
Agreement if it does not receive payment of its Standby Servicer Fee or
Successor Servicer Fee required to be made under the terms of this Agreement,
which failure continues unremedied for a period of thirty (30) days after
receipt by the Insurer of written notice of such failure and that the Standby
Servicer intends to terminate its appointment as Standby Servicer if such
failure to pay is not remedied within such thirty (30) day period, which written
notice shall explicitly state that failure to pay any Standby Servicer Fee or
successor Servicer Fee owing to the Standby Servicer, if not cured within thirty
(30) days of the date of receipt of notice thereof, will give the Standby
Servicer the right to terminate its appointment as Standby Servicer.
SECTION 14.03 APPOINTMENT OF SUCCESSORS.
(a) Upon the Servicer's receipt of notice of termination pursuant to
Section 14.01 or the Servicer's resignation in accordance with the terms of this
Agreement, the Servicer shall continue to perform its functions as Servicer
under this Agreement, in the case of termination, only until the date specified
in such termination notice (which date shall be at least 30 days after the date
of such notice) or, if no such date is specified in a notice of termination,
until receipt of such notice and, in the case of resignation, until the later of
(x) the date thirty (30) days from the delivery to the Back-up Servicer, the
Standby Servicer, the Indenture Trustee and the Insurer of written notice of
such resignation (or the date of written confirmation of such notice prior to
the expiration of the thirty (30) days) in accordance with the terms of this
Agreement and (y) the date upon which the Servicer shall become unable to act as
Servicer, as specified in the notice of resignation and accompanying Opinion of
Counsel. In the event of the Servicer's resignation or termination hereunder,
and unless the Controlling Party directs otherwise, the Standby Servicer shall
automatically be the successor 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 Standby
Servicer as Servicer by the terms and provisions hereof; provided, however, that
neither the Standby Servicer, the Back-up Servicer nor any other successor
Servicer shall be liable for any actions of the Servicer or any other
predecessor Servicer prior to such succession or for any breach by the Servicer
or any other predecessor Servicer of any of its representations, warranties or
covenants contained in this Agreement or in any related document or agreement.
(b) Upon appointment, the successor Servicer shall be the successor in
all respects to the predecessor Servicer and shall be subject to all the
responsibilities, duties, and liabilities arising thereafter relating thereto
placed on the predecessor Servicer (subject to the modified duties of SST set
forth in Schedule C attached hereto), and shall be entitled to the Servicing Fee
(or with respect to SST, the successor Servicer fee set forth in Schedule C
attached hereto) and all of the rights granted to the predecessor Servicer, by
the terms and provisions of this Agreement. The predecessor Servicer shall be
entitled to be reimbursed for Outstanding Advances.
(c) In connection with such appointment, the Indenture Trustee may make
such arrangements for the successor Servicer out of payments on Receivables it
and such successor Servicer shall agree; provided, however, that no such
compensation shall be in excess of that permitted the original Servicer under
this Agreement. The Owner Trustee and such successor Servicer shall take such
action, consistent with this Agreement, as shall be necessary to effectuate any
such succession.
(d) To the extent that the Standby Servicer shall be entitled to any
indemnity payment from the Servicer pursuant to Sections 13.02 or 14.03(i) and
such indemnity payment has not been made within 30 calendar days of demand
thereof, the Standby Servicer shall be entitled to reimbursement for such unpaid
amounts, to the extent of available funds, under priority (viii) of Section
9.05(a) of the Indenture.
(e) If the Standby Servicer becomes aware of any error or continuing
error which in the opinion of the Back-up Servicer impairs its ability to
perform its services hereunder, the Standby Servicer may undertake such data or
records reconstruction as it deems appropriate to correct any such error or
continued error and to prevent future continuing error. To the extent it is not
otherwise reimbursed under this Agreement, the Standby Servicer shall be
entitled to recover its costs incurred in correcting any such error or
continuing error.
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(f) Upon the Standby Servicer's receipt of notice of termination
following a Standby Servicer Default or the Standby Servicer's resignation in
accordance with the terms of this Agreement, the Back-up Servicer shall continue
to perform its functions as Standby Servicer or Servicer, as applicable, under
this Agreement, in the case of termination, only until the date specified in
such termination notice or, if no such date is specified in a notice of
termination, until receipt of such notice and, in the case of resignation, until
the later of (x) the date 30 days from the delivery to the Standby Servicer, the
Indenture Trustee, and the Insurer of written notice of such resignation (or the
date of written confirmation of such notice prior to the expiration of the 30
days) in accordance with the terms of this Agreement and (y) the date upon which
the Standby Servicer shall become unable to act as Servicer, as specified in the
notice of resignation and accompanying Opinion of Counsel. In the event of the
Standby Servicer's resignation or termination hereunder, and if the Controlling
Party so directs, the Back-up Servicer shall be the successor in all respects to
the Standby Servicer in its capacity as Standby Servicer and, if applicable,
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 Standby Servicer and, if applicable, the Servicer
by the terms and provisions hereof; provided, however, that the Back-up Servicer
shall not be liable for any actions of the Standby Servicer prior to such
succession or for any breach by the Standby Servicer of any of its
representations, warranties and covenants contained in this Agreement or in any
related document or agreement.
(g) Upon receipt by any successor Servicer (other than the Standby
Servicer in accordance with Section 14.03(f) above) of notice of termination or
such successor Servicer's resignation in accordance with the terms of this
Agreement, such successor Servicer shall continue to perform its functions as
Servicer under this Agreement, in the case of termination, only until the date
specified in such termination notice or, if no such date is specified in a
notice of termination, until receipt of such notice and, in the case of
resignation, until the later of (x) the date 30 days from the delivery to the
Back-up Servicer, if any, the Indenture Trustee and the Insurer of written
notice of such resignation (or the date of written confirmation of such notice
prior to the expiration of the 30 days) in accordance with the terms of this
Agreement and (y) the date upon which such successor Servicer shall become
unable to act as Servicer, as specified in the notice of resignation and
accompanying Opinion of Counsel. In the event of such successor Servicer's
resignation or termination hereunder, and if the Controlling Party so directs,
the Back-up Servicer, if any, shall be the successor in all respects to the
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;
provided, however, that the Back-up Servicer shall not be liable for any actions
of the predecessor Servicer prior to such succession or for any breach by the
predecessor Servicer of any of its representations, warranties and covenants
contained in this Agreement or in any related document or agreement.
(h) Notwithstanding the above, if the Back-up Servicer is legally unable
to so act or the Controlling Party otherwise directs in accordance with Section
8.02(d), the Controlling Party shall appoint a successor Servicer, successor
Back-up Servicer or successor Standby Servicer. Otherwise, the Indenture Trustee
shall appoint (after soliciting bids from potential servicers), or petition a
court of competent jurisdiction to appoint, a Servicer (as successor Servicer),
Back-up Servicer (as successor Back-up Servicer) or Standby Servicer (as
successor Standby Servicer) hereunder, in each case acceptable to the
Controlling Party, in the assumption of all or any part of the responsibilities,
duties or liabilities of the outgoing Servicer, Back-up Servicer or Standby
Servicer, as applicable, hereunder. The outgoing Servicer, Back-up Servicer or
Standby Servicer shall continue to act as such hereunder until a successor
acceptable to the Controlling Party is appointed and assumes the obligations as
successor Servicer, Back-up Servicer or Standby Servicer, as applicable.
(i) Any successor Servicer may accept and reasonably rely on all
accounting and servicing records and other documentation provided to such
successor Servicer in connection with succession to Servicer duties, including
documents prepared or maintained by BVAC, the Transferor, or the Servicer, or
any party providing services related to the Receivables (each, a "Third Party").
The Servicer shall indemnify and hold harmless the successor Servicer and its
officers, employees and agents, the Issuer, the Noteholders and the Insurer
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, the Issuer, the Noteholders and the Insurer may sustain in
any way (i) solely related to the negligence or
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misconduct of the Servicer or any such Third Party based upon any matter related
to or arising out of this Agreement except for any claims, losses, penalties,
fines, forfeitures, legal fees, and related costs and judgments arising from
such successor Servicer's own negligence or willful misconduct; or (ii) solely
related to the conduct of such successor Servicer undertaken at the direction of
any party hereto or which relate to the transfer of servicing to the successor
Servicer. The successor Servicer shall have no duty, responsibility, obligation
or liability (collectively "liability") for the acts or omissions of any Third
Party. In the event that the Servicer fails to make any such indemnity payment,
the successor Servicer shall be entitled to receive such payment from the
Issuer, to the extent of Available Funds on each Payment Date, in the priorities
set forth in Section 9.05(a) of the Indenture; provided, that such Issuer
payment shall not relieve the Servicer from the responsibility for making such
payment and the Issuer shall be subrogated to the rights of the successor
Servicer with respect to such indemnity claim and shall have a direct right to
institute proceedings against the Servicer for such payment. If any error,
inaccuracy or omission (collectively "error") exists in any information provided
to a successor Servicer and such error causes or materially contributes to such
successor Servicer making or continuing any error (a "continuing error"), such
successor Servicer shall have no liability for such continuing error; provided,
however, that this provision shall not protect such successor Servicer against
any liability arising from its willful misconduct, bad faith or gross negligence
in discovering or correcting or failing to discover or correct any error or in
the performance of its other duties contemplated herein.
SECTION 14.04. NOTICE OF EVENTS OF SERVICER DEFAULT. Upon any notice of
an Event of Servicer Default or upon any termination of, or appointment of a
successor to, the Servicer pursuant to this Article XIV, the Owner Trustee shall
give prompt written notice thereof to the Certificateholder at the addresses
appearing in the Certificate Register, to each of the Rating Agencies then
rating the Notes, to the Insurer and to the Indenture Trustee for further notice
thereof to the Noteholders.
SECTION 14.05. WAIVER OF PAST DEFAULTS. The Insurer (so long as the
Insurer is the Controlling Party) or the Indenture Trustee (if an Insurer
Default has occurred or is continuing or the Insurance Agreement has terminated)
upon direction from holders of Notes evidencing not less than 51% of the
outstanding principal balance of the Notes may waive any default by the Servicer
in the performance of its obligations hereunder and/or its consequences, except
a default in making any required deposits to or payments from the Collection
Account in accordance with this Agreement; provided, that no waiver of any
default or provision of this Agreement shall become effective without the
consent of the Insurer (so long as the Insurer is the Controlling Party). Upon
any such waiver of a past default, such default shall cease to exist, and any
Event of Default arising therefrom shall be deemed to have been remedied for
every purpose of this Agreement. No such waiver shall extend to any subsequent
or other default or impair any right consequent thereon.
ARTICLE XV
THE OWNER TRUSTEE
SECTION 15.01. DUTIES OF OWNER TRUSTEE. The Owner Trustee, both prior to
and after the occurrence of an Event of Default, shall undertake to perform such
duties and only such duties as are specifically set forth in this Agreement. If
an Event of Default shall have occurred and shall not have been cured and the
Owner Trustee has received notice of such Event of Default, the Owner Trustee
shall exercise such of the rights and powers vested in it by this Agreement, and
shall use the same degree of care and skill in their exercise, as a prudent
person would exercise or use under the circumstances in the conduct of his own
affairs.
The Owner Trustee shall execute and deliver, on behalf of the Trust,
each Basic Document to which the Trust is a party and all certificates,
instruments and agreements contemplated thereby. The Owner Trustee shall execute
and authenticate the Certificate in accordance with this Agreement and shall
execute the Notes in accordance with the Indenture.
It shall be the duty of the Owner Trustee to discharge (or cause to be
discharged) all its responsibilities pursuant to the terms of this Agreement and
to administer the Trust in the interest of the Certificateholder, subject to and
in accordance with the provisions of this Agreement and the other documents to
which the Trust is a party. Without limiting the foregoing, the Owner Trustee
shall, upon written direction of the Certificateholder and on behalf of the
Trust file and prove any claim or claims that
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may exist on behalf of the Trust against the Transferor in connection with any
claims paying procedure as part of an insolvency or a receivership proceeding
involving the Transferor. Notwithstanding the foregoing, the Owner Trustee shall
be deemed to have discharged its duties and responsibilities hereunder and under
the other documents to which the Trust is a party to the extent the
Administrator has agreed in the Administration Agreement to perform any act or
to discharge any duty of the Trust or the Owner Trustee hereunder or under any
other document to which the Trust is a party, and the Owner Trustee shall not be
held liable for the default or failure of the Administrator to carry out its
obligations under the Administration Agreement. Except as expressly provided in
the documents to which the Trust is a party, the Owner Trustee shall have no
obligation to administer, service or collect the Receivables or to maintain,
monitor or otherwise supervise the administration, servicing or collection of
the Receivables.
SECTION 15.02. ACTION UPON INSTRUCTION.
(a) Subject to Article X and the terms of the Spread Account Agreement,
the Instructing Party shall have the exclusive right to direct the actions of
the Owner Trustee in the management of the Trust, so long as such instructions
are not in violation of the express terms set forth herein or in any Basic
Document. The Instructing Party shall not instruct the Owner Trustee in a manner
inconsistent with this Agreement or the Basic Documents.
