EXHIBIT 10.1
SALE AND SERVICING AGREEMENT
among
NATIONAL CITY AUTO RECEIVABLES TRUST 2004-A,
Issuer,
NATIONAL CITY VEHICLE RECEIVABLES INC.,
Depositor,
NATIONAL CITY BANK,
Seller, Servicer, Administrator and Custodian,
and
THE BANK OF NEW YORK,
Indenture Trustee
Dated as of February 1, 2004
TABLE OF CONTENTS
PAGE
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ARTICLE I
DEFINITIONS
Section 1.01. Definitions............................................................................. 1
Section 1.02. Other Definitional Provisions........................................................... 20
ARTICLE II
CONVEYANCE OF RECEIVABLES
Section 2.01. Conveyance of Receivables............................................................... 22
ARTICLE III
THE RECEIVABLES
Section 3.01. Representations and Warranties of the Seller............................................ 24
Section 3.02. Representations and Warranties of the Depositor......................................... 24
Section 3.03. Repurchase Upon Breach.................................................................. 25
Section 3.04. Custody of Receivable Files............................................................. 25
Section 3.05. Duties of Servicer as Custodian......................................................... 25
Section 3.06. Instructions; Authority to Act.......................................................... 26
Section 3.07. Custodian's Indemnification............................................................. 26
Section 3.08. Effective Period and Termination........................................................ 27
ARTICLE IV
ADMINISTRATION AND SERVICING OF RECEIVABLES
Section 4.01. Duties of Servicer...................................................................... 28
Section 4.02. Collection of Receivable Payments; Modifications of Receivables......................... 29
Section 4.03. Realization upon Receivables............................................................ 29
Section 4.04. [Reserved].............................................................................. 30
Section 4.05. Maintenance of Security Interests in Financed Vehicles.................................. 30
Section 4.06. Covenants of Servicer................................................................... 30
Section 4.07. Purchase of Receivables Upon Breach..................................................... 31
Section 4.08. Servicing Fee........................................................................... 31
Section 4.09. Servicer's Certificate.................................................................. 31
Section 4.10. Annual Statement as to Compliance; Notice of Servicer Termination Event................. 32
Section 4.11. Annual Independent Accountants' Report.................................................. 32
Section 4.12. Access to Certain Documentation and Information Regarding Receivables................... 32
Section 4.13. Term of Servicer........................................................................ 33
Section 4.14. Access to Information Regarding Trust and Basic Documents............................... 33
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ARTICLE V
DISTRIBUTIONS; STATEMENTS TO SECURITYHOLDERS
Section 5.01. Establishment of Accounts............................................................... 34
Section 5.02. Collections............................................................................. 36
Section 5.03. Application of Collections.............................................................. 36
Section 5.04. Purchase Amounts........................................................................ 37
Section 5.05. Permitted Withdrawals from Collection Account........................................... 37
Section 5.06. Distributions........................................................................... 37
Section 5.07. Reserve Account......................................................................... 40
Section 5.08. Statements to Securityholders........................................................... 41
Section 5.09. Net Deposits............................................................................ 42
ARTICLE VI
THE DEPOSITOR
Section 6.01. Representations of Depositor............................................................ 43
Section 6.02. Corporate Existence..................................................................... 44
Section 6.03. Liability of Depositor; Indemnities..................................................... 44
Section 6.04. Merger or Consolidation of, or Assumption of the Obligations of, Depositor.............. 44
Section 6.05. Limitation on Liability of Depositor and Others......................................... 45
Section 6.06. Depositor May Own Securities............................................................ 45
Section 6.07. Depositor to Provide Copies of Relevant Securities Filings.............................. 45
Section 6.08. Amendment of Depositor's Organizational Documents....................................... 45
Section 6.09. Separateness Covenants.................................................................. 45
ARTICLE VII
THE SERVICER
Section 7.01. Representations of Servicer............................................................. 46
Section 7.02. Indemnities of Servicer................................................................. 47
Section 7.03. Merger or Consolidation of, or Assumption of the Obligations of, Servicer............... 48
Section 7.04. Limitation on Liability of Servicer and Others.......................................... 48
Section 7.05. [Reserved].............................................................................. 49
Section 7.06. Servicer Not to Resign.................................................................. 49
ARTICLE VIII
DEFAULT
Section 8.01. Servicer Termination Events............................................................. 50
Section 8.02. Consequences of a Servicer Termination Event............................................ 50
Section 8.03. Appointment of Successor Servicer....................................................... 51
Section 8.04. Notification to Securityholders......................................................... 52
Section 8.05. Waiver of Past Defaults................................................................. 52
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ARTICLE IX
TERMINATION
Section 9.01. Optional Purchase of All Receivables.................................................... 53
ARTICLE X
MISCELLANEOUS
Section 10.01. Amendment............................................................................... 54
Section 10.02. Protection of Title to Trust............................................................ 55
Section 10.03. Notices................................................................................. 57
Section 10.04. Assignment by the Depositor or the Servicer............................................. 57
Section 10.05. Limitations on Rights of Others......................................................... 57
Section 10.06. Severability............................................................................ 57
Section 10.07. Counterparts............................................................................ 57
Section 10.08. Headings................................................................................ 57
Section 10.09. GOVERNING LAW........................................................................... 58
Section 10.10. Assignment by Issuer.................................................................... 58
Section 10.11. Nonpetition Covenants................................................................... 58
Section 10.12. Limitation of Liability of Owner Trustee and Indenture Trustee.......................... 58
Schedule A [Reserved]
Schedule B Final Schedule of Receivables
Schedule C Location of Receivable Files
Exhibit A Representations and Warranties of the Seller under
Section 3.02 of the Receivables Purchase Agreement
Exhibit B Form of Payment Date Statement to Securityholders
Exhibit C Form of Servicer's Certificate
Exhibit D-1 Extension Policy
Exhibit D-2 Form of Dealer Agreement
Exhibit D-3 Form of Assignment
Exhibit E [Reserved]
Exhibit F Perfection Representations, Warranties and Covenants
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This SALE AND SERVICING AGREEMENT, dated as of February 1, 2004, among
NATIONAL CITY AUTO RECEIVABLES TRUST 2004-A, a Delaware statutory trust (the
"Issuer"), NATIONAL CITY VEHICLE RECEIVABLES INC., a Delaware corporation (the
"Depositor"), NATIONAL CITY BANK, a national banking association, as servicer
(in such capacity, the "Servicer"), as seller to the Depositor (in such
capacity, the "Seller"), as administrator (in such capacity, the
"Administrator") and as custodian (in such capacity, the "Custodian") and THE
BANK OF NEW YORK, a New York banking corporation, as indenture trustee (the
"Indenture Trustee").
WHEREAS, the Issuer desires to purchase from the Depositor a portfolio
of receivables arising in connection with motor vehicle retail installment sale
contracts and retail installment loans originated or purchased by National City
Bank in the ordinary course of its business and sold by National City Bank to
the Depositor;
WHEREAS, the Depositor is willing to sell such receivables to the
Issuer;
WHEREAS the Issuer is willing to pledge such receivables to the
Indenture Trustee; and
WHEREAS, National City Bank 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:
"Administration Agreement" shall mean the Owner Trust Administration
Agreement dated as of February 1, 2004, among National City Auto Receivables
Trust 2004-A, as the Trust, National City Bank, as Owner Trust Administrator,
and The Bank of New York, as Indenture Trustee, as the same may be amended,
supplemented or otherwise modified from time to time.
"Affiliate" means. as to any Person, any other Person controlling,
controlled by or under common control with such Person.
"Aggregate Net Losses" means, for any Payment Date, the amount equal to
the aggregate Principal Balance of all Receivables that were designated as
Liquidated Receivables during the related Collection Period minus the
Liquidation Proceeds allocable to principal collected during such Collection
Period with respect to any Receivables designated as Liquidated Receivables and
minus any Recoveries allocable to principal collected during that Collection
Period with respect to any Receivable designated a Liquidated Receivable.
"Agreement" means this Sale and Servicing Agreement, as the same may be
amended, supplemented or otherwise modified from time to time.
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"Amount Financed" means with respect to a Receivable, the amount
advanced under the Receivable toward the purchase price of the Financed Vehicle
and any related costs, exclusive of any amount allocable to the premium of
force-placed physical damage insurance covering the Financed Vehicle.
"Annual Percentage Rate" or "APR" of a Receivable means the annual rate
of interest stated in the related Contract.
"Available Collections" means, for each Payment Date, the sum of the
following amounts with respect to the Collection Period preceding such Payment
Date: (a) that portion of all collections on the Receivables allocable to
interest, (b) that portion of all collections on the Receivables allocable to
principal, (c) Liquidation Proceeds for such Collection Period to the extent
allocable to interest, (d) Liquidation Proceeds for such Collection Period to
the extent allocable to principal, (e) 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, (f) that portion allocable
to principal of the Purchase Amount of all Receivables that became Purchased
Receivables during or in respect of such Collection Period, (g) Recoveries for
such Collection Period, (h) Investment Earnings for the related Payment Date,
(i) Net Investment Losses required to be deposited by the Servicer, and (j)
partial prepayments of any refunded item included in the principal balance of a
Receivable, such as extended warranty protection plan costs, or physical damage,
credit life, disability insurance premiums, or any partial prepayment which
causes a reduction in the Obligor's periodic payment to an amount below the
Scheduled Payment as of the Cut-off Date; provided, however, that in calculating
the Available Collections the following will be excluded: (a) all payments and
proceeds (including Liquidation Proceeds) of any Receivables the Purchase Amount
of which has been included in the Available Funds in a prior Collection Period;
and (b) any late fees, prepayment charges, extension fees, charges for checks
returned for insufficient funds and other administrative fees and expenses or
similar charges allowed by applicable law and the terms of the Receivables,
collected by and payable to the Servicer during the related Collection Period.
"Available Funds" means, for each Payment Date, the sum of (a) the
Available Collections for such Payment Date and (b) the Reserve Account
Withdrawal Amount, if any, for such Payment Date.
"Average Net Loss Ratio" means, for any Payment Date, the average of
the Net Loss Ratios for such Payment Date and the preceding two Payment Dates.
"Basic Documents" means the Trust Agreement, the Indenture, this
Agreement, the Receivables Purchase Agreement, the Administration Agreement and
the Note Depository Agreement and other documents and certificates delivered in
connection therewith.
"Business Day" means any day other than a Saturday, a Sunday, a legal
holiday or any other day on which national banking institutions, commercial
banking institutions or trust companies in the States of New York, Ohio or
Delaware are authorized or required by law, executive order or governmental
decree to be closed.
2
"Certificate" means a certificate evidencing the beneficial interest of
a Certificateholder in the Trust, executed and countersigned as provided in the
Trust Agreement and substantially in the form set forth in Exhibit A therein.
"Certificate Distribution Account" has the meaning assigned to such
term in the Trust Agreement.
"Certificateholder" or "Holder" shall mean a Person in whose name a
Certificate is registered.
"Class" means any one of the classes of Notes.
"Class A Monthly Principal Distributable Amount" means, with respect to
any Payment Date, the sum of (a) the lesser of (i) the Monthly Principal
Distributable Amount or (ii) the excess of the Outstanding Amount of the Class
A-1 Notes on that Payment Date over any Class A Principal Carryover Shortfall
(in each case, before giving effect to any payments made to Class A Noteholders
on that Payment Date) and (b) the Class A Percentage of the Monthly Principal
Distributable Amount reduced by amounts allocated in clause (a) of this
definition; provided, however, that the Class A Monthly Principal Distributable
Amount shall not exceed the excess of the Outstanding Amount of the Class A
Notes over the Class A Principal Carryover Shortfall.
"Class A Note" means any Class A-1 Note, Class A-2 Note, Class A-3 Note
or Class A-4 Note.
"Class A Noteholders' Interest Distributable Amount" means, with
respect to any Payment Date, the sum of the Class A-1 Interest Distributable
Amount for such Payment Date, the Class A-2 Interest Distributable Amount for
such Payment Date, the Class A-3 Interest Distributable Amount for such Payment
Date and, the Class A-4 Interest Distributable Amount for such Payment Date.
"Class A Percentage" means a fraction, expressed as a percentage, the
numerator of which is the sum of the Initial Class A-2 Note Balance, the Initial
Class A-3 Note Balance and the Initial Class A-4 Note Balance, and the
denominator of which is the sum of the Initial Class A-2 Note Balance, the
Initial Class A-3 Note Balance, the Initial Class A-4 Note Balance, the Initial
Class B Note Balance and the Initial Class C Note Balance; provided, however,
that, unless the Class A Notes have been paid in full, for any Payment Date as
of which the Average Net Loss Ratio is greater than or equal to 4.50%, the Class
A Percentage shall be 100%; provided further that, on any Payment Date after the
Class A Notes have been paid in full, the Class A Percentage shall be 0%.
"Class A Principal Carryover Shortfall" means, with respect to any
Payment Date after the initial Payment Date, the amount, if any, by which the
sum of the Class A Monthly Principal Distributable Amount for the preceding
Payment Date and any outstanding Class A Principal Carryover Shortfall on that
preceding Payment Date exceeds the amount in respect of principal on the Class A
Notes actually paid to the Class A Noteholders on that preceding Payment Date.
3
"Class A Principal Distributable Amount" means, with respect to any
Payment Date, the sum of the Class A Monthly Principal Distributable Amount for
that Payment Date and the Class A Principal Carryover Shortfall for that Payment
Date; provided, however, that the Class A Principal Distributable Amount on any
Payment Date shall not exceed the Outstanding Amount of the Class A Notes on
that Payment Date; and provided further that, on the Final Scheduled Payment
Date of any Class of Class A Notes, the Class A Principal Distributable Amount
shall not be less than the amount that is necessary to pay that class of Class A
Notes in full.
"Class A Uncapped Monthly Principal Distributable Amount" means, with
respect to any Payment Date, the sum of (a) the lesser of (i) the Monthly
Principal Distributable Amount (ii) the excess of the Outstanding Amount of the
Class A-1 Notes on that Payment Date over any Class A Principal Carryover
Shortfall (in each case, before giving effect to any payments made to Class A
Noteholders on that Payment Date) and (b) the Class A Percentage of the Monthly
Principal Distributable Amount reduced by amounts allocated in clause (a) of
this definition.
"Class A-1 Final Scheduled Payment Date" means the Payment Date in
February 2005.
"Class A-1 Interest Carryover Shortfall" means, with respect to any
Payment Date, the amount, if any, by which the sum of the Class A-1 Monthly
Interest Distributable Amount for the preceding Payment Date and any outstanding
Class A-1 Interest Carryover Shortfall on such preceding Payment Date exceeds
the amount in respect of interest for the Class A-1 Notes actually deposited in
the Note Interest Distribution Account on such preceding Payment Date, plus
interest on the amount of interest due but not paid to the Class A-1 Noteholders
on such preceding Payment Date, to the extent permitted by law, at the Class A-1
Rate.
"Class A-1 Interest Distributable Amount" means, with respect to any
Payment Date, the sum of the Class A-1 Monthly Interest Distributable Amount for
such Payment Date and the Class A-1 Interest Carryover Shortfall for such
Payment Date.
"Class A-1 Monthly Interest Distributable Amount" means, with respect
to any Payment Date, interest accrued from and including the prior Payment Date
(or, in the case of the first Payment Date, from and including the Closing Date)
to and including the day immediately prior to such Payment Date, on the Class
A-1 Notes at the Class A-1 Rate on the Outstanding Amount of the Class A-1 Notes
on the immediately preceding Payment Date (or, in the case of the first Payment
Date, the Closing Date), after giving effect to all distributions of principal
to the Class A-1 Noteholders on or prior to such preceding Payment Date. For all
purposes of this Agreement and the other Basic Documents, interest with respect
to the Class A-1 Notes shall be computed on the basis of the actual number of
days in the related Interest Period and a 360-day year.
"Class A-1 Note Balance" means, as of any date of determination, the
Initial Class A-1 Note Balance less all amounts distributed to Class A-1
Noteholders on or prior to such date and allocable to principal.
"Class A-1 Noteholder" means the Person in whose name a Class A-1 Note
is registered in the Note Register.
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"Class A-1 Notes" means the 1.10% Asset Backed Notes, Class A-1,
substantially in the form of Exhibit A-1 to the Indenture.
"Class A-1 Rate" means 1.10% per annum.
"Class A-2 Final Scheduled Payment Date" means the Payment Date in
February 2007.
"Class A-2 Interest Carryover Shortfall" means, with respect to any
Payment Date, the amount, if any, by which the sum of the Class A-2 Monthly
Interest Distributable Amount for the preceding Payment Date and any outstanding
Class A-2 Interest Carryover Shortfall on such preceding Payment Date exceeds
the amount in respect of interest for the Class A-2 Notes actually deposited in
the Note Interest Distribution Account on such preceding Payment Date, plus
interest on the amount of interest due but not paid to the Class A-2 Noteholders
on such preceding Payment Date, to the extent permitted by law, at the Class A-2
Rate.
"Class A-2 Interest Distributable Amount" means, with respect to any
Payment Date, the sum of the Class A-2 Monthly Interest Distributable Amount for
such Payment Date and the Class A-2 Interest Carryover Shortfall for such
Payment Date.
"Class A-2 Monthly Interest Distributable Amount" means, with respect
to any Payment Date, interest accrued from and including the 15th day of the
preceding calendar month (or, in the case of the first Payment Date, from and
including the Closing Date) to and including the 14th day of the calendar month
in which such Payment Date occurs, on the Class A-2 Notes at the Class A-2 Rate
on the Outstanding Amount of the Class A-2 Notes on the immediately preceding
Payment Date (or, in the case of the first Payment Date, the Closing Date),
after giving effect to all distributions of principal to the Class A-2
Noteholders on or prior to such preceding Payment Date. For all purposes of this
Agreement and the other Basic Documents, interest with respect to the Class A-2
Notes shall be computed on the basis of a 360-day year consisting of twelve
30-day months.
"Class A-2 Noteholder" means the Person in whose name a Class A-2 Note
is registered in the Note Register.
"Class A-2 Notes" means the 1.50% Asset Backed Notes, Class A-2,
substantially in the form of Exhibit A-2 to the Indenture.
"Class A-2 Rate" means 1.50% per annum.
"Class A-3 Final Scheduled Payment Date" means the Payment Date in July
2008.
"Class A-3 Interest Carryover Shortfall" means, with respect to any
Payment Date, the amount, if any, by which the sum of the Class A-3 Monthly
Interest Distributable Amount for the preceding Payment Date and any outstanding
Class A-3 Interest Carryover Shortfall on such preceding Payment Date exceeds
the amount in respect of interest for the Class A-3 Notes actually deposited in
the Note Interest Distribution Account on such preceding Payment Date, plus
interest on the amount of interest due but not paid to the Class A-3 Noteholders
on such preceding Payment Date, to the extent permitted by law, at the Class A-3
Rate.
