Exhibit 10.1
FORM OF SALE AND SERVICING AGREEMENT
between
[____________] TRUST 200_-_,
Issuer,
and
CITIGROUP VEHICLE SECURITIES INC.,
Depositor
and
[-------------------]
Servicer
Dated as of ________ __, 200_
TABLE OF CONTENTS
Page
ARTICLE I.
Definitions
Section 1.01. Definitions..................................................1
Section 1.02. Other Definitional Provisions...............................16
ARTICLE II.
Conveyance of Receivables
Section 2.01. Conveyance of Receivables...................................17
ARTICLE III.
The Receivables
Section 3.01. Representations and Warranties of the Depositor with
Respect to the Receivables..................................18
Section 3.02. Repurchase upon Breach......................................18
Section 3.03. Custody of Receivable Files.................................19
Section 3.04. Duties of Servicer as Custodian.............................19
Section 3.05. Instructions; Authority To Act..............................20
Section 3.06. Custodian's Indemnification.................................20
Section 3.07. Effective Period and Termination............................20
ARTICLE IV.
Administration and Servicing of Receivables
Section 4.01. Duties of Servicer..........................................21
Section 4.02. Collection and Allocation of Receivable Payments............21
Section 4.03. Realization upon Receivables................................22
Section 4.04. Physical Damage Insurance...................................22
Section 4.05. Maintenance of Security Interests in Financed Assets........22
Section 4.06. Covenants of Servicer.......................................22
Section 4.07. Purchase of Receivables upon Breach.........................22
Section 4.08. Servicing Fee...............................................23
Section 4.09. Servicer's Certificate......................................23
Section 4.10. Annual Statement as to Compliance; Notice of Default........23
Section 4.11. Annual Independent Certified Public Accountants' Report.....24
Section 4.12. Access to Certain Documentation and Information Regarding
Receivables.................................................24
Section 4.13. Servicer Expenses...........................................24
Section 4.14. Appointment of Subservicer..................................24
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ARTICLE V.
Statements to Certificateholders and Noteholders; Distributions;
Reserve Account
Section 5.01. Establishment of Trust Accounts.............................25
Section 5.02. Collections.................................................27
Section 5.03. Application of Collections..................................27
Section 5.04. Application of Payaheads....................................28
Section 5.05. Advances....................................................28
Section 5.06. Additional Deposits.........................................29
Section 5.07. Distributions...............................................29
Section 5.08. Reserve Account.............................................30
Section 5.09. Statements to Certificateholders and Noteholders............32
Section 5.10. Net Deposits................................................33
ARTICLE VI.
The Depositor
Section 6.01. Representations of Depositor................................33
Section 6.02. Corporate Existence.........................................35
Section 6.03. Liability of the Depositor; Indemnities.....................35
Section 6.04. Merger or Consolidation of, or Assumption of the
Obligations of, Depositor...................................36
Section 6.05. Limitation on Liability of Depositor and Others.............36
Section 6.06. Depositor May Own Certificates or Notes.....................36
ARTICLE VII.
The Servicer
Section 7.01. Representations of Servicer.................................37
Section 7.02. Indemnities of Servicer.....................................38
Section 7.03. Merger or Consolidation of, or Assumption of
the Obligations of, Servicer................................39
Section 7.04. Limitation on Liability of Servicer and Others..............39
Section 7.05. Not To Resign as Servicer..............40
ARTICLE VIII.
Default
Section 8.01. Servicer Default............................................40
Section 8.02. Appointment of Successor....................................41
Section 8.03. Repayment of Advances.......................................42
Section 8.04. Notification to Noteholders and Certificateholders..........42
Section 8.05. Waiver of Past Defaults.....................................42
ARTICLE IX.
Termination
Section 9.01. Optional Purchase of All Receivables........................42
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ARTICLE X.
Miscellaneous
Section 10.01. Amendment..................................................44
Section 10.02. Protection of Title to Trust...............................45
Section 10.03. Notices....................................................46
Section 10.04. Assignment by the Depositor or the Servicer................47
Section 10.05. Limitations on Rights of Others............................47
Section 10.06. Severability...............................................47
Section 10.07. Separate Counterparts......................................47
Section 10.08. Headings...................................................47
Section 10.09. Governing Law..............................................47
Section 10.10. Assignment by Issuer.......................................47
Section 10.11. Nonpetition Covenants......................................48
Section 10.12. Limitation of Liability of Owner Trustee and
Indenture Trustee..........................................48
SCHEDULE A Schedule of Receivables
SCHEDULE B Location of the Receivable Files
EXHIBIT A Form of Distribution Statement to Certificateholders.......A-1
EXHIBIT B Form of Distribution Statement to Noteholders..............B-1
EXHIBIT C Form of Servicer's Certificate.............................C-1
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SALE AND SERVICING AGREEMENT dated as of ______ __, 200_, between
__________ TRUST 200_-_, a Delaware statutory trust (the
"Issuer"), and CITIGROUP VEHICLE SECURITIES INC., a Delaware
corporation, as Depositor and _____________, a ______
corporation, as servicer.
WHEREAS the Issuer desires to purchase a portfolio of receivables
arising in connection with [automotive] [recreational vehicle] retail
installment sale contracts and loan installments generated by
_________________________ in the ordinary course of business;
WHEREAS Citigroup Vehicle Securities Inc. is willing to sell such
receivables to the Issuer; and
WHEREAS ___________ is willing to service such receivables;
NOW, THEREFORE, in consideration of the premises and the mutual
covenants herein contained, the parties hereto agree as follows:
ARTICLE I.
Definitions
Section 1.01. Definitions. Whenever used in this Agreement, the
following words and phrases, unless the context otherwise requires, shall have
the following meanings:
["Accelerated Principal Distribution Amount" means, with respect to any
Distribution Date, an amount equal to that portion of the Total Distribution
Amount for such Distribution Date that remains after the payment of (i) the
Servicing Fee, (ii) the Noteholders' Interest Distributable Amount, (iii) the
Regular Principal Distribution Amount, (iv) the Certificateholders' Interest
Distributable Amount, and (v) the amount, if any, required to be deposited into
the Reserve Account on such Distribution Date pursuant to Section
5.07(b)(ii)(F).]
"Advance" means either a Precomputed Advance or Simple Interest Advance
or both, as applicable.
"Amount Financed" means with respect to a Receivable, the amount
advanced toward the purchase price of the Financed Assets and any related costs,
exclusive of any amount allocable to the premium of force-placed physical damage
insurance covering the Financed Assets.
"Annual Percentage Rate" or "APR" of a Receivable means the annual rate
of finance charges stated in the related Contract.
"Available Amount" means, with respect to any Distribution Date, the
amount of funds on deposit in the Reserve Account on such Distribution Date
(other than Investment Earnings on Eligible Investments) [less the Certificate
Interest Reserve Amount with respect to such Distribution Date before giving
effect to any reduction thereto on such date].
"Certificate Balance" equals, initially, $_____________ and,
thereafter, equals the Initial Certificate Balance reduced by all amounts
allocable to principal previously distributed to Certificateholders.
"Certificate Distribution Account" has the meaning assigned to such
term in the Trust Agreement.
"Certificate Interest Reserve Amount" means, at the time of reference,
the lesser of (i) $__________ less the amount of any application of the
Certificate Interest Reserve Amount to pay interest on the Certificates on any
prior Distribution Date and (ii) ______% of the Certificate Balance on such
Distribution Date (before giving effect to any reduction thereof on such
Distribution Date); provided, however, that the Certificate Interest Reserve
Amount shall be zero subsequent to any reduction by any Rating Agency of its
rating of any Class of Notes to less than "A-" or its equivalent, or withdrawal
by any Rating Agency of its rating of any Class of Notes, unless such rating has
been restored.
"Certificate Pool Factor" means, as of the close of business on the
last day of a Collection Period, a seven-digit decimal figure equal to the
Certificate Balance (after giving effect to any reductions therein to be made on
the immediately following Distribution Date) divided by the Initial Certificate
Balance. The Certificate Pool Factor will be 1.0000000 as of the Closing Date;
thereafter, the Certificate Pool Factor will decline to reflect reductions in
the Certificate Balance.
"Certificateholders" has the meaning assigned to such term in the Trust
Agreement.
"Certificateholders' Distributable Amount" means, with respect to any
Distribution Date, the sum of the Certificateholders' Principal Distributable
Amount and the Certificateholders' Interest Distributable Amount for such date.
"Certificateholders' Interest Carryover Shortfall" means, with respect
to any Distribution Date, the excess of the sum of the Certificateholders'
Monthly Interest Distributable Amount for the preceding Distribution Date and
any outstanding Certificateholders' Interest Carryover Shortfall on such
preceding Distribution Date, over the amount in respect of interest that is
actually deposited in the Certificate Distribution Account on such preceding
Distribution Date, plus 30 days' interest on such excess, to the extent
permitted by law, at the Pass-Through Rate.
"Certificateholders' Interest Distributable Amount" means, with respect
to any Distribution Date, the sum of the Certificateholders' Monthly Interest
Distributable Amount for such Distribution Date and the Certificateholders'
Interest Carryover Shortfall for such Distribution Date. Interest with respect
to the Certificates shall be computed on the basis of a 360-day year consisting
of twelve 30-day months for all purposes of this Agreement and the Basic
Documents.
"Certificateholders' Monthly Interest Distributable Amount" means, with
respect to any Distribution Date, 30 days of interest (or, in the case of the
first Distribution Date, interest accrued from and including the Closing Date to
but excluding ________ __, 200_) at the Pass-Through Rate on the Certificate
Balance on the last day of the preceding Collection Period (or, in the case of
the first Distribution Date, on the Closing Date).
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"Certificateholders' Monthly Principal Distributable Amount" means,
with respect to any Distribution Date prior to the Distribution Date on which
the Notes are paid in full, zero; and with respect to any Distribution Date on
or after the Distribution Date on which the Notes are paid in full, the Regular
Principal Distribution Amount for such Distribution Date (less, on the
Distribution Date on which the Notes are paid in full, the portion thereof
payable on the Notes).
"Certificateholders' Principal Carryover Shortfall" means, as of the
close of any Distribution Date, the excess of the Certificateholders' Monthly
Principal Distributable Amount and any outstanding Certificateholders' Principal
Carryover Shortfall from the preceding Distribution Date, over the amount in
respect of principal that is actually deposited in the Certificate Distribution
Account on such current Distribution Date.
"Certificateholders' Principal Distributable Amount" means, with
respect to any Distribution Date, the sum of the Certificateholders' Monthly
Principal Distributable Amount for such Distribution Date and the
Certificateholders' Principal Carryover Shortfall as of the close of the
preceding Distribution Date; provided, however, that the Certificateholders'
Principal Distributable Amount shall not exceed the Certificate Balance. In
addition, on the Final Scheduled Distribution Date, the principal required to be
included in the Certificateholders' Principal Distributable Amount will include
the lesser of (a) (i) any Scheduled Payments of principal due and remaining
unpaid on each Precomputed Receivable and (ii) any principal due and remaining
unpaid on each Simple Interest Receivable, in each case, in the Trust as of the
Final Scheduled Maturity Date or (b) the amount that is necessary (after giving
effect to the other amounts to be deposited in the Certificate Distribution
Account on such Distribution Date and allocable to principal) to reduce the
Certificate Balance to zero.
"Certificates" means the Trust Certificates (as defined in the Trust
Agreement).
"Class" means any one of the classes of Notes.
"Class [A-1] Final Scheduled Distribution Date" means the _________
200_ Distribution Date.
"Class [A-1] Noteholder" means the Person in whose name a Class [A-1]
Note is registered in the Note Register.
"Class [A-2] Final Scheduled Distribution Date" means the _________
____ Distribution Date.
"Class [A-2] Noteholder" means the Person in whose name a Class [A-2]
Note is registered in the Note Register.
"Collection Account" means the account designated as such, established
and maintained pursuant to Section 5.01(a)(i).
"Collection Period" means a calendar month. Any amount stated as of the
last day of a Collection Period or as of the first day of a Collection Period
shall give effect to the following calculations as determined as of the close of
business on such last day: (1) all applications of collections, (2) all current
and previous Payaheads, (3) all applications of Payahead Balances,
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(4) all Advances and reductions of Outstanding Precomputed Advances or
Outstanding Simple Interest Advances and (5) all distributions to be made on the
following Distribution Date.
"Contract" means a [automotive] [recreational vehicle] retail
installment sale contract or installment loan.
"Corporate Trust Office" means the principal office of the Indenture
Trustee at which at any particular time its corporate trust business shall be
administered, which office at the date of the execution of this Agreement is
located at _______________________, ________, ________ _____; or at such other
address as the Indenture Trustee may designate from time to time by notice to
the Noteholders and the Depositor, or the principal corporate trust office of
any successor Indenture Trustee (of which address such successor Indenture
Trustee will notify the Noteholders and the Depositor).
"Cutoff Date" means _________ __, 200__.
"Dealer" means the dealer who sold a Financed Asset to an Obligor and
who originated and assigned the related Receivable to an Originator.
"Delivery" when used with respect to Trust Account Property means:
(a) with respect to bankers' acceptances, commercial paper,
negotiable certificates of deposit and other obligations that constitute
"instruments" within the meaning of Section 9-105(1)(i) of the UCC and are
susceptible of physical delivery, transfer thereof to the Indenture Trustee or
its nominee or custodian by physical delivery to the Indenture Trustee or its
nominee or custodian endorsed to, or registered in the name of, the Indenture
Trustee or its nominee or custodian or endorsed in blank, and, with respect to a
certificated security (as defined in Section 8-102(4) of the UCC) transfer
thereof (i) by delivery of such certificated security endorsed to, or registered
in the name of, the Indenture Trustee or its nominee or custodian or endorsed in
blank to a securities intermediary (as defined in Section 8-102(14) of the UCC)
and the making by such securities intermediary of entries on its books and
records identifying such certificated securities as belonging to the Indenture
Trustee or its nominee or custodian and the sending by such securities
intermediary of a confirmation of the purchase of such certificated security by
the Indenture Trustee or its nominee or custodian, or (ii) by delivery thereof
to a "clearing corporation" (as defined in Section 8-102(5) of the UCC) and the
making by such clearing corporation of appropriate entries on its books reducing
the appropriate securities account of the transferor and increasing the
appropriate securities account of a securities intermediary by the amount of
such certificated security, the identification by the clearing corporation of
the certificated securities for the sole and exclusive account of the securities
intermediary, the maintenance of such certificated securities by such clearing
corporation or its nominee subject to the clearing corporation's exclusive
control, the sending of a confirmation by the securities intermediary of the
purchase by the Indenture Trustee or its nominee or custodian of such securities
and the making by such securities intermediary of entries on its books and
records identifying such certificated securities as belonging to the Indenture
Trustee or its nominee or custodian (all of the foregoing, "Physical Property"),
and, in any event, any such Physical Property in registered form shall be in the
name of the Indenture Trustee or its nominee or custodian; and such additional
or alternative procedures as may hereafter become appropriate
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to effect the complete transfer of ownership of any such Trust Account Property
(as defined herein) to the Indenture Trustee or its nominee or custodian,
consistent with changes in applicable law or regulations or the interpretation
thereof;
(b) with respect to any securities issued by the U.S. Treasury,
the Federal Home Loan Mortgage Corporation or by the Federal National Mortgage
Association that is a book-entry security held through the Federal Reserve
System pursuant to Federal book-entry regulations, the following procedures, all
in accordance with applicable law, including applicable Federal regulations and
Articles 8 and 9 of the UCC: book-entry registration of such Trust Account
Property to an appropriate book-entry account maintained with a Federal Reserve
Bank by a securities intermediary which is also a "depository" 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 or its nominee or custodian of the purchase by the
Indenture Trustee or its nominee or custodian of such book-entry securities; 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
or its nominee or custodian and indicating that such custodian holds such Trust
Account Property solely as agent for the Indenture Trustee or its nominee or
custodian; and such additional or alternative procedures as may hereafter become
appropriate to effect complete transfer of ownership of any such Trust Account
Property to the Indenture Trustee or its nominee or custodian, consistent with
changes in applicable law or regulations or the interpretation thereof; and
(c) with respect to any item of Trust Account Property that is an
uncertificated security under Article 8 of the UCC and that is not governed by
clause (a) above, registration on the books and records of the issuer thereof in
the name of the securities intermediary, the sending of a confirmation by the
securities intermediary of the purchase by the Indenture Trustee or its nominee
or custodian of such uncertificated security, the making by such securities
intermediary of entries on its books and records identifying such uncertificated
certificates as belonging to the Indenture Trustee or its nominee or custodian.