(b) The Owner Trustee shall not be required to take any action hereunder
or under any Basic Document if the Owner Trustee shall have reasonably
determined, or shall have been advised by counsel, that such action is likely to
result in liability or unreimbursed expenses on the part of the Owner Trustee or
is contrary to the terms hereof or of any Basic Document or is otherwise
contrary to law.
(c) Whenever the Owner Trustee is unable to decide between alternative
courses of action permitted or required by the terms of this Agreement or any
Basic Document, the Owner Trustee shall promptly give notice (in such form as
shall be appropriate under the circumstances) to the Instructing Party
requesting instruction from it as to the course of action to be adopted, and to
the extent the Owner Trustee acts in good faith in accordance with any written
instruction of the Instructing Party received, the Owner Trustee shall not be
liable on account of such action to any Person. If the Owner Trustee shall not
have received appropriate instruction within ten days of such notice (or within
such shorter period of time as reasonably may be specified in such notice or may
be necessary under the circumstances) it may, but shall be under no duty to,
take or refrain from taking such action, not inconsistent with this Agreement or
the Basic Documents, as it shall deem to be in the best interests of the
Certificateholder and shall have no liability to any Person for such action or
inaction except as otherwise expressly provided in this Agreement.
(d) In the event that the Owner Trustee is unsure as to the application
of any provision of this Agreement or any Basic Document or any such provision
is ambiguous as to its application, or is, or appears to be, in conflict with
any other applicable provision, or in the event that this Agreement permits any
determination by the Owner Trustee or is silent or is incomplete as to the
course of action that the Owner Trustee is required to take with respect to a
particular set of facts, the Owner Trustee may give notice (in such form as
shall be appropriate under the circumstances) to the Instructing Party
requesting instruction from it and, to the extent that the Owner Trustee acts or
refrains from acting in good faith in accordance with any such instruction
received, the Owner Trustee shall not be liable, on account of such action or
inaction, to any Person. If the Owner Trustee shall not have received
appropriate instruction within 10 days of such notice (or within such shorter
period of time as reasonably may be specified in such notice or may be necessary
under the circumstances) it may, but shall be under no duty to, take or refrain
from taking such action, not inconsistent with this Agreement or the Basic
Documents, as it shall deem to be in the best interests of the Certificateholder
and shall have no liability to any Person for such action or inaction except as
otherwise expressly provided in this Agreement.
The Owner Trustee shall not take any action (a) that violates the
purposes of the Trust set forth in Section 1.03 or (b) that, to the actual
knowledge of the Owner Trustee, would result in the Trust's becoming taxable as
a corporation for federal income tax purposes. The Instructing Party shall not
direct the Owner Trustee to take action that would violate the provisions of
this Section.
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The Owner Trustee, upon receipt of all resolutions, certificates,
statements, opinions, reports, documents, orders or other instruments furnished
to the Owner Trustee that shall be specifically required to be furnished
pursuant to any provision of this Agreement, shall examine them to determine
whether they conform to the requirements of this Agreement. The Owner Trustee
shall furnish to the Certificateholder, the Insurer and the Rating Agencies
promptly upon receipt of a written request therefor, duplicates or copies of all
reports, notices, requests, demands, certificates, financial statements and any
other instruments furnished to the Owner Trustee under the Basic Documents.
The Owner Trustee shall furnish to the Certificateholder, the Insurer
and the Rating Agencies promptly upon receipt of a written request therefor,
duplicates or copies of all reports, notices, requests, demands, certificates,
financial statements and any other instruments furnished to the Owner Trustee
under the Basic Documents.
No provision of this Agreement shall be construed to relieve the Owner
Trustee from liability for its own negligent action, its own grossly negligent
failure to act, or its own bad faith; provided, however, that:
(i) Prior to the occurrence of an Event of Default, and after the
curing of all such Events of Default that may have occurred, the duties
and obligations of the Owner Trustee shall be determined solely by the
express provisions of this Agreement, the Owner Trustee shall not be
liable except for the performance of such duties and obligations as
shall be specifically set forth in this Agreement, no implied covenants
or obligations shall be read into this Agreement against the Owner
Trustee and, in the absence of bad faith on the part of the Owner
Trustee, or manifest error, the Owner Trustee may conclusively rely on
the truth of the statements and the correctness of the opinions
expressed in any certificates or opinions furnished to the Owner Trustee
and conforming to the requirements of this Agreement;
(ii) The Owner Trustee shall not be liable for an error of
judgment made in good faith by a Responsible Officer, unless it shall be
proved that the Owner Trustee shall have been grossly negligent in
ascertaining the pertinent facts;
(iii) The Owner Trustee shall not be liable with respect to any
action taken, suffered, or omitted to be taken in good faith in
accordance with this Agreement or at the direction of the Certificate
relating to the time, method, and place of conducting any proceeding for
any remedy available to the Owner Trustee, or exercising any trust or
power conferred upon the Owner Trustee, under this Agreement;
(iv) The Owner Trustee shall not be charged with knowledge of any
failure by the Servicer to comply with the obligations of the Servicer
referred to in clauses (i) or (ii) of Section 8.01, or of any failure by
the Transferor to comply with the obligations of the Transferor referred
to in clause (ii) of Section 8.01, unless a Responsible Officer of the
Owner Trustee receives written notice of such failure (it being
understood that knowledge of the Servicer or the Servicer as custodian,
in its capacity as agent for the Owner Trustee, is not attributable to
the Owner Trustee) from the Servicer or the Transferor, as the case may
be; and
(v) Without limiting the generality of this Section or Section
15.07, the Owner Trustee shall have no duty (A) to see to any recording,
filing, or depositing of this Agreement or any agreement referred to
therein or any financing statement (or continuation statement)
evidencing a security interest in the Receivables or the Financed
Vehicles, or to see to the maintenance of any such recording or filing
or depositing or to any rerecording, refiling or redepositing of any
thereof, (B) to see to any insurance of the Financed Vehicles or
Obligors or to effect or maintain any such insurance, (C) to see to the
payment or discharge of any tax, assessment, or other governmental
charge or any Lien or encumbrance of any kind owing with respect to,
assessed, or levied against, any part of the Trust, (D) to confirm or
verify the contents of any reports or certificates of the Servicer
delivered to the Trust pursuant to this Agreement believed by the Owner
Trustee to be genuine and to have been signed or presented by the proper
party or parties, or (E) to inspect the Financed Vehicles at any time or
ascertain or inquire as to the performance or observance of any of the
Transferor's or the Servicer's representations,
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warranties or covenants or the Servicer's duties and obligations as
Servicer and as custodian of the Receivable Files under this Agreement.
The Owner Trustee shall not be required to expend or risk its own funds
or otherwise incur financial liability in the performance of any of its duties
hereunder, or in the exercise of any of its rights or powers, if there shall be
reasonable ground for believing that the repayment of such funds or adequate
indemnity against such risk or liability shall not be reasonably assured to it,
and none of the provisions contained in this Agreement shall in any event
require the Owner Trustee to perform, or be responsible for the manner of
performance of, any of the obligations of the Servicer under this Agreement
except during such time, if any, as the Owner Trustee shall be the successor to,
and be vested with the rights, duties, powers, and privileges of, the Servicer
in accordance with the terms of this Agreement. Except for actions expressly
authorized by this Agreement, the Owner Trustee shall take no action reasonably
likely to impair the security interests created or existing under any Receivable
or to impair the value of any Receivable.
SECTION 15.03. ACCOUNTING AND RECORDS TO THE CERTIFICATEHOLDER, THE
INTERNAL REVENUE SERVICE AND OTHERS. The Owner Trustee shall (a) maintain (or
cause to be maintained) the books of the Trust on a calendar year basis with
respect to amounts actually received or disbursed by the Owner Trustee, (b)
deliver (or cause to be delivered) to each Certificateholder, as may be required
by the Code and applicable Treasury Regulations, such information as may be
requested to enable each Certificateholder to prepare its federal and state
income tax returns, and (c) file or cause to be filed such tax returns relating
to the Trust provided to it in execution form, and pursuant to direction of BVAC
make such elections, except Form 8832, as may from time to time be requested in
connection with any applicable state or federal statute or rule or regulation
thereunder. The Owner Trustee shall make all elections pursuant to this Section
as directed in writing by BVAC. The Owner Trustee shall sign all tax information
returns provided to it in execution form pursuant to this Section and any other
returns as may be requested by BVAC, and in doing so shall rely entirely upon,
and shall have no liability for information provided by, or calculations
provided by, BVAC. The Trust shall elect under Section 1278 of the Code to
include in income currently any market discount that accrues with respect to the
Receivables. The Trust shall not make the election provided under Section 754 of
the Code.
SECTION 15.04. SIGNATURE ON RETURNS; TAX MATTERS PARTNER.
(a) The Owner Trustee shall sign on behalf of the Trust the tax returns
of the Trust, if any, unless applicable law requires a Certificateholder to sign
such documents, in which case, as provided in Section 9.10 such documents shall
be signed by BVAC as "tax matter partner".
(b) The Certificateholder hereby elects BVAC as the "tax matters
partner" of the Trust pursuant to Section 6231 of the Code and the Treasury
Regulations promulgated thereunder.
SECTION 15.05. OWNER TRUSTEE'S CERTIFICATE. On or as soon as
practicable after each Payment Date on which Receivables shall be (i) assigned
to BVAC pursuant to Section 7.02 or deemed to be assigned to the Transferor as a
result of the application of Available Funds in respect of Charged-Off
Receivables pursuant to Sections 9.05 or (ii) assigned to the Servicer pursuant
to Section 8.10 or to the Servicer or any other Person designated by the
Servicer pursuant to Section 16.02, the Owner Trustee shall, at the written
request of the Servicer, execute an Owner Trustee's Certificate, substantially
in the form of, in the case of an assignment to BVAC, Exhibit 1, or, in the case
of an assignment to the Servicer, Exhibit 2, based on the information contained
in the Servicer's Certificate for the related Collection Period, amounts
deposited to the Collection Account, and notices received pursuant to this
Agreement, identifying the Receivables repurchased or deemed to be repurchased
by BVAC pursuant to Section 7.02 or Section 8.08 or purchased by the Servicer
pursuant to Section 8.10 or the Servicer or any other Person designated by the
Servicer pursuant to Section 16.02 during such Collection Period, and shall
deliver such Owner Trustee's Certificate, accompanied by a copy of the
Servicer's Certificate for such Collection Period to BVAC or the Servicer, as
the case may be with a copy to the Indenture Trustee. The Owner Trustee's
Certificate shall be an assignment pursuant to Section 15.06.
SECTION 15.06. TRUST'S ASSIGNMENT OF PURCHASED RECEIVABLES. With
respect to each Receivable repurchased by BVAC pursuant to Section 7.02 or
Section 8.08, or deemed to be so repurchased pursuant to Section 8.05, purchased
by the Servicer pursuant to Section 8.10 or the Servicer
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or any other Person designated by the Servicer pursuant to Section 16.02, the
Trust shall assign, as of the last day of the Collection Period during which
such Receivable became a Charged-Off Receivable or became subject to repurchase
by BVAC or purchase by the Servicer or such other Person, without recourse,
representation, or warranty, to BVAC, the Servicer or such other Person (as the
case may be) all the Trust's right, title, and interest in and to such
Receivables, and all security and documents relating thereto, such assignment
being an assignment outright and not for security. If in any enforcement suit or
legal proceeding it shall be held that the Servicer may not enforce a Receivable
on the ground that it shall not be a real party in interest or a holder entitled
to enforce the Receivable, the Owner Trustee shall, at BVAC's expense, take such
steps as the Owner Trustee deems necessary to enforce the Receivable, including
bringing suit in its name and/or the name of the Indenture Trustee.
SECTION 15.07. CERTAIN MATTERS AFFECTING THE OWNER TRUSTEE. Except as
otherwise provided in Section 15.01:
(i) The Owner Trustee may rely and shall be protected in acting
or refraining from acting upon any resolution, Officers' Certificate,
Servicer's Certificate, certificate of auditors, or any other
certificate, statement, instrument, opinion, report, notice, request,
consent, order, appraisal, bond, or other paper or document believed by
it to be genuine and to have been signed or presented by the proper
party or parties.
(ii) The Owner Trustee may consult with counsel and any advice or
Opinion of Counsel shall be full and complete authorization and
protection in respect of any action taken or suffered or omitted by it
under this Agreement in good faith and in accordance with such advice or
Opinion of Counsel.
(iii) The Owner Trustee shall be under no obligation to exercise
any of the rights or powers vested in it by this Agreement, or to
institute, conduct, or defend any litigation under this Agreement or in
relation to this Agreement, at the request, order, or direction of the
Certificateholder pursuant to the provisions of this Agreement, unless
the Certificateholder shall have offered to the Owner Trustee reasonable
security or indemnity reasonably satisfactory to the Owner Trustee
against the costs, expenses, and liabilities that may be incurred
therein or thereby. Nothing contained in this Agreement, however, shall
relieve the Owner Trustee of the obligations, upon the occurrence of an
Event of Default (that shall not have been cured), to exercise such of
the rights and powers vested in it by this Agreement, and to use the
same degree of care and skill in their exercise as a prudent man would
exercise or use under the circumstances in the conduct of his own
affairs.