5
"Class A-3 Interest Distributable Amount" means, with respect to any
Payment Date, the sum of the Class A-3 Monthly Interest Distributable Amount for
such Payment Date and the Class A-3 Interest Carryover Shortfall for such
Payment Date.
"Class A-3 Monthly Interest Distributable Amount" means, with respect
to any Payment Date, interest accrued from and including the 15th day of the
preceding calendar month (or, in the case of the first Payment Date, from and
including the Closing Date) to and including the 14th day of the calendar month
in which such Payment Date occurs, on the Class A-3 Notes at the Class A-3 Rate
on the Outstanding Amount of the Class A-3 Notes on the immediately preceding
Payment Date (or, in the case of the first Payment Date, the Closing Date),
after giving effect to all distributions of principal to the Class A-3
Noteholders on or prior to such preceding Payment Date. For all purposes of this
Agreement and the other Basic Documents, interest with respect to the Class A-3
Notes shall be computed on the basis of a 360-day year consisting of twelve
30-day months.
"Class A-3 Noteholder" means the Person in whose name a Class A-3 Note
is registered in the Note Register.
"Class A-3 Notes" means the 2.11% Asset Backed Notes, Class A-3,
substantially in the form of Exhibit A-3 to the Indenture.
"Class A-3 Rate" means 2.11% per annum.
"Class A-4 Final Scheduled Payment Date" means the Payment Date in May
2011.
"Class A-4 Interest Carryover Shortfall" means, with respect to any
Payment Date, the amount, if any, by which the sum of the Class A-4 Monthly
Interest Distributable Amount for the preceding Payment Date and any outstanding
Class A-4 Interest Carryover Shortfall on such preceding Payment Date exceeds
the amount in respect of interest for the Class A-4 Notes actually deposited in
the Note Interest Distribution Account on such preceding Payment Date, plus
interest on the amount of interest due but not paid to the Class A-4 Noteholders
on such preceding Payment Date, to the extent permitted by law, at the Class A-4
Rate.
"Class A-4 Interest Distributable Amount" means, with respect to any
Payment Date, the sum of the Class A-4 Monthly Interest Distributable Amount for
such Payment Date and the Class A-4 Interest Carryover Shortfall for such
Payment Date.
"Class A-4 Monthly Interest Distributable Amount" means, with respect
to any Payment Date, interest accrued from and including the 15th day of the
preceding calendar month (or, in the case of the first Payment Date, from and
including the Closing Date) to and including the 14th day of the calendar month
in which such Payment Date occurs, on the Class A-4 Notes at the Class A-4 Rate
on the Outstanding Amount of the Class A-4 Notes on the immediately preceding
Payment Date (or, in the case of the first Payment Date, the Closing Date),
after giving effect to all distributions of principal to the Class A-4
Noteholders on or prior to such preceding Payment Date. For all purposes of this
Agreement and the other Basic Documents, interest with respect to the Class A-4
Notes shall be computed on the basis of a 360-day year consisting of twelve
30-day months.
6
"Class A-4 Noteholder" means the Person in whose name a Class A-4 Note
is registered in the Note Register.
"Class A-4 Notes" means the 2.88% Asset Backed Notes, Class A-4,
substantially in the form of Exhibit A-4 to the Indenture.
"Class A-4 Rate" means 2.88% per annum.
"Class B Final Scheduled Payment Date" means the Payment Date in May
2011.
"Class B Interest Carryover Shortfall" means, with respect to any
Payment Date, the amount, if any, by which the sum of the Class B Monthly
Interest Distributable Amount for the preceding Payment Date and any outstanding
Class B Interest Carryover Shortfall on such preceding Payment Date exceeds the
amount in respect of interest for the Class B Notes actually deposited in the
Note Interest Distribution Account on such preceding Payment Date, plus interest
on the amount of interest due but not paid to the Class B Noteholders on such
preceding Payment Date, to the extent permitted by law, at the Class B Rate.
"Class B Monthly Interest Distributable Amount" means, with respect to
any Payment Date, interest accrued from and including the 15th day of the
preceding calendar month (or, in the case of the first Payment Date, from and
including the Closing Date) to and including the 14th day of the calendar month
in which such Payment Date occurs, on the Class B Notes at the Class B Rate on
the Outstanding Amount of the Class B Notes on the immediately preceding Payment
Date (or, in the case of the first Payment Date, the Closing Date), after giving
effect to all distributions of principal to the Class B Noteholders on or prior
to such preceding Payment Date. For all purposes of this Agreement and the other
Basic Documents, interest with respect to the Class B Notes shall be computed on
the basis of a 360-day year consisting of twelve 30-day months.
"Class B Monthly Principal Distributable Amount" means with respect to
any Payment Date, the sum of (a) the Class B Percentage of an amount equal to
(i) the Monthly Principal Distributable Amount for that Payment Date less, (ii)
the amount allocated in clause (a) of the definition of "Class A Monthly
Principal Distributable Amount" and (b) the excess, if any, of the Class A
Uncapped Monthly Principal Distributable Amount over the Class A Monthly
Principal Distributable Amount; provided, however, that the Class B Monthly
Principal Distributable Amount shall not exceed the excess of the Outstanding
Amount of the Class B Notes over the Class B Principal Carryover Shortfall.
"Class B Noteholder" means the Person in whose name a Class B Note is
registered in the Note Register.
"Class B Noteholders' Interest Distributable Amount" means, with
respect to any Payment Date, the sum of the Class B Monthly Interest
Distributable Amount for such Payment Date and the Class B Interest Carryover
Shortfall for such Payment Date.
"Class B Notes" means the 2.45% Asset Backed Notes, Class B,
substantially in the form of Exhibit B to the Indenture.
7
"Class B Percentage" means a fraction, expressed as a percentage, the
numerator of which is the Initial Class B Note Balance, and the denominator of
which is the sum of the Initial Class A-2 Note Balance, the Initial Class A-3
Note Balance, the Initial Class A-4 Note Balance, the Initial Class B Note
Balance and the Initial Class C Note Balance; provided, however, on any Payment
Date as of which the Average Net Loss Ratio is greater than or equal to 4.50%,
if the Class A Notes have been paid in full, the Class B Percentage shall be
100%; otherwise, the Class B Percentage shall be zero. Notwithstanding the
above, on any Payment Date after the Class A Notes have been paid in full and
the Average Net Loss Ratio is less than 4.50%, the Class B Percentage means a
fraction, expressed as a percentage, the numerator of which is the sum of the
Initial Class A-2 Note Balance, the Initial Class A-3 Note Balance, the Initial
Class A-4 Note Balance and the Initial Class B Note Balance, and the denominator
of which is the sum of the Initial Class A-2 Note Balance, the Initial Class A-3
Note Balance, the Initial Class A-4 Note Balance, the Initial Class B Note
Balance and the Initial Class C Note Balance; provided that, on any Payment Date
after the Class B Notes have been paid in full, the Class B Percentage shall be
zero.
"Class B Principal Carryover Shortfall" means, with respect to any
Payment Date after the initial Payment Date, the amount, if any, by which the
sum of the Class B Monthly Principal Distributable Amount for the preceding
Payment Date and any outstanding Class B Principal Carryover Shortfall on that
preceding Payment Date exceeds the amount in respect of principal on the Class B
Notes actually paid to the Class B Noteholders on that preceding Payment Date.
"Class B Principal Distributable Amount" means, with respect to any
Payment Date, the sum of the Class B Monthly Principal Distributable Amount for
that Payment Date and the Class B Principal Carryover Shortfall for that Payment
Date; provided, however, that the Class B Principal Distributable Amount on any
Payment Date shall not exceed the Outstanding Amount of the Class B Notes on
that Payment Date; and provided further that, on the Final Scheduled Payment
Date of the Class B Notes, the Class B Principal Distributable Amount shall not
be less than the amount that is necessary to pay the Class B Notes in full.
"Class B Rate" means 2.45% per annum.
"Class C Final Scheduled Payment Date" means the Payment Date in May
2011.
"Class C Interest Carryover Shortfall" means, with respect to any
Payment Date, the amount, if any, by which the sum of the Class C Monthly
Interest Distributable Amount for the preceding Payment Date and any outstanding
Class C Interest Carryover Shortfall on such preceding Payment Date exceeds the
amount in respect of interest for the Class C Notes actually deposited in the
Note Interest Distribution Account on such preceding Payment Date, plus interest
on the amount of interest due but not paid to the Class C Noteholders on such
preceding Payment Date, to the extent permitted by law, at the Class C Rate.
"Class C Monthly Interest Distributable Amount" means, with respect to
any Payment Date, interest accrued from and including the 15th day of the
preceding calendar month (or, in the case of the first Payment Date, from and
including the Closing Date) to and including the 14th day of the calendar month
in which such Payment Date occurs, on the Class C Notes at the
8
Class C Rate on the Outstanding Amount of the Class C Notes on the immediately
preceding Payment Date (or, in the case of the first Payment Date, the Closing
Date), after giving effect to all distributions of principal to the Class C
Noteholders on or prior to such preceding Payment Date. For all purposes of this
Agreement and the other Basic Documents, interest with respect to the Class C
Notes shall be computed on the basis of a 360-day year consisting of twelve
30-day months.
"Class C Monthly Principal Distributable Amount" means with respect to
any Payment Date, the sum of (a) the Monthly Principal Distributable Amount,
less (b) the Class A Monthly Principal Distributable Amount, less (c) the Class
B Monthly Principal Distributable Amount.
"Class C Noteholder" means the Person in whose name a Class C Note is
registered in the Note Register.
"Class C Noteholders' Interest Distributable Amount" means, with
respect to any Payment Date, the sum of the Class C Monthly Interest
Distributable Amount for such Payment Date and the Class C Interest Carryover
Shortfall for such Payment Date.
"Class C Notes" means the 2.99% Asset Backed Notes, Class C,
substantially in the form of Exhibit C to the Indenture.
"Class C Principal Carryover Shortfall" means, with respect to any
Payment Date after the initial Payment Date, the amount, if any, by which the
sum of the Class C Monthly Principal Distributable Amount for the preceding
Payment Date and any outstanding Class C Principal Carryover Shortfall on that
preceding Payment Date exceeds the amount in respect of principal on the Class C
Notes actually paid to the Class C Noteholders on that preceding Payment Date.
"Class C Principal Distributable Amount" means, with respect to any
Payment Date, the sum of the Class C Monthly Principal Distributable Amount for
that Payment Date and the Class C Principal Carryover Shortfall for that Payment
Date; provided, however, that the Class C Principal Distributable Amount on any
Payment Date shall not exceed the Outstanding Amount of the Class C Notes on
that Payment Date: and provided further that, on the Final Scheduled Payment
Date of the Class C Notes, the Class C Principal Distributable Amount shall not
be less than the amount that is necessary to pay the Class C Notes in full.
"Class C Rate" means 2.99% per annum.
"Closing Date" means February 25, 2004.
"Collateral" has the meaning specified in the Granting Clause of the
Indenture.
"Collection Account" means the account designated as such, established
and maintained pursuant to Section 5.01(a).
"Collection Period" means, with respect to the first Payment Date, the
calendar month ending on February 29, 2004, and, with respect to each subsequent
Payment Date, the calendar month preceding such Payment Date. Any amount stated
as of the last day of a Collection
9
Period or as of the first day of a Collection Period shall give effect to the
following calculations as determined as of the close of business on such last
day: (i) all applications of collections and (ii) all distributions to be made
on the following Payment Date.
"Contract" means a motor vehicle retail installment sale contract or a
motor vehicle retail installment loan contract, including, without limitation,
the provisions thereof constituting a security agreement.
"Controlling Party" means (i) if the Notes have not been paid in full,
the Indenture Trustee acting at the direction of at least a majority in
Outstanding Amount of the Noteholders and (ii) if the Notes have been paid in
full, the Owner Trustee for the benefit of the Holders of the Certificates.
"Conveyed Assets" shall have the meaning set forth in Section 2.01.
"Corporate Trust Administration Department" shall have the meaning set
forth in the Trust Agreement.
"Corporate Trust Office" shall have the meaning set forth in the
Indenture.
"Cram Down Loss" means any loss resulting from an order issued by a
court of appropriate jurisdiction in an insolvency proceeding that reduces the
amount owed on a Receivable or otherwise modifies or restructures the scheduled
payments to be made thereon. The amount of any such Cram Down Loss will equal
the excess of (i) the Principal Balance of the Receivable immediately prior to
such order over (ii) the Principal Balance of such Receivable as so reduced,
modified or restructured. A Cram Down Loss will be deemed to have occurred on
the date on which the Servicer receives notice of such order.
"Custodian" means National City Bank, in its capacity as custodian of
the Receivables.
"Cutoff Date" means the beginning of business on February 1, 2004.
"Dealer" means the dealer that sold a Financed Vehicle and through
which National City or National City Michigan originated the related Receivable
or that originated the related Receivable and assigned it to National City or
National City Michigan pursuant to a Dealer Agreement or form of assignment, as
applicable.
"Dealer Agreement" means an agreement between National City or National
City Michigan and a Dealer pursuant to which such Dealer sells Contracts to
National City or National City Michigan, as applicable, or pursuant to which
National City or National City Michigan originates Contracts through such
Dealer, substantially in the form of Exhibit D-2 hereto.
"Delivery" when used with respect to Trust Account Property means:
(a) with respect to any "instruments" within the meaning of
Section 9-102(a)(47) of the UCC and are susceptible of physical delivery,
transfer thereof to the Indenture Trustee by
10
physical delivery to the Indenture Trustee endorsed to, or registered in the
name of, the Indenture Trustee or endorsed in blank, and, with respect to a
certificated security (as defined in Section 8-102 of the UCC) transfer thereof
(i) by delivery of such certificated security endorsed to, or registered in the
name of, the Indenture Trustee or (ii) by delivery thereof to a "clearing
corporation" (as defined in Section 8-102 of the UCC) and the making by such
clearing corporation of appropriate entries on its books reducing the
appropriate securities account of the transferor and increasing the appropriate
securities account of the Indenture Trustee by the amount of such certificated
security and the identification by the clearing corporation of the certificated
securities for the sole and exclusive account of the Indenture Trustee (all of
the foregoing, "Physical Property"), and, in any event, any such Physical
Property in registered form shall be in the name of the Indenture Trustee or its
nominee; and such additional or alternative procedures as may hereafter become
appropriate to effect the complete transfer of ownership of any such Trust
Account Property to the Indenture Trustee or its nominee or custodian,
consistent with changes in applicable law or regulations or the interpretation
thereof;
(b) with respect to any security issued by the U.S. Treasury, the
Federal Home Loan Mortgage Corporation or by the Federal National Mortgage
Association that is a book-entry security held through the Federal Reserve
System pursuant to federal book-entry regulations, the following procedures, all
in accordance with applicable law, including applicable federal regulations and
Articles 8 and 9 of the UCC: book-entry registration of such Trust Account
Property to an appropriate book-entry account maintained with a Federal Reserve
Bank by a securities intermediary that is also a "depository" pursuant to
applicable federal regulations; the making by such securities intermediary of
entries in its books and records crediting such Trust Account Property to the
Indenture Trustee's security account at the securities intermediary and
continuously identifying such book-entry security held through the Federal
Reserve System pursuant to federal book-entry regulations as belonging to the
Indenture Trustee; and such additional or alternative procedures as may
hereafter become appropriate to effect complete transfer of ownership of any
such Trust Account Property to the Indenture Trustee, consistent with changes in
applicable law or regulations or the interpretation thereof;
(c) with respect to any item of Trust Account Property that is an
uncertificated security under Article 8 of the UCC and that is not governed by
clause (b) above, registration on the books and records of the issuer thereof in
the name of the Indenture Trustee or its nominee or custodian who either (i)
becomes the registered owner on behalf of the Indenture Trustee or (ii) having
previously become the registered owner, acknowledges in writing that it holds
for the Indenture Trustee; and
(d) with respect to any item of Trust Account Property that is a
security entitlement causing the securities intermediary to indicate on its
books and records that such security entitlement has been credited to a
securities account of the Indenture Trustee.
"Depositor" means National City Vehicle Receivables Inc. and its
successors in interest.
"Determination Date" means, with respect to each Payment Date, the
earlier of (i) the eleventh calendar day of the month in which such Payment Date
occurs (or if such eleventh day
11
is not a Business Day, the next succeeding Business Day) and (ii) the third
Business Day preceding such Payment Date.
"Eligible Deposit Account" means either (a) a segregated account with
an Eligible Institution or (b) a segregated trust account with the corporate
trust department of a depository institution organized under the laws of the
United States of America or any State, having corporate trust powers and acting
as trustee for funds deposited in such account, so long as any of the securities
of such depository institution shall have a credit rating from each Rating
Agency in one of its generic rating categories that signifies investment grade.
"Eligible Institution" means (a) the corporate trust department of the
Indenture Trustee or the Owner Trustee or (b) a depository institution organized
under the laws of the United States of America or any State, that (i) has either
(A) a long-term unsecured debt rating of at least "AA-" by Standard & Poor's and
"A2" by Moody's or (B) a short-term unsecured debt rating or certificate of
deposit rating of at least "A-1+" by Standard & Poor's and "Prime-1" by Moody's
and (ii) the deposits of which are insured by the FDIC.
"Eligible Investments" means securities, negotiable instruments or
security entitlements, excluding any security with an "r" attached to the rating
thereof, that evidence:
(a) direct obligations of, and obligations fully guaranteed as to
the full and timely payment by, the United States of America;
(b) demand deposits, time deposits or certificates of deposit of
any depository institution or trust company incorporated under the laws of the
United States of America or any State (or any domestic branch of a foreign bank)
and subject to supervision and examination by federal or state banking or
depository institution authorities; provided, however, that at the time of the
investment or contractual commitment to invest therein, the commercial paper or
other short-term unsecured debt obligations (other than such obligations the
rating of which is based on the credit of a Person other than such depository
institution or trust company) thereof shall have a credit rating from each
Rating Agency in the highest investment category granted thereby;
(c) commercial paper having, at the time of the investment or
contractual commitment to invest therein, a rating from each Rating Agency in
the highest investment category granted thereby;
(d) investments in money market funds having a rating from each
Rating Agency in the highest investment category granted thereby (including
funds for which the Indenture Trustee or the Owner Trustee or any of their
respective Affiliates is investment manager or advisor);
(e) bankers' acceptances issued by any depository institution or
trust company referred to in clause (b) above;
(f) repurchase obligations with respect to any security that is a
direct obligation of, or fully guaranteed by, the United States of America or
any agency or instrumentality thereof the obligations of which are backed by the
full faith and credit of the United States of America, in
12
either case entered into with a depository institution or trust company (acting
as principal) described in clause (b) above; and
(g) any other investment with respect to which the Rating Agency
Condition is met and the Issuer, the Indenture Trustee or the Servicer has
received written notification from each Rating Agency that the acquisition of
such investment will not result in a reduction, withdrawal or downgrade of the
then-current rating of any Class of Notes.