"Depositor" means Citigroup Vehicle Securities Inc., or its successor
in interest.
"Distribution Date" means, with respect to each Collection Period, the
_____ day of the following month or, if such day is not a Business Day, the
immediately following Business Day, commencing on ________ __, 200__.
"Eligible Deposit Account" means either (a) a segregated account with
an Eligible Institution or (b) a segregated trust account with the corporate
trust department of a depository institution organized under the laws of the
United States of America or any one of the states thereof or the District of
Columbia (or any domestic branch of a foreign bank), having corporate trust
powers and acting as trustee for funds deposited in such account, so long as any
of the securities of such depository institution shall have a credit rating from
each Rating Agency in one of its generic rating categories that signifies
investment grade.
"Eligible Institution" means (a) the corporate trust department of the
Indenture Trustee, the Owner Trustee or __________________________ so long as it
shall be Paying Agent under
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the Trust Agreement or (b) a depository institution organized under the laws of
the United States of America or any one of the states thereof or the District of
Columbia (or any domestic branch of a foreign bank), which (i) has either (A) a
long-term unsecured debt rating of AAA or better by Standard & Poor's and A1 or
better by Moody's or (B) a certificate of deposit rating of A-1+ by Standard &
Poor's and P-1 or better by Moody's, or any other long-term, short-term or
certificate of deposit rating acceptable to the Rating Agencies and (ii) whose
deposits are insured by the FDIC. If so qualified, the Indenture Trustee, the
Owner Trustee or _____________________ may be considered an Eligible Institution
for the purposes of this definition.
"Eligible Investments" means book-entry securities, negotiable
instruments or securities represented by instruments in bearer or registered
form which evidence:
(a) direct obligations of, and obligations fully guaranteed as to
the full and timely payment by, the United States of America;
(b) demand deposits, time deposits or certificates of deposit of
any depository institution or trust company incorporated under the laws of the
United States of America or any state thereof (or any domestic branch of a
foreign bank) and subject to supervision and examination by Federal or State
banking or depository institution authorities; provided, however, that at the
time of the investment or contractual commitment to invest therein, the
commercial paper or other short-term unsecured debt obligations (other than such
obligations the rating of which is based on the credit of a Person other than
such depository institution or trust company) thereof shall have a credit rating
from each of the Rating Agencies in the highest investment category granted
thereby;
(c) commercial paper having, at the time of the investment or
contractual commitment to invest therein, a rating from each of the Rating
Agencies in the highest investment category granted thereby;
(d) investments in money market funds having a rating from each
of the Rating Agencies in the highest investment category granted thereby
(including funds for which the Indenture Trustee or the Owner Trustee or any of
their respective Affiliates is investment manager or advisor);
(e) bankers' acceptances issued by any depository institution or
trust company referred to in clause (b) above;
(f) repurchase obligations with respect to any security that is a
direct obligation of, or fully guaranteed by, the United States of America or
any agency or instrumentality thereof the obligations of which are backed by the
full faith and credit of the United States of America, in either case entered
into with a depository institution or trust company (acting as principal)
described in clause;
(g) repurchase obligations with respect to any security or whole
loan, entered into with (i) a depository institution or trust company (acting as
principal) described in clause (b) above (except that the rating referred to in
the proviso in such clause (b) shall be A-1 or higher in the case of Standard &
Poor's) (such depository institution or trust company being referred to in
6
this definition as a "financial institution"), (ii) a broker/dealer (acting as
principal) registered as a broker or dealer under Section 15 of the Exchange Act
(a "broker/dealer") the unsecured short-term debt obligations of which are rated
P-1 by Moody's and at least A-1 by Standard & Poor's at the time of entering
into such repurchase obligation (a "rated broker/dealer"), (iii) an unrated
broker/dealer (an "unrated broker/dealer"), acting as principal, that is a
wholly-owned subsidiary of a non-bank holding company the unsecured short-term
debt obligations of which are rated P-1 by Moody's and at least A-1 by Standard
& Poor's at the time of entering into such repurchase obligation (a "Rated
Holding Company") or (iv) an unrated subsidiary (a "Guaranteed Counterparty"),
acting as principal, that is a wholly-owned subsidiary of a direct or indirect
parent Rated Holding Company, which guarantees such subsidiary's obligations
under such repurchase agreement; provided that the following conditions are
satisfied:
(A) the aggregate amount of funds invested in repurchase
obligations of a financial institution, a rated broker/dealer, an
unrated broker/dealer or Guaranteed Counterparty in respect of which
the Standard & Poor's unsecured short-term ratings are A-1 (in the case
of an unrated broker/dealer or Guaranteed Counterparty, such rating
being that of the related Rated Holding Company) shall not exceed ___%
of the sum of the then outstanding principal balance of the Notes and
the Certificate Balance (there being no limit on the amount of funds
that may be invested in repurchase obligations in respect of which such
Standard & Poor's rating is A-1+ (in the case of an unrated
broker/dealer or Guaranteed Counterparty, such rating being that of the
related Rated Holding Company));
(B) in the case of the Reserve Account, the rating from
Standard & Poor's in respect of the unsecured short-term debt
obligations of the financial institution, rated broker/dealer, unrated
broker/dealer or Guaranteed Counterparty (in the case of an unrated
broker/dealer or Guaranteed Counterparty, such rating being that of the
related Rated Holding Company) shall be A-1+;
(C) the repurchase obligation must mature within 30 days of
the date on which the Indenture Trustee or the Issuer, as applicable,
enters into such repurchase obligation;
(D) the repurchase obligation shall not be subordinated to any
other obligation of the related financial institution, rated
broker/dealer, unrated broker/dealer or Guaranteed Counterparty;
(E) the collateral subject to the repurchase obligation is
held, in the appropriate form, by a custodial bank on behalf of the
Indenture Trustee or the Issuer, as applicable;
(F) the repurchase obligation shall require that the
collateral subject thereto shall be marked to market daily;
(G) in the case of a repurchase obligation of a Guaranteed
Counterparty, the following conditions shall also be satisfied:
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(i) the Indenture Trustee or the Issuer, as
applicable, shall have received an opinion of counsel (which
may be in-house counsel) to the effect that the guarantee of
the related Rated Holding Company is a legal, valid and
binding agreement of the Rated Holding Company, enforceable in
accordance with its terms, subject as to enforceability to
bankruptcy, insolvency, reorganization and moratorium or other
similar laws affecting creditors' rights generally and to
general equitable principles;
(ii) the Indenture Trustee or the Issuer, as
applicable, shall have received (x) an incumbency certificate
for the signer of such guarantee, certified by an officer of
such Rated Holding Company and (y) a resolution, certified by
an officer of the Rated Holding Company, of the board of
directors (or applicable committee thereof) of the Rated
Holding Company authorizing the execution, delivery and
performance of such guarantee by the Rated Holding Company;
(iii) the only conditions to the obligation of such
Rated Holding Company to pay on behalf of the Guaranteed
Counterparty shall be that the Guaranteed Counterparty shall
not have paid under such repurchase obligation when required
(it being understood that no notice to, demand on or other
action in respect of the Guaranteed Counterparty is necessary)
and that the Indenture Trustee or the Issuer shall make a
demand on the Rated Holding Company to make the payment due
under such guarantee;
(iv) the guarantee of the Rated Holding Company shall
be irrevocable with respect to such repurchase obligation and
shall not be subordinated to any other obligation of the Rated
Holding Company; and
(v) each of Standard & Poor's and Moody's has
confirmed in writing to the Indenture Trustee or Issuer, as
applicable, that it has reviewed the form of the guarantee of
the Rated Holding Company and has determined that the issuance
of such guarantee will not result in the downgrade or
withdrawal of the ratings assigned to the Notes or the
Certificates.
(H) the repurchase obligation shall require that the
repurchase obligation be overcollateralized and shall provide that,
upon any failure to maintain such overcollateralization, the repurchase
obligation shall become due and payable, and unless the repurchase
obligation is satisfied immediately, the collateral subject to the
repurchase agreement shall be liquidated and the proceeds applied to
satisfy the unsatisfied portion of the repurchase obligation;
(h) any other investment with respect to which the Issuer or the
Servicer has received written notification from the Rating Agencies that the
acquisition of such investment as
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an Eligible Investment will not result in a withdrawal or downgrading of the
ratings on the Notes or Certificates.
"FDIC" means the Federal Deposit Insurance Corporation.
"Final Scheduled Distribution Date" means the Distribution Date
immediately following the Final Scheduled Maturity Date.
"Final Scheduled Maturity Date" means ______ __, ____.
"Financed Asset" means a new or used [automobile, light-duty truck],
[recreational vehicle], together with all accessions thereto, securing an
Obligor's indebtedness under the respective Receivable.
"Indenture" means the Indenture dated as of ______ __, 200__, between
the Issuer and the Indenture Trustee.
"Indenture Trustee" means the Person acting as Indenture Trustee under
the Indenture, its successors in interest and any successor trustee under the
Indenture.
"Initial Certificate Balance" shall have the meaning set forth in the
Trust Agreement.
"Insolvency Event" means, with respect to a specified Person, (a) the
filing of a decree or order for relief by a court having jurisdiction in the
premises in respect of such Person or any substantial part of its property in an
involuntary case under any applicable federal or state bankruptcy, insolvency or
other similar law now or hereafter in effect, or appointing a receiver,
liquidator, assignee, custodian, trustee, sequestrator or similar official for
such Person or for any substantial part of its property, or ordering the
winding-up or liquidation of such Person's affairs, and such decree or order
shall remain unstayed and in effect for a period of 60 consecutive days; or (b)
the commencement by such Person of a voluntary case under any applicable federal
or state bankruptcy, insolvency or other similar law now or hereafter in effect,
or the consent by such Person to the entry of an order for relief in an
involuntary case under any such law, or the consent by such Person to the
appointment of or taking possession by a receiver, liquidator, assignee,
custodian, trustee, sequestrator or similar official for such Person or for any
substantial part of its property, or the making by such Person of any general
assignment for the benefit of creditors, or the failure by such Person generally
to pay its debts as such debts become due, or the taking of action by such
Person in furtherance of any of the foregoing.
"Interest Distribution Amount" means, with respect to any Distribution
Date, the sum of the following amounts, without duplication, with respect to the
Receivables in respect of the Collection Period preceding such Distribution
Date: (a) that portion of all collections on Receivables (including Payaheads)
allocable to interest plus that portion of Payaheads allocable to principal, (b)
Liquidation Proceeds with respect to the Receivables to the extent allocable to
interest due thereon in accordance with the Servicer's customary servicing
procedures, (c) all Advances made by the Servicer of interest due on
Receivables, (d) the Purchase Amount of each Receivable that became a Purchased
Receivable during such Collection Period to the extent attributable to accrued
interest on such Receivable, (e) Recoveries for such Collection Period, and (f)
Investment Earnings for the related Distribution Date; provided, however, that
in
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calculating the Interest Distribution Amount the following will be excluded:
(i) amounts received on Precomputed Receivables to the extent of any
unreimbursed Precomputed Advances of interest; (ii) Liquidation Proceeds with
respect to a particular Precomputed Receivable to the extent of any unreimbursed
Precomputed Advances of interest; (iii) all payments and proceeds (including
Liquidation Proceeds) of any Purchased Receivables the Purchase Amount of which
has been included in the Interest Distribution Amount in a prior Collection
Period; (iv) the sum for all the Simple Interest Receivables of collections on
each such Simple Interest Receivable received during such preceding Collection
Period in excess of the amount of interest that would be due on the aggregate
Principal Balance of the Simple Interest Receivables during such Collection
Period at their respective APRs if a payment were received on each Simple
Interest Receivable during such Collection Period on the date payment is due
under the terms of such Simple Interest Receivable; and (v) Liquidation Proceeds
with respect to a Simple Interest Receivable attributable to accrued and unpaid
interest thereon (but not including interest for the then current Collection
Period) but only to the extent of any unreimbursed Simple Interest Advances.
"Investment Earnings" means, with respect to any Distribution Date, the
investment earnings (net of losses and investment expenses) on amounts on
deposit in the Trust Accounts to be deposited into the Collection Account on
such Distribution Date pursuant to Section 5.01(b).
"Issuer" means [__________] Trust 200_-_.
"Lien" means a security interest, lien, charge, pledge, equity or
encumbrance of any kind, other than tax liens, mechanics' liens and any liens
that attach to the respective Receivable by operation of law as a result of any
act or omission by the related Obligor.
"Liquidated Receivable" means any Receivable, liquidated by the
Servicer through the sale of a Financed Asset or otherwise.
"Liquidation Proceeds" means, with respect to any Liquidated
Receivable, the moneys collected in respect thereof, from whatever source on a
Liquidated Receivable during the Collection Period in which such Receivable,
became a Liquidated Receivable, net of the sum of any amounts expended by the
Servicer in connection with such liquidation and any amounts required by law to
be remitted to the Obligor on such Liquidated Receivable.
"Moody's" means Xxxxx'x Investors Service, Inc., or its successor.
"Note Distribution Account" means the account designated as such,
established and maintained pursuant to Section 5.01.
"Note Pool Factor" means, with respect to each Class of Notes as of the
close of business on the last day of a Collection Period, a seven-digit decimal
figure equal to the outstanding principal balance of such Class of Notes (after
giving effect to any reductions thereof to be made on the immediately following
Distribution Date) divided by the original outstanding principal balance of such
Class of Notes. The Note Pool Factor will be 1.0000000 as of the Closing Date;
thereafter, the Note Pool Factor will decline to reflect reductions in the
outstanding principal balance of such Class of Notes.
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"Noteholders' Distributable Amount" means, with respect to any
Distribution Date, the sum of the Noteholders' Principal Distributable Amount
and the Noteholders' Interest Distributable Amount for such Distribution Date.
"Noteholders' Interest Carryover Shortfall" means, with respect to any
Distribution Date, the excess of the sum of the Noteholders' Monthly Interest
Distributable Amount for the preceding Distribution Date and any outstanding
Noteholders' Interest Carryover Shortfall on such preceding Distribution Date,
over the amount in respect of interest that is actually deposited in the Note
Distribution Account on such preceding Distribution Date, plus interest on the
amount of interest due but not paid to Noteholders on the preceding Distribution
Date, to the extent permitted by law, at the respective Interest Rates borne by
each Class of the Notes for the related Interest Period.
"Noteholders' Interest Distributable Amount" means, with respect to any
Distribution Date, the sum of the Noteholders' Monthly Interest Distributable
Amount for such Distribution Date and the Noteholders' Interest Carryover
Shortfall for such Distribution Date. For all purposes of this Agreement and the
Basic Documents, interest with respect to the Class [A-1] and Class [A-2] Notes
shall be computed on the basis of the actual number of days in each applicable
Floating Rate Interest Accrual Period divided by 360.
"Noteholders' Monthly Interest Distributable Amount" means, with
respect to any Distribution Date, interest accrued for the related Interest
Accrual Period or Floating Rate Interest Accrual Period, as applicable, on each
Class of Notes at the respective Interest Rate for such Class on the outstanding
principal balance of the Notes of such Class on the immediately preceding
Distribution Date (or, in the case of the first Distribution Date, the Closing
Date), after giving effect to all distributions of principal to the Noteholders
of such Class on or prior to such Distribution Date (or, in the case of the
first Distribution Date, on the Closing Date).
"Noteholders' Monthly Principal Distributable Amount" means, with
respect to any Distribution Date, the sum of (i) the Regular Principal
Distribution Amount plus (ii) the Accelerated Principal Distribution Amount plus
(iii) any accelerated payments of principal required to be made from amounts on
deposit in the Reserve Account pursuant to Section 5.08(b)(ii).
"Noteholders' Principal Carryover Shortfall" means, as of the close of
any Distribution Date, the excess of the Noteholders' Monthly Principal
Distributable Amount and any outstanding Noteholders' Principal Carryover
Shortfall from the preceding Distribution Date, over the amount in respect of
principal that is actually deposited in the Note Distribution Account on such
current Distribution Date.