(iv) The Owner Trustee shall not be liable for any action taken,
suffered, or omitted by it in good faith and believed by it to be
authorized or within the discretion or rights or powers conferred upon
it by this Agreement.
(v) Prior to the occurrence of an Event of Default and after the
curing of all Events of Servicer Default that may have occurred, the
Owner Trustee shall not be bound to make any investigation into the
facts of matters stated in any resolution, certificate, statement,
instrument, opinion, report, notice, request, consent, order, approval,
bond, or other paper or document, unless requested in writing to do so
by the Insurer or the Indenture Trustee or holders of Notes evidencing
not less than 25% of the outstanding principal balance of the Notes;
provided, however, that if the payment within a reasonable time to the
Owner Trustee of the costs, expenses, or liabilities likely to be
incurred by it in the making of such investigation shall be, in the
opinion of the Owner Trustee, not reasonably assured to the Owner
Trustee by the security afforded to it by the terms of this Agreement,
the Owner Trustee may require reasonable indemnity against such cost,
expense, or liability as a condition to so proceeding. The reasonable
expense of every such examination shall be paid by BVAC, as initial
Servicer, or, if paid by the Owner Trustee, shall be reimbursed by BVAC,
as initial Servicer, upon demand. Nothing in this clause (v) shall
affect the obligation of the Servicer to observe any applicable law
prohibiting disclosure of information regarding the Obligors.
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(vi) The Owner Trustee may execute any of the trusts or powers
hereunder or perform any duties under this Agreement either directly or
by or through agents or attorneys or a custodian. The Owner Trustee
shall not be responsible for any misconduct or negligence solely
attributable to the acts or omissions of the Servicer in its capacity as
Servicer or custodian or the Administrator.
(vii) The Owner Trustee shall have no duty of independent
inquiry, except as may be required by Section 15.01, and the Owner
Trustee may rely upon the representations and warranties and covenants
of the Transferor and the Servicer contained in this Agreement with
respect to the Receivables and the Receivable Files.
SECTION 15.08. OWNER TRUSTEE NOT LIABLE FOR CERTIFICATE OR RECEIVABLES.
The recitals contained herein and in the Certificate (other than the certificate
of authentication on the Certificate) shall be taken as the statements of the
Transferor or the Servicer, as the case may be, and the Owner Trustee assumes no
responsibility for the correctness thereof. The Owner Trustee shall make no
representations as to the validity or sufficiency of this Agreement or of the
Certificate (other than the certificate of authentication on the Certificate),
or of any Receivable or related document. The Owner Trustee shall at no time
have any responsibility or liability for or with respect to the legality,
validity, and enforceability of any security interest in any Financed Vehicle or
any Receivable, or the perfection and priority of such a security interest or
the maintenance of any such perfection and priority, or for or with respect to
the efficacy of the Trust or its ability to generate the payments to be
distributed to the Certificateholder or the Noteholders under this Agreement or
the Indenture, including, without limitation: the existence, condition,
location, and ownership of any Financed Vehicle; the existence and
enforceability of any physical damage insurance, lender's single interest
insurance, or credit life or disability and hospitalization insurance with
respect to any Receivable; the existence and contents of any Receivable or any
computer or other record thereof; the validity of the assignment of any
Receivable to the Trust or of any intervening assignment; the completeness of
any Receivable; the performance or enforcement of any Receivable; the compliance
by the Transferor or the Servicer with any warranty or representation made under
this Agreement or in any related document and the accuracy of any such warranty
or representation prior to the Owner Trustee's receipt of notice or other
discovery of any noncompliance therewith or any breach thereof; any investment
of monies by the Servicer or any loss resulting therefrom (it being understood
that the Owner Trustee shall remain responsible for any Trust Property that it
may hold); the acts or omissions of the Transferor, the Servicer, or any
Obligor; an action of the Servicer taken in the name of the Owner Trustee; or
any action by the Owner Trustee taken at the instruction of the Servicer. Except
with respect to a claim based on the failure of the Owner Trustee to perform its
duties under this Agreement or based on the Owner Trustee's negligence or
willful misconduct, no recourse shall be had for any claim based on any
provision of this Agreement, the Certificateholder or the Noteholders, or any
Receivable or assignment thereof against the Owner Trustee in its individual
capacity, the Owner Trustee shall not have any personal obligation, liability,
or duty whatsoever to any Certificateholder or the Noteholders or any other
Person with respect to any such claim, and any such claim shall be asserted
solely against the Trust or any indemnitor who shall furnish indemnity as
provided in this Agreement. The Owner Trustee shall not be accountable for the
use or application by the Transferor of any Certificate or Notes or of the
proceeds thereof, or for the use or application of any funds paid to the
Transferor or the Servicer in respect of the Receivables.
SECTION 15.09. OWNER TRUSTEE MAY OWN NOTES. The Owner Trustee in its
individual or any other capacity may become the owner or pledgee of Notes with
the same rights as it would have if it were not the Owner Trustee.
SECTION 15.10. OWNER TRUSTEE'S AND INDENTURE TRUSTEE'S FEES AND
EXPENSES; INDEMNIFICATION.
(a) In accordance with the priorities set forth in Section 9.05(a) of
the Indenture, the Owner Trustee shall receive as compensation for its services
hereunder the Owner Trustee Fee, and the Owner Trustee shall be entitled to be
reimbursed in accordance with such priorities for its other reasonable expenses
incurred hereunder, including the reasonable compensation, expenses and
disbursements of such agents, representatives, experts and counsel as the Owner
Trustee may employ in connection with the exercise and performance of its rights
and its duties hereunder and under the Basic Documents, and
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the Servicer shall pay or reimburse the Owner Trustee upon its request for all
reasonable expenses, disbursements, and advances (including the reasonable
compensation and the expenses and disbursements of its counsel and of all
persons not regularly in its employ) incurred or made by the Owner Trustee in
accordance with any provisions of this Agreement and the Indenture, except any
such expense, disbursement, or advance as may be attributable to its willful
misfeasance, negligence, or bad faith. Any amounts paid to the Owner Trustee
pursuant to this Section 15.10 shall be deemed not to be a part of the Trust
Property immediately after such payment. The Servicer shall indemnify the Owner
Trustee (which, for purposes of this section, shall include its directors,
officers, employees, and agents) for and hold it harmless against any loss,
liability, or expense incurred without willful misfeasance, negligence, or bad
faith on its part, arising out of or in connection with the acceptance or
administration of the Trust, including the costs and expenses of defending
itself against any claim or liability in connection with the exercise or
performance of any of its powers or duties under this Agreement and the
Indenture. The Servicer shall pay the fees and expenses of the Administrator
under the Administration Agreement; provided, however, that the Servicer shall
only be required to pay the reasonable fees and expenses of any successor
Administrator or such other fees agreed to in writing by the Servicer and BVAC.
Additionally, the Transferor, pursuant to Section 12.02 and subject to the
limitations set forth therein, and the Servicer, pursuant to Section 13.02,
respectively, shall indemnify the Owner Trustee with respect to certain matters.
This indemnity shall survive the termination of this Agreement and the Indenture
or the termination of the Trust and the resignation or removal of the Owner
Trustee.
(b) The Servicer hereby agrees to pay or reimburse the fees and expenses
of the Indenture Trustee as provided in Section 6.07 of the Indenture. No
successor Servicer shall be obligated to make the indemnity payments required by
this Section 15.10 and instead the Owner Trustee and the Indenture Trustee shall
receive such amounts, to the extent of Available Funds on each Payment Date, in
the priorities set forth in Section 9.05(a) of the Indenture provided, however,
the Owner Trustee agrees that no amount owed or paid under the Policy shall be
paid to the Owner Trustee for amounts payable to the Owner Trustee.
SECTION 15.11. ELIGIBILITY REQUIREMENTS FOR OWNER TRUSTEE. The Owner
Trustee under this Agreement shall at all times be a corporation (i) having an
office in the same State as the location of the Corporate Trust Office as
specified in this Agreement; (ii) organized and doing business under the laws of
such State or the United States of America; (iii) authorized under such laws to
exercise corporate trust powers; (iv) having a net worth of at least
$50,000,000; (v) subject to supervision or examination by federal or State
authorities; and (vi) the long-term unsecured debt of which is rated at least A2
by Moody's and A by Standard & Poor's or which is approved by the Insurer and
each Rating Agency. If such corporation shall publish reports of condition at
least annually, pursuant to law or to the requirements of the aforesaid
supervising or examining authority, then for the purpose of this Section 15.11,
the combined capital and surplus of such corporation shall be deemed to be its
combined capital and surplus as set forth in its most recent report of condition
so published. In case at any time the Owner Trustee shall cease to be eligible
in accordance with the provisions of this Section 15.11, the Owner Trustee shall
resign immediately in the manner and with the effect specified in Section 15.12.
SECTION 15.12. RESIGNATION OR REMOVAL OF OWNER TRUSTEE. The Owner
Trustee may at any time resign and be discharged from the trusts hereby created
by giving written notice thereof to the Servicer. Upon receiving such notice of
resignation, the Servicer (or it SST is then acting as the Servicer, the
Indenture Trustee), with the prior written consent of the Insurer (so long as it
is the Controlling Party), shall promptly appoint a successor Owner Trustee, by
written instrument, in duplicate, one copy of which instrument shall be
delivered to the resigning Trustee and one copy to the successor Owner Trustee.
If no successor Owner Trustee shall have been so appointed and have accepted
appointment within 30 days after the giving of such notice of resignation, the
resigning Owner Trustee may petition any court of competent jurisdiction for the
appointment of a successor Owner Trustee.
If at any time the Owner Trustee shall cease to be eligible in
accordance with the provisions of Section 15.11 and shall fail to resign after
written request therefor by the Servicer, or if at any time the Owner Trustee
shall be legally unable to act, or shall be adjudged a bankrupt or insolvent, or
a receiver of the Owner Trustee or of its property shall be appointed, or any
public officer shall take charge or control of the Owner Trustee or of its
property or affairs for the purpose of rehabilitation, conservation, or
liquidation, then the Servicer may remove the Owner Trustee. If it shall remove
the Owner Trustee under the
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authority of the immediately preceding sentence, the Servicer shall promptly
appoint a successor Owner Trustee by written instrument, in duplicate, one copy
of which instrument shall be delivered to the Owner Trustee so removed and one
copy to the successor Owner Trustee.
Any resignation or removal of the Owner Trustee and appointment of a
successor Owner Trustee pursuant to any of the provisions of this Section 15.12
shall not become effective until acceptance of appointment by the successor
Owner Trustee pursuant to Section 15.13.
SECTION 15.13. SUCCESSOR OWNER TRUSTEE. Any successor Owner Trustee
appointed pursuant to Section 15.12 shall execute, acknowledge, and deliver to
the Servicer and to its predecessor Owner Trustee an instrument accepting such
appointment under this Agreement, and thereupon the resignation or removal of
the predecessor Owner Trustee shall become effective and such successor Owner
Trustee, without any further act, deed, or conveyance, shall become fully vested
with all the rights, powers, duties, and obligations of its predecessor under
this Agreement, with like effect as if originally named as Owner Trustee. Any
successor Owner Trustee appointed hereunder shall file an amendment to the
Certificate of Trust with the Delaware Secretary of State reflecting the name
and principal place of business of such successor Owner Trustee in the State of
Delaware. The predecessor Owner Trustee shall deliver to the successor Owner
Trustee all documents and statements held by it under this Agreement; and the
Servicer and the predecessor Owner Trustee shall execute and deliver such
instruments and do such other things as may reasonably be required for fully and
certainly vesting and confirming in the successor Owner Trustee all such rights,
powers, duties, and obligations.
No successor Owner Trustee shall accept appointment as provided in this
Section 15.13 unless at the time of such acceptance such successor Owner Trustee
shall be eligible pursuant to Section 15.11.
Upon acceptance of appointment by a successor Owner Trustee pursuant to
this Section 15.13, the Servicer shall mail notice of the successor of such
Owner Trustee under this Agreement to the Indenture Trustee and to the Holder of
the Certificate at its address as shown in the Certificate Register. If the
Servicer shall fail to mail such notice within 10 days after acceptance of
appointment by the successor Owner Trustee, the successor Owner Trustee shall
cause such notice to be mailed at the expense of the Servicer (or if BVAC is no
longer the Servicer, the Owner Trustee shall be reimbursed for such expenses in
accordance with the priorities set forth in Section 9.05(a) of the Indenture).
SECTION 15.14. MERGER OR CONSOLIDATION OF OWNER TRUSTEE. Any
corporation into which the Owner Trustee may be merged or converted or with
which it may be consolidated, or any corporation resulting from any merger,
conversion, or consolidation to which the Owner Trustee shall be a party, or any
corporation succeeding to all or substantially all of the corporate trust
business of the Owner Trustee, shall be the successor of the Owner Trustee
hereunder, provided such corporation shall be eligible pursuant to Section
15.11, without the execution or filing of any instrument or any further act on
the part of any of the parties hereto, anything herein to the contrary
notwithstanding.