"Eligible Servicer" means National City or any other Person that at the
time of its appointment as Servicer (i) is servicing a portfolio of motor
vehicle retail installment sale contracts or motor vehicle installment loans,
(ii) is legally qualified and has the capacity to service the Receivables, (iii)
has demonstrated the ability professionally and competently to service a
portfolio of motor vehicle retail installment sale contracts or motor vehicle
installment loans similar to the Receivables with reasonable skill and care and
(iv) has a minimum net worth of $50,000,000.
"Extension Policy" means the policies of the Servicer with respect to
granting extensions on the Contracts as set forth on Exhibit D-1 hereto.
"FDIC" means the Federal Deposit Insurance Corporation, and its
successors.
"Final Scheduled Payment Date" means the Class A-1 Final Scheduled
Payment Date, the Class A-2 Final Scheduled Payment Date, the Class A-3 Final
Scheduled Payment Date, the Class A-4 Final Scheduled Payment Date, the Class B
Final Scheduled Payment Date or the Class C Final Scheduled Payment Date, as
applicable.
"Financed Vehicle" means a new or used automobile, light-duty truck,
van, minivan or sport utility vehicle, together with all accessions thereto,
securing an Obligor's indebtedness under the related Contract.
"First Priority Principal Distribution Amount" means, with respect to
any Payment Date, the excess, if any, of (x) the aggregate Outstanding Amount of
the Class A Notes (as of the day immediately preceding such Payment Date) over
(y) the Pool Balance for such Payment Date.
"Fitch" means Fitch Ratings, Inc. or any successor thereto.
"Indenture" means the Indenture, dated as of February 1, 2004, between
the Issuer and the Indenture Trustee, as the same may be amended, supplemented
or otherwise modified from time to time.
"Indenture Trustee" means the Person acting as Indenture Trustee under
the Indenture, its successors in interest and any successor trustee under the
Indenture.
"Initial Class A-1 Note Balance" means $178,000,000.
"Initial Class A-2 Note Balance" means $197,000,000.
13
"Initial Class A-3 Note Balance" means $240,000,000.
"Initial Class A-4 Note Balance" means $200,020,000.
"Initial Class B Note Balance" means $36,650,000.
"Initial Class C Note Balance" means $10,785,978.
"Initial Pool Balance" means an amount equal to the aggregate Principal
Balance, as of the Cutoff Date, of the Receivables listed on Schedule B hereto.
"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 conservator,
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 conservator, 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 Period" means, with respect to the Class A-1 Notes, the
period from and including the most recent Payment Date on which interest has
been paid (or, in the case of the first Payment Date, the Closing Date) to and
including the day before the Payment Date and, with respect to the Class A-2
Notes, the Class A-3 Notes, the Class A-4 Notes, the Class B Notes and the Class
C Notes, the period from and including the 15th day of the preceding calendar
month (or, in the case of the first Payment Date, the Closing Date) to and
including the 14th day of the calendar month in which such Payment Date occurs.
"Investment Earnings" means, with respect to any Payment Date, the
investment earnings (net of losses and investment expenses) on amounts on
deposit in the Collection Account and the Reserve Account to be applied on such
Payment Date pursuant to Section 5.01(g).
"Issuer" means National City Auto Receivables Trust 2004-A.
"Lien" means a security interest, lien, charge, pledge, equity or
encumbrance of any kind, other than tax liens, mechanics' liens and any liens
that attach to the respective Receivable by operation of law as a result of any
act or omission by the related Obligor.
14
"Liquidated Receivable" means a Receivable with respect to which the
earliest of the following shall have occurred: (i) the related Financed Vehicle
has been repossessed and liquidated, (ii) the Servicer has determined in
accordance with its collection policies that all amounts that it expects to
receive with respect to the Receivable have been received or (iii) the end of
the Collection Period in which the Receivable becomes 120 days or more past due.
"Liquidation Proceeds" means, with respect to any Receivable that
becomes a Liquidated Receivable, the moneys collected in respect thereof, from
whatever source, during or after the Collection Period in which such Receivable
became a Liquidated Receivable, including liquidation of the related Financed
Vehicle, net of the sum of any out-of-pocket expenses of the Servicer reasonably
allocated to such liquidation and any amounts required by law to be remitted to
the Obligor on such Liquidated Receivable.
"Minimum Required Rating" means, with respect to National City, a
short-term unsecured debt rating equal to or greater than "Prime-1" by Moody's
and "A-1" by Standard & Poor's.
"Monthly Principal Distributable Amount" means, for any Payment Date,
an amount equal to the excess, if any, of (a) the Pool Balance as of the first
day of the related Collection Period (before giving effect to any reduction in
the Pool Balance on that day) over (b) the Pool Balance as of the last day of
the related Collection Period (after giving effect to any reduction in the Pool
Balance on that day); provided, however, that the Monthly Principal
Distributable Amount shall not be greater on any Payment Date than the excess of
(a) (i) the Note Balance on that Payment Date (before giving effect to any
payments made to Noteholders on that Payment Date) minus (ii) the aggregate of
the Class A Principal Carryover Shortfall, the Class B Principal Carryover
Shortfall and the Class C Principal Carryover Shortfall for that Payment Date,
over (b) the Pool Balance as of the last day of the related Collection Period
(after giving effect to any reduction in the Pool Balance on that day).
"Moody's" means Xxxxx'x Investors Service, Inc., and its successors.
"National City" means National City Bank, a national banking
association.
"National City Michigan" means National City Bank of Michigan/Illinois,
a national banking association.
"Net Investment Losses" means, with respect to a Trust Account and any
Collection Period, the amount, if any, by which the aggregate of all losses and
expenses incurred during such period in connection with the investment of funds
in Eligible Investments in accordance with Section 5.01(g) exceeds the aggregate
of all interest and other income realized during such period on such funds.
"Net Loss Ratio" means, for any Payment Date, the ratio expressed as an
annualized percentage of (i) the Aggregate Net Losses for such Payment Date, to
(ii) the Pool Balance on the last day of the second Collection Period preceding
the Collection Period in which such Payment Date occurs.
15
"Note Balance" means, as of any date of determination, an amount equal
to the sum of (i) the Initial Class A-1 Note Balance, (ii) the Initial Class A-2
Note Balance, (iii) the Initial Class A-3 Note Balance, (iv) the Initial Class
A-4 Note Balance, (v) the Initial Class B Note Balance and the Initial Class C
Note Balance, less all amounts distributed to Noteholders on or prior to such
date and allocable to principal.
"Note Interest Distribution Account" means the account designated as
such, established and maintained pursuant to Section 5.01(b).
"Note Pool Factor" means, with respect to each Class of Notes as of the
close of business on the last day of a Collection Period, a seven-digit decimal
figure equal to the Outstanding Amount of such Class of Notes (after giving
effect to any reductions thereof to be made on the immediately following Payment
Date) divided by the original Outstanding Amount of such Class of Notes. 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 Amount of such
Class of Notes.
"Notes" means the Class A-1 Notes, the Class A-2 Notes, the Class A-3
Notes, the Class A-4 Notes, the Class B Notes and the Class C Notes.
"Noteholders" means the Class A-1 Noteholders, the Class A-2
Noteholders, the Class A-3 Noteholders, the Class A-4 Noteholders, the Class B
Noteholders or the Class C Noteholders.
"Obligor" on a Receivable means the purchaser or co-purchasers of the
related Financed Vehicle, and any other Person obligated to make payments
thereunder.
"Officers' Certificate" means a certificate signed by (a) the chairman
of the board, the president, any vice president, the controller or any assistant
controller and (b) 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 Servicer or the Trust,
which counsel shall be acceptable to the Indenture Trustee, the Owner Trustee or
the Rating Agencies, as applicable, and which shall be addressed to the Owner
Trustee and the Indenture Trustee and which shall be at the expense of the
Person required to provide such an Opinion of Counsel.
"Outstanding Amount" means, as of any date of determination and as to
any Notes, the aggregate principal amount of such Notes Outstanding (as defined
in the Indenture) as of such date of determination.
"Owner Trustee" means Wilmington Trust Company, acting not in its
individual capacity but solely as owner trustee under the Trust Agreement.
"Paid-Ahead Period" shall have the meaning ascribed thereto in Section
5.03(b).
16
"Payment Date" means, with respect to each Collection Period, the
fifteenth day of the following month or, if such day is not a Business Day, the
immediately following Business Day, commencing on March 15, 2004.
"Person" means any individual, corporation, partnership, joint venture,
limited liability company, association, joint-stock company, trust, national
banking association, unincorporated organization or government or any agency or
political subdivision thereof.
"Physical Property" has the meaning assigned to such term in the
definition of "Delivery" above.
"Pool Balance" means, with respect to any Payment Date, an amount equal
to the aggregate Principal Balance of the Receivables at the end of the related
Collection Period, after giving effect (without duplication in the case of any
given Receivable) to all payments of principal received from Obligors and that
portion allocable to principal of the Purchase Amount of all Receivables that
became Purchased Receivables during or in respect of such Collection Period, and
after adjustment (without duplication in the case of any given Receivable) for
the aggregate amount of any Cram Down Losses during such Collection Period and
the reduction to zero of the aggregate outstanding Principal Balance of all
Receivables that became Liquidated Receivables during such Collection Period.
"Principal Balance" means, with respect to any Receivable and a
Determination Date, the Amount Financed minus an amount equal to the sum, as of
the close of business on the last day of the related Collection Period, of (1)
that portion of all amounts received on or prior to such day with respect to
such Receivable and allocable to principal using the Simple Interest Method, and
(2) any Cram Down Losses with respect to such Receivable.
"Principal Distribution Account" means the account designated as such,
established and maintained pursuant to Section 5.01(c).
"Purchase Amount" means, with respect to any Receivable that became a
Purchased Receivable, the unpaid principal balance owed by the Obligor thereon
plus unpaid interest on such amount at the applicable APR to the last day of the
month of repurchase.
"Purchased Receivable" means a Receivable purchased as of the close of
business on the last day of a Collection Period by or on behalf of the Servicer
pursuant to Section 4.07 or by or on behalf of the Seller pursuant to Section
3.03 and the Receivables Purchase Agreement.
"Rating Agency" means Moody's, Fitch or Standard & Poor's, as the
context may require. If none of Moody's, Fitch, Standard & Poor's or a successor
thereto remains in existence, "Rating Agency" shall mean any nationally
recognized statistical rating organization or other comparable Person designated
by the Depositor.
"Rating Agency Condition" means, with respect to any action, that each
Rating Agency shall have been given 10 days' (or such shorter period as shall be
acceptable to each Rating Agency) prior notice thereof and that each Rating
Agency shall not have notified the Issuer or
17
the Indenture Trustee in writing that such action will result in a reduction,
withdrawal or down-grade of the then-current rating of any Class of Notes.
"Realized Losses" means, as to any Payment Date, the amount, if any, by
which the outstanding aggregate Principal Balance of all Receivables that became
Liquidated Receivables during the related Collection Period exceeds that portion
allocable to principal of all net Liquidation Proceeds received with respect to
such Liquidated Receivables.
"Receivable Files" means the following documents with respect to each
Financed Vehicle:
(i) the fully executed original of each Receivable
(together with any agreements modifying each such Receivable, including
any extension agreement);
(ii) the original credit application, or an electronic
copy thereof;
(iii) the original certificate of title or such other
documents that the Servicer or the Seller shall keep on file in
accordance with its customary procedures evidencing the security
interest of the Seller in the related Financed Vehicle; and
(iv) any and all other documents that the Servicer shall
have kept on file in accordance with its customary procedures relating
to a Receivable, an Obligor or a Financed Vehicle.
"Receivables" means any Contract listed on Schedule B (which Schedule
may be in the form of microfiche or in electronic format).
"Receivables Purchase Agreement" means the Receivables Purchase
Agreement dated as of February 1, 2004, between National City Bank, as seller
and National City Vehicle Receivables Inc., as depositor, as the same may be
amended, supplemented or otherwise modified from time to time.
"Record Date" means (a) with respect to the Notes, as to any Payment
Date, the day immediately preceding such Payment Date unless the Notes are no
longer Book-Entry Notes, in which case the Record Date will be the last day of
the month preceding such Payment Date, and (b) with respect to the Certificates,
as to any Payment Date, the last day of the month preceding such Payment Date.
"Recoveries" means, with respect to any Collection Period after a
Collection Period in which a Receivable becomes a Liquidated Receivable, all
monies received by the Servicer with respect to such Liquidated Receivable
during that Collection Period, net of any fees, costs and expenses incurred by
and reimbursed to the Servicer in connection with the collection of such
Liquidated Receivable and any payments required by law to be remitted to the
Obligor.
"Regular Note Principal Distribution Amount" means, with respect to any
Payment Date, the excess, if any, of (a) the aggregate Outstanding Amount of the
Notes as of the day immediately preceding such Payment Date over (b) the Pool
Balance with respect to such
18
Payment Date; provided, however, that the Regular Note Principal Distribution
Amount on any Payment Date shall not exceed the Outstanding Amount of the Notes
as of the day immediately preceding such Payment Date and provided further, that
the Regular Note Principal Distribution Amount on or after the Final Scheduled
Payment Date of any Class of Notes shall not be less than the amount that is
necessary to reduce the Outstanding Amount of such Class of Notes to zero; and
provided further that, on the Reserve Account Pay-Down Date, the Regular Note
Principal Distribution Amount shall equal the amount necessary to reduce the
aggregate Outstanding Amount of the Notes to zero.
"Reserve Account" means the account designated as such, established by
the Issuer and maintained by the Indenture Trustee pursuant to Section 5.01(d).
"Reserve Account Excess Amount" means, with respect to any Payment
Date, the excess, if any, of (i) the amount on deposit in the Reserve Account on
such Payment Date (after giving effect to any withdrawals therefrom or deposits
therein relating to such Payment Date) over (ii) the Specified Reserve Account
Balance with respect to such Payment Date.
"Reserve Account Pay-Down Date" means the Payment Date immediately
following the first Payment Date on which the amount on deposit in the Reserve
Account on such Payment Date (after giving effect to any withdrawals therefrom
relating to such Payment Date) is equal to or greater than the Outstanding
Amount of the Notes on such Payment Date (after giving effect to payments on
such Payment Date).
"Reserve Account Withdrawal Amount" means, with respect to each Payment
Date, the lesser of (a) the amount then on deposit in the Reserve Account (prior
to giving effect to any withdrawals therefrom relating to any Reserve Account
Excess Amount for such Payment Date) and (b) the excess, if any, of (i) the
aggregate amount required to be paid pursuant to Sections 5.06(b)(i) through
(vii) on such Payment Date over (ii) the Available Collections for such Payment
Date; provided that, with respect to the Payment Date occurring on the Reserve
Account Pay-Down Date, the Reserve Account Withdrawal Amount shall equal the
amount necessary to reduce the Outstanding Amount of the Notes to zero.
"Reserve Initial Deposit" means $2,156,139.95.
"Responsible Officer" means the chairman of the board, the president,
any executive vice president, any vice president, the treasurer, any assistant
treasurer, the secretary, or any assistant secretary of the Servicer.
Responsible Officer of the Owner Trustee shall be as defined in the Indenture.
"Scheduled Payment" means, with respect to each Receivable, the
scheduled monthly payment amount set forth in the related Contract and required
to be paid by the Obligor during each Collection Period.
"Second Priority Principal Distribution Amount" means, with respect to
any Payment Date, the excess, if any, of (x) the aggregate Outstanding Amount of
the Class A Notes and the Class B Notes (as of the day immediately preceding
such Payment Date) over (y) the Pool Balance for such Payment Date.
19
"Securities" means the Notes and the Certificates.
"Securityholders" means the Noteholders and/or the Certificateholders,
as the context may require.
"Seller" means National City and its successors in interest, as seller
of the Receivables to the Depositor pursuant to the Receivables Purchase
Agreement.
"Servicer" means National City, as the servicer of the Receivables, and
each successor to National City (in the same capacity) pursuant to Section 7.03
or 8.03.
"Servicer Termination Event" shall have the meaning set forth in
Section 8.01.
"Servicer's Certificate" means an Officers' Certificate of the Servicer
delivered pursuant to Section 4.09, substantially in the form of Exhibit C.
"Servicing Fee" means, with respect to any Payment Date, an amount
equal to the sum of (i) the product of one-twelfth of the Servicing Fee Rate and
the Pool Balance as of the first day of the related Collection Period, and (ii)
any late fees, prepayment charges, extension fees, charges for checks returned
for insufficient funds and other administrative fees or similar charges
collected on the Receivables.
"Servicing Fee Rate" means 1.00% per annum.
"Simple Interest Method" means the method of allocating the monthly
payments received with respect to a Receivable to interest in an amount equal to
the product of (i) the applicable APR, (ii) the period of time (expressed as a
fraction of a year, based on the actual number of days in the calendar month and
365 or 366 days, as applicable, in the calendar year) elapsed since the
preceding payment was made under such Receivable and (iii) the outstanding
principal amount of such Receivable, and allocating the remainder of each such
monthly payment to principal.
"Specified Reserve Account Balance" means, with respect to each Payment
Date, an amount equal to the lesser of (a) 1.25% of the aggregate principal
balance of the Receivables as of the Cutoff Date and (b) the greater of (i)
2.00% of the aggregate principal balance of the Receivables as of the last day
of the related Collection Period and (ii) 1.00% of the aggregate principal
balance of the Receivables as of the Cutoff Date; provided, however, that in no
event shall the Specified Reserve Account Balance be greater than the Note
Balance on that Payment Date after giving effect to all payments on that Payment
Date.
"Standard & Poor's" means Standard & Poor's Ratings Services, a
division of The XxXxxx-Xxxx Companies, Inc., and its successors.
"Trust" means the Issuer.
"Trust Account Property" means the Trust Accounts, all amounts and
investments held from time to time in any Trust Account (whether in the form of
deposit accounts, Physical
20
Property, book-entry securities, uncertificated securities or otherwise) and all
proceeds of the foregoing.
"Trust Accounts" means the Collection Account, the Note Interest
Distribution Account, Principal Distribution Account and the Reserve Account.
"Trust Agreement" means the Amended and Restated Trust Agreement, dated
as of February 1, 2004, between the Depositor and the Owner Trustee, as the same
may be amended, supplemented or otherwise modified from time to time.