"Noteholders' Principal Distributable Amount" means, with respect to
any Distribution Date, the sum of the Noteholders' Monthly Principal
Distributable Amount for such Distribution Date and the Noteholders' Principal
Carryover Shortfall as of the close of the preceding Distribution Date;
provided, however, that the Noteholders' Principal Distributable Amount shall
not exceed the outstanding principal balance of the Notes. In addition, (a) on
the Class [A-1] Final Scheduled Distribution Date, the principal required to be
deposited in the Note Distribution Account will include the amount necessary
(after giving effect to the other amounts to be
11
deposited in the Note Distribution Account on such Distribution Date and
allocable to principal) to reduce the Outstanding Amount of the Class [A-1]
Notes to zero; and on the Class [A-2] Final Scheduled Distribution Date, the
principal required to be deposited in the Note Distribution Account will include
the amount necessary (after giving effect to the other amounts to be deposited
in the Note Distribution Account on such Distribution Date and allocable to
principal) to reduce the Outstanding Amount of the Class [A-2] Notes to zero.
"Obligor" on a Receivable means the purchaser or co-purchasers of the
Financed Asset and any other Person who owes payments under the Receivable.
"Officers' Certificate" means a certificate signed by (a) the chairman
of the board, any vice president, the controller or any assistant controller and
(b) the president, a treasurer, assistant treasurer, secretary or assistant
secretary of the Depositor or the Servicer, as appropriate.
"Opinion of Counsel" means one or more written opinions of counsel, who
may be an employee of or counsel to the Depositor, the Seller or the Servicer,
which counsel shall be acceptable to the Indenture Trustee, the Owner Trustee or
the Rating Agencies, as applicable.
"Original Pool Balance" means $________________.
"Originator" means ____________________________ who originated or
purchased a Contract from a Dealer and sold such Contract to the Seller.
"Outstanding Precomputed Advances" on the Precomputed Receivables means
the sum, as of the close of business on the last day of a Collection Period, of
all Precomputed Advances as reduced as provided in Section 5.05(a).
"Outstanding Simple Interest Advances" on the Simple Interest
Receivables means the sum, as of the close of business on the last day of a
Collection Period, of all Simple Interest Advances as reduced as provided in
Section 5.05(b).
"Owner Trust Estate" has the meaning assigned to such term in the Trust
Agreement.
"Owner Trustee" means the Person acting as Owner Trustee under the
Trust Agreement, its successors in interest and any successor owner trustee
under the Trust Agreement.
"Pass-Through Rate" means ____% per annum.
"Payahead" on a Receivable that is 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 5.03 with respect to such Receivable.
"Payahead Account" means the account designated as such, established
and maintained pursuant to Section 5.02(d).
"Payahead Balance" on a Receivable that is 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
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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 5.03 and 5.05.
"Payment Determination Date" means, with respect to any Distribution
Date, the Business Day immediately preceding such Distribution Date.
"Physical Property" has the meaning assigned to such term in the
definition of "Delivery" above.
"Pool Balance" means, as of the close of business on the last day of a
Collection Period, the aggregate Principal Balance of the Receivables as of such
day (excluding Purchased Receivables and Liquidated Receivables).
"Precomputed Advance" means the amount, as of the close of business on
the last day of a Collection Period, which the Servicer is required to advance
on the related Precomputed Receivables pursuant to Section 5.05(a).
"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 or the
sum of monthly balances or any equivalent method or which is a monthly actuarial
receivable.
"Principal Balance" of (a) a Precomputed Receivable, as of the close of
business on the last day of a Collection Period, means the Amount Financed minus
the sum of (i) that portion of all Scheduled Payments (excluding Payaheads
retained in the Payahead Account, but including Payaheads that have been applied
to Scheduled Payments) due on or prior to such day allocable to principal using
the actuarial or constant yield method, (ii) any refunded portion of extended
warranty protection plan costs or of physical damage, credit life or disability
insurance premiums included in the Amount Financed, (iii) any payment of the
Purchase Amount with respect to the Precomputed Receivable allocable to
principal and (iv) any prepayment in full or any partial prepayments applied to
reduce the Principal Balance of the Precomputed Receivable and (b) a Simple
Interest Receivable, as of the close of business on the last day of a Collection
Period, means the Amount Financed minus the sum of (i) the portion of all
payments made by or on behalf of the related Obligor on or prior to such day and
allocable to principal using the Simple Interest Method and (ii) any payment of
the Purchase Amount with respect to the Simple Interest Receivable allocable to
principal.
"Purchase Amount" means the amount, as of the close of business on the
last day of a Collection Period, required to prepay in full a Receivable under
the terms thereof including interest to the end of the month of purchase.
"Purchased Receivable" means a Receivable purchased as of the close of
business on the last day of a Collection Period by the Servicer pursuant to
Section 4.07 or by the Depositor pursuant to Section 3.02.
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"Rating Agency" means Moody's and Standard & Poor's or, if no such
organization or successor is any longer in existence, a nationally recognized
statistical rating organization or other comparable Person designated by the
Depositor, notice of which designation shall be given to the Indenture Trustee,
the Owner Trustee and the Servicer. Any notice required to be given to a Rating
Agency pursuant to this Agreement shall also be given to [RATING AGENCY] and
[RATING AGENCY], although, except as set forth above, neither shall be deemed to
be a Rating Agency for any purposes of this Agreement.
"Rating Agency Condition" means, with respect to any action, that each
Rating Agency shall have been given 10 days' (or such shorter period as shall be
acceptable to each Rating Agency) prior notice thereof and that each of the
Rating Agencies shall have notified the Depositor, the Servicer, the Owner
Trustee and the Indenture Trustee in writing that such action will not result in
a reduction or withdrawal of the then current rating of the Notes or the
Certificates.
"Realized Losses" means, with respect to any Receivable that becomes a
Liquidated Receivable, the excess of the Principal Balance of such Liquidated
Receivable over Liquidation Proceeds to the extent allocable to principal.
"Receivable Files" means the documents specified in Section 3.03.
"Receivables Purchase Agreement" means the Receivables Purchase
Agreement dated as of ____________, 200__, between the Seller, as seller and the
Depositor, as purchaser.
"Recoveries" means, with respect to any Receivable that becomes a
Liquidated Receivable, monies collected in respect thereof, from whatever
source, during any Collection Period following the Collection Period in which
such Receivable became a Liquidated Receivable, net of the sum of any amounts
expended by the Servicer for the account of the Obligor and any amounts required
by law to be remitted to the Obligor.
"Regular Principal Distribution Amount" means, with respect to any
Distribution Date, the sum of the following amounts, without duplication, with
respect to the Receivables in respect of the Collection Period preceding such
Distribution Date: (a) that portion of all collections on Receivables allocable
to principal (exclusive of Payaheads allocable to principal that have not been
applied as payments under the related Receivables in such Collection Period and
inclusive of Payaheads allocable to principal that have been applied as payments
under the related Receivables in such Collection Period), (b) all Liquidation
Proceeds attributable to the principal amount of Receivables that became
Liquidated Receivables during such Collection Period in accordance with the
Servicer's customary servicing procedures, plus the amount of Realized Losses
with respect to such Liquidated Receivables, (c) all Precomputed Advances made
by the Servicer of principal due on the Precomputed Receivables, (d) to the
extent attributable to principal, the Purchase Amount of each Receivable that
became a Purchased Receivable during such Collection Period, (e) partial
prepayments on Precomputed Receivables relating to refunds of extended warranty
protection plan costs or of physical damage, credit life or disability insurance
policy premiums, but only if such costs or premiums were financed by the
respective Obligors thereon as of the date of the original contract and only to
the extent not included under clause (c) above, and (f) on the Final Scheduled
Distribution Date, any amounts advanced by the
14
Servicer on such Final Scheduled Distribution Date with respect to principal on
the Receivables; provided, however, that in calculating the Regular Principal
Distribution Amount the following will be excluded: (i) amounts received on
Precomputed Receivables to the extent that the Servicer has previously made an
unreimbursed Precomputed Advance of principal, (ii) Liquidation Proceeds with
respect to a particular Precomputed Receivable to the extent of any unreimbursed
Precomputed Advances of principal, (iii) all payments and proceeds (including
Liquidation Proceeds) of any Purchased Receivables the Purchase Amount of which
has been included in the Principal Distribution Amount in a prior Collection
Period, and (iv) Recoveries.
"Reserve Account" means the account designated as such, established and
maintained pursuant to Section 5.01.
"Reserve Account Initial Deposit" means an amount equal to the
Specified Reserve Account Balance on the Closing Date (which is equal to
$__________________).
"Scheduled Payment" on a Precomputed 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 under the actuarial method
over the term of the Receivable and to provide interest at the APR.
"Seller" means ______________ and its successors in interest.
"Servicer" means _______________, as the servicer of the Receivables,
and each successor to _____ (in the same capacity) pursuant to Section 7.03 or
8.02.
"Servicer Default" means an event specified in Section 8.01.
"Servicer's Certificate" means an Officers' Certificate of the Servicer
delivered pursuant to Section 4.09, substantially in the form of Exhibit C.
"Servicing Fee" means the fee payable to the Servicer for services
rendered during each Collection Period, determined pursuant to Section 4.08.
"Servicing Fee Rate" means ____% per annum.
"Simple Interest Advance" means the amount of interest, as of the close
of business on the last day of a Collection Period, which the Servicer is
required to advance on the Simple Interest Receivables pursuant to Section
5.05(b).
"Simple Interest Method" means the method of allocating a fixed level
payment to principal and interest, pursuant to which the portion of such payment
that is allocated to interest is equal to the product of the fixed rate of
interest multiplied by the unpaid principal balance multiplied by the period of
time elapsed since the preceding payment of interest was made and the remainder
of such payment is allocable to principal.
"Simple Interest Receivable" means any Receivable under which the
portion of a payment allocable to interest and the portion allocable to
principal is determined in accordance with the Simple Interest Method.
15
"Specified Reserve Account Balance" means [STATE FORMULA].
"Standard & Poor's" means Standard & Poor's Ratings Services, a
division of The XxXxxx-Xxxx Companies, Inc., or its successor.
"Receivable" means any Contract listed on Schedule A (which Schedule
may be in the form of microfiche).
"Total Distribution Amount" means, for each Distribution Date, the sum
of the applicable Interest Distribution Amount and the applicable Regular
Principal Distribution Amount (other than the portion thereof attributable to
Realized Losses).
"Trust" means the Issuer.
"Trust Account Property" means the Trust Accounts, all amounts and
investments held from time to time in any Trust Account (whether in the form of
deposit accounts, Physical Property, book-entry securities, uncertificated
securities or otherwise), including the Reserve Account Initial Deposit, and all
proceeds of the foregoing.
"Trust Accounts" has the meaning assigned thereto in Section 5.01.
"Trust Agreement" means the Trust Agreement dated as of ______ __,
200_, between the Depositor and the Owner Trustee.
"Trust Officer" means, in the case of the Indenture Trustee, any
Officer within the Corporate Trust Office of the Indenture Trustee, including
any Vice President, Assistant Vice President, Secretary, Assistant Secretary or
any other officer of the Indenture Trustee customarily performing functions
similar to those performed by any of the above designated officers and also,
with respect to a particular matter, any other officer to whom such matter is
referred because of such officer's knowledge of and familiarity with the
particular subject and, with respect to the Owner Trustee, any officer in the
Corporate Trust Administration Department of the Owner Trustee with direct
responsibility for the administration of the Trust Agreement and the Basic
Documents on behalf of the Owner Trustee.
Section 1.02. Other Definitional Provisions. (a) Capitalized terms used
herein and not otherwise defined herein shall have the meanings assigned to them
in the Indenture.
(b) All terms defined in this Agreement shall have the defined
meanings when used in any certificate or other document made or delivered
pursuant hereto unless otherwise defined therein.
(c) As used in this Agreement and in any certificate or other
document made or delivered pursuant hereto or thereto, accounting terms not
defined in this Agreement or in any such certificate or other document, and
accounting terms partly defined in this Agreement or in any such certificate or
other document to the extent not defined, shall have the respective meanings
given to them under generally accepted accounting principles. To the extent that
the definitions of accounting terms in this Agreement or in any such certificate
or other document are inconsistent with the meanings of such terms under
generally accepted accounting principles,
16
the definitions contained in this Agreement or in any such certificate or other
document shall control.
(d) The words "hereof", "herein", "hereunder" and words of
similar import when used in this Agreement shall refer to this Agreement as a
whole and not to any particular provision of this Agreement; Article, Section,
Schedule and Exhibit references contained in this Agreement are references to
Articles, Sections, Schedules and Exhibits in or to this Agreement unless
otherwise specified; and the term "including" shall mean "including without
limitation".
(e) The definitions contained in this Agreement are applicable to
the singular as well as the plural forms of such terms and to the masculine as
well as to the feminine and neuter genders of such terms.
(f) Any agreement, instrument or statute defined or referred to
herein or in any instrument or certificate delivered in connection herewith
means such agreement, instrument or statute as from time to time amended,
modified or supplemented and includes (in the case of agreements or instruments)
references to all attachments thereto and instruments incorporated therein;
references to a Person are also to its permitted successors and assigns.
ARTICLE II.
Conveyance of Receivables
Section 2.01. Conveyance of Receivables. In consideration of the
Issuer's delivery to or upon the order of the Depositor of $_____________ less
the amount to be deposited to the Reserve Account on the Closing Date, the
Depositor does hereby sell, transfer, assign, set over and otherwise convey to
the Issuer, without recourse (subject to the obligations of the Depositor set
forth herein), all right, title and interest of the Depositor in and to:
(a) the Receivables and all moneys due thereon on or after
____________, 200__, in the case of Precomputed Receivables (including such
payments due on or after _______________, 200_ and collected after ___________,
200_ and before ______________, 200_), and all moneys received thereon on and
after ____________, 200_, in the case of Simple Interest Receivables;
(b) the security interests in the Financed Assets granted by
Obligors pursuant to the Receivables and any other interest of the Depositor in
the Financed Assets;
(c) any proceeds with respect to the Receivables from claims on
any physical damage, credit life or disability insurance policies covering
Financed Assets or Obligors;
(d) any proceeds from recourse to Dealers with respect to
Receivables with respect to which the Servicer has determined in accordance with
its customary servicing procedures that eventual payment in full is unlikely;
(e) any Financed Asset that shall have secured a Receivable and
shall have been acquired by or on behalf of the Seller, the Servicer, the
Depositor or the Trust;
17
(f) all right, title and interest of the Depositor under the
Receivables Purchase Agreement, including, without limitation, the right of the
Depositor to cause the Seller to purchase receivables under certain
circumstances;
(g) all right, title and interest in all funds on deposit from
time to time in the Trust Accounts, including the Reserve Account Initial
Deposit and the Certificate Distribution Account, and in all investments and
proceeds thereof (including all income thereon); and
(h) the proceeds of any and all of the foregoing.
ARTICLE III.
The Receivables
Section 3.01. Representations and Warranties of the Depositor with
Respect to the Receivables. The Depositor makes the following representations
and warranties as to the Receivables on which the Issuer is deemed to have
relied in acquiring the Receivables. Such representations and warranties speak
as of the execution and delivery of this Agreement and as of the Closing Date,
but shall survive the sale, transfer and assignment of the Receivables to the
Issuer and the pledge thereof to the Indenture Trustee pursuant to the
Indenture.
(a) Title. It is the intention of the Depositor that the transfer
and assignment herein contemplated constitute a sale of the Receivables from the
Depositor to the Issuer and that the beneficial interest in and title to the
Receivables not be part of the debtor's estate in the event of the filing of a
bankruptcy petition by or against the Depositor under any bankruptcy law. No
Receivable has been sold, transferred, assigned or pledged by the Depositor to
any Person other than the Issuer. Immediately prior to the transfer and
assignment herein contemplated, the Depositor had good and marketable title to
each Receivable, free and clear of all Liens and rights of others and,
immediately upon the transfer thereof, the Issuer shall have good and marketable
title to each Receivable, free and clear of all Liens and rights of others; and
the transfer has been perfected under the UCC.
(b) All Filings Made. All filings (including UCC filings)
necessary in any jurisdiction to give (i) the Issuer a first perfected ownership
interest in the Receivables and (ii) the Indenture Trustee a first perfected
security interest in the Receivables shall have been made.