SECTION 15.15. APPOINTMENT OF CO-TRUSTEE OR SEPARATE OWNER TRUSTEE.
Notwithstanding any other provisions of this Agreement, at any time, for the
purpose of meeting any legal requirements of any jurisdiction in which any part
of the Trust or any Financed Vehicle may at the time be located, the Servicer
(or if SST is then acting as Servicer, the Back-up Servicer) and the Owner
Trustee acting jointly shall have the power and shall execute and deliver all
instruments to appoint one or more Persons approved by the Owner Trustee to act
as co-trustee, jointly with the Owner Trustee, or separate trustee or separate
trustees, of all or any part of the Trust, and to vest in such Person, in such
capacity and for the benefit of the Certificateholder, such title to the Trust,
or any part thereof, and, subject to the other provisions of this Section 15.15,
such powers, duties, obligations, rights, and trusts as the Servicer and the
Owner Trustee may consider necessary or desirable. If the Servicer shall not
have joined in such appointment within 15 days after the receipt by it of a
request so to do, or in the case an Event of Servicer Default shall have
occurred and be continuing, the Owner Trustee alone shall have the power to make
such appointment. No co-trustee or separate trustee under this Agreement shall
be required to meet the terms of eligibility as a successor Owner Trustee
pursuant to Section 15.11 and no notice to Certificateholder of the appointment
of any co-trustee or separate trustee shall be required pursuant to Section
15.13.
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Each separate trustee and co-trustee shall, to the extent permitted by
law, be appointed and act subject to the following provisions and conditions:
(i) All rights, powers, duties, and obligations conferred or imposed
upon the Owner Trustee shall be conferred upon and exercised or performed by the
Owner Trustee and such separate trustee or co-trustee jointly (it being
understood that such separate trustee or co-trustee is not authorized to act
separately without the Owner Trustee joining in such act), except to the extent
that under any law of any jurisdiction in which any particular act or acts are
to be performed, the Owner Trustee shall be incompetent or unqualified to
perform such act or acts, in which event such rights, powers, duties, and
obligations (including the holding of title to the Trust or any portion thereof
in any such jurisdiction) shall be exercised and performed singly by such
separate trustee or co-trustee, but solely at the direction of the Owner
Trustee;
(ii) No trustee under this Agreement shall be personally liable by
reason of any act or omission of any other trustee under this Agreement; and
(iii) The Servicer and the Owner Trustee acting jointly may at any time
accept the resignation of or remove any separate trustee or co-trustee.
Any notice, request, or other writing given to the Owner Trustee shall
be deemed to have been given to each of the then separate trustees and
co-trustees, as effectively as if given to each of them. Every instrument
appointing any separate trustee or co-trustee shall refer to this Agreement and
the conditions of this Article XV. Each separate trustee and co-trustee, upon
its acceptance of the trusts conferred, shall be vested with the estates or
property specified in its instrument of appointment, either jointly with the
Owner Trustee or separately, as may be provided therein, subject to all the
provisions of this Agreement, specifically including every provision of this
Agreement relating to the conduct of, affecting the liability of, or affording
protection to, the Owner Trustee. Each such instrument shall be filed with the
Owner Trustee and a copy thereof given to the Servicer.
Any separate trustee or co-trustee may at any time appoint the Owner
Trustee, its agent or attorney-in-fact with full power and authority, to the
extent not prohibited by law, to do any lawful act under or in respect of this
Agreement on its behalf and in its name. If any separate trustee or co-trustee
shall die, become incapable of acting, resign, or be removed, all of its
estates, properties, rights, remedies, and trusts shall vest in and be exercised
by the Owner Trustee, to the extent permitted by law, without the appointment of
a new or successor Owner Trustee.
SECTION 15.16. REPRESENTATIONS AND WARRANTIES OF OWNER TRUSTEE. The
Owner Trustee makes the following representations and warranties on which the
Transferor, the Certificateholder and the Secured Parties may rely:
(i) Organization and Existence. The Owner Trustee is a national
banking corporation duly organized and validly existing under the laws
of the State of Delaware and is authorized to engage in a banking and
trust business under such laws.
(ii) Power and Authority. The Owner Trustee has full power,
authority, and legal right to execute, deliver, and perform this
Agreement, and shall have taken all necessary action to authorize the
execution, delivery, and performance by it of this Agreement.
(iii) Duly Executed. This Agreement has been duly executed and
delivered by the Owner Trustee and constitutes the legal, valid, and
binding agreement of the Owner Trustee, enforceable in accordance with
its terms, except as such enforceability may be limited by (i)
bankruptcy, insolvency, liquidation, reorganization, moratorium,
conservatorship, receivership or other similar laws now or hereinafter
in effect relating to the enforcement of creditors' rights in general,
as such laws would apply in the event of a bankruptcy, insolvency,
liquidation, reorganization, moratorium, conservatorship, receivership
or similar occurrence affecting the Owner Trustee, and (ii) general
principles of equity (regardless of whether such enforceability is
considered in a proceeding in equity or at law) as well as concepts of
reasonableness, good faith and fair dealing.
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ARTICLE XVI
TERMINATION
SECTION 16.01. TERMINATION OF THE TRUST.
(a) The respective obligations and responsibilities of the Transferor,
the Servicer, the Standby Servicer, the Indenture Trustee, the Back-up Servicer
and the Owner Trustee created hereby shall terminate and the Trust created by
this Agreement shall dissolve upon (i) written notice to the Owner Trustee from
the Servicer (or if SST is then acting Servicer, the Transferor) at any time
after the disposition of the Trust corpus as of the last day of any Collection
Period at the direction of the Servicer, at its option, pursuant to Section
16.02, or (ii) the payment to all Noteholders and the Insurer of all amounts
required to be paid to them pursuant to this Agreement, the Indenture and the
Insurance Agreement (as set forth in writing by the Insurer) and the disposition
of all property held as part of the Trust; however, that in no event shall the
trust created by this Agreement continue beyond the expiration of 21 years from
the date as of which this Agreement is executed. The Servicer shall promptly
notify the Owner Trustee, the Indenture Trustee and the Insurer in writing of
any prospective termination pursuant to this Section 16.01. Notwithstanding the
foregoing, the Trust shall continue and the Indenture Trustee shall pursue
recovery of any Preference Amounts under the Policy and the distribution of the
same to Noteholders until the Policy terminates by its own terms.
(b) Neither the Transferor nor any Certificateholder shall be entitled
to revoke or terminate the Trust.
(c) Notice of any termination of the Trust, specifying the Payment Date
upon which the Certificateholder shall surrender its Certificate to the
Indenture Trustee, as paying agent who shall then surrender such Certificate to
the Owner Trustee for cancellation, shall be given by the Owner Trustee by
letter to the Certificateholder mailed within five Business Days of receipt of
notice of such termination from the Transferor or Servicer, as the case may be,
given pursuant to this Section 16.01 stating (i) the Payment Date upon or with
respect to which final payment of the Certificate shall be made upon
presentation and surrender of the Certificate at the office of the Indenture
Trustee therein designated, (ii) the amount of any such final payment and (iii)
that the Record Date otherwise applicable to such Payment Date is not
applicable, payments being made only upon presentation and surrender of the
Certificate at the office of the Owner Trustee therein specified. The Owner
Trustee shall give such notice to the Certificate Registrar (if other than the
Owner Trustee), the Insurer and the Indenture Trustee at the time such notice is
given to the Certificateholder. Upon presentation and surrender of the
Certificate to the Owner Trustee, the Indenture Trustee shall cause to be
distributed to the Certificateholder amounts distributable on such Payment Date
pursuant to Section 16.02.
In the event that the Certificateholder shall not surrender its
Certificate for cancellation within six months after the date specified in the
above-mentioned written notice, the Owner Trustee shall give a second written
notice to the Certificateholder to surrender its Certificate for cancellation
and receive the final distribution with respect thereto. If within one year
after the second notice the Certificate shall not have been surrendered for
cancellation, any funds remaining in the Trust after exhaustion of such remedies
shall be distributed, subject to applicable escheat laws, by the Indenture
Trustee to the Transferor and the Certificateholder shall look solely to the
Transferor for payment.
(d) Any funds remaining in the Trust after funds for final distribution
have been distributed or set aside for distribution and reasonable provision has
been made for known claims and obligations of the Trust shall be distributed to
the Certificateholder.
(e) Upon dissolution and the winding up of the Trust pursuant to Section
16.01(a), the Owner Trustee shall cause the Certificate of Trust to be canceled
by filing a certificate of cancellation with the Secretary of State in
accordance with the provisions of Section 3810 of the Delaware Statutory Trust
Act.
SECTION 16.02. OPTIONAL DISPOSITION OF ALL RECEIVABLES. On any Payment
Date (after giving effect to any payments to be made on such Payment Date) on
which (i) the Notional Principal Amount has been reduced to zero and (ii) the
aggregate Principal Balance of the Receivables will be equal to or less than 10%
of the Original Pool Balance, the Servicer shall have the option to cause the
Owner Trustee to
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sell (to the Servicer or any other person designated by the Servicer) the corpus
of the Trust at the Redemption Price. Any such purchase will be effective as of
the end of the Collection Period which relates to the Payment Date on which the
repurchase occurs. The proceeds of such sale will be deposited into the
Collection Account for distribution to the Indenture Trustee (and, to the extent
applicable, the Insurer) on the next succeeding Payment Date. The Servicer shall
notify the Owner Trustee and the Indenture Trustee on or before the
Determination Date if the aggregate Principal Balance as of the related Payment
Date (after giving effect to any payments to be made on such Payment Date) will
be less than or equal to 10% of the Original Pool Balance. The Servicer shall
notify the Owner Trustee and the Indenture Trustee in writing on or before the
Determination Date if the Servicer intends to exercise its option to purchase
the corpus of the Trust pursuant to this Section 16.02. Such Redemption Price
shall be deposited to the Collection Account in immediately available funds by
11:00 a.m., New York City time, on the Payment Date and, upon notice to the
Owner Trustee and the Indenture Trustee of such deposit, whereupon the Notes and
the Certificate shall no longer evidence any right or interest in the
Receivables or any proceeds thereof. The fair market value of the outstanding
Receivables for purposes of this Section 16.02 shall be an amount equal to the
average of the bid prices for such assets taken as a whole, provided to the
Servicer by two independent, nationally recognized dealers in automobile loans
substantially similar to the Receivables.
ARTICLE XVII
MISCELLANEOUS PROVISIONS
SECTION 17.01. AMENDMENT.
(a) This Agreement may be amended from time to time by the Issuer, the
Transferor, the Servicer, the Back-up Servicer, the Standby Servicer, BVAC, the
Owner Trustee and the Indenture Trustee and, (i) so long as the Insurer is the
Controlling Party, with the prior written consent of the Insurer and, (ii) if an
Insurer Default has occurred and is continuing or the Insurance Agreement has
terminated with the consent of the Majority Noteholders (which consent given
pursuant to this Section or pursuant to any other provision of this Agreement
shall be conclusive and binding on such Holders and on all future Holders of
such Notes and of any Notes issued upon the transfer thereof or in exchange
thereof or in lieu thereof whether or not notation of such consent is made upon
the Notes) 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 Holders of Notes; provided, however, that, in the case
of either clause (i) or (ii) above, no such amendment shall (a) increase or
reduce in any manner the amount of, or accelerate or delay the timing of, or
change the allocation or priority of, collections of payments on Receivables or
payments that shall be required to be made on any Note or Certificate or change
the applicable interest rate payable on any Note without the consent of each
Noteholder and Certificateholder affected thereby, (b) reduce the aforesaid
percentage of the Note Balance required to consent to any such amendment,
without the consent of the Holders of all Notes then outstanding or eliminate
the right of the Noteholder or the Certificateholder to consent to any change
described in clause (a) affecting the Noteholder or the Certificateholder
without the consent of the Noteholder or the Certificateholder, as applicable,
or (c) result in a downgrade or withdrawal of the then current rating of the
Notes by either of the Rating Agencies without the consent of all the
Noteholders; provided, further that in the case of clause (ii) above, this
Agreement may be amended from time to time by the Issuer, the Transferor, the
Servicer, the Back-up Servicer, the Standby Servicer, BVAC, the Owner Trustee
and the Indenture Trustee, with the prior written consent of the Insurer, so
long as it is the Controlling Party, for any of the following purposes:
(x) to correct or amplify the description of any property at any
time conveyed to the Issuer hereunder, or better to assure, convey and
confirm unto the property conveyed pursuant hereto;
(y) to add to the covenants of the Transferor, BVAC, the
Servicer, the Back-up Servicer or the Standby Servicer for the benefit
of the Holders of the Notes and the Insurer; or
(z) to cure any ambiguity, to correct or supplement any provision
herein which may be inconsistent with any other provision herein or to
make any other provisions with respect to matters or questions arising
under this Agreement; provided that such action pursuant to this
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subclause (z) shall not adversely affect in any material respect the
interests of the Holders of the Notes, as evidenced by written
confirmation that such amendment would not result in a downgrade or
withdrawal of the then current rating of the Notes by either of the
Rating Agencies.