"Trust Officer" means, in the case of the Indenture Trustee, any
Officer within the Capital Markets Fiduciary Services department of the
Indenture Trustee (or any successor department), including any Assistant Vice
President, Assistant Treasurer, Assistant Secretary or any other officer of the
Indenture Trustee customarily performing functions similar to those performed by
any of the above designated officers and also, with respect to a particular
matter, any other officer to whom such matter is referred because of such
officer's knowledge of and familiarity with the particular subject, in each case
having direct responsibility for the administration of the Basic Documents and,
with respect to the Owner Trustee, any officer in the Corporate Trust
Administration Department of the Owner Trustee with direct responsibility for
the administration of the Trust Agreement and the other Basic Documents on
behalf of the Owner Trustee.
"UCC" means the Uniform Commercial Code, as in effect in the relevant
jurisdiction.
Section 1.02. Other Definitional Provisions.
(a) Capitalized terms used herein that are not otherwise defined
shall have the meanings ascribed thereto in the Indenture or, if not defined
therein, in the Trust Agreement.
(b) All terms defined in this Agreement shall have the defined
meanings when used in any certificate or other document made or delivered
pursuant hereto unless otherwise defined therein.
(c) As used in this Agreement and in any certificate or other
document made or delivered pursuant hereto or thereto, accounting terms not
defined in this Agreement or in any such certificate or other document, and
accounting terms partly defined in this Agreement or in any such certificate or
other document to the extent not defined, shall have the respective meanings
given to them under generally accepted accounting principles. To the extent that
the definitions of accounting terms in this Agreement or in any such certificate
or other document are inconsistent with the meanings of such terms under
generally accepted accounting principles, the definitions contained in this
Agreement or in any such certificate or other document shall control.
(d) The words "hereof," "herein," "hereunder" and words of similar
import when used in this Agreement shall refer to this Agreement as a whole and
not to any particular provision of this Agreement; Article, Section, Schedule
and Exhibit references contained in this Agreement are references to Articles,
Sections, Schedules and Exhibits in or to this Agreement
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unless otherwise specified; "or" shall include "and/or"; 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.
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ARTICLE II
CONVEYANCE OF RECEIVABLES
Section 2.01. Conveyance of Receivables.
(a) In consideration of the Issuer's delivery to or upon the order
of the Depositor of the Notes and the Certificates, the Depositor does hereby
transfer, set over and otherwise convey to the Issuer, without recourse (subject
to the obligations of the Depositor set forth herein), all right, title and
interest of the Depositor in and to:
(i) the Receivables and all moneys received thereon on or
after the Cutoff Date;
(ii) the security interests in the Financed Vehicles and
any accessions thereto granted by Obligors pursuant to the Receivables
and any other interest of the Depositor in such Financed Vehicles;
(iii) any Liquidation Proceeds and any other proceeds with
respect to the Receivables from claims on any physical damage, credit
life or disability insurance policies covering the Financed Vehicles or
the related Obligors, including any GAP, vendor's single interest or
other collateral protection insurance policy or coverage;
(iv) any property that shall have secured a Receivable and
that shall have been acquired by or on behalf of the Seller, the
Depositor, the Servicer or the Trust;
(v) the proceeds from any Servicer's errors and omissions
protection policy, any fidelity bond and any blanket physical damage
policy, to the extent such proceeds relate to any Financed Vehicle;
(vi) all documents and other items contained in the
Receivable Files;
(vii) all of the Depositor's rights (but not its
obligations) under the Receivables Purchase Agreement;
(viii) all funds on deposit from time to time in the Trust
Accounts and the Certificate Distribution Account and in all
investments therein and proceeds thereof (including all Investment
Earnings thereon);
(ix) all accounts, money, chattel paper, securities,
instruments, documents, deposit accounts, certificates of deposit,
letters of credit, advices of credit, banker's acceptances,
uncertificated securities, general intangibles, contract rights, goods
and other property consisting of, arising from or relating to any and
all of the foregoing; and
(x) the proceeds of any and all of the foregoing
(collectively, with the assets listed in clauses (i) through (ix)
above, the "Conveyed Assets").
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(b) It is the intention of the parties hereto that the transfer
and assignment contemplated by this Agreement shall constitute a sale of the
Receivables and other Conveyed Assets (for non-tax purposes) from the Depositor
to the Trust and the beneficial interest in and title to the Receivables and the
related property shall not be part of the Depositor's estate in the event of the
filing of a bankruptcy petition by or against the Depositor under any bankruptcy
law. In the event that, notwithstanding the intent of the parties hereto, the
transfer and assignment contemplated hereby is held not to be a sale (for
non-tax purposes), this Agreement shall constitute a security agreement under
applicable law, and, in such event, the Depositor shall be deemed to have
granted, and the Depositor hereby grants, to the Issuer a security interest in
the Conveyed Assets, for the benefit of the Trust and its assignees as security
for the Depositor's obligations hereunder and the Depositor consents to the
pledge of the foregoing Conveyed Assets under the Indenture to the Indenture
Trustee.
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ARTICLE III
THE RECEIVABLES
Section 3.01. Representations and Warranties of the Seller.
(a) The Seller has made each of the representations and warranties
set forth in Exhibit A hereto under the Receivables Purchase Agreement and has
consented to the assignment by the Depositor to the Issuer of the Depositor's
rights with respect thereto. Such representations and warranties speak as of the
execution and delivery of this Agreement and as of the Closing Date, but shall
survive the transfer and assignment of the Receivables to the Issuer and the
pledge of such Receivables to the Indenture Trustee. Pursuant to Section 2.01 of
this Agreement, the Depositor has transferred and conveyed to the Issuer, as
part of the assets of the Issuer, its rights under the Receivables Purchase
Agreement, including the representations and warranties of the Seller therein as
set forth in Exhibit A, upon which representations and warranties the Issuer
relies in accepting the Receivables and delivering the Securities, together with
all rights of the Depositor with respect to any breach thereof, including the
right to require the Seller to acquire Receivables in accordance with the
Receivables Purchase Agreement. It is understood and agreed that the
representations and warranties referred to in this Section shall survive the
transfer and delivery of the Receivables to the Issuer or the Custodian.
(b) The Seller hereby agrees that the Issuer shall have the right
to enforce any and all rights under the Receivables Purchase Agreement assigned
to the Issuer herein, including the right to cause the Seller to acquire any
Receivable with respect to which it is in breach of any of its representations
and warranties set forth in Exhibit A, directly against the Seller as though the
Issuer were a party to the Receivables Purchase Agreement, and the Issuer shall
not be obligated to exercise any such rights indirectly through the Depositor.
Section 3.02. Representations and Warranties of the Depositor. The
Depositor makes the following representations and warranties, on which the
Issuer relies in accepting the Receivables and delivering the Securities. Such
representations and warranties speak as of the execution and delivery of this
Agreement and as of the Closing Date, but shall survive the transfer and
assignment of the Receivables by the Depositor to the Issuer and the pledge
thereof to the Indenture Trustee in accordance with the terms of the Indenture:
(a) Title. The Depositor shall convey to the Issuer all right,
title and interest of the Depositor in and to the Receivables, including all
right, title and interest of the Depositor in and to the security interests in
the related Financed Vehicles.
(b) All Filings Made. The Depositor has caused all filings
(including UCC filings) to be made in Delaware with respect to the sale of the
Receivables to the Issuer and the pledge contemplated in the Basic Agreements to
the Indenture Trustee.
(c) Liens. The Depositor has not taken any actions to create,
incur or suffer to exist any Lien on or restriction on transferability of any
Receivable except for the Lien of the Indenture and the restrictions on
transferability imposed by this Agreement.
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(a) Perfection. The Depositor further makes all the
representations, warranties and covenants set forth in Exhibit F.
Section 3.03. Repurchase Upon Breach. Each of the Depositor, the Owner
Trustee, the Indenture Trustee, the Seller and the Servicer shall inform the
other parties to this Agreement promptly, in writing, upon the discovery by it
of any breach of the Seller's representations and warranties made pursuant to
Section 3.01 of this Agreement or Section 3.02 of the Receivables Purchase
Agreement, without regard to any limitation set forth in such representation or
warranty concerning the knowledge of the Seller as to the facts stated therein.
Unless any such breach shall have been cured by the last day of the first
Collection Period commencing after the discovery or notice thereof, the Seller
shall be obligated and, if necessary, the Issuer shall enforce the obligations
of the Seller under the Receivables Purchase Agreement, to purchase as of such
last day any Receivable materially and adversely affected by any such breach;
provided, however, that, notwithstanding the qualification of any of the
Seller's representations and warranties made pursuant to Section 3.01 of this
Agreement or Section 3.02 of the Receivables Purchase Agreement as to the
Seller's knowledge, a breach in the substance of any such representation and
warranty (without giving effect to such qualification as to knowledge) shall
require the Seller to perform its repurchase or cure obligations set forth in
this Section 3.03. In consideration of the repurchase of any such Receivable,
the Seller shall remit the Purchase Amount to the Collection Account and notify
in writing the Indenture Trustee of such deposit in the manner specified in
Section 5.04. The sole remedy of the Issuer, the Indenture Trustee, the
Noteholders, or the Certificateholders with respect to the unpaid balance plus
accrued interest on any Receivable as to which a breach of a representation or
warranty has occurred pursuant to Section 3.01 of this Agreement or Section 3.02
of the Receivables Purchase Agreement or the agreement contained in this Section
shall be to require the Seller to purchase such Receivable pursuant to this
Section or to repurchase such Receivable pursuant to the Receivables Purchase
Agreement.
Section 3.04. Custody of Receivable Files. To assure uniform quality in
servicing the Receivables and to reduce administrative costs, the Issuer hereby
revocably appoints the Servicer, and the Servicer hereby accepts such
appointment, to act for the benefit of the Issuer and the Indenture Trustee as
custodian of the Receivable Files, which are hereby constructively delivered by
the Issuer to the Indenture Trustee.
Section 3.05. Duties of Servicer as Custodian.
(a) Safekeeping. The Servicer shall hold the Receivable Files as
custodian for the benefit of the Issuer and the Indenture Trustee, and shall
maintain such accurate and complete accounts, records and computer systems
pertaining to each Receivable File as shall enable the Issuer to comply with
this Agreement. In performing its duties as custodian, the Servicer shall act
with reasonable care, using that degree of skill and attention that the Servicer
exercises with respect to the receivable files relating to all comparable
automotive 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
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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 C to
this Agreement or at such other office as shall be specified to the Issuer and
the Indenture Trustee by written notice not later than 90 days after any change
in location. The Servicer shall make available to the Issuer and the Indenture
Trustee or their duly authorized representatives, attorneys or auditors a list
of locations of the Receivable Files and the related accounts, records and
computer systems maintained by the Servicer at such times during normal business
hours as the Issuer shall reasonably instruct, which does not unreasonably
interfere with the Servicer's normal operations or customer or employee
relations.
(c) Release of Documents. Upon instruction from the Indenture
Trustee or, if the Notes have been paid in full, from the Owner Trustee, the
Servicer shall release any Receivable File to the Indenture Trustee or the Owner
Trustee, as the case may be, or to the agent or designee of the Indenture
Trustee or the Owner Trustee, as the case may be, at such place or places as the
Indenture Trustee or the Owner Trustee, as applicable, may designate, as soon as
practicable without resulting in unreasonable interference with the Servicer's
normal operations or customer or employee relations. Upon the release and
delivery of any such document in accordance with the instructions of the
Indenture Trustee or the Owner Trustee, as the case may be, the Servicer shall
be released from any further liability and responsibility under this Section
3.05 with respect to such documents and any other provision of this Agreement if
the fulfillment of the Servicer's responsibilities is dependent upon possession
of such documents, unless and until such time as such documents shall be
returned to the Servicer. In no event shall the Servicer be responsible for any
loss occasioned by the Indenture Trustee's or the Owner Trustee's failure to
return any Receivable File or any portion thereof in a timely manner.
Section 3.06. Instructions; Authority to Act. The Servicer shall be
deemed to have received proper instructions with respect to the Receivable Files
upon its receipt of written instructions signed by a Trust Officer of the
Indenture Trustee or, if the Notes have been paid in full, of the Owner Trustee.
Section 3.07. Custodian's Indemnification. The Servicer, as custodian,
shall indemnify the Trust, the Owner Trustee and the Indenture Trustee and each
of their officers, directors, employees and agents for any and all liabilities,
obligations, losses, compensatory damages, payments, costs, or expenses of any
kind whatsoever that may be imposed on, incurred by or asserted against the
Trust, the Owner Trustee or the Indenture Trustee or any of their officers,
directors, employees or agents as the result of any improper act or omission in
any way relating to the maintenance and custody by the Servicer as custodian of
the Receivable Files; provided, however, that the Servicer shall not be liable
to the Trust, the Owner Trustee, the Indenture Trustee or any such officer,
director, employee or agent of the Trust, the Owner Trustee or the Indenture
Trustee for any portion of any such amount resulting from the willful
misfeasance, bad faith or negligence of the Owner Trustee or the Indenture
Trustee, as the case may be, or any
27
such officer, director, employee or agent of the Trust, the Owner Trustee or the
Indenture Trustee, as the case may be.
Indemnification under this Section shall survive the resignation or
removal of the Servicer or the termination of this Agreement with respect to
acts or omissions of such Servicer preceding such resignation or removal and
shall include reasonable fees and expenses of counsel and expenses of
litigation. If the Servicer shall have made any indemnity payments pursuant to
this Section and the Person to or on behalf of whom such payments are made
thereafter collects any of such amounts from others, such Person shall promptly
repay such amounts to the Servicer, without interest.
Section 3.08. Effective Period and Termination. The Servicer's
appointment as custodian shall become effective as of the Cutoff Date and shall
continue in full force and effect unless and until terminated pursuant to this
Section 3.08. If the Servicer or any successor Servicer shall resign as Servicer
in accordance with the provisions of this Agreement or if all of the rights and
obligations of the Servicer or any successor Servicer shall have been terminated
under Section 8.02, the appointment of such Servicer as custodian may be
terminated by the Issuer, by the Indenture Trustee or by the Noteholders
evidencing not less than 25% of the Controlling Class or, if no Notes are
Outstanding, by Holders (other than the Seller or an Affiliate thereof) of
Certificates evidencing not less than 25% of the percentage interests in the
Certificates, in the same manner as the Indenture Trustee or such
Securityholders may terminate the rights and obligations of the Servicer under
Section 8.02. 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, only by written notification to the Servicer pursuant to Section
8.02. As soon as practicable after any termination of such appointment (but in
no event more than ten (10) Business Days after any such termination of
appointment), the Servicer shall deliver the Receivable Files to the Indenture
Trustee or the Indenture Trustee's agent at such place or places as the
Indenture Trustee may reasonably designate. Notwithstanding the termination of
National City as custodian, the Indenture Trustee and the Owner Trustee agree
that, upon any such termination and for so long as National City remains the
Servicer hereunder, the Indenture Trustee or the Owner Trustee, as the case may
be, shall provide, or cause its agent to provide, access to the Receivable Files
to the Servicer for the purpose of enabling the Servicer to perform its
obligations under this Agreement with respect to the servicing of the
Receivables.
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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 and the Indenture Trustee, shall manage, service, administer and make
collections on the Receivables and perform the other actions required by the
Servicer under this Agreement. The Servicer shall service the Receivables in
accordance with its customary and usual procedures and consistent with the
procedures employed by institutions that service motor vehicle retail
installment sale contracts and motor vehicle retail installment loan contracts.
The Servicer's duties shall include the collection and posting of all payments,
responding to inquiries of Obligors, investigating delinquencies, sending
monthly billing statements to Obligors, reporting any required 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 performing the other duties specified herein. The Servicer
also shall administer and enforce all rights of the holder of the Receivables
under the Receivables and the Dealer Agreements and assignment forms. To the
extent consistent with the standards, policies and procedures otherwise required
hereby, the Servicer shall follow its customary standards, policies and
procedures and shall have full power and authority, acting alone, to do any and
all things in connection with the managing, servicing, administration and
collection of the Receivables that it may deem necessary or desirable. Without
limiting the generality of the foregoing, the Servicer is hereby authorized and
empowered to execute and deliver, on behalf of itself, the Issuer, the Owner
Trustee, the Indenture Trustee, the Certificateholders and the Noteholders, or
any of them, any and all instruments of satisfaction or cancellation, or of
partial or full release or discharge, and all other comparable instruments with
respect to the Receivables and with respect to the Financed Vehicles; provided,
however, that, notwithstanding the foregoing, the Servicer shall not, except
pursuant to an order from a court of competent jurisdiction or as otherwise
required by applicable law, execute documents that would release an Obligor from
payment of any unpaid amount due under any Receivable, reduce the related APR or
waive the right to collect the unpaid balance of any Receivable from an Obligor.
Notwithstanding the foregoing, in connection with the settlement by the Servicer
of a defaulted Receivable, the Servicer may settle the account of such
Receivable for less than the full amount of principal and interest due on such
Receivable, if in its reasonable discretion, consistent with its customary
servicing standards, it believes that the acceptance of the settlement proceeds
from the related Obligor would result in the Trust or Indenture Trustee
receiving a greater amount of collections than the Liquidation Proceeds that
would result from repossessing and liquidating the related Financed Vehicle. The
Servicer is hereby authorized to commence, in its own name or in the name of the
Issuer, the Indenture Trustee, the Owner Trustee, the Certificateholders or the
Noteholders, a legal proceeding to enforce a Receivable pursuant to Section 4.03
or to commence or participate in any other legal proceeding (including a
bankruptcy proceeding) relating to or involving a Receivable, an Obligor or a
Financed Vehicle. If the Servicer commences or participates in any such legal
proceeding in its own name, the Indenture Trustee or the Issuer shall thereupon
be deemed to have automatically assigned the applicable Receivable to the
Servicer solely for purposes of commencing or participating in such proceeding
as a party or claimant, and the Servicer is authorized and empowered by the
Indenture Trustee or the Issuer to execute and
29
deliver in the Indenture Trustee's or the Issuer's name any notices, demands,
claims, complaints, responses, affidavits or other documents or instruments in
connection with any such proceeding. If in any enforcement suit or legal
proceeding it shall be held that the Servicer may not enforce a Receivable on
the ground that it shall not be a real party in interest or a holder entitled to
enforce such Receivable, the Owner Trustee shall, at the Servicer's expense and
direction, take steps to enforce such Receivable, including bringing suit in its
name or the name of the Issuer, the Indenture Trustee, the Certificateholders or
the Noteholders. The Owner Trustee and the Indenture Trustee shall upon the
written request of the Servicer furnish the Servicer with any powers of attorney
and other documents reasonably necessary or appropriate to enable the Servicer
to carry out its servicing and administrative duties hereunder.
Section 4.02. Collection of Receivable Payments; Modifications of
Receivables.
(a) Consistent with the standards, policies and procedures
required by this Agreement, the Servicer shall make 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 motor vehicle
receivables that it services for itself and otherwise act with respect to the
Receivables in such a manner as will, in the reasonable judgment of the
Servicer, maximize the amount to be received by the Trust with respect thereto.
The Servicer is authorized in its discretion to waive any prepayment charge,
late payment charge or any other similar fees that may be collected in the
ordinary course of servicing any Receivable.