Section 3.02. Repurchase upon Breach. The Depositor, the Servicer or
the Owner Trustee, as the case may be, shall inform the other parties to this
Agreement and the Indenture Trustee promptly, in writing, upon the discovery of
any breach of the Depositor's representations and warranties made pursuant to
Section 3.01 or the Seller's representations and warranties made pursuant to
Section 3.02 of the Receivables Purchase Agreement. Unless any such breach shall
have been cured by the last day of the second Collection Period following the
discovery thereof by the Trustee or receipt by the Trustee of notice from the
Depositor or the Servicer of such breach, the Depositor shall be obligated to
repurchase any Receivable materially and adversely affected by any such breach
as of such last day (or, at the Depositor's option, the last day of the first
Collection Period following such discovery or notice). In consideration of the
repurchase of any Receivable, the Depositor shall remit the Purchase Amount, in
the manner specified in
18
Section 5.06; provided, however, that the obligation of the Depositor to
repurchase any receivable arising solely as a result of a breach of the Seller's
representations and warranties under Section 3.02 of the Receivables Purchase
Agreement is subject to the receipt by the Depositor of the Purchase Amount from
the Seller. Subject to the provisions of Section 6.03, the sole remedy of the
Trustee, the Trust, the Noteholders or the Certificateholders with respect to a
breach of representations and warranties pursuant to the agreement contained in
this Section shall be to require the Depositor to repurchase Receivables
pursuant to this Section, subject to the conditions contained herein or to
enforce the Seller's obligation to the Depositor to repurchase such Receivables
pursuant to the Receivables Purchase Agreement.
Section 3.03. Custody of Receivable Files. To assure uniform quality in
servicing the Receivables and to reduce administrative costs, the Issuer hereby
revocably appoints the Servicer, and the Servicer hereby accepts such
appointment, to act for the benefit of the Issuer and the Indenture Trustee as
custodian of the following documents or instruments which are hereby or will
hereby be constructively delivered to the Indenture Trustee, as pledgee of the
Issuer, as of the Closing Date with respect to each Receivable:
(a) the fully executed original Receivable;
(b) the original credit application fully executed by the
Obligor;
(c) the original certificate of title or such documents that the
Servicer, or the Depositor shall keep on file, in accordance with its customary
procedures, evidencing the security interest of the Depositor in the Financed
Asset; and
(d) any and all other documents that the Servicer or the
Depositor shall keep on file, in accordance with its customary procedures,
relating to a Receivable, an Obligor, or a Financed Asset.
Section 3.04. Duties of Servicer as Custodian. (a) Safekeeping. The
Servicer shall hold the Receivable Files as custodian for the benefit of the
Issuer and maintain such accurate and complete accounts, records and computer
systems pertaining to each Receivable File as shall enable the Issuer to comply
with this Agreement. In performing its duties as custodian the Servicer shall
act with reasonable care, using that degree of skill and attention that the
Servicer exercises with respect to the receivable files relating to all
comparable [automotive] [recreational vehicle] receivables that the Servicer
services for itself or others. 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 Issuer or the Indenture Trustee to verify the
accuracy of the Servicer's record keeping. The Servicer shall promptly report to
the Issuer and the Indenture Trustee any failure on its part to hold the
Receivable Files and maintain its accounts, records and computer systems as
herein provided and shall promptly take appropriate action to remedy any such
failure. Nothing herein shall be deemed to require an initial review or any
periodic review by the Issuer or the Indenture Trustee of the Receivable Files.
(b) Maintenance of and Access to Records. The Servicer shall
maintain each Receivable File at one of its offices specified in Schedule B or
at such other office as shall be
19
specified to the Issuer and the Indenture Trustee by written notice not later
than 90 days after any change in location. The Servicer shall make available to
the Issuer and the Indenture Trustee or their respective duly authorized
representatives, attorneys or auditors a list of locations of the Receivable
Files and the related accounts, records and computer systems maintained by the
Servicer at such times during normal business hours as the Issuer or the
Indenture Trustee shall instruct.
(c) Release of Documents. Upon instruction from the Indenture
Trustee, the Servicer shall release any Receivable File to the Indenture
Trustee, the Indenture Trustee's agent or the Indenture Trustee's designee, as
the case may be, at such place or places as the Indenture Trustee may designate,
as soon as practicable.
Section 3.05. 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 Trust Officer of the
Indenture Trustee.
Section 3.06. Custodian's Indemnification. The Servicer as custodian
shall indemnify the Trust, the Owner Trustee and the Indenture Trustee and each
of their respective officers, directors, employees and agents for any and all
liabilities, obligations, losses, compensatory damages, payments, costs or
expenses of any kind whatsoever that may be imposed on, incurred by or asserted
against the Trust, the Owner Trustee or the Indenture Trustee or any of their
respective officers, directors, employees and agents as the result of any
improper act or omission in any way relating to the maintenance and custody by
the Servicer as custodian of the Receivable Files; provided, however, that the
Servicer shall not be liable to the Owner Trustee for any portion of any such
amount resulting from the willful misfeasance, bad faith or negligence of the
Owner Trustee, and the Servicer shall not be liable to the Indenture Trustee for
any portion of any such amount resulting from the willful misfeasance, bad faith
or negligence of the Indenture Trustee.
Section 3.07. Effective Period and Termination. The Servicer's
appointment as custodian shall become effective as of the Cutoff Date and shall
continue in full force and effect until terminated pursuant to this Section. If
_______ shall resign as Servicer in accordance with the provisions of this
Agreement or if all of the rights and obligations of any Servicer shall have
been terminated under Section 8.01, the appointment of such Servicer as
custodian shall be terminated by the Indenture Trustee or by the Holders of
Notes evidencing not less than 25% of the Outstanding Amount of the Notes or,
with the consent of Holders of the Notes evidencing not less than 25% of the
Outstanding Amount of the Notes, by the Owner Trustee or by Certificateholders
evidencing not less than 25% of the Certificate Balance, in the same manner as
the Indenture Trustee or such Holders may terminate the rights and obligations
of the Servicer under Section 8.01. The Indenture Trustee or, with the consent
of the Indenture Trustee, the Owner Trustee may terminate the Servicer's
appointment as custodian, with cause, at any time upon written notification to
the Servicer and, without cause, upon 30 days' prior written notification to the
Servicer. As soon as practicable after any termination of such appointment, the
Servicer shall deliver the Receivable Files to the Indenture Trustee or the
Indenture Trustee's agent at such place or places as the Indenture Trustee may
reasonably designate.
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ARTICLE IV.
Administration and Servicing of Receivables
Section 4.01. Duties of Servicer. The Servicer, for the benefit of the
Issuer (to the extent provided herein), shall manage, service, administer and
make collections on the Receivables (other than Purchased Receivables) with
reasonable care, using that degree of skill and attention that the Servicer
exercises with respect to all comparable [automotive] [recreational vehicle]
receivables that it services for itself or others. The Servicer's duties shall
include collection and posting of all payments, responding to inquiries of
Obligors on such Receivables, investigating delinquencies, sending payment
coupons to Obligors, reporting tax information to Obligors, accounting for
collections, furnishing monthly and annual statements to the Owner Trustee and
the Indenture Trustee with respect to distributions and making Advances pursuant
to Section 5.05. Subject to the provisions of Section 4.02, the Servicer shall
follow its customary standards, policies and procedures in performing its duties
as Servicer. Without limiting the generality of the foregoing, the Servicer is
authorized and empowered to execute and deliver, on behalf of itself, the
Issuer, the Owner Trustee, the Indenture Trustee, the Certificateholders and the
Noteholders or any of them, any and all instruments of satisfaction or
cancellation, or partial or full release or discharge, and all other comparable
instruments, with respect to such Receivables or to the Financed Assets securing
such Receivables. If the Servicer shall commence a legal proceeding to enforce a
Receivable, the Issuer (in the case of a Receivable other than a Purchased
Receivable) 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 such Receivable, the Owner Trustee shall, at the
Servicer's expense and direction, take steps to enforce such Receivable,
including bringing suit in its name or the name of the Owner Trustee, the
Indenture Trustee, the Certificateholders or the Noteholders. The Owner Trustee
shall upon the written request of the Servicer furnish the Servicer with any
powers of attorney and other documents reasonably necessary or appropriate to
enable the Servicer to carry out its servicing and administrative duties
hereunder.
Section 4.02. Collection and Allocation of Receivable Payments. 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 [automotive] [recreational vehicle] receivables that it services
for itself or others. The Servicer shall allocate collections between principal
and interest in accordance with the customary servicing procedures it follows
with respect to all comparable [automotive] [recreational vehicle] receivables
that it services for itself or others. The Servicer may grant extensions,
rebates or adjustments on a Receivable, which shall not, for the purposes of
this Agreement, modify the original due dates or amounts of the Scheduled
Payments on a Precomputed Receivable or the original due dates or amounts of the
originally scheduled payments of interest on Simple Interest Receivables;
provided, however, that if the Servicer extends the date for final payment by
the Obligor of any Receivable beyond the Final Scheduled Maturity Date, it shall
promptly repurchase the Receivable from the Issuer in accordance with the terms
of Section 4.07. The Servicer may in its discretion waive any late payment
charge or any other fees that may be collected in the ordinary course of
servicing a Receivable. The
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Servicer shall not agree to any alteration of the interest rate on any
Receivable or of the amount of any Scheduled Payment on Precomputed Receivables
or the originally scheduled payments on Simple Interest Receivables.
Section 4.03. Realization upon Receivables. On behalf of the Issuer,
the Servicer shall use its best efforts, consistent with its customary servicing
procedures, to repossess or otherwise convert the ownership of the Financed
Assets securing any Receivable as to which the Servicer shall have determined
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 receivables, which may include reasonable efforts to realize
upon any recourse to Dealers and selling the Financed Asset at public or private
sale. The foregoing shall be subject to the provision that, in any case in which
the Financed Asset shall have suffered damage, the Servicer shall not expend
funds in connection with the repair or the repossession of such Financed Asset
unless it shall determine in its discretion that such repair and/or repossession
will increase the Liquidation Proceeds by an amount greater than the amount of
such expenses.
Section 4.04. Physical Damage Insurance. The Servicer shall, in
accordance with its customary servicing procedures, require that each Obligor
shall have obtained physical damage insurance covering the Financed Asset as of
the execution of the Receivable.
Section 4.05. Maintenance of Security Interests in Financed Assets. The
Servicer shall, in accordance with its customary servicing procedures, take such
steps as are necessary to maintain perfection of the security interest created
by each Receivable in the related Financed Asset. The Servicer is hereby
authorized to take such steps as are necessary to re-perfect such security
interest on behalf of the Issuer and the Indenture Trustee in the event of the
relocation of a Financed Asset or for any other reason.
Section 4.06. Covenants of Servicer. The Servicer shall not release the
Financed Asset securing any Receivable from the security interest granted by
such Receivable in whole or in part except in the event of payment in full by
the Obligor thereunder or repossession, nor shall the Servicer impair the rights
of the Issuer, the Indenture Trustee, the Certificateholders or the Noteholders
in such Receivable, nor shall the Servicer increase the number of scheduled
payments due under a Receivable.
Section 4.07. Purchase of Receivables upon Breach. The Servicer or the
Owner Trustee shall inform the other party and the Indenture Trustee and the
Depositor promptly, in writing, upon the discovery of any breach pursuant to
Section 4.02, 4.05 or 4.06. Unless the breach shall have been cured by the last
day of the second Collection Period following such discovery (or, at the
Servicer's election, the last day of the first following Collection Period), the
Servicer shall purchase any Receivable materially and adversely affected by such
breach as of such last day. If the Servicer takes any action during any
Collection Period pursuant to Section 4.02 that impairs the rights of the
Issuer, the Indenture Trustee, the Certificateholders or the Noteholders in any
Receivable or as otherwise provided in Section 4.02, the Servicer shall purchase
such Receivable as of the last day of such Collection Period. In consideration
of the purchase of any such Receivable pursuant to either of the two preceding
sentences, the Servicer shall remit the Purchase Amount in the manner specified
in Section 5.06. For purposes of this Section, the Purchase Amount shall consist
in part of a release by the Servicer of all rights of reimbursement
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with respect to Outstanding Precomputed Advances and Outstanding Simple Interest
Advances on the Receivable. Subject to Section 7.02, the sole remedy of the
Issuer, the Owner Trustee, the Indenture Trustee, the Certificateholders or the
Noteholders with respect to a breach pursuant to Section 4.02, 4.05 or 4.06
shall be to require the Servicer to purchase Receivables pursuant to this
Section. The 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.
Section 4.08. Servicing Fee. The Servicing Fee for a Distribution Date
shall equal the product of (a) one-twelfth, (b) the Servicing Fee Rate and (c)
the Pool Balance as of the first day of the preceding Collection Period. The
Servicer shall also be entitled to all late fees, prepayment charges including,
in the case of a Receivable that provides for payments according to the "Rule of
78s" and 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 according to the "Rule of 78s"),
and other administrative fees or similar charges allowed by applicable law with
respect to the Receivables, collected (from whatever source) on the Receivables,
plus any reimbursement pursuant to the last paragraph of Section 7.02.
Section 4.09. Servicer's Certificate. Not later than [11:00 A.M. (New
York time)] on each Payment Determination Date, the Servicer shall deliver to
the Owner Trustee, each Paying Agent, the Indenture Trustee and the Depositor,
with a copy to the Rating Agencies, a Servicer's Certificate containing all
information necessary to make the distributions to be made on the related
Distribution Date pursuant to Sections 5.07 and 5.08 for the related Collection
Period. Receivables to be purchased by the Servicer or to be repurchased by the
Depositor or the Seller shall be identified by the Servicer by account number
with respect to such Receivable (as specified in Schedule A).
Section 4.10. Annual Statement as to Compliance; Notice of Default. (a)
The Servicer shall deliver to the Owner Trustee and the Indenture Trustee, on or
before _________ of each year beginning ________, 200__, an Officers'
Certificate, dated as of ______________ of the preceding year, stating that (i)
a review of the activities of the Servicer during the preceding 12-month period
(or such longer period as shall have elapsed since the Closing Date) and of its
performance under this Agreement has been made under such officers' supervision
and (ii) to the best of such officers' 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 officers and the nature and status
thereof. The Indenture Trustee shall send a copy of such certificate and the
report referred to in Section 4.11 to the Rating Agencies. A copy of such
certificate and the report referred to in Section 4.11 may be obtained by any
Certificateholder, Certificate Owner, Noteholder or Note Owner by a request in
writing to the Owner Trustee addressed to the Corporate Trust Office. Upon the
telephone request of the Owner Trustee, the Indenture Trustee will promptly
furnish the Owner Trustee a list of Noteholders as of the date specified by the
Owner Trustee.
(b) The Servicer shall deliver to the Owner Trustee, the
Indenture Trustee and the Rating Agencies, promptly after having obtained
knowledge thereof, but in no event later
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than five (5) Business Days thereafter, written notice in an Officers'
Certificate of any event which with the giving of notice or lapse of time, or
both, would become a Servicer Default under Section 8.01(a) or (b).
Section 4.11. Annual Independent Certified Public Accountants' Report.
The Servicer shall cause a firm of independent certified public accountants,
which may also render other services to the Servicer, the Depositor or their
Affiliates, to deliver to the Owner Trustee and the Indenture Trustee on or
before __________ of each year beginning ________ , 200__, a report addressed to
the Board of Directors of the Servicer, to the effect that such firm has
examined the financial statements of the Servicer and issued its report thereon
and that such examination (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] [recreation vehicle]
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 such Program are applicable to the servicing obligations set
forth in this Agreement; and (c) except as described in the report, disclosed no
exceptions or errors in the records relating to [automobile and light-duty
truck] [recreational vehicle] loans serviced for others that, in the firm's
opinion, paragraph four of such Program requires such firm to report.
Such report will also indicate that the firm is independent of the
Servicer within the meaning of the Code of Professional Ethics of the American
Institute of Certified Public Accountants.
Section 4.12. Access to Certain Documentation and Information Regarding
Receivables. The Servicer shall provide to the Certificateholders and
Noteholders access to the Receivable Files in such cases where the
Certificateholders or Noteholders 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 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.
Section 4.13. Servicer Expenses. The Servicer shall be required to pay
all expenses incurred by it in connection with its activities hereunder,
including fees and disbursements of independent accountants, taxes imposed on
the Servicer and expenses incurred in connection with distributions and reports
to Certificateholders and Noteholders.
Section 4.14. Appointment of Subservicer. The Servicer may at any time
appoint a subservicer to perform all or any portion of its obligations as
Servicer hereunder; provided, however, that the Rating Agency Condition shall
have been satisfied in connection therewith; and provided, further, that the
Servicer shall remain obligated and be liable to the Issuer, the Owner Trustee,
the Indenture Trustee, the Certificateholders and the Noteholders for the
servicing and administering of the Receivables in accordance with the provisions
hereof without diminution of such obligation and liability by virtue of the
appointment of such subservicer and to the same extent and under the same terms
and conditions as if the Servicer alone were
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servicing and administering the Receivables. The fees and expenses of the
subservicer shall be as agreed between the Servicer and its subservicer from
time to time, and none of the Issuer, the Owner Trustee, the Indenture Trustee,
the Certificateholders or the Noteholders shall have any responsibility
therefor.