(b) The Owner Trustee shall furnish prior notice of any such proposed
amendment to each Rating Agency and promptly after the execution of any such
amendment or consent, the Indenture Trustee shall furnish a copy of such
amendment and/or consent, if applicable, to each Noteholder, the Insurer and
each of the Rating Agencies.
(c) Prior to the execution of any amendment to this Agreement, the Owner
Trustee shall be entitled to receive and rely upon an Opinion of Counsel stating
that the execution of such amendment is authorized or permitted by this
Agreement and the Opinion of Counsel referred to in Section 17.02(i)(1). The
Indenture Trustee may, but shall not be obligated to, enter into any such
amendment which affects the Indenture Trustee's own rights, duties or immunities
under this Agreement or otherwise.
(d) So long as an Insurer Default shall not have occurred and be
continuing and the Insurance Agreement has not terminated, the Insurer shall
have the right to exercise all rights, including voting rights, which the
Noteholders are entitled to exercise pursuant to this Agreement, without any
consent of such Noteholders; provided, however, that without the consent of each
Noteholder affected thereby, the Insurer shall not exercise such rights to amend
this Agreement in any manner that would (i) reduce the amount of, or delay the
timing of, collections of payments on the Receivables or distributions which are
required to be made on any Note, (ii) adversely affect in any material respect
the interests of the Holders of any Notes, or (iii) alter the rights of any such
Holder to consent to such amendment.
(e) Notwithstanding any provision in this Agreement to the contrary, in
the event an Insurer Default shall have occurred and be continuing or the
Insurance Agreement has terminated, the Insurer shall not have the right to take
any action under this Agreement, consent to or to control or direct the actions
of the Trust, the Transferor, the Servicer, the Back-up Servicer, the Standby
Servicer, the Indenture Trustee or the Owner Trustee pursuant to the terms of
this Agreement, nor shall the consent of the Insurer be required with respect to
any action (or waiver of a right to take action) to be taken by the Trust, the
Transferor, the Servicer, the Back-up Servicer, the Standby Servicer, the
Indenture Trustee, the Owner Trustee or the Noteholders or the
Certificateholder.
(f) It shall not be necessary for the consent of the Certificateholder
or the Noteholders pursuant to this Section 17.01 to approve the particular form
of any proposed amendment or consent, but it shall be sufficient if such consent
shall approve the substance thereof. The manner of obtaining such consents and
of evidencing the authorization of the execution thereof by the
Certificateholder shall be subject to such reasonable requirements as the Owner
Trustee may prescribe.
(g) Promptly after the execution of any amendment to the Certificate of
Trust, the Owner Trustee shall cause the filing of such amendment with the
Secretary of State of the State of Delaware.
SECTION 17.02. PROTECTION OF TITLE TO TRUST.
(a) Each of the Transferor and BVAC, as to itself, shall file such
financing statements and cause to be 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 Noteholders, to the extent expressly
set forth herein or the other Basic Documents, the Insurer and the Indenture
Trustee in the Receivables and in the proceeds thereof and the sale of accounts
and chattel paper. Each of the Transferor and BVAC, as to itself, shall deliver
(or cause to be delivered) to the Indenture Trustee and the Insurer file-stamped
copies of, or filing receipts for, any document filed as provided above, as soon
as available following such filing.
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(b) Neither BVAC nor the Transferor shall change its name, identity, or
corporate structure in any manner that would, could, or might make any financing
statement or continuation statement filed by the Transferor or BVAC in
accordance with paragraph (a) above seriously misleading within the meaning of
Section 9-507 of the UCC, unless it shall have given the Indenture Trustee and
the Insurer at least 60 days' prior written notice thereof and shall have
promptly filed appropriate amendments to all previously filed financing
statements or continuation statements and shall have delivered an Opinion of
Counsel (A) stating that, in the opinion of such counsel, all amendments to all
previously filed financing statements and continuation statements have been
executed and filed that are necessary fully to preserve and protect the interest
of the Indenture Trustee in the Receivables and the other Trust Property, and
reciting the details of such filings or (B) stating that, in the opinion of such
counsel, no such action shall be necessary to preserve and protect such
interest.
(c) Each of the Transferor and BVAC shall give the Indenture Trustee and
the Insurer at least 60 days' prior written notice of any relocation of its
principal executive office, or state of incorporation, if, as a result of such
relocation, the applicable provisions of the UCC would require the filing of any
amendment of any previously filed financing or continuation statement or of any
new financing statement and shall promptly file any such amendment and shall
have delivered an Opinion of Counsel (A) stating that, in the opinion of such
counsel, all amendments to all previously filed financing statements and
continuation statements have been executed and filed that are necessary fully to
preserve and protect the interest of the Indenture Trustee in the Receivables
and the other Trust Property, and reciting the details of such filings or (B)
stating that, in the opinion of such counsel, no such action shall be necessary
to preserve and protect such interest. The Servicer shall at all times maintain
each office from which it shall service Receivables, and its principal executive
office, within the United States of America.
(d) The Servicer shall maintain accounts and records as to each
Receivable accurately and in sufficient detail to permit (i) the reader thereof
to know at any time the status of such Receivable, including payments and
recoveries made and payments owing (and the nature of each) and (ii)
reconciliation between payments or recoveries on (or with respect to) each
Receivable and the amounts from time to time deposited in the Collection Account
in respect of such Receivable.
(e) The Servicer shall maintain its computer systems so that, from and
after the time of sale under this Agreement of the Receivables to the Trust, the
Servicer's master computer records (including any back-up archives) that refer
to a Receivable shall indicate clearly (including by means of tagging) the
interest of the Trust in such Receivable and that such Receivable is owned by
the Trust. Indication of the Trust's ownership of a Receivable shall be deleted
from or modified on the Servicer's computer systems when, and only when, the
Receivable shall have been paid in full or repurchased.
(f) If at any time BVAC or the Transferor or the Servicer shall propose
to sell, grant a security interest in, or otherwise transfer any interest in
automotive receivables to any prospective purchaser, lender, or other
transferee, the Servicer shall give to such prospective purchaser, lender, or
other transferee computer tapes, records, or print-outs (including any restored
from back-up archives) that, if they shall refer in any manner whatsoever to any
Receivable, shall indicate clearly (including by means of tagging) that such
Receivable has been sold and is owned by the Trust and pledged to the Indenture
Trustee.
(g) Upon reasonable prior notice, the Servicer shall permit the
Indenture Trustee, the Insurer and their respective agents at any time during
normal business hours to inspect, audit, and make copies of and abstracts from
the Servicer's records regarding any Receivable; provided, that such inspection
and audit shall not unreasonably interfere with the Servicer's daily business
operations.
(h) Upon request, the Servicer shall furnish to the Owner Trustee, the
Indenture Trustee and the Insurer, within five Business Days, a list of all
Receivables (by account number and name of Obligor) then held as part of the
Trust, together with a reconciliation of such list to the schedule of
Receivables attached hereto as Schedule A and to each of the Servicer's
Certificates furnished before such request indicating removal of Receivables
from the Trust.
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(i) The Servicer shall deliver to the Owner Trustee, the Indenture
Trustee and the Insurer:
(1) promptly after the execution and delivery of this
Agreement and of each amendment thereto, an Opinion of Counsel
either (A) stating that, in the opinion of such counsel, all
financing statements (and releases of financing statements) and
continuation statements have been executed that are necessary
fully to preserve and protect the interest of the Indenture
Trustee in the Receivables, and reciting the details of the
expected filings thereof or referring to prior Opinions of
Counsel in which such details are given, or (B) stating that, in
the opinion of such counsel, no such action shall be necessary to
preserve and protect such interest; and
(2) within 90 days after the beginning of each calendar
year beginning with the first calendar year beginning more than
three months after the Cut-off Date, an Opinion of Counsel, dated
as of a date during such 90-day period, either (A) stating that,
in the opinion of such Counsel, all financing statements and
continuation statements have been executed and filed that are
necessary fully to preserve and protect the interest of the
Indenture Trustee in the Receivables, and reciting the details of
such filings or referring to prior Opinions of Counsel in which
such details are given, or (B) stating that, in the opinion of
such Counsel, no such action shall be necessary to preserve and
protect such interest. Such Opinion of Counsel shall also
describe the execution and filing of any financing statements and
continuation statements that will, in the opinion of such
counsel, be required to preserve and protect the interest of the
Indenture Trustee in the Receivables, until January 30 in the
following calendar year.
Each Opinion of Counsel referred to in clause (i)(1) or (i)(2) above
shall specify any action necessary (as of the date of such opinion) to be taken
in the following year to preserve and protect such interest.
(j) If the Back-up Servicer or the Standby Servicer is acting as the
successor Servicer, it shall be reimbursed for any costs incurred by it in
performing its duties pursuant to this Section.
SECTION 17.03. LIMITATION ON RIGHTS OF NOTEHOLDERS AND
CERTIFICATEHOLDERS.
(a) The death or incapacity of any Noteholder or Certificateholder shall
not operate to terminate this Agreement or the Trust, nor entitle such
Noteholder's or such Certificateholder's legal representatives or heirs to claim
an accounting or to take any action or commence any proceeding in any court for
a partition or winding up of the Trust, nor otherwise affect the rights,
obligations, and liabilities of the parties to this Agreement or any of them.
(b) No Noteholder shall have any right to vote (except as provided in
this Agreement) or in any manner otherwise control the operation and management
of the Trust, or the obligations of the parties to this Agreement, nor shall
anything in this Agreement set forth, or contained in the terms of the Notes be
construed so as to constitute the Noteholders from time to time as partners or
members of an association; nor shall any Noteholder be under any liability to
any third person by reason of any action taken pursuant to any provision of this
Agreement.
No Noteholder shall have any right by virtue or by availing itself of any
provisions of this Agreement to institute any suit, action, or proceeding in
equity or at law upon or under or with respect to this Agreement, unless the
Insurer (so long as the Insurer is the Controlling Party) has given its prior
written consent and such Holder previously shall have given to the Indenture
Trustee a written notice of default and of the continuance thereof, and unless
also (i) the default arises from the Transferor's or the Servicer's failure to
remit payments when due hereunder, or (ii) the Majority Noteholders shall have
made written request upon the Indenture Trustee to institute such action, suit
or proceeding in its own name as Indenture Trustee under this Agreement and such
Holder shall have offered to the Indenture Trustee such reasonable indemnity as
it may require against the costs, expenses, and liabilities to be incurred
therein or thereby, and the Indenture Trustee, for 30 days after its receipt of
such notice, request, and offer of indemnity, shall have neglected or refused to
institute any such action, suit or proceeding and during such 30-day period no
request or waiver inconsistent with such written request has been given to the
Indenture Trustee pursuant to this Section or Section 13.04; no one or more
Holders of Notes or Certificates shall
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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 Notes or 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 Noteholders
or all Certificateholders, as applicable. For the protection and enforcement of
the provisions of this Section, each Noteholder, each Certificateholder and the
Indenture Trustee shall be entitled to such relief as can be given either at law
or in equity. Nothing in this Agreement shall be construed as giving the
Noteholders any direct right to make a claim on the Policy.
(c) In the event the Indenture Trustee shall receive conflicting or
inconsistent requests and indemnity from two or more groups of Holders of
Securities, each representing less than the required amount of the Securities,
the Trustee in its sole discretion may determine what action, if any, shall be
taken, notwithstanding any other provisions of this Agreement.
SECTION 17.04. GOVERNING LAW. THIS AGREEMENT SHALL BE CONSTRUED IN
ACCORDANCE WITH THE LAWS OF THE STATE OF DELAWARE AND THE OBLIGATIONS, RIGHTS,
AND REMEDIES OF THE PARTIES UNDER THIS AGREEMENT SHALL BE DETERMINED IN
ACCORDANCE WITH SUCH LAWS AND WITHOUT REGARD TO CONFLICT OF LAWS PRINCIPLES
(EXCEPT WITH REGARD TO THE UCC).
SECTION 17.05. NOTICES. All demands, notices, and communications upon or
to BVAC, the Transferor, the Servicer, the Back-up Servicer, the Standby
Servicer, the Indenture Trustee, the Owner Trustee, the Indenture Trustee, the
Insurer or any Rating Agency under this Agreement shall be in writing,
personally delivered, mailed by certified mail, return receipt requested or
delivered by overnight courier, and shall be deemed to have been duly given upon
receipt
(a) in the case of BVAC at the following address: 000 Xxx Xxxx Xxxx,
Xxxxxx, Xxxxxxxxxx 00000, Attention: Xxxxx X. Xxxxxx, Xx.; at the following
phone number: (000) 000-0000; and at the following fax number (000) 000-0000.