(b) The Servicer may grant payment extensions on the Receivables
only to the extent permissible in its extension policy attached hereto as
Exhibit D-1; provided, however, that no such extension shall extend the final
payment date on any Receivable beyond the last day of the Collection Period
ending six months prior to the Class C Final Scheduled Payment Date.
(c) Upon any extension not in accordance with this Section, the
Servicer shall be required to purchase the related Receivable in accordance with
Section 4.07.
Section 4.03. Realization upon Receivables. The Servicer shall,
consistent with customary servicing procedures and the terms of this Agreement,
act with respect to the Receivables in such manner as, in the Servicer's
reasonable judgment, will maximize the receipt of principal and interest on all
Receivables and Liquidation Proceeds in respect of Liquidated Receivables.
Consistent with the standards, policies and procedures required by this
Agreement, the Servicer shall use its best efforts to repossess or otherwise
convert the ownership of and liquidate any Financed Vehicle securing a
Receivable with respect to which the Servicer shall have determined that
eventual payment in full is unlikely. The Servicer shall begin such repossession
and conversion procedures as soon as practicable after default on such
Receivable in accordance with its customary procedures; provided, however, that
the Servicer may elect not to repossess a Financed Vehicle within such time
period if in its good faith judgment it determines that the proceeds ultimately
recoverable with respect to such Receivable would be increased by forbearance.
In repossessing or otherwise converting the ownership of a Financed Vehicle and
liquidating a Receivable, the Servicer is authorized to follow such customary
practices and procedures as it shall deem necessary or advisable, consistent
with the standard of
30
care required by Section 4.01, which practices and procedures may include the
sale of the related Financed Vehicle at public or private sale, the submission
of claims under an insurance policy and other actions by the Servicer in order
to realize upon a Receivable; provided, however, that, in any case in which the
Financed Vehicle shall have suffered damage, the Servicer shall not expend funds
in connection with any repair or towards the repossession of such Financed
Vehicle unless it shall determine in its reasonable judgment that such repair or
repossession shall increase the related Liquidation Proceeds by an amount
materially greater than the expense for such repair or repossession. The
Servicer shall be entitled to recover all expenses incurred by it that are
reasonably allocated to repossessing and liquidating a Financed Vehicle into
cash proceeds, but only out of the cash proceeds of the sale of such Financed
Vehicle or any deficiency obtained from the related Obligor.
Section 4.04. [Reserved].
Section 4.05. Maintenance of Security Interests in Financed Vehicles.
(a) The Servicer shall, in accordance with its customary servicing
procedures, take such steps as are necessary to maintain perfection of the
security interest created by each Receivable in the related Financed Vehicle.
The Servicer is hereby authorized to take such steps as are necessary to
re-perfect such security interest on behalf of the Issuer and the Indenture
Trustee in the event of the relocation of a Financed Vehicle, or for any other
reason. In the event that the assignment of a Receivable to the Indenture
Trustee is insufficient, without a notation on the related Financed Vehicle's
certificate of title, or without fulfilling any additional administrative
requirements under the laws of the State in which such Financed Vehicle is
located, to perfect a security interest in the related Financed Vehicle in favor
of the Indenture Trustee, the Servicer hereby agrees that the designation of
National City as the secured party on the certificate of title is in its
capacity as agent of the Indenture Trustee.
(b) The Depositor, the Owner Trustee, the Indenture Trustee and
the Servicer hereby agree that, upon the occurrence of a Servicer Termination
Event, the Controlling Party may take or cause to be taken such actions as may,
in the opinion of counsel to the Controlling Party, be necessary to perfect or
re-perfect the security interests in the Financed Vehicles in the name of the
Issuer or the Indenture Trustee, including by amending the title documents of
the Financed Vehicles. The Servicer hereby agrees to pay all expenses related to
such perfection or reperfection and to take all action necessary therefor. If
such expenses are not paid within 15 days after delivery of any invoice
therefor, such expenses shall be paid pursuant to Section 5.06(b)(ix).
Section 4.06. Covenants of Servicer. By its execution and delivery of
this Agreement, the Servicer hereby covenants as follows (upon which covenants
the Issuer, the Indenture Trustee and the Owner Trustee rely in accepting the
Receivables and delivering the applicable Securities):
(a) Liens in Force. No Financed Vehicle securing a Receivable
shall be released in whole or in part from the security interest granted by such
Receivable, except upon payment in full of such Receivable or as otherwise
contemplated herein;
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(b) No Impairment. The Servicer shall do nothing to impair the
rights of the Trust in the property of the Trust;
(c) No Amendments. The Servicer shall not extend or otherwise
amend the terms of any Receivable, except in accordance with Sections 4.01 and
Section 4.02; and
(d) Restrictions on Liens. The Servicer shall not (A) create,
incur or suffer to exist, or agree to create, incur or suffer to exist, or
consent to or permit in the future (upon the occurrence of a contingency or
otherwise) the creation, incurrence or existence of any Lien on or restriction
on transferability of any Receivable except for the Lien of the Indenture and
the restrictions on transferability imposed by this Agreement or (B) other than
as contemplated herein, sign or file any UCC financing statements in any
jurisdiction that names National City or the Depositor as a debtor, and any
Person other than the Depositor, the Indenture Trustee or the Issuer as a
secured party, or sign any security agreement authorizing any secured party
thereunder to file any such financing statement, in each case with respect to
the Receivables or the related property.
Section 4.07. Purchase of Receivables Upon Breach. Upon discovery by
any of the Servicer, the Seller, the Depositor, the Owner Trustee or the
Indenture Trustee of a breach of any of the covenants set forth in Sections
4.02(b), 4.05(a) or 4.06, the party discovering such breach shall give prompt
written notice to the others; provided, however, that the failure to give any
such notice shall not affect any obligation of the Servicer under this Section
4.07. On or before the last day of the first Collection Period commencing after
its discovery or receipt of notice of the breach of any covenant set forth in
Sections 4.02(b), 4.05(a) or 4.06 that materially and adversely affects the
interests of the Issuer, the Indenture Trustee, the Owner Trustee, the
Certificateholders or the Noteholders in any Receivable, the Servicer shall,
unless such breach shall have been cured in all material respects by such date,
purchase from the Issuer the Receivable affected by such breach. In
consideration of the purchase of any such Receivable, the Servicer shall remit
the related Purchase Amount into the Collection Account, with written notice to
the Indenture Trustee of such deposit, in the manner specified in Section 5.04.
Subject to Section 7.02, it is understood and agreed that the obligation of the
Servicer to purchase any Receivable with respect to which such a breach has
occurred and is continuing shall, if such obligation is fulfilled, constitute
the sole remedy against the Servicer for such breach available to the Issuer,
the Owner Trustee, the Indenture Trustee, the Certificateholders or the
Noteholders.
Section 4.08. Servicing Fee. The Servicing Fee shall be payable to the
Servicer on each Payment Date. That part of the Servicing Fee based on the
Servicing Fee Rate shall be calculated on the basis of a 360-day year comprised
of twelve 30-day months. The Servicer shall be required to pay all expenses
incurred by it in connection with its activities under this Agreement (including
taxes imposed on the Servicer and expenses incurred in connection with
distributions and reports made by the Servicer to the Owner Trustee and the
Indenture Trustee), except to the extent otherwise expressly provided herein.
Section 4.09. Servicer's Certificate. Not later than 10:00 a.m. (New
York City time) on each Determination Date, the Servicer shall deliver to the
Owner Trustee, the Indenture Trustee and the Depositor, with a copy to each
Rating Agency and Xxxxxxx Lynch, Pierce, Xxxxxx & Xxxxx Incorporated, a
Servicer's Certificate containing all information necessary to make the
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distributions to be made on the related Payment Date pursuant to Section 5.06
for the related Collection Period and any other information the Indenture
Trustee may reasonably request. Such Servicer's Certificate shall be certified
by a Responsible Officer of the Servicer that the information provided is
complete and no defaults have occurred. With respect to each Collection Period,
Receivables to be purchased by the Servicer or to be repurchased by the Seller
and each Receivable that became a Liquidated Receivable, in each case, during
such Collection Period shall be identified by the Servicer by account number
with respect to such Receivable (as specified in the applicable Schedule of
Receivables).
Section 4.10. Annual Statement as to Compliance; Notice of Servicer
Termination Event; Xxxxxxxx-Xxxxx.
(a) The Servicer shall deliver to the Owner Trustee, the Indenture
Trustee and each Rating Agency, on or before March 15 of each year, beginning
March 15, 2005, an Officer's Certificate signed by a Responsible Officer of the
Servicer, stating that (i) a review of the activities of the Servicer during the
preceding calendar year (or, in the case of the first such Officer's
Certificate, the period from the Closing Date through December 31 of such year)
and of the performance of its obligations under this Agreement has been made
under such officer's supervision and (ii) to such officer's knowledge, based on
such review, the Servicer has fulfilled all its obligations under this Agreement
throughout such period or, if there has been a default in the fulfillment of any
such obligation, specifying each such default known to such officer and the
nature and status thereof.
(b) The Servicer shall deliver to the Owner Trustee, the Indenture
Trustee and each Rating Agency, promptly after having obtained knowledge
thereof, but in no event later than two Business Days thereafter, written notice
in an Officer's Certificate of any event that is, or with the giving of notice
or lapse of time or both would become, a Servicer Termination Event under
Section 8.01.
(c) The Servicer shall provide on a timely basis for filing with
the applicable reports of the Issuer under the Securities Exchange Act of 1934,
as amended, the certifications, if any, required by Section 302 of the
Xxxxxxxx-Xxxxx Act of 2002 to be included in those reports.
Section 4.11. Annual Independent Accountants' Report. The Servicer
shall cause a firm of independent certified public accountants, which may also
render other services to the Servicer or its Affiliates, to deliver to the Owner
Trustee, the Indenture Trustee and each Rating Agency, on or before March 15 of
each year, beginning March 15, 2005, a report addressed to the Board of
Directors of the Servicer, the Owner Trustee and the Indenture Trustee, to the
effect that such firm has audited the books and records of the Servicer and
issued its report thereon and that (i) such audit 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; (ii) the firm is independent of the Depositor
and the Servicer within the meaning of the Code of Professional Ethics of the
American Institute of Certified Public Accountants; (iii) a review in accordance
with agreed-upon procedures was made of the Servicer's Certificates relating to
the preceding calendar year (or, in the case of the first such report, the
period from the Closing Date through December 31 of such year), including
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the delinquency, default and loss statistics required to be specified therein
and, except as disclosed in the accountants' report, no exceptions or errors in
the Servicer's Certificates were found; and (iv) a review in accordance with
agreed-upon procedures was made of the Servicer's compliance with its servicing
obligations in this Agreement, including without limitation the obligations of
the Servicer set forth in Section 4.02(b) hereof, and, except as disclosed in
the accountants' report, no exceptions to such compliance were found.
Section 4.12. Access to Certain Documentation and Information Regarding
Receivables. The Servicer shall provide to representatives of the Owner Trustee,
the Indenture Trustee, the Certificateholders and the Noteholders reasonable
access to the documentation regarding the Receivables and the related Trust
property. Access shall be afforded without charge, but only upon reasonable
request, which does not unreasonably interfere with the Servicer's normal
business operations or employee or customer relations, and during the normal
business hours at the offices of the Servicer. Nothing in this Section shall
affect the obligation of the Servicer to observe any applicable law prohibiting
disclosure of information regarding the Obligors and the failure of the Servicer
to provide access to information as a result of such obligation shall not
constitute a breach of this Section.
Section 4.13. Term of Servicer. The Servicer hereby covenants and
agrees to act as Servicer under, and for the term of, this Agreement.
Section 4.14. Access to Information Regarding Trust and Basic
Documents. The Servicer shall furnish to the Owner Trustee from time to time
such information regarding the Trust or the Basic Documents as the Owner Trustee
shall reasonably request. Upon request, the Indenture Trustee shall furnish to
the Owner Trustee annually a copy of the Note Register; provided, however, the
Indenture Trustee shall not be obligated to furnish a copy of the Note Register
more than once each calendar year. The Servicer shall furnish to the Owner
Trustee copies of all documents and reports required to be provided by the
Servicer pursuant to this Article IV.
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ARTICLE V
DISTRIBUTIONS; STATEMENTS TO SECURITYHOLDERS
Section 5.01. Establishment of Accounts.
(a) The Servicer, for the benefit of the Noteholders and the
Certificateholders, shall establish and maintain in the name of the Indenture
Trustee an Eligible Deposit Account (the "Collection Account"), bearing a
designation clearly indicating that the funds deposited therein are held for the
benefit of the Noteholders and the Certificateholders.
(b) The Issuer, for the benefit of the Noteholders, shall cause
the Indenture Trustee to establish with and maintain in the name of the
Indenture Trustee an Eligible Deposit Account (the "Note Interest Distribution
Account"), bearing a designation clearly indicating that the funds deposited
therein are held for the benefit of the Noteholders.
(c) The Issuer, for the benefit of the Noteholders, shall cause
the Indenture Trustee to establish with and maintain in the name of the
Indenture Trustee an Eligible Deposit Account (the "Principal Distribution
Account"), bearing a designation clearly indicating that the funds deposited
therein are held for the benefit of the Noteholders.
(d) The Issuer, for the benefit of the Noteholders, shall cause
the Indenture Trustee to establish with and maintain, in the name of the
Indenture Trustee, an Eligible Deposit Account (the "Reserve Account"), bearing
a designation clearly indicating that the funds deposited therein are held for
the benefit of the Noteholders.
(e) [Reserved].
(f) [Reserved].
(g) Funds on deposit in the Collection Account and the Reserve
Account shall be invested by the Indenture Trustee in Eligible Investments
selected in writing by the Servicer; provided, however, that if the Servicer
fails to select any Eligible Investment, the Indenture Trustee shall invest such
funds in an Eligible Investment described in clause (d) of the definition of
"Eligible Investment" herein. All such Eligible Investments shall be held by the
Indenture Trustee for the benefit of the Noteholders and/or the
Certificateholders, as applicable. Other than as permitted in writing by the
Rating Agencies in the case of the Reserve Account, funds on deposit in the
Collection Account and the Reserve Account shall be invested in Eligible
Investments that will mature not later than the Business Day immediately
preceding the next Payment Date. If the Servicer shall so request, funds
deposited in the Collection Account or the Reserve Account on a day that
immediately precedes a Payment Date upon the maturity of any Eligible
Investments may, at the discretion of the Indenture Trustee, be invested
overnight.
(h) In the event that there are Net Investment Losses in Eligible
Investments chosen by the Servicer, the Servicer shall deposit into the
Collection Account, no later than one (1) Business Day prior to the Payment
Date, the amount of the Net Investment Losses. The Indenture Trustee shall not
be held liable in any way for any Net Investment Losses, except for
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losses attributable to the Indenture Trustee's failure to make payments on such
Eligible Investments issued by the Indenture Trustee, in its commercial capacity
as principal obligor and not as Indenture Trustee, in accordance with their
terms.
(i) (i) The Indenture Trustee shall possess all right, title and
interest in all funds and investment property on deposit from time to time in or
credited to the Trust Accounts and in all proceeds thereof (including all income
thereon) and all such funds, investment property, proceeds and income shall be
part of the Trust Estate, except as otherwise set forth herein. The Trust
Accounts shall be under the sole dominion and control of the Indenture Trustee
for the benefit of the Noteholders and, as applicable, the Certificateholders.
If, at any time, any Trust Account ceases to be an Eligible Deposit Account, the
Indenture Trustee (or, in the case of the Collection Account, 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 from the account that is no longer an Eligible Deposit Account
to the Trust Account.
(ii) With respect to the Trust Account Property, the
Indenture Trustee agrees, by its acceptance hereof, that:
(A) any Trust Account Property that is held in deposit
accounts shall be held solely in the Eligible Deposit Accounts, subject to the
last sentence of Section 5.01(i)(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 of the UCC) acting solely
for the Indenture Trustee;
(C) any Trust Account Property that is a book-entry security
held through the Federal Reserve System pursuant to federal book-entry
regulations shall be delivered in accordance with paragraph (b) of the
definition of "Delivery" and shall be maintained by the Indenture Trustee,
pending maturity or disposition, through continued book-entry registration of
such Trust Account Property as described in such paragraph;
(D) any Trust Account Property that is an "uncertificated
security" under Article 8 of the UCC and that is not governed by clause (C)
above shall be delivered to the Indenture Trustee in accordance with paragraph
(c) of the definition of "Delivery" and shall be maintained by the Indenture
Trustee, pending maturity or disposition, through continued registration of the
Indenture Trustee's (or its nominee's) ownership of such security; and
(E) any Trust Account Property that is a security entitlement
shall be delivered in accordance with paragraph (d) of the definition herein of
"Delivery" and shall be held pending
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maturity or disposition by the Indenture Trustee or a securities intermediary
acting solely for the Indenture Trustee.
(iii) The Servicer shall have the power, revocable by the
Indenture Trustee or by the Owner Trustee with the consent of the
Indenture Trustee, following a Servicer Termination Event to instruct
the Indenture Trustee to make withdrawals and payments from the Trust
Accounts and the Certificate Distribution Account for the purpose of
withdrawing any amounts deposited in error into such accounts.
Section 5.02. Collections. The Servicer shall remit to the Collection
Account all payments by or on behalf of the Obligors with respect to the
Receivables (other than Purchased Receivables), all Liquidation Proceeds and any
subsequent Recoveries on the Business Day prior to the Payment Date for so long
as (i) National City is the Servicer, (ii) the Servicer has the Minimum Required
Rating, and (iii) no Servicer Termination Event shall have occurred and be
continuing. If (i) National City is no longer the Servicer, (ii) National City
no longer has the Minimum Required Rating, or (iii) a Servicer Termination Event
shall have occurred and be continuing, the Servicer shall remit to the
Collection Account all payments by or on behalf of the Obligors with respect to
the Receivables (other than Purchased Receivables), all Liquidation Proceeds and
any subsequent Recoveries within two Business Days of receipt thereof.
Notwithstanding anything herein to the contrary, so long as National City is the
Servicer, National City may withhold from deposit into the Collection Account
any amounts indicated on the related Servicer's Certificate as being due and
payable to the Seller. For purposes of this Article V, the phrase "payments by
or on behalf of Obligors" shall mean payments made with respect to the
Receivables by Persons other than the Servicer or the Seller.
Section 5.03. Application of Collections.
(a) All payments received from or on behalf of an Obligor during
each Collection Period with respect to each Receivable (other than a Purchased
Receivable), shall be applied to interest, fees and principal in accordance with
the Simple Interest Method and the Servicer's customary procedures. Generally,
subject to the foregoing sentence, the Servicer applies obligor payments, first
to interest, second to late charges and certain other charges and third to
unpaid principal.