ARTICLE V.
Statements to Certificateholders and Noteholders;
Distributions; Reserve Account
Section 5.01. Establishment of Trust Accounts. (a) (i) The Servicer,
for the benefit of the Noteholders and the Certificateholders, shall establish
and maintain in the name of the Indenture Trustee an Eligible Deposit Account
(the "Collection Account"), bearing a designation clearly indicating that the
funds deposited therein are held for the benefit of the Noteholders and the
Certificateholders.
(ii) The Servicer, for the benefit of the Noteholders, shall
establish and maintain in the name of the Indenture Trustee an Eligible Deposit
Account (the "Note Distribution Account"), bearing a designation clearly
indicating that the funds deposited therein are held for the benefit of the
Noteholders.
(iii) The Servicer, for the benefit of the Noteholders and the
Certificateholders, shall establish and maintain in the name of the Indenture
Trustee an Eligible Deposit Account (the "Reserve Account"), bearing a
designation clearly indicating that the funds deposited therein are held for the
benefit of the Noteholders and the Certificateholders.
(b) Funds on deposit in the Collection Account, the Note Distribution
Account and the Reserve Account (collectively the "Trust Accounts") shall be
invested (1) by the Indenture Trustee in Eligible Investments selected in
writing by the Servicer or an investment manager selected by the Servicer, which
investment manager shall have agreed to comply with the terms of this Agreement
as it relates to investing such funds or (2) by an investment manager in
Eligible Investments selected by such investment manager; provided that (A) such
investment manager shall be selected by the Servicer, (B) such investment
manager shall have agreed to comply with the terms of this Agreement as it
relates to investing such funds, (C) any investment so selected by such
investment manager shall be made in the name of the Indenture Trustee and shall
be settled by a Delivery to the Indenture Trustee that complies with the terms
of this Agreement as it relates to investing such funds, and (D) prior to the
settlement of any investment so selected by such investment manager the
Indenture Trustee shall affirm that such investment is an Eligible Investment.
It is understood and agreed that the Indenture Trustee shall not be liable for
any loss arising from an investment in Eligible Investments made in accordance
with this Section 5.01(b). All such Eligible Investments shall be held by the
Indenture Trustee for the benefit of the Noteholders and the Certificateholders
or the Noteholders, as applicable; provided, that on each Payment Determination
Date all interest and other investment income (net of losses and investment
expenses) on funds on deposit in the Trust Accounts shall be deposited into the
Collection Account and shall be deemed to constitute a portion of the Interest
Distribution Amount for the related Distribution Date. Other than as permitted
by the Rating Agencies, funds on deposit in the Collection Account, the Reserve
Account and the Note Distribution Account
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shall be invested in Eligible Investments that will mature (A) not later than
the Business Day immediately preceding the next Distribution Date or (B) on such
next Distribution Date if either (x) such investment is held in the trust
department of the institution with which the Collection Account, the Reserve
Account, the Note Distribution Account or the Certificate Distribution Account,
as applicable, is then maintained and is invested in a time deposit of the
Indenture Trustee rated at least A-1 by Standard & Poor's and P-1 by Moody's
(such account being maintained within the trust department of the Indenture
Trustee) or (y) the Indenture Trustee (so long as the short-term unsecured debt
obligations of the Indenture Trustee are either (i) rated at least P-1 by
Moody's and A-1 by Standard & Poor's on the date such investment is made or (ii)
guaranteed by an entity whose short-term unsecured debt obligations are rated at
least P-1 by Moody's and A-1 by Standard & Poor's on the date such investment is
made) has agreed to advance funds on such Distribution Date to the Note
Distribution Account and the Certificate Distribution Account in the amount
payable on such investment on such Distribution Date pending receipt thereof to
the extent necessary to make distributions on such Distribution Date. The
guarantee referred to in clause (y) of the preceding sentence shall be subject
to the Rating Agency Condition. For the purpose of the foregoing, unless the
Indenture Trustee affirmatively agrees in writing to make such advance with
respect to such investment prior to the time an investment is made, it shall not
be deemed to have agreed to make such advance. Funds deposited in a Trust
Account on a day which immediately precedes a Distribution Date upon the
maturity of any Eligible Investments are not required to be invested overnight.
(c) (i) The Indenture Trustee shall possess all right, title
and interest in all funds on deposit from time to time in the Trust Accounts and
in all proceeds thereof (including all income thereon) and all such funds,
investments, proceeds and income shall be part of the Trust Estate. The Trust
Accounts shall be under the sole dominion and control of the Indenture Trustee
for the benefit of the Noteholders or the Noteholders and the
Certificateholders, as the case may be. If, at any time, any of the Trust
Accounts ceases to be an Eligible Deposit Account, the Indenture Trustee (or the
Servicer on its behalf) shall within 10 Business Days (or such longer period,
not to exceed 30 calendar days, as to which each Rating Agency may consent)
establish a new Trust Account as an Eligible Deposit Account and shall transfer
any cash and/or any investments to such new Trust Account.
(ii) With respect to the Trust Account Property, the
Indenture Trustee agrees, by its acceptance hereof, that:
(A) any Trust Account Property that is held in deposit
accounts shall be held solely in the Eligible Deposit Accounts, subject
to the last sentence of Section 5.01(c)(i); and each such Eligible
Deposit Account shall be subject to the exclusive custody and control
of the Indenture Trustee, and the Indenture Trustee shall have sole
signature authority with respect thereto;
(B) any Trust Account Property that constitutes Physical
Property shall be delivered to the Indenture Trustee in accordance with
paragraph (a) of the definition of "Delivery" and shall be held,
pending maturity or disposition, solely by the Indenture Trustee or a
securities intermediary (as such term is defined in Section 8-102(14)
of the UCC) acting solely for the Indenture Trustee;
26
(C) any Trust Account Property that is a book-entry security
held through the Federal Reserve System pursuant to federal book-entry
regulations shall be delivered in accordance with paragraph (b) of the
definition of "Delivery" and shall be maintained by the Indenture
Trustee, pending maturity or disposition, through continued book-entry
registration of such Trust Account Property as described in such
paragraph; and
(D) any Trust Account Property that is an "uncertificated
security" under Section 8-102(18) of the UCC and that is not governed
by clause (C) above shall be delivered to the Indenture Trustee in
accordance with paragraph (c) of the definition of "Delivery" and shall
be maintained by the Indenture Trustee, pending maturity or
disposition, through continued registration of the Indenture Trustee's
(or its nominee's) ownership of such security.
(iii) The Servicer shall have the power, revocable by the
Indenture Trustee or by the Owner Trustee with the consent of the Indenture
Trustee, to instruct the Indenture Trustee to make withdrawals and payments from
the Trust Accounts for the purpose of permitting the Servicer or the Owner
Trustee to carry out its respective duties hereunder or permitting the Indenture
Trustee to carry out its duties under the Indenture.
(d) The Servicer shall establish and maintain with the Trustee an
Eligible Deposit Account (the "Payahead Account"). The Payahead Account shall
not be property of the Trust. The Servicer shall, or shall cause the Trustee to,
transfer all Payaheads from the Collection Account to the Payahead Account on or
prior to the date on which Payaheads are transferred to the Collection Account
pursuant to Section 5.05.
Section 5.02. Collections. The Servicer shall remit within two Business
Days of receipt thereof to the Collection Account all payments by or on behalf
of the Obligors with respect to the Receivables (other than Purchased
Receivables) and all Liquidation Proceeds, both as collected during the
Collection Period. Notwithstanding the foregoing, for so long as (i) _________
remains the Servicer, (ii) no Servicer Default shall have occurred and be
continuing and (iii)(x) _________ maintains a short-term rating of at least A-1
by Standard & Poor's and P-1 by Moody's (and for five Business Days following a
reduction in either such rating) or (y) prior to ceasing daily remittances, the
Rating Agency Condition shall have been satisfied (and any conditions or
limitations imposed by the Rating Agencies in connection therewith are complied
with), the Servicer shall remit such collections with respect to the preceding
calendar month to the Collection Account on the Payment Determination Date
immediately preceding the related Distribution Date. For purposes of this
Article V the phrase "payments by or on behalf of Obligors" shall mean payments
made with respect to the Receivables by Persons other than the Servicer or the
Depositor.
Section 5.03. Application of Collections. (a) All collections for the
Collection Period shall be applied by the Servicer as follows:
With respect to each Receivable (other than a Purchased
Receivable), payments by or on behalf of the Obligor shall be
applied first, in the case of Precomputed Receivables, to
reduce Outstanding Precomputed Advances as described in
27
Section 5.05(a) and, in the case of Simple Interest
Receivables, to reduce Outstanding Simple Interest Advances to
the extent described in Section 5.05(b). Next, any excess
shall be applied, in the case of Precomputed Receivables, to
the Scheduled Payment and, in the case of Simple Interest
Receivables, to interest and principal in accordance with the
Simple Interest Method. With respect to Precomputed
Receivables, any remaining excess shall be added to the
Payahead Balance, and shall be applied to prepay the
Precomputed Receivable, but only if the sum of such excess and
the previous Payahead Balance shall be sufficient to prepay
the Receivable in full. Otherwise, any such remaining excess
payments shall constitute a Payahead and shall increase the
Payahead Balance.
Section 5.04. Application of Payaheads. Within two Business Days
following each Determination Date, the Trustee shall cause to be transferred
from the Payahead Account to the Collection Account, in immediately available
funds, the aggregate Payaheads from previous Collection Periods applicable as
all or part of any Scheduled Payment on a Precomputed Receivable due during the
related Collection Period, in the amounts set forth in the Servicer's
Certificate for such Distribution Date.
Section 5.05. Advances. (a) As of the close of business on the last day
of each Collection Period, if the payments by or on behalf of the Obligor on a
Precomputed Receivable (other than a Purchased Receivable) shall be less than
the Scheduled Payment, the Payahead Balance shall be applied by the Servicer to
the extent of the shortfall and such Payahead Balance shall be reduced
accordingly. Next, the Servicer shall advance any remaining shortfall (such
amount, a "Precomputed Advance"), to the extent that the Servicer, at its sole
discretion, shall determine that the Precomputed Advance shall be recoverable
from the Obligor, the Purchase Amount, Liquidation Proceeds or proceeds of any
other Precomputed Receivables. With respect to each Precomputed Receivable, the
Precomputed Advance shall increase Outstanding Precomputed Advances. Outstanding
Precomputed Advances shall be reduced by subsequent payments by or on behalf of
the Obligor, collections of Liquidation Proceeds in respect of such Precomputed
Receivables or payments of the Purchase Amount with respect to such Precomputed
Receivables.
If the Servicer shall determine that an Outstanding Precomputed Advance
with respect to any Precomputed Receivable shall not be recoverable as
aforesaid, the Servicer shall be reimbursed from any collections made on other
Precomputed Receivables in the Trust and Outstanding Precomputed Advances with
respect to such Precomputed Receivables shall be reduced accordingly.
(b) As of the close of business on the last day of each
Collection Period, the Servicer shall advance an amount equal to the amount of
interest due on the Simple Interest Receivables at their respective APR's for
the related Collection Period (assuming the Simple Interest Receivables pay on
their respective due dates) minus the amount of interest actually received on
the Simple Interest Receivables during the related Collection Period (such
amount, a "Simple Interest Advance"). With respect to each Simple Interest
Receivable, the Simple Interest Advance shall increase Outstanding Simple
Interest Advances. If such calculation results in a negative number, an amount
equal to the absolute value of such negative number shall be paid to the
Servicer and the amount of Outstanding Simple Interest Advances shall be
28
reduced by such amount. In addition, in the event that a Simple Interest
Receivable becomes a Liquidated Receivable, Liquidation Proceeds with respect to
such Simple Interest Receivable attributable to accrued and unpaid interest
thereon (but not including interest for the then current Collection Period)
shall be paid to the Servicer to reduce Outstanding Simple Interest Advances,
but only to the extent of any Outstanding Simple Interest Advances. The Servicer
shall not make any advance in respect of principal of Simple Interest
Receivables.
Section 5.06. Additional Deposits. The Servicer shall deposit in the
Collection Account on the Payment Determination Date for the related Collection
Period the aggregate Advances pursuant to Section 5.05. To the extent that the
Servicer fails to make a Simple Interest Advance pursuant to Section 5.05(b) on
the date required, the Servicer shall notify the Indenture Trustee to withdraw
such amount (or, if determinable, such portion of such amount as does not
represent advances for delinquent interest) from the Reserve Account and deposit
such amount in the Collection Account. The Servicer and the Depositor shall
deposit or cause to be deposited in the Collection Account the aggregate
Purchase Amount with respect to Purchased Receivables and the Servicer shall
deposit therein all amounts to be paid under Section 9.01. The Servicer will
deposit the aggregate Purchase Amount with respect to Purchased Receivables when
such obligations are due, unless the Servicer shall not be required to make
daily deposits pursuant to Section 5.02. All such other deposits shall be made
on the Payment Determination Date for the related Collection Period.
Section 5.07. Distributions.
(a) (i) On each Payment Determination Date, the Servicer shall
calculate all amounts required to be deposited in the Note Distribution Account
and the Certificate Distribution Account.
(ii) On each Distribution Date, the Servicer shall instruct
the Indenture Trustee (based on the information contained in the Servicer's
Certificate delivered on the related Payment Determination Date pursuant to
Section 4.09) to make the following deposits and distributions for receipt by
the Servicer or deposit in the applicable account by 11:00 A.M. (New York time),
to the extent of the Total Distribution Amount, in the following order of
priority:
(A) to the extent the Servicer has not received the
payment of the Servicing Fee at the beginning of the related
Collection Period pursuant to clause (a) above, to the
Servicer, from the Interest Distribution Amount, the Servicing
Fee (and all unpaid Servicing Fees from prior Collection
Periods);
(B) to the Note Distribution Account, from the Total
Distribution Amount remaining after the application of clause
(A), the Noteholders' Interest Distributable Amount;
(C) to the Note Distribution Account, from the Total
Distribution Amount remaining after the application of clauses
(A) and (B), the Noteholders' Principal Distributable Amount;
29
(D) to the Certificate Distribution Account, from the
Total Distribution Amount remaining after the application of
clauses (A) through (C), the Certificateholders' Interest
Distributable Amount;
(E) to the Certificate Distribution Account, from the
Total Distribution Amount remaining after the application of
clauses (A) through (D), the Certificateholders' Principal
Distributable Amount;
(F) to the Reserve Account, from the Total
Distribution Amount remaining after the application of clauses
(A) through (E) (it being understood that the Accelerated
Principal Distribution Amount is a function of and subject to
the amount required to be deposited in the Reserve Account
pursuant to this clause (F)), the amount, if any, necessary to
reinstate the balance in the Reserve Account up to the
Specified Reserve Account Balance; and
(G) to the Reserve Account, the portion, if any, of
the Total Distribution Amount remaining after the application
of clauses (A) through (F).
Notwithstanding that the Notes have been paid in full, the Indenture Trustee
shall continue to maintain the Collection Account hereunder until the
Certificate Balance is reduced to zero.
Section 5.08. Reserve Account. (a) On the Closing Date, the Owner
Trustee will deposit, on behalf of the Depositor, the Reserve Account Initial
Deposit into the Reserve Account from the net proceeds of the sale of the Notes
and the Certificates.
(b) (i) After giving effect to clause (ii) below, if the amount
on deposit in the Reserve Account on any Distribution Date (after giving effect
to all deposits thereto or withdrawals therefrom on such Distribution Date) is
greater than the Specified Reserve Account Balance for such Distribution Date,
the Servicer shall instruct the Indenture Trustee to distribute the amount of
such excess to the Depositor.
(ii) On each Distribution Date subsequent to any reduction
or withdrawal by any Rating Agency of its rating of any Class of Notes, unless
such rating has been restored, if the amount on deposit in the Reserve Account
(after taking into account any deposits thereto pursuant to Section 5.07(a) and
withdrawals therefrom pursuant to Section 5.08(c), (d) or (e) on such date) is
greater than the Specified Reserve Account Balance for such Distribution Date,
then the Servicer shall instruct the Indenture Trustee to include the amount of
such excess in the Noteholders' Monthly Principal Distribution Amount and to
deposit the amount of such excess (up to the amount of cash or cash equivalents
in the Reserve Account) to the Collection Account for deposit to the Note
Distribution Account for distribution to Noteholders as an accelerated payment
of principal on such Distribution Date; provided, that the amount of such
deposit shall not exceed the outstanding principal balance of the Notes after
giving effect to all other payments of principal to be made on such date.