(b) in the case of the Transferor at the following address: 0000 Xxxxx
Xx Xxxxxx Xxxx, Xxx Xxxxx, Xxxxxxxxxx 00000, Attention: Xxxxxx X. Xxxxxxxx; at
the following phone number: (000) 000-0000; and at the following fax number
(000) 000-0000.
(c) in the case of the Standby Servicer, at the following address: 0000
Xxxxxxx Xxxx, Xx. Xxxxxx, Xxxxxxxx 00000, Attention: Xxxxxx X. Xxxx; at the
following phone number: (000) 000-0000; and at the following fax number (816)
000-0000.
(d) in the case of the Indenture Trustee, the Back-up Servicer and the
Indenture Trustee, at its Corporate Trust Office, Attention: Xxxxxx Xxxxxx;
(e) in the case of the Owner Trustee at the following address: Bay View
2002-LJ-1 Owner Trust, c/o Wilmington Trust Company, Owner Trustee, 0000 Xxxxx
Xxxxxx Xxxxxx, Xxxxxxxxxx, Xxxxxxxx 00000-0000, Attention: Corporate Trust
Administration; at the following phone number (000) 000-0000; and at the
following fax number (000) 000-0000;
(f) in the case of the Servicer, to the Back-up Servicer or the Standby
Servicer, as applicable, or to the address of any successor Servicer appointed
in accordance with Section 14.02 hereof;
(g) in the case of Moody's at: 00 Xxxxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx
00000;
(h) in the case of Standard & Poor's, at: 00 Xxxxx Xxxxxx, Xxx Xxxx, Xxx
Xxxx 00000;
(i) in the case of the Insurer, to: Financial Security Assurance Inc.,
000 Xxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000, Attention: Transaction Oversight
Department, Re: Bay View 2002-LJ-1 Owner Trust, Confirmation: (000) 000-0000,
Telecopy Nos. (000) 000-0000, (000) 000-0000 (in each case in
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which notice or other communication to Financial Security refers to an Event of
Default, a claim on the Policy or with respect to which failure on the part of
Financial Security to respond shall be deemed to constitute consent or
acceptance, then a copy of such notice of other communication should also be
sent to the attention of each of the General Counsel and the Head-Financial
Guaranty Group and shall be marked to indicate "URGENT MATERIAL ENCLOSED");
Any notice required or permitted to be mailed to a Noteholder or
Certificateholder, as the case may be shall be given by first class mail,
postage prepaid, at the address of such Holder as shown in the Note or
Certificate Register. Any notice so mailed within the time prescribed in this
Agreement shall be conclusively presumed to have been duly given, whether or not
the Noteholder or the Certificateholder, as the case may be, shall receive such
notice.
SECTION 17.06. SEVERABILITY OF PROVISIONS. If any one or more of the
covenants, agreements, provisions, or terms of this Agreement shall be for any
reason whatsoever held invalid, then such covenants, agreements, provisions, or
terms shall be deemed severable from the remaining covenants, agreements,
provisions, or terms of this Agreement and shall in no way affect the validity
or enforceability of the other provisions of this Agreement or of the
Certificate or the Notes or the rights of the Holders thereof or of the Insurer.
SECTION 17.07. ASSIGNMENT. Notwithstanding anything to the contrary
contained herein, except as provided in Sections 13.02 and 13.03 and as provided
in the provisions of this Agreement concerning the resignation of the Servicer,
the Back-up Servicer and the Standby Servicer, this Agreement may not be
assigned by the Transferor, the Servicer, the Back-up Servicer or the Standby
Servicer without the prior written consent of the Owner Trustee and the
Controlling Party.
SECTION 17.08. INSURER. Without limiting the generality of the
foregoing, all covenants and agreements in this Agreement which confer rights
upon the Insurer shall be for the benefit of and run directly to the Insurer to
the extent expressly set forth herein or in the other Basic Documents, and the
Insurer shall be entitled to rely on and enforce such covenants and agreements,
subject, however, to the limitations on such rights provided in this Agreement
and the Basic Documents. The Insurer may disclaim any of its respective rights
and powers under this Agreement (but not its duties and obligations under the
Policy), upon delivery of a written notice to the Owner Trustee. Nothing herein,
however, shall be construed to have created a fiduciary obligation of the Owner
Trustee to any person or persons other than the Certificateholders.
SECTION 17.09. NO PETITION. The Owner Trustee (in its individual
capacity and as Owner Trustee), by entering into this Agreement, each
Certificateholder, by accepting a Certificate, and the Indenture Trustee and
each Noteholder by accepting the benefits of this Agreement, hereby covenants
and agrees that they will not at any time institute against the Transferor or
the Trust, or join in any institution against the Transferor or the Trust of,
any bankruptcy, reorganization, arrangement, insolvency or liquidation
proceedings, or other proceedings under any federal or state bankruptcy or
similar law in connection with any obligations relating to the Certificates, the
Notes, this Agreement or any of the Basic Documents.
SECTION 17.10. NO RECOURSE. Each Certificateholder, by accepting a
Certificate, acknowledges that such Certificateholder's Certificate represents a
100% beneficial interest in the assets of the Trust only and does not represent
an interest in or obligation of the Transferor, the Servicer, the Back-up
Servicer, the Standby Servicer, BVAC, the Owner Trustee, the Indenture Trustee,
the Insurer, the Collateral Agent or any Affiliate thereof, and no recourse may
be had against such parties or their assets, except as may be expressly set
forth or contemplated in this Agreement, the Certificate or the Basic Documents.
SECTION 17.11. NO LEGAL TITLE TO TRUST PROPERTY IN CERTIFICATEHOLDER.
The Certificateholder shall not have legal title to any part of the Trust
Property. The Certificateholder shall be entitled to receive distributions only
in accordance with the Indenture, the Spread Account Agreement and this
Agreement. No transfer, by operation of law or otherwise, of any right, title or
interest of the Certificateholder to and in its ownership interest in the Trust
Property shall operate to terminate this Agreement or the trusts hereunder or
entitle any transferee to an accounting or to the transfer to it of legal title
to any part of the Trust Property.
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SECTION 17.12. FURTHER ASSURANCES. The Transferor, the Servicer, the
Back-up Servicer and the Standby Servicer agree to do and perform, from time to
time, any and all acts and to execute any and all further instruments required
or reasonably requested by the Indenture Trustee or the Insurer more fully to
effect the purposes of this Agreement and the other Basic Documents, including,
without limitation, the execution of any financing statements or continuation
statements relating to the Receivables for filing under the provisions of the
UCC of any applicable jurisdiction.
SECTION 17.13. NO WAIVER; CUMULATIVE REMEDIES. No failure to exercise
and no delay in exercising, on the part of the Owner Trustee, the Insurer, or
the Noteholders or the Certificateholders, any right, remedy, power or privilege
hereunder, shall operate as a waiver thereof; nor shall any single or partial
exercise of any right, remedy, power or privilege hereunder preclude any other
or further exercise thereof or the exercise of any other right, remedy, power or
privilege. The rights, remedies, powers and privileges therein provided are
cumulative and not exhaustive of any rights, remedies, powers and privileges
provided by law.
SECTION 17.14 THIRD-PARTY BENEFICIARIES. This Agreement will inure to
the benefit of and be binding upon the parties hereto, the Indenture Trustee,
the Noteholders and the Certificateholders, respectively, and their respective
successors and permitted assigns. Except as may be otherwise provided in this
Agreement, no other person will have any right or obligation hereunder. The
Owner Trustee (including in its individual capacity), the Spread Account
Depositor Owner Trustee (including in its individual capacity) and the Insurer
are each an express third party beneficiary of this Agreement. Each of the
parties to the Purchase Agreement hereby agrees that the Insurer shall be
permitted but not obligated to enforce the rights of the Transferor directly
thereunder in the place and stead of the Transferor but the Insurer shall have
no obligations under the Purchase Agreement.
SECTION 17.15. ACTIONS BY NOTEHOLDERS OR CERTIFICATEHOLDERS.
(a) Wherever in this Agreement a provision is made that an action may be
taken or a notice, demand, or instruction given by Noteholders or by
Certificateholders, as the case may be, such action, notice, demand or
instruction may be taken or given by any Noteholder or by any Certificateholder,
unless such provision requires a specific percentage of Noteholders or
Certificateholders, as the case may be.
(b) Any request, demand, authorization, direction, notice, consent,
waiver or other action provided by this Agreement to be taken or given by
Noteholders or Certificateholders, as the case may be, may be embodied in and
evidenced by one or more instruments of substantially similar tenor signed by
such Noteholders or Certificateholders, as the case may be, in person or by an
agent duly appointed in writing.
(c) The fact and date of the execution by any Noteholder or any
Certificateholder of any instrument or writing may be proved in any reasonable
manner which the Indenture Trustee deems sufficient.
(d) Any request, demand, authorization, direction, notice, consent,
waiver, or other act by a Noteholder or a Certificateholder, as the case may be,
shall bind such Noteholder or Certificateholder, as the case may be, and every
subsequent holder of such Certificate or Note 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 Indenture Trustee, the Transferor,
the Servicer, the Back-up Servicer or the Standby Servicer in reliance thereon,
whether or not notation of such action is made upon such Certificate or Note.
(e) The Indenture Trustee may require such additional proof of any
matter referred to in this Section as it shall deem necessary.
SECTION 17.16. CORPORATE OBLIGATION. No recourse may be taken, directly
or indirectly, against any partner, incorporator, subscriber to the capital
stock, stockholder, director, officer or employee of the Transferor, the
Servicer, the Back-up Servicer or the Standby Servicer with respect to their
respective obligations and indemnities under this Agreement or any certificate
or other writing delivered in connection herewith.
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SECTION 17.17. COVENANT NOT FILE A BANKRUPTCY PETITION. The parties
hereto agree that until one year and one day after such time as the Notes issued
under the Indenture are paid in full and all amounts due to the Insurer under
the Insurance Agreement are paid in full, they shall not (i) institute the
filing of a bankruptcy petition against the Transferor or the Trust based upon
any claim in its favor arising hereunder or under the Basic Documents; (ii) file
a petition or consent to a petition seeking relief on behalf of the Transferor
or the Trust under the Bankruptcy Law; or (iii) consent to the appointment of a
receiver, liquidator, assignee, trustee, sequestrator (or similar official) of
the Transferor or the Trust or a substantial portion of the property of the
Transferor or the Trust. The parties hereto agree that all obligations of the
Issuer and the Transferor are non-recourse to the Pledged Assets except as
specifically set forth in the Basic Documents.
SECTION 17.18. INDEPENDENCE OF THE SERVICER, BACK-UP SERVICER AND
STANDBY SERVICER. For all purposes of this Agreement, each of the Servicer,
Back-up Servicer and Standby Servicer shall be an independent contractor and
shall not be subject to the supervision of the Trust, the Indenture Trustee or
the Owner Trustee with respect to the manner in which it accomplishes the
performance of its obligations hereunder. Unless expressly authorized by this
Agreement, the Servicer, Back-up Servicer and Standby Servicer shall have no
authority to act for or represent the Issuer or the Owner Trustee in any way and
shall not otherwise be deemed an agent of the Issuer or the Owner Trustee.
SECTION 17.19. NO JOINT VENTURE. Nothing contained in this Agreement
(i) shall constitute the Servicer, the Back-up Servicer or the Standby Servicer
and either of the Trust or the Owner Trustee as members of any partnership,
joint venture, association, syndicate, unincorporated business or other separate
entity, (ii) shall be construed to impose any liability as such on any of them
or (iii) shall be deemed to confer on any of them any express, implied or
apparent authority to incur any obligation or liability on behalf of the others.
SECTION 17.20. HEADINGS. The headings of articles and sections and the
table of contents contained in this Agreement are provided for convenience only.
They form no part of this Agreement and shall not affect its construction or
interpretation. Unless otherwise indicated, all references to articles and
sections in this Agreement refer to the corresponding articles and sections of
this Agreement.
SECTION 17.21. ENTIRE AGREEMENT. This Agreement sets forth the entire
agreement between the parties with respect to the subject matter hereof, and
this Agreement supersedes and replaces any agreement or understanding that may
have existed between the parties prior to the date hereof in respect of such
subject matter.
SECTION 17.22. LIMITATION OF LIABILITY OF OWNER TRUSTEE.
Notwithstanding anything contained herein to the contrary, this Agreement has
been countersigned by Wilmington Trust Company not in its individual capacity
but solely in its capacity as Owner Trustee of the Issuer and in no event shall
Wilmington Trust Company in its individual capacity or, except as expressly
provided in this Agreement, as Owner Trustee, have any liability for the
representations, warranties, covenants, agreements or other obligations of the
Issuer hereunder or in any of the certificates, notices or agreements of the
Issuer delivered pursuant hereto, as to all of which recourse shall be had
solely to the assets of the Issuer. For all purposes of this Agreement, in the
performance of its duties or obligations hereunder or in the performance of any
duties or obligations of the Issuer hereunder, the Owner Trustee shall be
subject to, and entitled to the benefits of, the terms and provisions of this
Agreement.