(b) Without limitation of Section 5.03(a), if an Obligor on a
Receivable, in addition to making the payment due thereon in a Collection
Period, makes one or more additional scheduled payments in such Collection
Period, the additional scheduled payments made in such Collection Period shall
be treated as a partial principal prepayment and shall be applied to reduce the
principal balance of such Receivable in such Collection Period and, unless
otherwise requested by such Obligor, such Obligor shall not be required to make
any scheduled payment in respect of such Receivable for the number of due dates
corresponding to the number of such additional scheduled payments (the
"Paid-Ahead Period"). During the Paid-Ahead Period, interest shall continue to
accrue on the Principal Balance of such Receivable, as reduced by the
application of such additional scheduled payments.
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Section 5.04. Purchase Amounts. For so long as (i) National City is the
Servicer, (ii) National City has the Minimum Required Rating, and (iii) no
Servicer Termination Event shall have occurred and be continuing, the Servicer
and the Seller shall be entitled pursuant to the first sentence of Section 5.02
to deposit or cause to be deposited the aggregate Purchase Amounts in the
Collection Account on the Business Day prior to the Payment Date immediately
following the Collection Period during which the related purchase of Purchased
Receivables shall have occurred, rather than on the date of the related purchase
of Purchased Receivables. If, however, (i) National City no longer is the
Servicer, (ii) National City no longer has the Minimum Required Rating, or (iii)
a Servicer Termination Event shall have occurred and be continuing, the Servicer
or the Seller shall deposit or cause to be deposited in the Collection Account
the aggregate Purchase Amount with respect to Purchased Receivables on the date
of the related purchase of such Purchased Receivables and the Servicer shall
deposit therein all amounts to be paid under Section 4.07 and Section 9.01 on
the date of the related purchase of Purchased Receivables.
Section 5.05. Permitted Withdrawals from Collection Account. On each
Distribution Date, the Indenture Trustee, at the direction of the Servicer,
shall, in addition to, and prior to, the withdrawals from the Collection Account
on such Distribution Date pursuant to Section 5.06(b), make the following
withdrawals from the Collection Account, for the following purposes:
(a) to withdraw any amount not required to be deposited in the
Collection Account or deposited therein in error; and
(b) to clear and terminate the Collection Account in connection
with the termination of this Agreement.
The Servicer shall keep and maintain an accounting, as part of the
monthly Servicer's Certificate prepared by the Servicer, for the purpose of
justifying any withdrawals from the Collection Account pursuant to this Section
5.05. It is understood that whenever reference is made in this Agreement to
withdrawals by the Servicer from the Collection Account and distributions by the
Servicer of amounts so withdrawn, such withdrawals and distributions shall be
made or caused to be made by the Indenture Trustee in accordance with written
instructions from the Servicer signed by a Responsible Officer of the Servicer.
Section 5.06. Distributions.
(a) On each Determination Date, the Servicer shall calculate all
amounts required to be deposited pursuant to this Section and deliver a
Servicer's Certificate pursuant to Section 4.09.
(b) On each Payment Date, the Servicer shall instruct the
Indenture Trustee in writing (based on the information contained in the
Servicer's Certificate delivered on the related Determination Date pursuant to
Section 4.09) to make payments, deposits and distributions on such Payment Date,
to the extent of funds on deposit in the Collection Account with respect to such
Payment Date (including funds, if any, deposited therein from the Reserve
Account pursuant to Section 5.07(b), pursuant to clauses (i) through (x) below,
in the following order and priority:
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(i) to the Servicer, from Available Funds, the Servicing
Fee for the related Collection Period (and any accrued and unpaid
Servicing Fees from prior Collection Periods);
(ii) to the Note Interest Distribution Account, for
payment to the Class A Noteholders pursuant to Section 5.06(c)(i), from
the Available Funds remaining after the application of clause (i), the
Class A Noteholders' Interest Distributable Amount;
(iii) to the Principal Distribution Account, for
distribution pursuant to Section 5.06(d), from the Available Funds
remaining after the application of clauses (i) and (ii), the First
Priority Principal Distribution Amount, if any;
(iv) to the Note Interest Distribution Account, for
payment to the Class B Noteholders pursuant to Section 5.06(c)(ii),
from the Available Funds remaining after the application of clauses (i)
through (iii), the Class B Noteholders' Interest Distributable Amount;
(v) to the Principal Distribution Account, for
distribution pursuant to Section 5.06(d), from the Available Funds
remaining after the application of clauses (i) through (iv), the Second
Priority Principal Distribution Amount, if any, reduced by any First
Priority Principal Distribution Amount paid pursuant to clause (iii)
above;
(vi) to the Note Interest Distribution Account, for
payment to the Class C Noteholders pursuant to Section 5.06(c)(iii),
from the Available Funds remaining after the application of clauses (i)
through (v), the Class C Noteholders' Interest Distributable Amount;
(vii) to the Principal Distribution Account, for
distribution pursuant to Section 5.06(d), from the Available Funds
remaining after the application of clauses (i) through (vi), the
Regular Note Principal Distribution Amount, reduced by any First
Priority Principal Distribution Amount paid pursuant to clause (iii)
above and any Second Priority Principal Distribution Amount paid
pursuant to clause (v) above;
(viii) to the Reserve Account, from the Available
Collections remaining after the application of clauses (i) through
(vii), any deficiency in the Specified Reserve Account Balance;
(ix) to the applicable party, from the Available
Collections remaining after the application of clauses (i) through
(viii), any accrued and unpaid fees, expenses and indemnification
expenses owed to such party under any of the Basic Documents (including
legal fees and expenses), to the extent not paid pursuant to clauses
(i) through (viii); and
(x) the remainder, if any, of the Available Collections
and the Reserve Account Excess Amount, if any, to the Certificate
Distribution Account for distribution to the Holders of the
Certificates.
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Notwithstanding that the Notes have been paid in full, the Indenture
Trustee shall continue to maintain the Collection Account and the Principal
Distribution Account hereunder until all amounts distributable on the
Certificates have been distributed to the Holders of the Certificates.
(c) On each Payment Date, the Servicer shall instruct the
Indenture Trustee in writing (based on the information contained in the
Servicer's Certificate delivered on the related Determination Date pursuant to
Section 4.09) to withdraw the funds on deposit in the Note Interest Distribution
Account with respect to the Collection Period preceding such Payment Date and
make payments and distributions on such date pursuant to clauses (i) through
(iii) below, in the following order and priority:
(i) to the Class A Noteholders, the Class A Noteholders'
Interest Distributable Amount for such Payment Date;
(ii) to the Class B Noteholders, the Class B Noteholders'
Interest Distributable Amount for such Payment Date; and
(iii) to the Class C Noteholders, the Class C Noteholders'
Interest Distributable Amount for such Payment Date.
(d) On each Payment Date, the Servicer shall instruct the
Indenture Trustee in writing (based on the information contained in the
Servicer's Certificate delivered on the related Determination Date pursuant to
Section 4.09) to withdraw the funds on deposit in the Principal Distribution
Account with respect to the Collection Period preceding such Payment Date and
make payments and distributions on such date pursuant to clauses (i) through
(iii) below, in the following order and priority:
(i) to the Class A Noteholders, in the following order
and priority, the Class A Principal Distributable Amount for such
Payment Date:
(A) to the Class A-1 Noteholders on account of
principal until the Outstanding Amount of the Class A-1 Notes
is reduced to zero;
(B) to the Class A-2 Noteholders on account of
principal until the Outstanding Amount of the Class A-2 Notes
is reduced to zero;
(C) to the Class A-3 Noteholders on account of
principal until the Outstanding Amount of the Class A-3 Notes
is reduced to zero; and
(D) to the Class A-4 Noteholders on account of
principal until the Outstanding Amount of the Class A-4 Notes
is reduced to zero;
(ii) to the Class B Noteholders, the Class B Principal
Distributable Amount for such Payment Date; and
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(iii) to the Class C Noteholders, the Class C Principal
Distributable Amount for such Payment Date.
(e) Notwithstanding Sections 5.06(b), (c) and (d) above, and
subject to the provisions of Section 5.04(b) of the Indenture:
(i) on each Payment Date following the occurrence and
during the continuation of an Event of Default specified in Section
5.01(i), 5.01(ii), 5.01(iv) or 5.01(v) of the Indenture that has
resulted in an acceleration of the Notes (or following the occurrence
of any such event after an Event of Default specified in Section
5.01(iii) of the Indenture has occurred and the Notes have been
accelerated), the Servicer shall instruct the Indenture Trustee:
(A) to transfer the funds on deposit in
the Collection Account remaining after the application of
clauses 5.06(b)(i) and (ii) above to the Principal
Distribution Account to the extent necessary to reduce the
Outstanding Amount of the Class A Notes to zero, and to
withdraw such funds from the Principal Distribution Account
and pay such funds:
(1) to the Class A-1 Noteholders until the
Outstanding Amount of the Class A-1 Notes is reduced
to zero; and
(2) to the Class A-2 Noteholders, Class A-3
Noteholders and Class A-4 Noteholders, ratably,
without preference or priority of any kind, on the
basis of the respective Outstanding Amounts of the
Class A-2 Notes, the Class A-3 Notes and the Class
A-4 Notes, until the respective Outstanding Amount of
each such subclass of Class A Notes is reduced to
zero; or
(B) if the Class A Notes shall have
been paid in full, to transfer the funds on deposit in the
Collection Account remaining after the application of clauses
5.06(b)(i) through (iv) above to the Principal Distribution
Account to the extent necessary to reduce the Outstanding
Amount of the Class B Notes to zero, and to withdraw such
funds from the Principal Distribution Account and pay such
funds to the Class B Noteholders until the Outstanding Amount
of the Class B Notes is reduced to zero; or
(C) if the Class A Notes and Class B
Notes shall have been paid in full, to transfer the funds on
deposit in the Collection Account remaining after the
application of clauses 5.06(b)(i) through (vi) above to the
Principal Distribution Account to the extent necessary to
reduce the Outstanding Amount of the Class C Notes to zero,
and to withdraw such funds from the Principal Distribution
Account and pay such funds to the Class C Noteholders until
the Outstanding Amount of the Class C Notes is reduced to
zero; and
(ii) notwithstanding the order and priority set forth in
clauses (A) through (D) of Section 5.06(d)(i), on each Payment Date
following the occurrence and during the
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continuation of an Event of Default specified in Section 5.01(iii) of
the Indenture that has resulted in an acceleration of the Notes, the
Servicer shall instruct the Indenture Trustee to apply the Class A
Principal Distributable Amount payable under Section 5.06(d)(i) above
to:
(A) the repayment of principal of the
Class A-1 Notes until the Outstanding Amount of the Class A-1
Notes is reduced to zero; and
(B) the repayment of principal of the
Class A-2 Notes, the Class A-3 Notes and the Class A-4 Notes,
ratably, without preference or priority of any kind, on the
basis of the respective Outstanding Amounts of the Class A-2
Notes, the Class A-3 Notes and the Class A-4 Notes, until the
respective Outstanding Amount of each such subclass of Class A
Notes is reduced to zero.
Section 5.07. Reserve Account.
(a) On or prior to the Closing Date the Issuer shall cause to have
deposited an amount equal to the Reserve Initial Deposit into the Reserve
Account from the net proceeds of the sale of the Securities. The Reserve Account
shall be an asset of the Issuer.
(b) On each Payment Date, the Servicer shall instruct the
Indenture Trustee in writing (based on the information contained in the
Servicer's Certificate delivered on the related Determination Date pursuant to
Section 4.09) to withdraw the Reserve Account Withdrawal Amount, if any, and the
Reserve Account Excess Amount, if any, from the Reserve Account and deposit such
Reserve Account Withdrawal Amount and such Reserve Account Excess Amount into
the Collection Account for distribution in the order of priority set forth in
Section 5.06(b) no later than 12:00 noon, New York City time, on the Business
Day prior to the related Payment Date.
(c) In the event that, on any Payment Date, the amount on deposit
in the Reserve Account shall be less than the Specified Reserve Account Balance,
the Available Collections remaining after the payment of the amounts set forth
in Section 5.06(b)(i) through (vii), up to an amount equal to such shortfall,
shall be deposited by the Indenture Trustee to the Reserve Account on such
Payment Date.
(d) Subject to Section 9.01, amounts will continue to be applied
pursuant to Section 5.06 following payment in full of all of the Outstanding
Amount of the Notes until the Pool Balance is reduced to zero. Following the
payment in full of the aggregate Outstanding Amount of the Notes and of all
other amounts owing or to be distributed hereunder or under the Indenture or the
Trust Agreement to Noteholders and the termination of the Trust, any amount then
allocated to the Reserve Account shall be paid to the Certificate Distribution
Account for distribution to the Certificateholders.
Section 5.08. Statements to Securityholders. On each Determination
Date, the Servicer shall provide to the Indenture Trustee (with a copy to each
Rating Agency, Xxxxxxx Lynch, Pierce, Xxxxxx & Xxxxx Incorporated and each
Paying Agent (if any)) for the Indenture Trustee to forward, on the related
Payment Date, to each Noteholder of record as of the most recent
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Record Date and to the Owner Trustee (with a copy to each Paying Agent (if any))
for the Owner Trustee to forward, on the related Payment Date, to each
Certificateholder of record as of the most recent Record Date a statement
substantially in the form of Exhibit B setting forth at least the following
information as to the Securities to the extent applicable:
(a) the amount of collections received with respect to the
Receivables during the related Collection Period and allocable to principal for
each Class of Notes on the related Payment Date;
(b) the amount of collections received with respect to the
Receivables during the related Collection Period and allocable to interest for
each Class of Notes on the related Payment Date;
(c) the Outstanding Amount of each Class of Notes and the Note
Pool Factor for each such Class as of the close of business on the preceding
Payment Date, after giving effect to payments allocated to principal reported
under clause (a) above;
(d) the amount of the Servicing Fee paid to the Servicer on the
related Payment Date;
(e) the amount of the First Priority Principal Distribution
Amount, if any, for the related Payment Date;
(f) the amount of the Second Priority Principal Distribution
Amount, if any, for the related Payment Date;
(g) the amount of the Regular Note Principal Distribution Amount
for the related Payment Date;
(h) the aggregate amounts of Realized Losses, if any, and Cram
Down Losses, if any, with respect to the related Collection Period;
(i) the Pool Balance as of the close of business on the last day
of the related Collection Period, after giving effect to payments allocated to
principal reported under clause (a) above;
(j) the balance of the Reserve Account on the related
Determination Date after giving effect to deposits and withdrawals to be made on
the related Payment Date, if any;
(k) the amount of any deposit to the Reserve Account and the
amount and application of any funds withdrawn from the Reserve Account, in each
case with respect to the related Payment Date;
(l) the aggregate principal balance of all Receivables that became
Liquidated Receivables or Purchased Receivables during the related Collection
Period;
(m) the aggregate principal balance and number of Receivables that
are 30 to 59 days, 60 to 89 days or 90 days or more delinquent as of the last
day of the related Collection Period;
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(n) the Class A-1 Interest Carryover Shortfall, the Class A-2
Interest Carryover Shortfall, the Class A-3 Interest Carryover Shortfall, the
Class A-4 Interest Carryover Shortfall, the Class B Interest Carryover Shortfall
and the Class C Interest Carryover Shortfall, in each case after giving effect
to payments on the related Payment Date, and any change in such amounts from the
preceding statement;
(o) the Class A-1 Principal Carryover Shortfall, the Class A-2
Principal Carryover Shortfall, the Class A-3 Principal Carryover Shortfall, the
Class A-4 Principal Carryover Shortfall, the Class B Principal Carryover
Shortfall and the Class C Principal Carryover Shortfall, in each case after
giving effect to payments on the related Payment Date, and any change in such
amounts from the preceding statement; and
(p) the aggregate Purchase Amounts for Receivables, if any, that
were or are to be purchased during or with respect to such Collection Period.
Each amount set forth on the Payment Date Statement under clauses (a),
(b), (d), (e), (f), (g), (n) or (o) above shall also be expressed as a dollar
amount per $1,000 of original principal balance of a Note.
Section 5.09. Net Deposits. For so long as (i) National City is the
Servicer and (ii) the Servicer shall be entitled pursuant to Section 5.02 to
remit collections on a monthly basis rather than within two Business Days of
receipt, the Servicer may make the remittances pursuant to Sections 5.02 and
5.04 net of the Servicing Fee payable to the Servicer on the related Payment
Date. Nonetheless, the Servicer shall account for all such remittances and
payments in the related Servicer's Certificate as if the amounts were deposited
and/or transferred separately.
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ARTICLE VI
THE DEPOSITOR
Section 6.01. Representations of Depositor. The Depositor makes the
following representations to the Issuer, the Servicer, the Indenture Trustee and
the Seller. The Issuer relies on such representations in accepting the
Receivables and delivering the Securities. Such representations speak as of the
execution and delivery of this Agreement and as of the Closing Date, and shall
survive the sale, transfer and assignment of the Receivables by the Depositor to
the Issuer and the pledge thereof to the Indenture Trustee in accordance with
the terms of 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.
(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 where the failure to do so
would materially and adversely affect the Depositor's ability to transfer the
Receivables to the Trust pursuant to this Agreement or the validity or
enforceability of the Receivables.
(c) Power and Authority. The Depositor has the corporate power and
authority to execute and deliver this Agreement and the other Basic Documents to
which it is a party and to carry out their respective terms; the Depositor has
full power and authority to sell and assign the property to be sold and assigned
to and deposited with the Issuer, and the Depositor shall have duly authorized
such sale and assignment to the Issuer by all necessary corporate action; and
the execution, delivery and performance of this Agreement and the other Basic
Documents to which the Depositor is a party have been duly authorized by the
Depositor by all necessary corporate action.
(d) Binding Obligation. This Agreement and the other Basic
Documents to which the Depositor is a party, when duly executed and delivered by
the other parties hereto and thereto, shall constitute legal, valid and binding
obligations of the Depositor, enforceable against the Depositor in accordance
with their respective terms, except as the enforceability thereof may be limited
by bankruptcy, insolvency, reorganization or similar laws now or hereafter in
effect relating to or affecting creditors' rights generally and to general
principles of equity (whether applied in a proceeding at law or in equity).
(e) No Violation. The consummation of the transactions
contemplated by this Agreement and the other Basic Documents and the fulfillment
of the terms of this Agreement and the other Basic Documents shall not conflict
with, result in any breach of any of the terms or provisions of or constitute
(with or without notice or lapse of time, or both) a default under, the
certificate of incorporation or bylaws of the Depositor, or any indenture,
agreement, mortgage, deed of trust or other instrument to which the Depositor is
a party or by which it is bound; or
45
result in the creation or imposition of any Lien upon any of its properties
pursuant to the terms of any such indenture, agreement, mortgage, deed of trust
or other instrument, other than this Agreement and the other Basic Documents; or
violate any law, order, rule or regulation applicable to the Depositor of any
court or federal or state regulatory body, administrative agency or other
governmental instrumentality having jurisdiction over the Depositor.