(c) If the Servicer determines pursuant to Section 5.05 that it
is required to make an Advance on a Payment Determination Date and does not do
so from its own funds, the Servicer shall instruct the Indenture Trustee to
withdraw funds from the Reserve Account and deposit them in the Collection
Account to cover any shortfall. Such payment shall be deemed to
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have been made by the Servicer pursuant to Section 5.05 for purposes of making
distributions pursuant to this Agreement, but shall not otherwise satisfy the
Servicer's obligation to deliver the amount of the Advances, and the Servicer
shall within two Business Days replace any funds in the Reserve Account so used.
(d) (i) In the event that the Noteholders' Distributable Amount
for a Distribution Date exceeds the sum of the amounts deposited into the Note
Distribution Account pursuant to Section 5.07(a)(ii)(B) and (C) on such
Distribution Date, the Servicer shall instruct the Indenture Trustee to withdraw
from the Reserve Account on such Distribution Date an amount equal to such
excess, to the extent of funds available therein up to the Available Amount, and
deposit such amount into the Note Distribution Account.
(ii) In the event that the Noteholders' Principal
Distributable Amount on the Class [A-1] Final Scheduled Distribution Date or the
Class [A-2] Final Scheduled Distribution Date exceeds the amount deposited into
the Note Distribution Account pursuant to Section 5.07(a)(ii)(C) on such
Distribution Date, the Servicer shall instruct the Indenture Trustee to withdraw
from the Reserve Account on such Distribution Date an amount equal to such
excess, to the extent of funds available therein up to the Available Amount, and
deposit such amount into the Note Distribution Account.
(e) (i) In the event that the Certificateholders' Distributable
Amount for a Distribution Date exceeds the sum of the amounts deposited into the
Certificate Distribution Account pursuant to Section 5.07(a)(ii)(D) and (E) on
such Distribution Date, the Servicer shall instruct the Indenture Trustee to
withdraw from the Reserve Account on such Distribution Date an amount equal to
such excess, to the extent of funds available therein up to the Available Amount
after giving effect to paragraphs (c) and (d) above, and deposit such amount
into the Certificate Distribution Account on such Distribution Date.
(ii) In the event that the Certificateholders' Monthly
Interest Distributable Amount for a Distribution Date exceeds the amount
deposited in the Certificate Distribution Account pursuant to Section
5.07(b)(ii)(D), the Servicer shall instruct the Indenture Trustee to withdraw
from the Reserve Account on such Distribution Date an amount equal to such
excess, to the extent of funds available therein, after giving effect to
paragraphs (d)(i) and (e)(i) above, up to the Certificate Interest Reserve
Amount with respect to such Distribution Date, and deposit such amount into the
Certificate Distribution Account.
(iii) In the event that the Certificateholders' Principal
Distributable Amount on the Final Scheduled Distribution Date exceeds the amount
deposited in the Certificate Distribution Account pursuant to Section
5.07(b)(ii)(E), the Servicer shall instruct the Indenture Trustee to withdraw
from the Reserve Account on such Distribution Date an amount equal to such
excess, to the extent of funds available therein after giving effect to
paragraphs (d) and (e)(i) above, and deposit such amount into the Certificate
Distribution Account.
(f) Subject to Section 9.01, amounts will continue to be applied
pursuant to Section 5.07 following payment in full of the Outstanding Amount of
the Notes and the Certificate Balance until the Pool Balance is reduced to zero.
Following the payment in full of the aggregate Outstanding Amount of the Notes
and the Certificate Balance and of all other
31
amounts owing or to be distributed hereunder or under the Indenture or the Trust
Agreement to Noteholders and Certificateholders and the termination of the
Trust, any amount remaining on deposit in the Reserve Account shall be
distributed to the Depositor.
(g) On the Final Scheduled Distribution Date, if the amount of
funds remaining in the Reserve Account (after all other distributions to be made
from the Reserve Account pursuant to this Section have been made, other than
paragraphs (b)(i) and (f)) is in excess of the amounts described below, a
portion of such excess according to the following schedule shall be deposited in
the Certificate Distribution Account for distribution to Certificateholders:
(i) with respect to all such funds in the Reserve Account in
excess of $_________________ but which do not exceed $_____________, __% of such
amount;
(ii) with respect to all such funds in the Reserve Account
in excess of $____________ but which do not exceed $__________, __% of such
amount;
(iii) with respect to all such funds in the Reserve Account
in excess of $____________ but which do not exceed $_____________, __% of such
amount;
(iv) with respect to all such funds in the Reserve Account
in excess of $_____________ but which do not exceed $____________, __% of such
amount; and
(v) with respect to all such funds in the Reserve Account in
excess of $_______________, ___% of such amount.
The amounts to be deposited in the Certificate Distribution Account pursuant to
the preceding sentence are in excess of all amounts otherwise required to be
deposited in the Certificate Distribution Account pursuant to this Agreement,
notwithstanding anything to the contrary contained herein.
Section 5.09. Statements to Certificateholders and Noteholders. On each
Distribution Date, the Servicer shall provide to the Owner Trustee (with a copy
to the Rating Agencies and each Paying Agent) for the Owner Trustee to forward
to each Certificateholder of record as of the most recent Record Date and to the
Indenture Trustee (with a copy to each Paying Agent) for the Indenture Trustee
to forward to each Noteholder of record as of the most recent Record Date a
statement substantially in the form of Exhibits A and B, respectively, setting
forth at least the following information as to the Notes and the Certificates to
the extent applicable:
(i) the amount of such distribution allocable to principal
allocable to each Class of Notes and to the Certificates;
(ii) the amount of such distribution allocable to interest
allocable to each Class of Notes and to the Certificates;
(iii) the outstanding principal balance of each Class of
Notes, the Note Pool Factor for each such Class, the Certificate Balance and the
Certificate Pool Factor as of the
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close of business on the last day of the preceding Collection Period, after
giving effect to payments allocated to principal reported under clause (i)
above;
(iv) the amount of the Servicing Fee paid to the Servicer
with respect to the related Collection Period;
(v) the amount of Realized Losses, if any, with respect to
the related Collection Period;
(vi) the balance of the Reserve Account on such Payment
Determination Date after giving effect to deposits and withdrawals to be made on
the next following Distribution Date, if any;
(vii) the aggregate Payahead Balance; and
(viii) the Pool Balance as of the close of business on the
last day of the related Collection Period, after giving effect to payments
allocated to principal reported under clause (i) above.
Each amount set forth on the Distribution Date statement under clauses
(i), (ii) or (iv) above shall be expressed as a dollar amount per $1,000 of
original principal balance of a Certificate or Note, as applicable.
Section 5.10. Net Deposits. As an administrative convenience, unless
the Servicer is required to remit collections daily, the Servicer will be
permitted to make the deposit of collections on the Receivables, aggregate
Advances and Purchase Amounts for or with respect to the Collection Period net
of distributions to be made to the Servicer with respect to the Collection
Period. Similarly, the Servicer may cause a single net transfer to be made from
the Collection Account to the Payahead Account, or vice versa. The Servicer,
however, will account to the Owner Trustee, the Indenture Trustee, the
Noteholders and the Certificateholders as if all deposits, distributions and
transfers were made individually.
ARTICLE VI.
The Depositor
Section 6.01. Representations of Depositor. The Depositor makes the
following representations on which the Issuer is deemed to have relied in
acquiring the Receivables. The representations speak as of the execution and
delivery of this Agreement and as of the Closing Date, in the case of the
Receivables, and shall survive the sale of the Receivables to the Issuer and the
pledge thereof to the Indenture Trustee pursuant to the Indenture.
(a) Organization and Good Standing. The Depositor 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
33
times, and has, the corporate power, authority and legal right to acquire and
own the Receivables.
(b) Due Qualification. The Depositor 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 shall require such
qualifications.
(c) Power and Authority. The Depositor has the corporate power
and authority to execute and deliver this Agreement and to carry out its
respective terms; the Depositor has full power and authority to sell and assign
the property to be sold and assigned to and deposited with the Issuer, and the
Depositor shall have duly authorized such sale and assignment to the Issuer by
all necessary corporate action; and the execution, delivery and performance of
this Agreement has been, duly authorized by the Depositor by all necessary
corporate action.
(d) Binding Obligation. This Agreement constitutes, a legal,
valid and binding obligation of the Depositor enforceable in accordance with its
terms.
(e) No Violation. The consummation of the transactions
contemplated by this Agreement and the fulfillment of the terms hereof do not
conflict with, result in any breach of any of the terms and provisions of, or
constitute (with or without notice or lapse of time) a default under, the
articles of incorporation or bylaws of the Depositor, or any indenture,
agreement or other instrument to which the Depositor is a party or by which it
is bound; or result in the creation or imposition of any Lien upon any of its
properties pursuant to the terms of any such indenture, agreement or other
instrument (other than pursuant to the Basic Documents); or violate any law or,
to the best of the Depositor's knowledge, any order, rule or regulation
applicable to the Depositor of any court or of any federal or state regulatory
body, administrative agency or other governmental instrumentality having
jurisdiction over the Depositor or its properties.
(f) No Proceedings. To the Depositor's best knowledge, there are
no proceedings or investigations pending or threatened before any court,
regulatory body, administrative agency or other governmental instrumentality
having jurisdiction over the Depositor or its properties: (i) asserting the
invalidity of this Agreement, the Indenture or any of the other Basic Documents,
the Notes or the Certificates, (ii) seeking to prevent the issuance of the Notes
or the Certificates or the consummation of any of the transactions contemplated
by this Agreement, the Indenture or any of the other Basic Documents, (iii)
seeking any determination or ruling that might materially and adversely affect
the performance by the Depositor of its obligations under, or the validity or
enforceability of, this Agreement, the Indenture, any of the other Basic
Documents, the Notes or the Certificates or (iv) which might adversely affect
the federal or state income tax attributes of the Notes or the Certificates.
(g) Chief Executive Office. The chief executive office of the
Depositor is located at [ADDRESS].
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Section 6.02. Corporate Existence. During the term of this Agreement,
the Depositor will keep in full force and effect its existence, rights and
franchises as a corporation under the laws of the jurisdiction of its
incorporation and will obtain and preserve its qualification to do business in
each jurisdiction in which such qualification is or shall be necessary to
protect the validity and enforceability of this Agreement, the Basic Documents
and each other instrument or agreement necessary or appropriate to the proper
administration of this Agreement and the transactions contemplated hereby. In
addition, all transactions and dealings between the Depositor and its Affiliates
will be conducted on an arm's-length basis.
Section 6.03. Liability of the Depositor; Indemnities. The Depositor
shall be liable in accordance herewith only to the extent of the obligations
specifically undertaken by the Depositor under this Agreement:
(a) The Depositor shall indemnify, defend and hold harmless the
Issuer, the Owner Trustee, the Indenture Trustee, the Servicer and any of the
officers, directors, employees and agents of the Issuer, the Owner Trustee and
the Indenture Trustee from and against any taxes that may at any time be
asserted against any such Person with respect to the transactions contemplated
herein and in the Basic Documents, including any sales, gross receipts, general
corporation, tangible personal property, privilege or license taxes (but, in the
case of the Issuer, not including any taxes asserted with respect to, and as of
the date of, the sale of the Receivables to the Issuer or the issuance and
original sale of the Certificates and 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.
(b) The Depositor shall indemnify, defend and hold harmless the
Issuer, the Owner Trustee, the Indenture Trustee, the Certificateholders and the
Noteholders and any of the officers, directors, employees and agents of the
Issuer, the Owner Trustee and the Indenture Trustee from and against any loss,
liability or expense incurred by reason of (i) the Depositor's willful
misfeasance, bad faith or negligence in the performance of its duties under this
Agreement, or by reason of reckless disregard of its obligations and duties
under this Agreement and (ii) the Depositor's or the Issuer's violation of
federal or state securities laws in connection with the offering and sale of the
Notes and the Certificates.
(c) The Depositor shall indemnify, defend and hold harmless the
Owner Trustee and the Indenture Trustee and their respective officers,
directors, employees and agents 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 and in the Trust
Agreement contained, in the case of the Owner Trustee, and in the Indenture
contained, in the case of the Indenture Trustee, except to the extent that such
cost, expense, loss, claim, damage or liability: (i) in the case of the Owner
Trustee, shall be due to the willful misfeasance, bad faith or negligence
(except for errors in judgment) of the Owner Trustee or, in the case of the
Indenture Trustee, shall be due to the willful misfeasance, bad faith or
negligence (except for errors in judgment) of the Indenture Trustee; or (ii) in
the case of the Owner Trustee, shall arise from the breach by the Owner Trustee
of any of its representations or warranties set forth in Section 7.03 of the
Trust Agreement.
35
(d) The Depositor shall pay any and all taxes levied or assessed
upon all or any part of the Owner Trust Estate.
Indemnification under this Section shall survive the resignation or
removal of the Owner Trustee or the Indenture Trustee and the termination of
this Agreement and shall include reasonable fees and expenses of counsel and
expenses of litigation. If the Depositor shall have made any indemnity payments
pursuant to this Section and the Person to or on behalf of whom such payments
are made thereafter shall collect any of such amounts from others, such Person
shall promptly repay such amounts to the Depositor, without interest.
Section 6.04. Merger or Consolidation of, or Assumption of the
Obligations of, Depositor. Any Person (a) into which the Depositor may be merged
or consolidated, (b) which may result from any merger or consolidation to which
the Depositor shall be a party or (c) which may succeed to the properties and
assets of the Depositor substantially as a whole, which person in any of the
foregoing cases executes an agreement of assumption to perform every obligation
of the Depositor under this Agreement, shall be the successor to the Depositor
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 3.01 shall have been breached and no Servicer Default, and
no event that, after notice or lapse of time, or both, would become a Servicer
Default shall have occurred and be continuing, (ii) the Depositor 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
and that all conditions precedent, if any, provided for in this Agreement
relating to such transaction have been complied with, (iii) the Rating Agency
Condition shall have been satisfied with respect to such transaction and (iv)
the Depositor shall have delivered to the Owner Trustee 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 Owner Trustee and Indenture Trustee, respectively,
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 interests. Notwithstanding anything herein to the
contrary, the execution of the foregoing agreement of assumption and compliance
with clauses (i), (ii), (iii) and (iv) above shall be conditions to the
consummation of the transactions referred to in clauses (a), (b) or (c) above.
Section 6.05. Limitation on Liability of Depositor and Others. The
Depositor and any director, officer, employee or agent of the Depositor may rely
in good faith on the advice of counsel or on any document of any kind, prima
facie properly executed and submitted by any Person respecting any matters
arising hereunder. The Depositor shall not be under any obligation to appear in,
prosecute or defend any legal action that shall not be incidental to its
obligations under this Agreement, and that in its opinion may involve it in any
expense or liability.
Section 6.06. Depositor May Own Certificates or Notes. The Depositor
and any Affiliate thereof may in its individual or any other capacity become the
owner or pledgee of
36
Certificates or Notes with the same rights as it would have if it were not the
Depositor or an Affiliate thereof, except as expressly provided herein or in any
Basic Document.
ARTICLE VII.
The Servicer
Section 7.01. Representations of Servicer. The Servicer makes the
following representations on which the Issuer is deemed to have relied in
acquiring the Receivables. The representations speak as of the execution and
delivery of this Agreement and as of the Closing Date, in the case of the
Receivables, and shall survive the sale of the Receivables to the Issuer and the
pledge thereof to the Indenture Trustee pursuant to the Indenture.
(a) Organization and Good Standing. The Servicer is duly
organized and validly existing as a corporation in good standing under the laws
of the state of its incorporation, 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, own, sell
and service the Receivables and to hold the Receivable Files as custodian.
(b) Due Qualification. The 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) shall require such qualifications.
(c) Power and Authority. The Servicer has the corporate power and
authority to execute and deliver this Agreement and to carry out its terms; and
the execution, delivery and performance of this Agreement have been duly
authorized by the Servicer by all necessary corporate action.
(d) Binding Obligation. This Agreement constitutes a legal, valid
and binding obligation of the Servicer enforceable in accordance with its terms.