SECTION 17.23. EFFECT OF POLICY EXPIRATION DATE. Notwithstanding
anything to the contrary set forth herein, all references to any right of the
Insurer to direct, appoint, consent to, accept, approve of, take or omit to take
any action under this Agreement or any other Basic Document shall be
inapplicable at all times after the Policy Expiration Date or so long as an
Insurer Default has occurred and is continuing, and (i) if such reference
provides for another party or parties to take or omit to take such action
following an Insurer Default, such party or parties shall also be entitled to
take or omit to take such action, following the Policy Expiration Date and (ii)
if such reference does not provide for another party or parties to take or omit
to take such action following an Insurer Default, then the Indenture Trustee
acting at the direction of the Majority Noteholders shall have the right to take
or omit to take any such action, following the Policy Expiration Date or so long
as an Insurer Default has occurred and is continuing. In addition, any other
81
provision of this Agreement or any other Basic Document which is operative based
in whole or in part on whether an Insurer Default has or has not occurred shall,
at all times on or after the Policy Expiration Date, be deemed to refer to
whether or not the Policy Expiration Date has occurred.
SECTION 17.24. COUNTERPARTS. For the purpose of facilitating the
execution of this Agreement and for other purposes, this Agreement may be
executed in any number of counterparts, each of which counterparts shall be
deemed to be an original, and all of which counterparts shall constitute but one
and the same instrument.
SECTION 17.25. CONSENT TO JURISDICTION.
(a) TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, THE PARTIES
HERETO HEREBY IRREVOCABLY SUBMIT TO THE JURISDICTION OF THE UNITED STATES
DISTRICT COURT FOR THE SOUTHERN DISTRICT OF NEW YORK AND ANY COURT IN THE STATE
OF NEW YORK LOCATED IN THE CITY AND COUNTY OF NEW YORK, AND ANY APPELLATE COURT
FROM ANY THEREOF, IN ANY ACTION, SUIT OR PROCEEDING BROUGHT AGAINST IT AND TO OR
IN CONNECTION WITH ANY OF THE TRANSACTION DOCUMENTS OR THE TRANSACTION OR FOR
RECOGNITION OR ENFORCEMENT OF ANY JUDGMENT, AND THE PARTIES HERETO HEREBY
IRREVOCABLY AND UNCONDITIONALLY AGREE THAT ALL CLAIMS IN RESPECT OF ANY SUCH
ACTION OR PROCEEDING MAY BE HEARD OR DETERMINED IN SUCH NEW YORK STATE COURT OR
IN SUCH FEDERAL COURT. THE PARTIES HERETO AGREE THAT A FINAL JUDGMENT IN ANY
SUCH ACTION, SUIT OR PROCEEDING SHALL BE CONCLUSIVE AND MAY BE ENFORCED IN OTHER
JURISDICTIONS BY SUIT ON THE JUDGMENT OR IN ANY OTHER MANNER PROVIDED BY LAW. TO
THE EXTENT PERMITTED BY APPLICABLE LAW, THE PARTIES HERETO HEREBY WAIVE AND
AGREE NOT TO ASSERT BY WAY OF MOTION, AS A DEFENSE OR OTHERWISE IN ANY SUCH
SUIT, ACTION OR PROCEEDING, ANY CLAIM THAT IT IS NOT PERSONALLY SUBJECT TO THE
JURISDICTION OF SUCH COURTS, THAT THE SUIT, ACTION OR PROCEEDING IS BROUGHT IN
AN INCONVENIENT FORUM, THAT THE VENUE OF THE SUIT, ACTION OR PROCEEDING IS
IMPROPER OR THAT THE RELATED DOCUMENTS OR THE SUBJECT MATTER THEREOF MAY NOT BE
LITIGATED IN OR BY SUCH COURTS.
(b) To the extent permitted by applicable law, the parties hereto shall
not seek and hereby waive the right to any review of the judgment of any such
court by any court of any other nation or jurisdiction which may be called upon
to grant an enforcement of such judgment.
(c) Each of the Transferor and BVAC hereby agrees that until such time
as the Notes and the Reimbursement Obligations have been paid in full and the
Insurance Agreement has terminated, each of the Transferor and BVAC shall have
appointed, with prior written notice to the Insurer, an agent registered with
the Secretary of State of the State of New York, with an office in the County of
New York in the State of New York, as its true and lawful attorney and duly
authorized agent for acceptance of service of legal process (which as of the
date hereof is CT Corporation System, 000 Xxxxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx
00000). Each of the Transferor and BVAC agrees that service of such process upon
such Person shall constitute personal service of such process upon it.
SECTION 17.26. TRIAL BY JURY WAIVED. EACH PARTY HERETO HEREBY WAIVES,
TO THE FULLEST EXTENT PERMITTED BY LAW, ANY RIGHT TO A TRIAL BY JURY IN RESPECT
OF ANY LITIGATION ARISING DIRECTLY OR INDIRECTLY OUT OF, UNDER OR IN CONNECTION
WITH ANY OF THE TRANSACTION DOCUMENTS OR THE TRANSACTION. EACH PARTY HERETO (A)
CERTIFIES THAT NO REPRESENTATIVE, AGENT OR ATTORNEY OF ANY PARTY HERETO HAS
REPRESENTED, EXPRESSLY OR OTHERWISE, THAT IT WOULD NOT, IN THE EVENT OF
LITIGATION, SEEK TO ENFORCE THE FOREGOING WAIVER AND (B) ACKNOWLEDGES THAT IT
HAS BEEN INDUCED TO ENTER INTO THE TRANSACTION DOCUMENTS TO WHICH IT IS A PARTY
BY, AMONG OTHER THINGS, THIS WAIVER.
SECTION 17.27. XXXXXXXX-XXXXX CERTIFICATIONS. The certifications
required by the Xxxxxxxx-Xxxxx Act of 2002 and the rules of the Securities and
Exchange Commission promulgated thereunder to be included in filings with
respect to the Trust pursuant to the Securities Exchange Act of 1934, as
amended, shall be made by BVAC, so long as BVAC is the Servicer; if BVAC is no
longer the Servicer,
82
such certifications shall be made by the Transferor. If BVAC is no longer the
Servicer, the successor Servicer shall provide to the Transferor all information
as the Transferor may reasonably request in order to fulfill its obligations to
make such certifications. In addition, the Indenture Trustee shall provide to
BVAC or the Transferor (whichever of the two is then required to make such
certifications) with a certification signed by a Responsible Officer (as defined
in the Indenture) stating that such Responsible Officer is not actually aware
(without any independent duty of inquiry or investigation) of any matters which
would cause the certification to be made by BVAC or the Transferor, as the case
may be, to be incorrect.
[remainder of page intentionally left blank;
signature page follows]
83
IN WITNESS WHEREOF, the parties hereto have caused this Trust and
Servicing Agreement to be duly executed by their respective officers as of the
day and year first above written.
BAY VIEW SECURITIZATION CORPORATION,
as Transferor
By:
Title: Vice President
BAY VIEW ACCEPTANCE CORPORATION,
as Servicer
By:
Title: Vice President
DEUTSCHE BANK TRUST COMPANY AMERICAS
as Indenture Trustee and Back-up Servicer
By:
Title:
SYSTEM & SERVICES TECHNOLOGIES, INC.
as Standby Servicer
By:
Title:
WILMINGTON TRUST COMPANY,
as Owner Trustee
By:
Title: Vice President
84
Exhibit 1
Owner Trustee's Certificate
pursuant to Section 15.05
of the Trust and Servicing Agreement
Wilmington Trust Company, as owner trustee (the "Owner Trustee") of the
Bay View 2002-LJ-1 Owner Trust created pursuant to the Trust and Servicing
Agreement (the "Trust Agreement") dated as of September 1, 2002, among Bay View
Securitization Corporation, as depositor (the "Transferor"), Bay View Acceptance
Corporation, as servicer (the "Servicer"), Deutsche Bank Trust Company Americas
("Indenture Trustee" and "Back-up Servicer"), Systems & Services Technologies,
Inc. ("Standby Servicer"), and the Owner Trustee, does hereby sell, transfer,
assign, and otherwise convey to Bay View Acceptance Corporation without
recourse, representation, or warranty, all of the Owner Trustee's right, title,
and interest in and to all of the Receivables (as defined in the Trust
Agreement) identified in the attached Servicer's Certificate as "Purchased
Receivables," which have been repurchased by the Transferor pursuant to Section
7.02 or Section 8.08 and all security and documents relating thereto.
IN WITNESS WHEREOF I have hereunto set my hand this _____ day of
____________, _____.
Exhibit 2
Owner Trustee's Certificate
pursuant to Section 15.05
of the Trust and Servicing Agreement
Wilmington Trust Company, as trustee (the "Owner Trustee") of the Bay
View 2002-LJ-1 Owner Trust created pursuant to the Trust and Servicing Agreement
(the "Trust Agreement") dated as of September 1, 2002, among Bay View
Securitization Corporation, as depositor (the "Transferor"), Bay View Acceptance
Corporation, as servicer (the "Servicer"), Deutsche Bank Trust Company Americas
("Indenture Trustee" and "Back-up Servicer"), Systems & Services Technologies,
Inc. ("Standby Servicer"), and the Owner Trustee, does hereby sell, transfer,
assign, and otherwise convey to the [Servicer or the Certificateholders],
without recourse, representation, or warranty, all of the Owner Trustee's right,
title, and interest in and to all of the Receivables (as defined in the Trust
Agreement) identified in the attached Servicer's Certificate as "Purchased
Receivables," which have been purchased by [the Servicer pursuant to Section
8.10 or by the Certificateholders pursuant to Section 16.02], and all security
and documents relating thereto.
IN WITNESS WHEREOF I have hereunto set my hand this _____ day of
____________, _____.
Exhibit 3
Form of Servicer's Certificate
pursuant to Section 8.12
of the Trust and Servicing Agreement
SERVICER'S CERTIFICATE
EXHIBIT A
CERTIFICATE OF TRUST OF
BAY VIEW 2002-LJ-1 OWNER TRUST
This Certificate of Trust of Bay View 2002-LJ-1 Owner Trust (the
"Trust"), dated as of September 1, 2002, is being duly executed and filed by
Wilmington Trust Company, a Delaware banking corporation, as trustee, to form a
statutory trust under the Delaware Statutory Trust Act (12 Del. Code, Section
3801 et seq.).
1. Name. The name of the statutory trust formed hereby is BAY VIEW
2002-LJ-1 OWNER TRUST.
2. Delaware Trustee. The name and business address of the trustee
of the Trust in the State of Delaware is Wilmington Trust
Company, (Address), Attention: ________________.
IN WITNESS WHEREOF, the undersigned, being the sole trustee of the
Trust, has executed this Certificate of Trust as of the date first above
written.
WILMINGTON TRUST COMPANY,
not in its individual capacity but solely as owner
trustee under a Trust Agreement dated as of
September 1, 2002,
By:
Name:
Title:
EXHIBIT B
[Form of Certificate]
BAY VIEW2002-LJ-1 OWNER TRUST
AUTOMOBILE RECEIVABLE
BACKED CERTIFICATE
evidencing an undivided interest in the Trust, as defined below, the
property of which includes a pool of simple interest installment loan and
security agreements and installment sales contracts secured by new and used
automobiles, light-duty trucks, motorcycles, recreational vehicles and vans. The
contracts were sold to the Owner Trustee by Bay View Securitization Corporation.
(This Certificate does not represent an interest in or obligation of Bay
View Securitization Corporation or any of its affiliates. Neither this
Certificate nor the underlying Receivables, as defined below, are insured or
guaranteed by any other government agency).
NUMBER One Unit
R-1
THIS CERTIFIES THAT Bay View Securitization Corporation, a Delaware
corporation, is the registered owner of a nonassessable, fully-paid interest in
the Bay View 2002-LJ-1 Owner Trust (the "Trust"), a Delaware statutory trust.
The Trust was created pursuant to a Trust and Servicing Agreement dated as of
September 1, 2002 (the "Agreement"), among Bay View Securitization Corporation
as Transferor, Bay View Acceptance Corporation, as Servicer, Deutsche Bank Trust
Company Americas, as Indenture Trustee and Back-up Servicer, Systems & Servicers
Technologies, Inc., as Standby Servicer, and Wilmington Trust Company (the
"Owner Trustee"), a summary of certain of the pertinent provisions of which is
set forth below. A copy of the Agreement may be examined during normal business
hours at the Corporate Trust Office of the Owner Trustee by any
Certificateholder upon request. To the extent not otherwise defined herein, the
capitalized terms used herein have the meanings assigned to them in the
Agreement. This Certificate is issued under and is subject to the terms,
provisions, and conditions of the Agreement, to which Agreement the holder of
this Certificate by virtue of the acceptance hereof assents and by which such
holder is bound. The property of the Trust includes a pool of simple and
precomputed interest loan and security agreements and installment sales
contracts for new and used automobiles, light-duty trucks, recreational vehicles
and vans (the "Receivables"), all monies paid thereon, and all monies due
thereon after August 31, 2002, security interests in the vehicles financed
thereby, certain bank accounts and the proceeds thereof and certain other
property and rights described in the Agreement and the proceeds of the
foregoing.