(f) No Proceedings. There are no proceedings or investigations
pending or, to the Depositor's knowledge, threatened, against the Depositor
before any court, regulatory body, administrative agency or other tribunal or
governmental instrumentality having jurisdiction over the Depositor or its
properties: (i) asserting the invalidity of this Agreement or any other Basic
Document; (ii) seeking to prevent the issuance of the Notes or the Certificates
or the consummation of any of the transactions contemplated by this Agreement or
any other Basic Document; (iii) seeking any determination or ruling that might
materially and adversely affect the performance by the Depositor of its
obligations under, or the validity or enforceability of, this Agreement or any
other Basic Document; or (iv) seeking to adversely affect the federal income tax
attributes of the Trust, the Notes or the Certificates.
(g) No Consents. The Depositor is not required to obtain the
consent of any other party or any consent, license, approval, registration,
authorization, or declaration of or with any governmental authority, bureau or
agency in connection with the execution, delivery, performance, validity or
enforceability of this Agreement or any other Basic Document to which it is a
party that has not already been obtained.
Section 6.02. 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 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 (which shall not
include distributions on account of the Notes or the Certificates).
Section 6.04. Merger or Consolidation of, or Assumption of the
Obligations of, Depositor. Any Person with which the Depositor shall merge or
consolidate or which the Depositor shall permit to become the successor to the
Depositor's business shall execute an agreement of assumption of every
obligation of the Depositor under this Agreement and the other Basic Documents.
Whether or not such assumption agreement is executed, such successor Person
shall be the successor to the Depositor under this Agreement without the
execution or filing of any document or any further act on the part of any of the
parties to this Agreement. The Depositor shall provide prompt notice of any
merger, consolidation or succession pursuant to this Section 6.04 to the Owner
Trustee, the Indenture Trustee, the Servicer, the Securityholders and
46
the Rating Agencies. Notwithstanding the foregoing, the Depositor shall not
merge or consolidate with any other Person or permit any other Person to become
a successor to the Depositor's business unless (w) immediately after giving
effect to such transaction, no representation or warranty made pursuant to
Section 3.02 or 6.01 shall have been breached (for purposes hereof, such
representations and warranties shall speak as of the date of the consummation of
such transaction), (x) the Depositor shall have delivered to the Owner Trustee,
the Indenture Trustee and the Servicer an Officer's Certificate and an Opinion
of Counsel each stating that such consolidation, merger or succession and such
agreement of assumption comply with this Section 6.04 and that all conditions
precedent provided for in this Agreement relating to such transaction have been
complied with, (y) the Rating Agency Condition shall have been satisfied and (z)
the Depositor shall have delivered to the Owner Trustee, the Indenture Trustee
and the Servicer an Opinion of Counsel stating that, in the opinion of such
counsel, either (A) all financing statements and continuation statements and
amendments thereto have been executed and filed that are necessary to preserve
and protect the interest of the Trust in the Receivables and reciting the
details of such filings or (B) no such action is necessary to preserve and
protect such interest.
Section 6.05. Limitation on Liability of Depositor and Others. The
Depositor and any director, officer, employee or agent of the Depositor may rely
in good faith on the advice of counsel or on any document of any kind, prima
facie properly executed and submitted by any Person respecting any matters
arising hereunder. The Depositor shall be under no obligation to appear in,
prosecute or defend any legal action that shall not be incidental to its
obligations under this Agreement and that in its opinion may involve it in any
expense or liability.
Section 6.06. Depositor May Own Securities. The Depositor and any
Affiliate thereof may in its individual or any other capacity become the owner
or pledgee of Securities with the same rights as it would have if it were not
the Depositor or an Affiliate thereof, except as expressly provided herein or in
any Basic Document.
Section 6.07. Depositor to Provide Copies of Relevant Securities
Filings. The Depositor shall provide or cause to be provided to the Servicer a
copy of any document filed by the Depositor subsequent to the date hereof with
the Securities and Exchange Commission pursuant to the Securities Act of 1933 or
the Securities Exchange Act of 1934 that relate specifically to the Trust, the
Notes or the Certificates.
Section 6.08. Amendment of Depositor's Organizational Documents. The
Depositor shall not amend its organizational documents except in accordance with
the provisions thereof.
Section 6.09. Separateness Covenants. Each of the Depositor and the
Issuer hereby agrees to conduct its business separate and apart from the other.
In this regard, each of the Issuer and the Depositor shall:
(a) maintain its books and records separate from those of the
other and the Bank;
(b) maintain its bank accounts separate from those of the other
and the Bank;
(c) not commingle its assets with those of the other or the Bank;
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(d) not hold any of its assets in the name of the other or the
Bank;
(e) not conduct its own business in the name of the other or the
Bank;
(f) not pay its own liabilities and expenses out of the other's
funds;
(g) observe all corporate and other organizational formalities
applicable to keeping its business separate and apart from any other entity;
(h) maintain an arm's length relationship with the other and enter
into transactions with an affiliated entity only on a commercially reasonable
basis;
(i) not guarantee or become obligated for the debts of any other
entity;
(j) not hold out its credit as being available to satisfy the
obligations of the other or the Bank;
(k) allocate fairly and reasonably any overhead expenses (if any)
that are shared with the other or the Bank, including paying for office space
and services performed by any employee of the Bank (if any);
(l) use stationery, invoices, and checks separate from those of
the other and the Bank;
(m) not pledge its assets for the benefit of the other or the
Bank;
(n) hold itself out as an entity separate from the other and the
Bank;
(o) correct any known misunderstanding regarding its identity as
separate from the other and the Bank;
(p) not make loans to the other or the Bank (except as otherwise
permitted hereunder or under the Receivables Purchase Agreement);
(q) not identify itself as a division of the other or the Bank;
and
(r) maintain adequate capital in light of its contemplated
business operations.
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ARTICLE VII
THE SERVICER
Section 7.01. Representations of Servicer. The Servicer makes the
following representations upon which the Issuer is deemed to have relied in
acquiring the Receivables. Such representations speak as of the execution and
delivery of this Agreement and as of the Closing Date, and shall survive the
sale of the Receivables to the Issuer and the pledge thereof to the Indenture
Trustee in accordance with the terms of the Indenture.
(a) Organization and Good Standing. The Servicer is a national
banking association duly organized and validly existing as a banking institution
under the laws of the United States and continues to hold a valid certificate to
do business as such. The Servicer is duly authorized to own its properties and
transact its business and is in good standing in each jurisdiction in which the
character of the business transacted by it or any properties owned or leased by
it requires such authorization and in which the failure to be so authorized
would have a material adverse effect on the business, properties, assets, or
condition (financial or other) of the Servicer and its subsidiaries, considered
as one enterprise. The Servicer has, and at all relevant times had, the power,
authority and legal right to acquire, own, and service the Receivables.
(b) Licenses and Approvals. The Servicer has obtained all
necessary licenses and approvals, in all jurisdictions where the failure to do
so would materially and adversely affect the Servicer's ability to acquire, own
and service the Receivables.
(c) Power and Authority. The Servicer has the power and authority
to execute and deliver this Agreement and the other Basic Documents to which it
is a party and to carry out their respective terms; and the execution, delivery
and performance of this Agreement and the other Basic Documents to which it is a
party have been duly authorized by the Servicer by all necessary action.
(d) Binding Obligation. This Agreement and the other Basic
Documents to which it is a party constitute legal, valid and binding obligations
of the Servicer, enforceable against the Servicer in accordance with their
respective terms, except as the enforceability thereof may be limited by
bankruptcy, insolvency, reorganization or other similar laws affecting the
enforcement of creditors' rights generally and to general principles of equity
whether applied in a proceeding in equity or at law.
(e) No Violation. The consummation of the transactions
contemplated by this Agreement and the other Basic Documents to which it is a
party and the fulfillment of their respective terms shall not conflict with,
result in any breach of any of the terms and provisions of, or constitute (with
or without notice or lapse of time or both) a default under, the articles of
association or bylaws of the Servicer, or any indenture, agreement, mortgage,
deed of trust or other instrument to which the Servicer is a party or by which
it is bound; or result in the creation or imposition of any Lien upon any of its
properties pursuant to the terms of any such indenture, agreement, mortgage,
deed of trust or other instrument, other than this Agreement and the other Basic
Documents, or violate any law, order, rule or regulation applicable to the
Servicer of any
49
court or federal or state regulatory body, administrative agency or other
governmental instrumentality having jurisdiction over the Servicer or any of its
properties.
(f) No Proceedings. There are no proceedings or investigations
pending or, to the Servicer's knowledge, threatened, against the Servicer before
any court, regulatory body, administrative agency or other tribunal or
governmental instrumentality having jurisdiction over the Servicer or its
properties: (i) asserting the invalidity of this Agreement or any of the other
Basic Documents; (ii) seeking to prevent the issuance of the Securities or the
consummation of any of the transactions contemplated by this Agreement or any of
the other Basic Documents; (iii) seeking any determination or ruling that might
materially and adversely affect the performance by the Servicer of its
obligations under, or the validity or enforceability of, this Agreement or any
of the other Basic Documents; or (iv) seeking to adversely affect the federal
income tax or other federal, state or local tax attributes of the Securities.
Section 7.02. Indemnities of Servicer. The Servicer shall be liable in
accordance herewith only to the extent of the obligations specifically
undertaken by the Servicer and the representations made by the Servicer under
this Agreement:
(a) The Servicer shall indemnify, defend and hold harmless the
Issuer, the Owner Trustee, the Indenture Trustee, the Securityholders and the
Depositor and any of the officers, directors, employees and agents of the
Issuer, the Owner Trustee and the Indenture Trustee from and against any and all
costs, expenses, losses, damages, claims and liabilities arising out of or
resulting from the use, ownership or operation by the Servicer or any Affiliate
thereof of a Financed Vehicle, excluding any losses incurred in connection with
the sale of any repossessed Financed Vehicles in a commercially reasonable
manner and in compliance with the terms of this Agreement.
(b) The Servicer shall indemnify, defend and hold harmless the
Issuer, the Owner Trustee, the Indenture Trustee, the Depositor, and their
respective officers, directors, agents and employees, and the Securityholders,
from and against any taxes that may at any time be asserted against any of such
parties with respect to the transactions contemplated in this Agreement,
including any sales, gross receipts, tangible or intangible personal property,
privilege or license taxes (but not including any federal or other income taxes,
including franchise taxes asserted with respect to, and as of the date of, the
transfer of the Receivables to the Trust or the issuance and original sale of
the Securities), and any reasonable costs and expenses in defending against the
same.
(c) The Servicer shall indemnify, defend and hold harmless the
Issuer, the Owner Trustee, the Indenture Trustee, the Depositor, the
Securityholders and any of the officers, directors, employees or agents of the
Issuer, the Owner Trustee, the Depositor and the Indenture Trustee from and
against any and all 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.
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For purposes of this Section, in the event of the termination of the
rights and obligations of National City (or any successor thereto pursuant to
Section 7.03) as Servicer pursuant to Section 8.02, or the resignation by such
Servicer pursuant to this Agreement, such Servicer shall be deemed to be the
Servicer pending appointment of a successor Servicer (other than the Indenture
Trustee) pursuant to Section 8.03.
Indemnification under this Section shall survive the resignation or
removal of the Servicer or the termination of this Agreement with respect to
acts of the Servicer prior thereto, and shall include reasonable fees and
expenses of counsel and reasonable expenses of litigation. If the Servicer shall
have made any indemnity payments pursuant to this Section and the Person to or
on behalf of whom such payments are made thereafter collects any of such amounts
from others, such Person shall promptly repay such amounts to the Servicer,
without interest.
Section 7.03. Merger or Consolidation of, or Assumption of the
Obligations of, Servicer. Any Person (i) into which the Servicer may be merged
or consolidated, (ii) resulting from any merger or consolidation to which the
Servicer shall be a party, (iii) that acquires by conveyance, transfer or lease
substantially all of the assets of the Servicer or (iv) succeeding to the
business of the Servicer, which Person shall execute an agreement of assumption
to perform every obligation of the Servicer under this Agreement, shall be the
successor to the Servicer under this Agreement without the execution or filing
of any paper or any further act on the part of any of the parties to this
Agreement. The Servicer shall provide prompt notice of any merger, consolidation
or succession pursuant to this Section 7.03 to the Owner Trustee, the Indenture
Trustee and each Rating Agency. Notwithstanding the foregoing, the Servicer
shall not merge or consolidate with any other Person or permit any other Person
to become a successor to the Servicer's business unless (i) immediately after
giving effect to such transaction, no representation or warranty made pursuant
to Section 7.01 shall have been breached (for purposes hereof, such
representations and warranties shall speak as of the date of the consummation of
such transaction) and no event that, after notice or lapse of time or both,
would become a Servicer Termination Event shall have occurred, (ii) the Servicer
shall have delivered to the Owner Trustee and the Indenture Trustee an Officer's
Certificate and an Opinion of Counsel each stating that such consolidation,
merger or succession and such agreement of assumption comply with this Section
7.03 and that all conditions precedent provided for in this Agreement relating
to such transaction have been complied with and (iii) the Servicer shall have
delivered to the Owner Trustee and the Indenture Trustee an Opinion of Counsel
stating that either (A) all financing statements and continuation statements and
amendments thereto have been executed and filed that are necessary to preserve
and protect the interest of the Trust and the Indenture Trustee, respectively,
in the assets of the Trust and reciting the details of such filings or (B) no
such action shall be necessary to preserve and protect such interest.
Section 7.04. Limitation on Liability of Servicer and Others.
(a) Neither the Servicer nor any of its directors, officers,
employees or agents shall be under any liability to the Issuer, the Depositor,
the Indenture Trustee, the Owner Trustee, the Noteholders or the
Certificateholders, except as provided in this Agreement, for any action taken
or for refraining from the taking of any action in good faith pursuant to this
Agreement; provided, however, that this provision shall not protect the Servicer
against any liability that
51
would otherwise be imposed by reason of a breach of this Agreement or willful
misfeasance, bad faith or negligence in the performance of duties. The Servicer
and any director, officer, employee or agent of the Servicer may conclusively
rely in good faith on the written advice of counsel or on any document of any
kind prima facie properly executed and submitted by any Person respecting any
matters arising under this Agreement.
(b) The parties expressly acknowledge and consent to the Indenture
Trustee simultaneously acting in the capacity of successor Servicer and
Indenture Trustee. The Indenture Trustee may, in such capacities, discharge its
separate functions fully, without hindrance or regard to conflict of interest
principles, duty of loyalty principles or other breach of fiduciary duties to
the extent that any such conflict or breach arises from the performance by the
Indenture Trustee of express duties set forth in this Agreement in any of such
capacities.
Section 7.05. [Reserved].
Section 7.06. Servicer Not to Resign.
(a) Subject to the provisions of Section 7.03, the Servicer shall
not resign from the obligations and duties imposed on it by this Agreement as
Servicer except upon a determination that the performance of its duties under
this Agreement shall no longer be permissible under applicable law.
(b) Notice of any determination that the performance by the
Servicer of its duties hereunder is no longer permitted under applicable law
shall be communicated to the Owner Trustee and the Indenture Trustee at the
earliest practicable time (and, if such communication is not in writing, shall
be confirmed in writing at the earliest practicable time) and any such
determination shall be evidenced by an Opinion of Counsel to such effect
delivered by the Servicer to the Owner Trustee and the Indenture Trustee
concurrently with or promptly after such notice. No resignation of the Servicer
shall become effective until the Indenture Trustee (or another successor
Servicer, if so appointed pursuant to the second sentence of Section 8.03(b))
shall have assumed the responsibilities and obligations of the Servicer in
accordance with Section 8.03.
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ARTICLE VIII
DEFAULT
Section 8.01. Servicer Termination Events. For purposes of this
Agreement, the occurrence and continuance of any of the following shall
constitute a "Servicer Termination Event":
(a) any failure by the Servicer to deposit into the Collection
Account any proceeds or payment required to be so delivered under the terms of
this Agreement that continues unremedied for a period of five Business Days
after written notice of such failure is received by the Servicer or the Seller,
as the case may be, from the Owner Trustee or the Indenture Trustee or after
discovery of such failure by a Responsible Officer of the Servicer or the
Seller, as the case may be;
(b) failure by the Servicer to deliver to the Owner Trustee, the
Indenture Trustee and the Seller the Servicer's Certificate by the applicable
Determination Date, which failure continues unremedied for a period of five
Business Days;
(c) failure on the part of the Servicer (or, so long as the Seller
is the Servicer, the Seller) duly to observe or to perform in any material
respect any other covenants or agreements, as the case may be, set forth in this
Agreement, which failure shall (A) materially and adversely affect the rights of
Noteholders or Certificateholders and (B) 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 (1) to the Servicer or the Seller, as the
case may be, by the Owner Trustee or the Indenture Trustee, or (2) to the Owner
Trustee, the Indenture Trustee, the Seller and the Servicer by Noteholders
evidencing not less than 25% of the Outstanding Amount of the Controlling Class
or, if no Notes are outstanding, the Holders of Certificates evidencing not less
than 25% of the percentage interests in the Certificates; or
(d) the occurrence of an Insolvency Event with respect to the
Servicer.
Section 8.02. Consequences of a Servicer Termination Event. If a
Servicer Termination Event shall occur, the Indenture Trustee may, and at the
direction of Noteholders evidencing 25% of the Outstanding Amount of the
Controlling Class or, if no Notes are Outstanding, the Holders of Certificates
evidencing not less than 25% of the percentage interests in the Certificates,
shall terminate all of the rights and obligations of the Servicer under this
Agreement by notice in writing to the Servicer. On or after the receipt by the
Servicer of such written notice, all authority, power, obligations and
responsibilities of the Servicer under this Agreement automatically shall pass
to, be vested in and become obligations and responsibilities of the Indenture
Trustee or such other successor Servicer, if any, as shall have been appointed
pursuant to the second sentence of Section 8.03(b); provided, however, that the
Indenture Trustee or such other successor Servicer shall have no liability with
respect to any obligation that was required to be performed by the terminated
Servicer prior to the date that the Indenture Trustee or such other successor
Servicer becomes the Servicer or any claim of a third party based on any alleged
action or inaction of the terminated Servicer. The successor Servicer is
authorized and empowered by
53
this Agreement to execute and deliver, on behalf of the terminated Servicer, as
attorney-in-fact or otherwise, any and all documents and other instruments and
to do or accomplish all other acts or things necessary or appropriate to effect
the purposes of such notice of termination, whether to complete the transfer and
endorsement of the Receivables and related documents to show the Indenture
Trustee (or the Owner Trustee if the Notes have been paid in full) as lienholder
or secured party on the related certificates of title of the Financed Vehicles
or otherwise. The terminated Servicer agrees to cooperate with the successor
Servicer in effecting the termination of the responsibilities and rights of the
terminated Servicer under this Agreement, including the transfer to the
successor Servicer for administration by it of all money and property held by
the Servicer with respect to the Receivables and other records relating to the
Receivables, including any portion of the Receivables File held by the Servicer
and a computer tape in readable form as of the most recent Business Day
containing all information necessary to enable the successor Servicer to service
the Receivables. The terminated Servicer shall also provide the successor
Servicer access to Servicer personnel and computer records in order to
facilitate the orderly and efficient transfer of servicing duties.