(e) No Violation. The consummation of the transactions
contemplated by this Agreement and the fulfillment of the terms hereof shall not
conflict with, result in any breach of any of the terms and provisions of, or
constitute (with or without notice or lapse of time) a default under, the
articles of incorporation or bylaws of the Servicer, or any indenture, agreement
or other instrument to which the Servicer is a party or by which it is bound; or
result in the creation or imposition of any Lien upon any of its properties
pursuant to the terms of any such indenture, agreement or other instrument
(other than this Agreement); or violate any law or, to the best of the
Servicer's knowledge, any order, rule or regulation applicable to the Servicer
of any court or of any federal or state regulatory body, administrative agency
or other governmental instrumentality having jurisdiction over the Servicer or
its properties.
(f) No Proceedings. To the Servicer's best knowledge, there are
no proceedings or investigations pending or threatened before any court,
regulatory body,
37
administrative agency or other governmental instrumentality having jurisdiction
over the Servicer or its properties: (i) asserting the invalidity of this
Agreement, the Indenture, any of the other Basic Documents, the Notes or the
Certificates, (ii) seeking to prevent the issuance of the Notes or the
Certificates or the consummation of any of the transactions contemplated by this
Agreement, the Indenture or any of the other Basic Documents, (iii) seeking any
determination or ruling that might materially and adversely affect the
performance by the Servicer of its obligations under, or the validity or
enforceability of, this Agreement, the Indenture, any of the other Basic
Documents, the Notes or the Certificates or (iv) relating to the Servicer and
which might adversely affect the federal or state income tax attributes of the
Notes or the Certificates.
(g) No Insolvent Obligors. As of the Cutoff Date, no Obligor on a
Receivable is shown on the Receivable Files as the subject of a bankruptcy
proceeding.
Section 7.02. Indemnities of Servicer. The Servicer shall be liable in
accordance herewith only to the extent of the obligations specifically
undertaken by the Servicer under this Agreement:
(a) The Servicer shall indemnify, defend and hold harmless the
Issuer, the Owner Trustee, the Indenture Trustee, the Noteholders, the
Certificateholders and the Depositor and any of the officers, directors,
employees and agents of the Issuer, the Owner Trustee and the Indenture Trustee
from and against any and all 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 Asset.
(b) The Servicer shall indemnify, defend and hold harmless the
Issuer, the Owner Trustee, the Indenture Trustee, the Depositor, the
Certificateholders and the Noteholders and any of the officers, directors,
employees and agents of the Issuer, the Owner Trustee and the Indenture Trustee
from and against any and all costs, expenses, losses, claims, damages and
liabilities to the extent that such cost, expense, loss, claim, damage or
liability arose out of, or was imposed upon any such Person through, the
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.
For purposes of this Section, in the event of the termination of the
rights and obligations of __________ (or any successor thereto pursuant to
Section 7.03) as Servicer pursuant to Section 8.01, or a resignation by such
Servicer pursuant to this Agreement, such Servicer shall be deemed to be the
Servicer pending appointment of a successor Servicer (other than the Indenture
Trustee) pursuant to Section 8.02.
Indemnification under this Section shall survive the resignation or
removal of the Owner Trustee or the Indenture Trustee or 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 Person to or on behalf of whom such payments are made
thereafter collects any of such amounts from others, such Person shall promptly
repay such amounts to the Servicer, without interest.
38
Section 7.03. Merger or Consolidation of, or Assumption of the
Obligations of, Servicer. Any Person (a) into which the Servicer may be merged
or consolidated, (b) which may result from any merger or consolidation to which
the Servicer shall be a party, (c) which may succeed to the properties and
assets of the Servicer substantially as a whole or (d) with respect to the
Servicer's obligations hereunder, which is a corporation 50% or more of the
voting stock of which is owned, directly or indirectly, by
________________________, which Person executed an agreement of assumption to
perform every obligation of the Servicer hereunder, shall be the successor to
the Servicer under this Agreement without further act on the part of any of the
parties to this Agreement; provided, however, that (i) immediately after giving
effect to such transaction, no Servicer Default and no event which, after notice
or lapse of time, or both, would become a Servicer Default shall have occurred
and be continuing, (ii) the Servicer 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 and that all conditions precedent provided
for in this Agreement relating to such transaction have been complied with,
(iii) the Rating Agency Condition shall have been satisfied with respect to such
transaction, (iv) immediately after giving effect to such transaction, the
successor to the Servicer shall become the Administrator under the
Administration Agreement in accordance with Section 8 of such Agreement and (v)
the Servicer shall have delivered to the Owner Trustee and the Indenture Trustee
an Opinion of Counsel stating that, in the opinion of such counsel, either (A)
all financing statements and continuation statements and amendments thereto have
been executed and filed that are necessary fully to preserve and protect the
interest of the Owner Trustee and the Indenture Trustee, respectively, in the
Receivables and reciting the details of such filings or (B) no such action shall
be necessary to preserve and protect such interests. Notwithstanding anything
herein to the contrary, the execution of the foregoing agreement of assumption
and compliance with clauses (i), (ii), (iii), (iv) and (v) above shall be
conditions to the consummation of the transactions referred to in clause (a),
(b) or (c) above.
Section 7.04. Limitation on Liability of Servicer and Others. Neither
the Servicer nor any of the directors, officers, employees or agents of the
Servicer shall be under any liability to the Issuer, the Noteholders or the
Certificateholders, except as provided under this Agreement, for any action
taken or for refraining from the taking of any action pursuant to this Agreement
or for errors in judgment; provided, however, that this provision shall not
protect the Servicer or any such person against any liability that would
otherwise be imposed by reason of willful misfeasance, bad faith or negligence
in the performance of duties or by reason of reckless disregard of obligations
and duties under this Agreement. The Servicer and any director, officer,
employee or agent of the Servicer may rely in good faith on 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 and that in its opinion may involve it in any expense or liability;
provided, however, that the Servicer may undertake any reasonable action that it
may deem necessary or desirable in respect of this Agreement and the Basic
Documents and the rights and duties of the parties to this Agreement and the
Basic Documents and the interests of the Certificateholders under this Agreement
and the Noteholders under the Indenture.
39
Section 7.05. _______________ Not To Resign as Servicer. Subject to
the provisions of Section 7.03, _________ shall not resign from the obligations
and duties hereby imposed on it as Servicer under this Agreement except upon a
determination that the performance of its duties under this Agreement shall no
longer be permissible under applicable law. Notice of any such determination
permitting the resignation of __________ shall be communicated to the Owner
Trustee and the Indenture Trustee at the earliest practicable time (and, if
such communication is not in writing, shall be confirmed in writing at the
earliest practicable time) and any such determination shall be evidenced by an
Opinion of Counsel to such effect delivered to the Owner Trustee and the
Indenture Trustee concurrently with or promptly after such notice. No such
resignation shall become effective until the Indenture Trustee or a successor
Servicer shall (i) have assumed the responsibilities and obligations of _______
in accordance with Section 8.02 and (ii) have become the Administrator under the
Administration Agreement in accordance with Section 8 of such Agreement.
ARTICLE VIII.
Default
Section 8.01. Servicer Default. If any one of the following events (a
"Servicer Default") shall occur and be continuing:
(a) any failure by the Servicer to deliver to the Indenture
Trustee for deposit in any of the Trust Accounts or the Certificate Distribution
Account any required payment or to direct the Indenture Trustee to make any
required distributions therefrom, which failure continues unremedied for a
period of three Business Days after written notice of such failure is received
by the Servicer from the Owner Trustee or the Indenture Trustee or after
discovery of such failure by an officer of the Servicer; or
(b) failure by the Service, as the case may be, duly to observe
or to perform in any material respect any other covenants or agreements of the
Servicer (as the case may be) set forth in this Agreement or any other Basic
Document, which failure shall (i) materially and adversely affect the rights of
Certificateholders or Noteholders and (ii) continue unremedied for a period of
60 days after the date on which written notice of such failure, requiring the
same to be remedied, shall have been given (A) to the Servicer (as the case may
be) by the Owner Trustee or the Indenture Trustee or (B) to the Servicer (as the
case may be), and to the Owner Trustee and the Indenture Trustee by the Holders
of Notes or Certificates, as applicable, evidencing not less than 25% of the
Outstanding Amount of the Notes or 25% of the outstanding Certificate Balance;
or
(c) the occurrence of an Insolvency Event with respect to the
Servicer;
then, and in each and every case, so long as the Servicer Default shall not have
been remedied, either the Indenture Trustee or the Holders of Notes evidencing
not less than 25% of the Outstanding Amount of the Notes, by notice then given
in writing to the Servicer (and to the Indenture Trustee and the Owner Trustee
if given by the Noteholders) may terminate all the rights and obligations (other
than the obligations set forth in Section 7.02 hereof) of the Servicer
40
under this Agreement. On or after the receipt by the Servicer of such written
notice, all authority and power of the Servicer under this Agreement, whether
with respect to the Notes, the Certificates or the Receivables or otherwise,
shall, without further action, pass to and be vested in the Indenture Trustee or
such successor Servicer as may be appointed under Section 8.02; and, without
limitation, the Indenture Trustee and the Owner Trustee are hereby authorized
and empowered to execute and deliver, for the benefit 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, the Indenture Trustee and the Owner Trustee in effecting the
termination of the responsibilities and rights of the predecessor Servicer under
this Agreement, including the transfer to the successor Servicer for
administration by it of all cash amounts that shall at the time be held by the
predecessor Servicer for deposit, or shall thereafter be received by it with
respect to any Receivable. All reasonable costs and expenses (including
attorneys' fees) incurred in connection with transferring the Receivable Files
to the successor Servicer and amending this Agreement to reflect such succession
as Servicer pursuant to this Section shall be paid by the predecessor Servicer
upon presentation of reasonable documentation of such costs and expenses. Upon
receipt of notice of the occurrence of a Servicer Default, the Owner Trustee
shall give notice thereof to the Rating Agencies.
Section 8.02. Appointment of Successor. (a) Upon the Servicer's receipt
of notice of termination pursuant to Section 8.01 or the Servicer's resignation
in accordance with the terms of this Agreement, the predecessor Servicer shall
continue to perform its functions as Servicer under this Agreement, in the case
of termination, only until the date specified in such termination notice or, if
no such date is specified in a notice of termination, until receipt of such
notice and, in the case of resignation, until the later of (i) the date 45 days
from the delivery to the Owner Trustee and the Indenture Trustee of written
notice of such resignation (or written confirmation of such notice) in
accordance with the terms of this Agreement and (ii) the date upon which the
predecessor Servicer shall become unable to act as Servicer, as specified in the
notice of resignation and accompanying Opinion of Counsel. In the event of the
Servicer's termination hereunder, the Indenture Trustee shall appoint a
successor Servicer, and the successor Servicer shall accept its appointment
(including its appointment as Administrator under the Administration Agreement
as set forth in Section 8.02(b)) by a written assumption in form acceptable to
the Owner Trustee and the Indenture Trustee. In the event that a successor
Servicer has not been appointed at the time when the predecessor Servicer has
ceased to act as Servicer in accordance with this Section, the Indenture Trustee
without further action shall automatically be appointed the successor Servicer
and the Indenture Trustee shall be entitled to the Servicing Fee.
Notwithstanding the above, the Indenture Trustee shall, if it shall be legally
unable so to act, appoint or petition a court of competent jurisdiction to
appoint any established institution, having a net worth of not less than
$100,000,000 and whose regular business shall include the servicing of
[automotive] [recreational vehicle] receivables, as the successor to the
Servicer under this Agreement.
(b) Upon appointment, the successor Servicer (including the
Indenture Trustee acting as successor Servicer) shall (i) be the successor in
all respects to the predecessor Servicer and shall be subject to all the
responsibilities, duties and liabilities arising thereafter
41
relating thereto placed on the predecessor Servicer and shall be entitled to the
Servicing Fee and all the rights granted to the predecessor Servicer by the
terms and provisions of this Agreement and (ii) become the Administrator under
the Administration Agreement in accordance with Section 8 of such Agreement.
(c) The Servicer may not resign unless it is prohibited from
serving as such by law.
Section 8.03. Repayment of Advances. If the Servicer shall change, the
predecessor Servicer shall be entitled to receive reimbursement for Outstanding
Advances pursuant to Sections 5.03 and 5.05 with respect to all Advances made by
the predecessor Servicer.
Section 8.04. Notification to Noteholders and Certificateholders. Upon
any termination of, or appointment of a successor to, the Servicer pursuant to
this Article VIII, the Owner Trustee shall give prompt written notice thereof to
Certificateholders, and the Indenture Trustee shall give prompt written notice
thereof to Noteholders and the Rating Agencies.
Section 8.05. Waiver of Past Defaults. The Holders of Notes evidencing
not less than a majority of the Outstanding Amount of the Notes or the Holders
(as defined in the Trust Agreement) of Certificates evidencing not less than a
majority of the outstanding Certificate Balance (in the case of any default
which does not adversely affect the Indenture Trustee or the Noteholders) may,
on behalf of all Noteholders and Certificateholders, waive in writing any
default by the Servicer in the performance of its obligations hereunder and its
consequences, except a default in making any required deposits to or payments
from any of the Trust Accounts in accordance with this Agreement. Upon any such
waiver of a past default, such default shall cease to exist, and any Servicer
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 thereto.
ARTICLE IX.
Termination
Section 9.01. Optional Purchase of All Receivables. (a) As of the last
day of any Collection Period immediately preceding a Distribution Date as of
which the then outstanding Pool Balance is ____% or less of the Original Pool
Balance and the Class [A-1] Notes, have been paid in full, the Servicer shall
have the option to purchase the Owner Trust Estate, other than the Trust
Accounts and the Certificate Distribution Account; provided, however, that,
unless Moody's agrees otherwise, the Servicer may not effect any such purchase
if the rating of ___________'s long-term debt obligations is less than Baa3 by
Moody's, unless the Owner Trustee and the Indenture Trustee shall have received
an Opinion of Counsel to the effect that such purchase would not constitute a
fraudulent conveyance. To exercise such option, the Servicer shall deposit
pursuant to Section 5.06 in the Collection Account an amount equal to the
aggregate Purchase Amount for the Receivables (including defaulted Receivables),
plus the appraised value of any such other property held by the Trust other than
the Trust Accounts and the Certificate Distribution Account, such value to be
determined by an appraiser mutually
42
agreed upon by the Servicer, the Owner Trustee and the Indenture Trustee, and
shall succeed to all interests in and to the Trust. Notwithstanding the
foregoing, the Servicer shall not be permitted to exercise such option unless
the amount to be deposited in the Collection Account pursuant to the preceding
sentence is greater than or equal to the sum of the outstanding principal
balance of the Notes and the Certificate Balance and all accrued but unpaid
interest (including any overdue interest and premium) thereon.
(b) Upon any sale of the assets of the Trust pursuant to Section
9.02 of the Trust Agreement, the Servicer shall instruct the Indenture Trustee
to deposit the proceeds from such sale after all payments and reserves therefrom
have been made (the "Insolvency Proceeds") in the Collection Account. On the
Distribution Date on which the Insolvency Proceeds are deposited in the
Collection Account (or, if such proceeds are not so deposited on a Distribution
Date, on the Distribution Date immediately following such deposit), the Servicer
shall instruct the Indenture Trustee to make the following deposits (after the
application on such Distribution Date of the Total Distribution Amount and funds
on deposit in the Reserve Account pursuant to Sections 5.07 and 5.08) from the
Insolvency Proceeds and any funds remaining on deposit in the Reserve Account
(including the proceeds of any sale of investments therein as described in the
following sentence):
(i) to the Note Distribution Account, any portion of the
Noteholders' Interest Distributable Amount not otherwise deposited into the Note
Distribution Account on such Distribution Date;
(ii) to the Note Distribution Account, the outstanding
principal balance of the Notes (after giving effect to the reduction in the
outstanding principal balance of the Notes to result from the deposits made in
the Note Distribution Account on such Distribution Date and on prior
Distribution Dates);
(iii) to the Certificate Distribution Account, any portion
of the Certificateholders' Interest Distributable Amount not otherwise deposited
into the Certificate Distribution Account on such Distribution Date;
(iv) to the Certificate Distribution Account, the
Certificate Balance (after giving effect to the reduction in the Certificate
Balance to result from the deposits made in the Certificate Distribution Account
on such Distribution Date); and
(v) any remaining amount to the Reserve Account.
Any investments on deposit in the Reserve Account or Note Distribution Account
which will not mature on or before such Distribution Date shall be sold by the
Indenture Trustee at such time as will result in the Indenture Trustee receiving
the proceeds from such sale not later than the Payment Determination Date
preceding such Distribution Date. Any Insolvency Proceeds remaining in the
Reserve Account after the deposits described in clauses (i) through (v) above
shall be paid to the Depositor.