This Certificate represents an interest in certain assets of the Trust,
including the right to receive a portion of the collections and other amounts at
the times and in the amounts specified in the Agreement. The rights of the
Certificateholders in the assets of the Trust are subordinated to the rights of
the Noteholders as set forth in the Indenture and the Agreement.
Unless the certificate of authentication hereon shall have been executed
by a Responsible Officer of the Owner Trustee, by manual or facsimile signature,
this Certificate shall not entitle the holder hereof to any benefit under the
Agreement or be valid for any purpose. Registration of transfer of this
Certificate to a person may not be effected unless (a) the Insurer consents to
such transfer, (b) such transfer will not adversely affect the tax treatment of
the Trust or the Notes, and (c) the Rating Agency Condition has been satisfied
with respect to such transfer.
The obligations and responsibilities created by the Agreement and the
Trust created thereby shall terminate upon the payment to Certificateholders of
all amounts required to be paid to them pursuant to the Agreement and the
disposition of all property held as part of the Trust. The Servicer may at its
option cause the Owner Trustee to sell the corpus of the Trust at a price not to
be less than the price specified in the Agreement; however, such right is
exercisable only as of the last day of a Collection Period on which the Pool
Balance is less than or equal to 10% of the Original Pool Balance. The
Certificateholders are required to pay any unpaid fees and expenses of the Owner
Trustee and in connection with such disposition.
Although this Certificate summarizes certain provisions of the
Agreement, this Certificate does not purport to summarize the Agreement and
reference is made to the Agreement for information with respect to the
interests, rights, benefits, obligations, proceeds and duties evidenced hereby
and the rights, duties and obligations of the Owner Trustee. In the event of any
inconsistency or conflict between the terms of this Certificate and the terms of
the Agreement, the terms of the Agreement shall control. By acceptance of this
Certificate, the holder agrees to be bound by the terms of the Agreement,
including the agreement to treat the Trust as a partnership for income tax
purposes and the Certificates as an equity interest therein.
IN WITNESS WHEREOF, the Owner Trustee on behalf of the Trust and not in
its individual capacity has caused this Certificate to be duly executed.
Dated:
BAY VIEW 2002-LJ-1 OWNER TRUST
By Wilmington Trust Company, not in its individual
capacity, but solely in its capacity as Owner Trustee
By ,
------------------------------
Responsible Officer
CERTIFICATE OF AUTHENTICATION
This is the Certificate referred to in the Within-mentioned Agreement.
Wilmington Trust Company,
as Owner Trustee
By ,
------------------------------
Signatory
Dated:
ASSIGNMENT
FOR VALUE RECEIVED the undersigned hereby sells, assigns and transfers unto
PLEASE INSERT SOCIAL SECURITY
OR OTHER IDENTIFYING NUMBER
OF ASSIGNEE
(Please print or typewrite name and address, including postal zip code, of
assignee) the within Certificate, and all rights thereunder, hereby irrevocably
constituting and appointing Attorney to transfer said Certificate on the books
of the Certificate Registrar, with full power of substitution in the premises.
Dated:
*
Signature Guaranteed:
*
* NOTICE: The signature to this assignment must correspond with the name
as it appears upon the face of the within Certificate in every
particular, without alteration, enlargement or any change whatever. Such
signature must be guaranteed by a member of the New York Stock Exchange
or a commercial bank, trust company savings bank or other savings and
loan institution.
EXHIBIT C
CONFIRMATION OF COMPUTER TAPE
Bay View Acceptance Corporation
000 Xxx Xxxx Xxxx
Xxxxxx, Xxxxxxxxxx 00000
Financial Security Assurance Inc.
000 Xxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Re: Bay View 2002-LJ-1 Owner Trust
Month Year .
---------------- ------------------
Under the Trust and Servicing Agreement dated as of September 1, 2002
among Wilmington Trust Company, as Owner Trustee, Bay View Acceptance
Corporation, as Servicer, Bay View Securitization Corporation, as Transferor,
Systems & Services Technologies, Inc., as Standby Servicer, and Deutsche Bank
Trust Company Americas, as Indenture Trustee and Backup Servicer (the "Servicing
Agreement"), the undersigned is hereby providing written confirmation that (i)
it has received the Computer Tape and (ii) such Computer Tape is in readable
form.
Deutsche Bank Trust Company Americas
By:
---------------------------------
Name:
Title:
Date:
-----------------------
EXHIBIT D
CONFIRMATION OF COMPUTER TAPE
Bay View Acceptance Corporation
000 Xxx Xxxx Xxxx
Xxxxxx, Xxxxxxxxxx 00000
Financial Security Assurance Inc.
000 Xxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Re: Bay View 2002-LJ-1 Owner Trust
Month Year .
---------------- ------------------
Under the Trust and Servicing Agreement dated as of September 1, 2002
among Wilmington Trust Company, as Owner Trustee, Bay View Acceptance
Corporation, as Servicer, Bay View Securitization Corporation, as Transferor,
Systems & Services Technologies, Inc., as Standby Servicer, and Deutsche Bank
Trust Company Americas, as Indenture Trustee and Backup Servicer (the "Servicing
Agreement"), the undersigned is hereby providing written confirmation that (i)
it has received the Computer Tape, (ii) such Computer Tape is in the correct
format subject only to minor changes or modifications that would not
significantly affect the Standby Servicer's assumption and performance of the
Servicer's duties hereunder (subject to those duties that would be specifically
excluded if the Standby Servicer was the successor Servicer) and (iii) it has
verified the completeness of the Computer Tape in accordance with its duties set
forth in Schedule C to the Servicing Agreement. Capitalized terms shall have the
meaning ascribed to such terms in the Servicing Agreement.
Systems & Services Technologies, Inc.
By:
----------------------------------
Name:
Title:
Date:
-------------------
EXHIBIT E
Exception List under Section 8.08(b)
EXHIBIT F
CERTIFICATION
The undersigned, Deutsche Bank Trust Company Americas, as Indenture
Trustee, hereby certifies pursuant to Section 8.08(b) of the Trust and Servicing
Agreement, dated as of September 1, 2002 (the "Trust Agreement"), among Bay View
Securitization Corporation, as Transferor, Bay View Acceptance Corporation, as
Servicer, Deutsche Bank Trust Company Americas, as Indenture Trustee and Backup
Servicer, Systems & Services Technologies, Inc., as Standby Servicer, and
Wilmington Trust Company, as Owner Trustee, that it has performed the review
required by Section 8.08(b)(iv) of the Trust Agreement of the [Exception List
dated September 30, 2002/ Updated Exception List Dated _______, 200_] and
prepared the Updated Exception List attached hereto in accordance with such
Section 8.08(b)(iv) with respect to the Reserve Release Date to occur on
_______, 2002.
Capitalized terms used but not defined herein shall have the meanings
assigned to them in the Trust Agreement.
DEUTSCHE BANK TRUST COMPANY AMERICAS, as
Indenture Trustee
Date: By:
-------------------- -----------------------------
Name:
Title:
EXHIBIT G
BAY VIEW ACCEPTANCE CORPORATION
000 Xxx Xxxx Xxxx
Xxxxxx, Xxxxxxxxxx 00000
________ ___, 200__
Deutsche Bank Trust Company Americas,
Indenture Trustee
000 Xxxxx Xxx, XX XXX-000000
Xxxxxx Xxxx, Xxx Xxxxxx 00000
Re: Instructions for Reserve Release Amount
Ladies and Gentlemen:
Pursuant to Section 8.08(b)(v) of the Trust and Servicing Agreement,
dated as of September 1, 2002 (the "Trust Agreement"), among Bay View
Securitization Corporation, as Transferor, Bay View Acceptance Corporation, as
Servicer, Deutsche Bank Trust Company Americas, as Indenture Trustee and Backup
Servicer, Systems & Services Technologies, Inc., as Standby Servicer, and
Wilmington Trust Company, as Owner Trustee, you are hereby instructed to release
from the Reserve Account by wire transfer today to Bay View Acceptance
Corporation (in accordance with the wire transfer instructions previously
delivered) $_________, such amount representing the Reserve Release Amount with
respect to the Receivables most recently deleted from the Exception List, as
reflected in the certified Updated Exception List delivered by you on _______,
200__. The agreement by the Insurer that above amount represents the correct
Reserve Release Amount is evidenced by the acknowledgment of the Insurer below.
Capitalized terms used but not defined herein shall have the meanings
assigned to them in the Trust Agreement.
Very truly yours,
BAY VIEW ACCEPTANCE CORPORATION
By:
----------------------
Name: Xxxxx X. Xxxxxx
Title: President
Acknowledged and agreed as of the date set
forth above as to the Reserve Release Amount
set forth herein:
FINANCIAL SECURITY ASSURANCE, INC.
By:
Name:
Title:
Schedule A
to the Trust and
Servicing Agreement
SCHEDULE OF RECEIVABLES
Transferor Name of
Account Number Obligor Amount Financed
(as of the Cut-off Date)
$
A COPY OF THE SCHEDULE OF RECEIVABLES, INCLUDING
THE ABOVE CAPTIONED INFORMATION WITH RESPECT TO
EACH RECEIVABLE, WAS DELIVERED TO THE INDENTURE
TRUSTEE WITH A COUNTERPART OF THE TRUST AND
SERVICING AGREEMENT.
Schedule B
to the Trust and
Servicing Agreement
1. Location of Receivables:
Bay View Acceptance Corporation
000 Xxxxxxx Xxxxx
Xxxxxx, Xxxxxxxxxx 00000
SCHEDULE C
SCHEDULE OF STANDBY SERVICER FEES
AND SUCCESSOR SERVICE FEES
I. FEES
A. Standby Servicing (1)
1. One-Time Setup Fee $7,500
2. Monthly Fee (2) the greater of: 2 bps or
$3,000 per month
B. Successor Servicing (2)
1. One Time Boarding Fee $75,000
2. Monthly Fee (2)(3) the greater of: 75 bps or
$6 per contract
3. Minimum Monthly Fee $3,000
II. EXPENSES
A. Standby Servicing and Transfer Expenses
SST shall be reimbursed for all costs and expenses incurred in connection with
its Standby Servicing duties and the transfer of contracts to SST for successor
servicing. Such costs and expenses include, but are not limited to, those
related to travel, obligor mailings, freight and file shipping.
B. Successor Servicing Expenses (4)
SST shall be reimbursed for all out-of-pocket expenses including, but not
limited to, those associated with asset recovery, liquidation, sales, travel,
lodging, legal proceedings related to replevin actions or obligor bankruptcies,
statement and mailing costs, title processing, bank charges, and insurance
tracking, if any. Additionally, SST shall receive an administrative fee
amounting to 8% of the funds advanced by SST to cover any such expenses during
any monthly collection period. In order to avoid this administrative fee, the
trustee (or another party, as appropriate) may at any time during the term
establish and fund an advance account to be utilized by SST to cover all such
expenses and costs provided in this section for any monthly collection period.
Any such advance account must be fully funded on a monthly basis in an amount
sufficient to cover the out-of-pocket expenses projected by SST for each
subsequent monthly collection period.
III. MISCELLANEOUS (4)
A. Claim Filing Costs
In the event SST files insurance claims in connection with any contract serviced
by SST, SST shall receive $25.00 per filing.
B. Administrative Fees/Servicing Charges
SST shall receive all administrative fees, including extension processing fees,
NSF fees and late charges received by SST during any monthly collection period.
C. Deficiency Collections
Under separate agreement, SST may provide deficiency collections services on a
contingency fee basis.
--------
(1) Standby services limited to: (i) receipt of an electronic end of
month loan data transmission, including all relevant obligor contact information
including address and phone numbers, loan balance, payment information, and
comment histories; (ii) receipt of monthly servicer statements/reports; and
(iii) opening the monthly loan data transmissions to ensure the same are
readable. SST shall use its best efforts to identify any discrepancies or
confirm the calculations based solely on the information provided on said
statements/reports.
(2) Basis points are annualized (i.e., applicable basis points/12), and
shall be based on the beginning of month aggregate principal balance of each
individual Active Contract (as defined below).
(3) SST shall receive this fee for all Active Contracts for any full or
partial month where it functions as the servicer. Active Contract is defined as
any contract other than: (i) prepaid, fully satisfied contracts; (ii) contracts
in which the asset has been liquidated and SST has posted the liquidation
proceeds or any other anticipated proceeds (e.g., credit enhancement insurance);
or (iii) contracts in which SST has completed all work in connection with
processing and receiving insurance payoffs. There shall be a $0.50 monthly
servicing fee for each contract that is not an Active Contract until such time
as SST is duly instructed to write the obligor's balance down to $0.00.
(4) These items shall only apply to SST's performance of successor
servicing duties.
SCHEDULE D
Delivery Requirements
The Indenture 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, except for clearing corporation securities, be
delivered directly to the Indenture Trustee or its agent, together with each
document of transfer, if any, necessary to transfer title to such investment to
the Indenture Trustee in a manner that complies with this Agreement and the
requirements of the definition of Eligible Investments.