(c) As described in Article IX of the Trust Agreement, notice of
any termination of the Trust shall be given by the Servicer to the Owner Trustee
and the Indenture Trustee as soon as practicable after the Servicer has received
notice thereof.
43
(d) Following the satisfaction and discharge of the Indenture and the
payment in full of the principal of and interest on the Notes, the
Certificateholders will succeed to the rights of the Noteholders hereunder other
than Section 5.08(b) and the Owner Trustee will succeed to the rights of, and
assume the obligations of, the Indenture Trustee pursuant to this Agreement.
ARTICLE X.
Miscellaneous
Section 10.01. Amendment. This Agreement may be amended by the
Depositor, the Servicer and the Issuer, with the consent of the Indenture
Trustee, but without the consent of any of the Noteholders or the
Certificateholders, to cure any ambiguity, to correct or supplement any
provisions in this Agreement or for the purpose of adding any provisions to or
changing in any manner or eliminating any of the provisions in this Agreement or
of modifying in any manner the rights of the Noteholders or the
Certificateholders; provided, however, that such action shall not, as evidenced
by an Opinion of Counsel delivered to the Owner Trustee and the Indenture
Trustee, adversely affect in any material respect the interests of any
Noteholder or Certificateholder.
This Agreement may also be amended from time to time by the Depositor,
the Servicer and the Issuer, with the consent of the Indenture Trustee, the
consent of the Holders of Notes evidencing not less than a majority of the
Outstanding Amount of the Notes and the consent of the Holders (as defined in
the Trust Agreement) of outstanding Certificates evidencing not less than a
majority of the outstanding Certificate Balance, 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 Noteholders or
the Certificateholders; provided, however, that no such amendment shall (a)
increase or reduce in any manner the amount of, or accelerate or delay the
timing of, collections of payments on Receivables or distributions that shall be
required to be made for the benefit of the Noteholders or the Certificateholders
or (b) reduce the aforesaid percentage of the Outstanding Amount of the Notes
and the Certificate Balance, the Holders of which are required to consent to any
such amendment, without the consent of the Holders of all the outstanding Notes
and the Holders (as defined in the Trust Agreement) of all the outstanding
Certificates.
Promptly after the execution of any such amendment or consent, the
Owner Trustee shall furnish written notification of the substance of such
amendment or consent to each Certificateholder, the Indenture Trustee and each
of the Rating Agencies.
It shall not be necessary for the consent of Certificateholders or
Noteholders pursuant to this Section to approve the particular form of any
proposed amendment or consent, but it shall be sufficient if such consent shall
approve the substance thereof.
Prior to the execution of any amendment to this Agreement, the Owner
Trustee and the Indenture Trustee shall be entitled to receive and rely upon an
Opinion of Counsel stating that the execution of such amendment is authorized or
permitted by this Agreement and the Opinion of Counsel referred to in Section
10.02(i)(1). The Owner Trustee and the Indenture Trustee may,
44
but shall not be obligated to, enter into any such amendment which affects the
Owner Trustee's or the Indenture Trustee's, as applicable, own rights, duties or
immunities under this Agreement or otherwise.
Section 10.02. Protection of Title to Trust. (a) The Depositor shall
execute and file such financing statements and cause to be executed and filed
such continuation statements, all in such manner and in such places as may be
required by law fully to preserve, maintain and protect the interest of the
Issuer and of the Indenture Trustee in the Receivables and in the proceeds
thereof. The Depositor shall deliver (or cause to be delivered) to the Owner
Trustee and the Indenture Trustee file-stamped copies of, or filing receipts
for, any document filed as provided above, as soon as available following such
filing.
(b) Neither the Depositor nor the Servicer shall change its name,
identity or corporate structure in any manner that would, could or might make
any financing statement or continuation statement filed in accordance with
paragraph (a) above seriously misleading within the meaning of Section 9-402(7)
of the UCC, unless it shall have given the Owner Trustee and the Indenture
Trustee at least five days' prior written notice thereof and shall have promptly
filed appropriate amendments to all previously filed financing statements or
continuation statements.
(c) Each of the Depositor and the Servicer shall have an
obligation to give the Owner Trustee and the Indenture Trustee at least 60 days'
prior written notice of any relocation of its principal executive office if, as
a result of such relocation, the applicable provisions of the UCC would require
the filing of any amendment of any previously filed financing or continuation
statement or of any new financing statement and shall promptly file any such
amendment or new financing statement. The Servicer shall at all times maintain
each office from which it shall service Receivables, and its 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
and the Payahead 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, the
Servicer's master computer records (including any backup archives) that refer to
a Receivable shall indicate clearly the interest of the Issuer and the Indenture
Trustee in such Receivable and that such Receivable is owned by the Issuer and
has been pledged to the Indenture Trustee. Indication of the Issuer's and the
Indenture Trustee's interest in a Receivable shall be deleted from or modified
on the Servicer's computer systems when, and only when, the related Receivable
shall have been paid in full or repurchased.
(f) If at any time the Depositor or the Servicer shall propose to
sell, grant a security interest in, or otherwise transfer any interest in
[automotive] [recreational vehicle] receivables to any prospective purchaser,
lender or other transferee, the Servicer shall give to
45
such prospective purchaser, lender or other transferee computer tapes, records
or printouts (including any restored from backup archives) that, if they shall
refer in any manner whatsoever to any Receivable, shall indicate clearly that
such Receivable has been sold and is owned by the Issuer and has been pledged to
the Indenture Trustee.
(g) The Servicer shall permit the Indenture Trustee and its
agents at any time during normal business hours to inspect, audit and make
copies of and abstracts from the Servicer's records regarding any Receivable.
(h) Upon request, the Servicer shall furnish to the Owner Trustee
or to the Indenture Trustee, within five Business Days, a list of all
Receivables (by contract number and name of Obligor) then held as part of the
Trust, together with a reconciliation of such list to the Schedule of
Receivables and to each of the Servicer's Certificates furnished before such
request indicating removal of Receivables from the Trust.
(i) The Servicer shall deliver to the Owner Trustee and the
Indenture Trustee:
(1) promptly after the execution and delivery of this
Agreement and of each amendment hereto and on certain
Distribution Dates as required by Section 2.05(b)(x)(B), an
Opinion of Counsel stating that, in the opinion of such
counsel, either (A) all financing statements and continuation
statements have been executed and filed that are necessary
fully to preserve and protect the interest of the Owner
Trustee and the Indenture Trustee in the Receivables, and
reciting the details of such filings or referring to prior
Opinions of Counsel in which such details are given, or (B) no
such action shall be necessary to preserve and protect such
interest; and
(2) within 90 days after the beginning of each calendar year
beginning with the first calendar year beginning more than
three months after the Cutoff Date, an Opinion of Counsel,
dated as of a date during such 90-day period, stating that, in
the opinion of such counsel, either (A) all financing
statements and continuation statements have been executed and
filed that are necessary fully to preserve and protect the
interest of the Owner Trustee and the Indenture Trustee in the
Receivables, and reciting the details of such filings or
referring to prior Opinions of Counsel in which such details
are given, or (B) no such action shall be necessary to
preserve and protect such interest.
Each Opinion of Counsel referred to in clause (1) or (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.
(i) The Depositor shall, to the extent required by applicable
law, cause the Certificates and the Notes to be registered with the Commission
pursuant to Section 12(b) or Section 12(g) of the Exchange Act within the time
periods specified in such sections.
Section 10.03. Notices. All demands, notices, communications and
instructions upon or to the Depositor, the Servicer, the Owner Trustee, the
Indenture Trustee or the Rating Agencies under this Agreement shall be in
writing, personally delivered or mailed by certified mail, return
46
receipt requested, and shall be deemed to have been duly given upon receipt (a)
in the case of the Depositor, to Citigroup Vehicle Securities Inc., 000
Xxxxxxxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000, Attention of General Counsel
(212-___-____) or the Servicer, to ___________________________, Attention of
___________________, (b) in the case of the Issuer or the Owner Trustee, at the
Corporate Trust Office (as defined in the Trust Agreement), (c) in the case of
the Indenture Trustee, at the Corporate Trust Office, (d) in the case of [RATING
AGENCY], to [ADDRESS], (e) in the case of [RATING AGENCY], to [ADDRESS], (f) in
the case of [RATING AGENCY], to [ADDRESS] and (g) in the case of [RATING
AGENCY], to [ADDRESS]; or, as to each of the foregoing, at such other address as
shall be designated by written notice to the other parties.
Section 10.04. Assignment by the Depositor or the Servicer.
Notwithstanding anything to the contrary contained herein, except as provided in
the remainder of this Section, as provided in Sections 6.04 and 7.03 herein and
as provided in the provisions of this Agreement concerning the resignation of
the Servicer, this Agreement may not be assigned by the Depositor or the
Servicer.
Section 10.05. Limitations on Rights of Others. The provisions of this
Agreement are solely for the benefit of the Depositor, the Servicer, the Issuer,
the Owner Trustee, the Certificateholders, the Indenture Trustee and the
Noteholders, and nothing in this Agreement, whether express or implied, shall be
construed to give to any other Person any legal or equitable right, remedy or
claim in the Owner Trust Estate or under or in respect of this Agreement or any
covenants, conditions or provisions contained herein.
Section 10.06. Severability. Any provision of this Agreement that is
prohibited or unenforceable in any jurisdiction shall, as to such jurisdiction,
be ineffective to the extent of such prohibition or unenforceability without
invalidating the remaining provisions hereof, and any such prohibition or
unenforceability in any jurisdiction shall not invalidate or render
unenforceable such provision in any other jurisdiction.
Section 10.07. Separate Counterparts. This Agreement may be executed by
the parties hereto in separate counterparts, each of which when so executed and
delivered shall be an original, but all such counterparts shall together
constitute but one and the same instrument.
Section 10.08. Headings. The headings of the various Articles and
Sections herein are for convenience of reference only and shall not define or
limit any of the terms or provisions hereof.
Section 10.09. Governing Law. This Agreement shall be construed in
accordance with the laws of the State of New York, without reference to its
conflict of law provisions, and the obligations, rights and remedies of the
parties hereunder shall be determined in accordance with such laws.
Section 10.10. Assignment by Issuer. The Depositor hereby acknowledges
and consents to any mortgage, pledge, assignment and grant of a security
interest by the Issuer to the Indenture Trustee pursuant to the Indenture for
the benefit of the Noteholders of all right, title and interest
47
of the Issuer in, to and under the Receivables and/or the assignment of any or
all of the Issuer's rights and obligations hereunder to the Indenture Trustee.
Section 10.11. Nonpetition Covenants. Notwithstanding any prior
termination of this Agreement, the Servicer and the Depositor shall not, prior
to the date which is one year and one day after the termination of this
Agreement with respect to the Issuer or, acquiesce, petition or otherwise invoke
or cause the Issuer or the Depositor to invoke the process of any court or
government authority for the purpose of commencing or sustaining a case against
the Issuer or the Depositor under any federal or state bankruptcy, insolvency or
similar law, or appointing a receiver, liquidator, assignee, trustee, custodian,
sequestrator or other similar official of the Issuer or the Depositor or any
substantial part of its property, or ordering the winding up or liquidation of
the affairs of the Issuer or the Depositor.
Section 10.12. Limitation of Liability of Owner Trustee and Indenture
Trustee. (a) Notwithstanding anything contained herein to the contrary, this
Agreement has been countersigned by _________________________________ not in its
individual capacity but solely in its capacity as Owner Trustee of the Issuer
and in no event shall ____________________ in its individual capacity or, except
as expressly provided in the Trust Agreement, as beneficial owner of the Issuer
have any liability for the representations, warranties, covenants, agreements or
other obligations of the Issuer hereunder or in any of the certificates, notices
or agreements delivered pursuant hereto, as to all of which recourse shall be
had solely to the assets of the Issuer. For all purposes of this Agreement, in
the performance of its duties or obligations hereunder or in the performance of
any duties or obligations of the Issuer hereunder, the Owner Trustee shall be
subject to, and entitled to the benefits of, the terms and provisions of
Articles VI, VII and VIII of the Trust Agreement.
(b) Notwithstanding anything contained herein to the contrary,
this Agreement has been accepted by ________________________, not in its
individual capacity but solely as Indenture Trustee and in no event shall
______________________ have any liability for the representations, warranties,
covenants, agreements or other obligations of the Issuer hereunder or in any of
the certificates, notices or agreements delivered pursuant hereto, as to all of
which recourse shall be had solely to the assets of the Issuer.
48
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed by their respective officers as of the day and year first above
written.
[______________] TRUST 200_-_
By: [ ],
not in its individual capacity but solely
as Owner Trustee on behalf of the Trust
By:
Name:
Title:
CITIGROUP VEHICLE SECURITIES INC.
Depositor
By:
Name:
Title:
[--------------------------],
Servicer
By:
Name:
Title:
Acknowledged and accepted
as of the day and year
first above written:
[----------------------],
not in its individual capacity
but solely as Indenture Trustee
By: ___________________________
Name:
Title:
49
SCHEDULE A
Schedule of Receivables
Delivered to the Owner Trustee at Closing
Sched. A-1
SCHEDULE B
Location of Receivable Files
Sched. B-1
EXHIBIT A
Form of Distribution Statement to Certificateholders
[-----------------------------]
[______________] Trust 200_-_ Distribution Date Statement to Certificateholders
Principal Distribution Amount
Principal Per $1,000 Certificate
Interest Distribution Amount
Interest Per $1,000 Certificate
Note Balance:
Class A-1 Notes:
Class A-2 Notes:
Note Pool Factor:
Class A-1 Notes:
Class A-2 Notes:
Certificate Balance
Certificate Pool Factor
Servicing Fee
Servicing Fee Per $1,000 Certificate
Pool Balance
Realized Losses
Reserve Account Balance
Payahead Balance
A-1
EXHIBIT B
Form of Distribution Statement to Noteholders
[________________] Trust 200_-_ Distribution Date Statement to Noteholders
Principal Distribution Amount
Class A-1 Notes: ($ per $1,000 original principal amount)
Class A-2 Notes: ($ per $1,000 original principal amount)
Interest Distribution Amount
Class A-1 Notes: ($ per $1,000 original principal amount)
Class A-2 Notes: ($ per $1,000 original principal amount)
Note Balance
Class A-1 Notes
Class A-2 Notes
Note Pool Factor
Class A-1 Notes
Class A-2 Notes
Certificate Balance
Servicing Fee
Servicing Fee Per $1,000 Note
Realized Losses
Reserve Account Balance
Payahead Balance
B-1
EXHIBIT C
Form of Servicer's Certificate
[_________________] Trust 200_-_ Monthly Servicer's Certificate
Period
Distribution Date
Dates Covered From & Incl. To & Incl.
Collections
Accrual
30/360 Days
Actual/360 Days
Receivables Balances Beginning Ending
Pool Balance
Simple Interest
Original Pool Balance
Principal Distribution Amount
Principal Collections
+ Repurchases
+ Liquidation Proceeds
+ Realized Losses
Interest Distribution Amount
Collections - Precomputed Contracts
+ Collections - Simple Interest Contracts
+ Simple Interest Advances
+ Investment Earnings
Total Distribution Amount
Principal Distribution Amount
+ Interest Distribution Amount
-- Realized Losses
Total Distribution Amount:
Loss & Delinquency
C-1
Account Activity
Beginning Ending Interest/Interest
Balance Balance Change Factor Servicing Shortfall
Initial Pool
Principal Paydown
Payaheads
Advance
Reserve
Available Amount
Certificate Interest Reserve
Certificate Interest Reserve Draw
Notes
Class [A-1]
Class [A-2]
Certificates
Over Collateralization
Principal Allocation
Regular Accelerated Mandatory Total Principal
Principal Principal Redemption/ Principal Shortfall
Repayment
Notes
Class [A-1]
Class [A-2]
Certificates
Total
Miscellaneous
Noteholders' Percentage
Certificateholders' Percentage
Maximum Excess Principal
Available Excess Principal
Specified Reserve Account Balance
Certificate Interest Reserve Draw
Distribution Account to Depositor
Servicing Fee to Servicer
Allocation of Funds
Sources
Principal Distribution Amount
Interest Distribution Amount
Available Amount
Certificate Interest Reserve
Reserve Deposit from PFA
Redemption/Prepay Amt.
Total Sources
C-2