Section 8.03. Appointment of Successor Servicer.
(a) On and after the time the Servicer receives a notice of
termination pursuant to Section 8.02 or upon the resignation of the Servicer
pursuant to Section 7.06, the Indenture Trustee shall be the successor in all
respects to the Servicer in its capacity as Servicer under this Agreement and
shall be subject to all the rights, responsibilities, restrictions, duties,
liabilities and termination provisions relating to the Servicer under this
Agreement, except as otherwise stated herein. The Depositor, the Owner Trustee
and the Indenture Trustee (and any successor Servicer other than the Indenture
Trustee, if so appointed pursuant to the second sentence of Section 8.03(b))
shall take such action, consistent with this Agreement, as shall be necessary to
effectuate any such succession. If the Indenture Trustee or another successor
Servicer is acting as Servicer hereunder, it shall be subject to termination
under Section 8.02 upon the occurrence of any Servicer Termination Event after
its appointment as successor Servicer.
(b) On and after the time the Servicer receives a notice of
termination pursuant to Section 8.02 or upon the resignation of the Servicer
pursuant to Section 7.06, or if the Indenture Trustee is legally unable to act
as Servicer, the Indenture Trustee (or the Owner Trustee if the Notes have been
paid in full) may exercise at any time its right to appoint any Eligible
Servicer as a successor to the Servicer, and shall have no liability to the
Owner Trustee, the Indenture Trustee, the Servicer, the Depositor, any
Noteholders, any Certificateholders or any other Person if it does so.
Notwithstanding the above, if the Indenture Trustee shall be legally unable or
unwilling to act as Servicer, the Indenture Trustee, the Owner Trustee or
Noteholders evidencing 25% of the Outstanding Amount of the Controlling Class
or, if no Notes are outstanding, the Holders of Certificates evidencing not less
than 25% of the percentage interests in the Certificates, may petition a court
of competent jurisdiction to appoint any Eligible Servicer as the successor to
the Servicer. Pending appointment pursuant to the preceding sentence, the
Indenture Trustee shall act as successor Servicer unless it is legally unable to
do so, in which event the outgoing Servicer shall continue to act as Servicer
until a successor has been appointed and accepted such appointment. The Trustee
shall be entitled to withdraw from the Collection
54
Account and remit to the successor Servicer or such other party entitled thereto
all reasonably incurred Servicer transition costs.
(c) Upon appointment, the successor Servicer shall be the
successor in all respects to the predecessor Servicer and shall be subject to
all the responsibilities, duties and liabilities arising thereafter relating
thereto placed on the predecessor Servicer, and shall be entitled to the
Servicing Fee and all the rights granted to the predecessor Servicer by the
terms and provisions of this Agreement.
Section 8.04. Notification to Securityholders. Upon any termination of,
or appointment of a successor to, the Servicer pursuant to this Article VIII,
the Owner Trustee shall give prompt written notice thereof to the
Certificateholders, and the Indenture Trustee shall give prompt written notice
thereof to the Noteholders and each Rating Agency.
Section 8.05. Waiver of Past Defaults. Noteholders evidencing not less
than a majority of the Outstanding Amount of the Controlling Class or, if no
Notes are Outstanding, the Holders of Certificates evidencing not less than a
majority of the percentage interests in the Certificates may, on behalf of all
Securityholders, waive in writing any default by the Servicer in the performance
of its obligations hereunder and its consequences, except a default in making
any required deposits to or payments from any of the Trust Accounts in
accordance with this Agreement. Upon any such waiver of a past default, such
default shall cease to exist, and any Servicer Termination Event arising
therefrom shall be deemed to have been remedied for every purpose of this
Agreement. No such waiver shall extend to any subsequent or other default or
impair any right consequent thereto.
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ARTICLE IX
TERMINATION
Section 9.01. Optional Purchase of All Receivables.
(a) On each Determination Date as of which the Pool Balance is
equal to or less than 5% of the Initial Pool Balance, the Servicer shall have
the option to purchase the Receivables; provided, however, that the amount to be
paid for such purchase (as set forth in the following sentence) shall be
sufficient to pay in full the Outstanding Amount of all Notes Outstanding and to
pay any amounts due to the Indenture Trustee, the Owner Trustee and the
Administrator, pursuant to the Basic Documents. To exercise such option, the
Servicer shall deposit to the Collection Account pursuant to Section 5.04 an
amount equal to the lesser of (i) the fair market value of the Receivables and
(ii) the aggregate Purchase Amount for the Receivables (including Receivables
that became Liquidated Receivables during the related Collection Period) and
shall succeed to all interests in and to the Receivables. The exercise of such
option shall effect a retirement, in whole but not in part, of all outstanding
Notes.
(b) As described in Article IX of the Trust Agreement, notice of
any termination of the Trust shall be given by the Servicer to the Owner Trustee
and the Indenture Trustee as soon as practicable after the Servicer has received
notice thereof.
(c) Following the satisfaction and discharge of the Indenture and
the payment in full of the principal of and interest on the Notes, the
Certificateholders will succeed to the rights of the Noteholders hereunder and
the Owner Trustee will succeed to the rights of, the Indenture Trustee pursuant
to this Agreement.
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ARTICLE X
MISCELLANEOUS
Section 10.01. Amendment.
(a) This Agreement may be amended by the Depositor, the Servicer,
the Indenture Trustee and the Issuer, without the consent of any of the
Noteholders or the Certificateholders, to cure any ambiguity, to correct or
supplement any provisions in this Agreement or for the purpose of adding any
provisions to or changing in any manner or eliminating any of the provisions in
this Agreement or of modifying in any manner the rights of the Noteholders or
the Certificateholders; provided, however, that such action shall not, as
evidenced by an Opinion of Counsel delivered to the Owner Trustee and the
Indenture Trustee, adversely affect in any material respect the interests of any
Noteholder or Certificateholder; provided further that such action shall be
deemed not to adversely affect in any material respect the interests of any
Noteholder or Certificateholder and no Opinion of Counsel to that effect shall
be required if the Person requesting the amendment obtains a letter from the
Rating Agencies stating that the amendment would not result in the downgrading
or withdrawal of the ratings then assigned to the Notes.
(b) This Agreement may also be amended from time to time by the
Depositor, the Servicer and the Issuer, with the prior written consent of the
Indenture Trustee, Noteholders holding not less than a majority of the
Outstanding Amount of the Class A Notes, Noteholders holding not less than a
majority of the Outstanding Amount of the Class B Notes, Noteholders holding not
less than a majority of the Outstanding Amount of the Class C Notes and the
Holders of outstanding Certificates evidencing not less than a majority of the
percentage interests in the Certificates, for the purpose of adding any
provisions to or changing in any manner or eliminating any of the provisions of
this Agreement or of modifying in any manner the rights of the Securityholders;
provided, however, that no such amendment shall (i) increase or reduce in any
manner the amount of, or accelerate or delay the timing of, collections of
payments on Receivables or distributions that shall be required to be made for
the benefit of the Securityholders or (ii) reduce the aforesaid percentage of
the Outstanding Amount of the Class A Notes, the Class B Notes or the Class C
Notes, the Noteholders of which are required to consent to any such amendment,
without the consent of the Noteholders holding all Outstanding Class A Notes,
Class B Notes and Class C Notes or (iii) reduce the aforesaid percentage of the
percentage interests in the Certificates, the Holders of which are required to
consent to any such amendment, without the consent of the Holders of all
outstanding Certificates.
Promptly after the execution of any amendment or consent, the
Administrator shall furnish written notification of the substance of such
amendment or consent to each Securityholder, the Indenture Trustee and each
Rating Agency.
It shall not be necessary for the consent of Securityholders pursuant
to this Section to approve the particular form of any proposed amendment or
consent, but it shall be sufficient if such consent shall approve the substance
thereof.
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Prior to the execution of any amendment to this Agreement, the Owner
Trustee, on behalf of the Issuer, and the Indenture Trustee shall be entitled to
receive and rely upon an Opinion of Counsel stating that the execution of such
amendment is authorized or permitted by this Agreement and the Opinion of
Counsel referred to in Section 10.02(i)(A). The Owner Trustee, on behalf of the
Issuer, and the Indenture Trustee may, but shall not be obligated to, enter into
any such amendment that affects the Owner Trustee's or the Indenture Trustee's,
as applicable, own rights, duties or immunities under this Agreement or
otherwise.
Section 10.02. Protection of Title to Trust.
(a) The Servicer shall execute and file such financing statements
and cause to be executed and filed such continuation statements, all in such a
manner and in such places as may be required by law fully to preserve, maintain
and protect the interest of the Issuer and the Indenture Trustee in the
Receivables and the proceeds thereof. The Servicer shall deliver or cause to be
delivered to the Owner Trustee and the Indenture Trustee file-stamped copies of,
or filing receipts for, any document filed as provided above as soon as
available following such filing. In addition, the Seller and the Depositor
hereby authorize the Issuer at any time and from time to time to prepare and
file financing statements and amendments thereto in any jurisdiction as may be
necessary or desirable to preserve, maintain and protect the interests of the
Issuer and the Indenture Trustee in the Receivables and the proceeds thereof.
(b) None of the Seller, the Depositor or 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
9-506 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 Seller, the Depositor and the Servicer shall have
an obligation to give the Owner Trustee and the Indenture Trustee at least five
Business Days' prior written notice of any change in the jurisdiction of its
organization if, as a result of such change of jurisdiction, 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 each such Receivable, including payments and
recoveries made and payments owing (and the nature of each) and (ii)
reconciliation between payments or recoveries on or with respect to each such
Receivable and the amounts from time to time deposited in the Collection Account
in respect of each such Receivable.
(e) The Servicer shall maintain its computer systems so that, from
and after the time of sale under this Agreement of the Receivables, the
Servicer's master computer records (including
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any backup archives) that refer to a Receivable shall be coded to reflect that
such Receivable is part of the portfolio of Receivables that is the subject of
this Agreement and is owned by National City Auto Receivables Trust 2004-A and
pledged by National City Auto Receivables Trust 2004-A to the Indenture Trustee
for the benefit of the Noteholders. Indication of such Receivables' inclusion in
the portfolio 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 motor
vehicle receivables to any prospective purchaser, lender or other transferee,
the Servicer shall give to such prospective purchaser, lender or other
transferee computer tapes, records or printouts (including any restored from
backup archives) that, if they shall refer in any manner whatsoever to any
Receivable, shall indicate clearly that such Receivable has been sold and is
owned by the Issuer and has been pledged to the Indenture Trustee.
(g) The Servicer shall permit the Indenture Trustee and its agents
upon reasonable notice and at any time during normal business hours, which does
not unreasonably interfere with the Servicer's normal operations or customer or
employee relations, to inspect, audit and make copies of and abstracts from the
Servicer's records regarding any Receivable.
(h) Upon request, the Servicer shall furnish to the Owner Trustee
or the Indenture Trustee, within fifteen Business Days, a list of all
Receivables (by contract number and name of Obligor) then held as part of the
Trust, together with a reconciliation of such list to the Schedule of
Receivables and to each of the Servicer's Certificates furnished prior to such
request indicating removal of Receivables from the Trust.
The Servicer shall deliver to the Owner Trustee and the Indenture Trustee:
(i) promptly after the execution and delivery of this
Agreement and each amendment hereto, an Opinion of Counsel stating
that, in the opinion of such counsel, either (A) all financing
statements and continuation statements have been executed and filed
that are necessary to fully preserve and protect the interest of the
Trust and the Indenture Trustee in the Receivables, and reciting the
details of such filings or referring to prior Opinions of Counsel in
which such details are given, or (B) no such action shall be necessary
to preserve and protect such interest; and
(ii) 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 to fully
preserve and protect the interest of the Trust and the Indenture
Trustee in the Receivables, and reciting the details of such filings or
referring to prior Opinions of Counsel in which such details are given,
or (B) no such action shall be necessary to preserve and protect such
interest.
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Each Opinion of Counsel referred to in clause (i) or (ii) 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.
Section 10.03. Notices. All demands, notices, communications and
instructions upon or to the Depositor, the Servicer, the Issuer, the Owner
Trustee, the Indenture Trustee or any Rating Agency under this Agreement shall
be in writing, personally delivered, faxed and followed by first class mail, or
mailed by certified mail, return receipt requested, and shall be deemed to have
been duly given upon receipt (a) in the case of the Depositor, to National City
Vehicle Receivables Inc., 0000 Xxxxxx Xxxxxx, Xxxxxxxxxx, Xxxxxxxx 00000,
Attention: National City Vehicle Receivables Inc., Fax No.: (000) 000-0000; (b)
in the case of the Servicer, Administrator and Custodian, to National City Bank,
0000 Xxxx 0xx Xxxxxx, Xxxxxxxxx, Xxxx 00000, Attention: Xxxxxx Xxxxx, Fax No.:
(000) 000-0000, (c) in the case of the Indenture Trustee, to The Bank of New
York, 000 Xxxxxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000, Attention: Asset Backed
Finance Unit, Fax No.: (000) 000-0000; (d) in the case of the Issuer or the
Owner Trustee, at the Corporate Trust Administration Department (as defined in
the Trust Agreement); (e) in the case of Xxxxx'x, to 00 Xxxxxx Xxxxxx, Xxx Xxxx,
Xxx Xxxx 00000, Attention: ABS Monitoring Department, Fax No.: (000) 000-0000;
(f) in the case of Fitch, Fitch Ratings, Inc., Xxx Xxxxx Xxxxxx Xxxxx, Xxx Xxxx,
XX 00000 Attention: ABS Surveillance, Fax No.: (000) 000-0000; and (g) in the
case of Standard & Poor's, to 00 Xxxxx Xxxxxx (00xx Xxxxx), Xxx Xxxx, Xxx Xxxx
00000, Attention: Asset Backed Surveillance Department, Fax No.: (000) 000-0000;
or, as to each of the foregoing, at such other address as shall be designated by
written notice to the other parties.
Section 10.04. Assignment by the Depositor or the Servicer.
Notwithstanding anything to the contrary contained herein, except as provided in
Sections 6.04 and 7.03 herein and as provided in the provisions of this
Agreement concerning the resignation of the Servicer, this Agreement may not be
assigned by the Depositor or the Servicer.
Section 10.05. Limitations on Rights of Others. The provisions of this
Agreement are solely for the benefit of the Depositor, the Servicer, the Seller,
the Issuer, the Owner Trustee, the Certificateholders, the Indenture Trustee and
the Noteholders, and nothing in this Agreement, whether express or implied,
shall be construed to give to any other Person any legal or equitable right,
remedy or claim in the Trust Estate or under or in respect of this Agreement or
any covenants, conditions or provisions contained herein.
Section 10.06. Severability. Any provision of this Agreement that is
prohibited or unenforceable in any jurisdiction shall, as to such jurisdiction,
be ineffective to the extent of such prohibition or unenforceability without
invalidating the remaining provisions hereof, and any such prohibition or
unenforceability in any jurisdiction shall not invalidate or render
unenforceable such provision in any other jurisdiction.
Section 10.07. Counterparts. This Agreement may be executed by the
parties hereto in any number of counterparts, each of which when so executed and
delivered shall be an original, but all of which shall together constitute but
one and the same instrument.
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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 THAT WOULD APPLY THE LAW OF ANY JURISDICTION OTHER
THAN THE STATE OF NEW YORK, AND THE OBLIGATIONS, RIGHTS AND REMEDIES OF THE
PARTIES HEREUNDER SHALL BE DETERMINED IN ACCORDANCE WITH SUCH LAWS.
For the avoidance of doubt, the provisions of this Section 10.09 are
not intended to, and shall not be deemed to, determine the respective
jurisdictions whose laws govern the perfection or the priority of any security
interest (as defined in Section 1-201(37) of the UCC) that is created or
provided for under this Agreement.
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 in accordance with the terms of
the Indenture for the benefit of the Noteholders of all right, title and
interest of the Issuer in, to and under the Receivables or the assignment of any
or all of the Issuer's rights and obligations hereunder to the Indenture
Trustee.
Section 10.11. Nonpetition Covenants. Notwithstanding any prior
termination of this Agreement, the parties hereto shall not, prior to the date
that is one year and one day after the termination of this Agreement with
respect to the Issuer or the Depositor, acquiesce, petition or otherwise invoke
or cause the Issuer or the Depositor to invoke the process of any court or
government authority for the purpose of commencing or sustaining a case against
the Issuer or the Depositor under any federal or state bankruptcy, insolvency or
similar law, or appointing a receiver, liquidator, assignee, trustee, custodian,
sequestrator or other similar official of the Issuer or the Depositor or any
substantial part of its property, or ordering the winding up or liquidation of
the affairs of the Issuer or the Depositor.
Section 10.12. Limitation of Liability of Owner Trustee and Indenture
Trustee.
(a) Notwithstanding anything contained herein to the contrary,
this Agreement has been countersigned by Wilmington Trust Company not in its
individual capacity but solely in its capacity as Owner Trustee of the Issuer
and in no event shall Wilmington Trust Company in its individual capacity or,
except as expressly provided in the Trust Agreement, as Owner Trustee of the
Issuer have any liability for the representations, warranties, covenants,
agreements or other obligations of the Issuer hereunder or in any of the
certificates, notices or agreements delivered pursuant hereto, as to all of
which recourse shall be had solely to the assets of the Issuer in accordance
with the priorities set forth herein. For all purposes of this Agreement, in the
performance of its duties or obligations hereunder or in the performance of any
duties or obligations of the Issuer hereunder, the Owner Trustee shall be
subject to, and entitled to the benefits of, the terms and provisions of
Articles VI, VII and VIII of the Trust Agreement.
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(b) Notwithstanding anything contained herein to the contrary,
this Agreement has been accepted by The Bank of New York, not in its individual
capacity but solely as Indenture Trustee, and in no event shall The Bank of New
York have any liability for the representations, warranties, covenants,
agreements or other obligations of the Issuer hereunder or in any of the
certificates, notices or agreements delivered pursuant hereto, as to all of
which recourse shall be had solely to the assets of the Issuer in accordance
with the priorities set forth herein.
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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.
NATIONAL CITY AUTO RECEIVABLES TRUST 2004-A
By: WILMINGTON TRUST COMPANY,
not in its individual capacity
but solely as Owner Trustee
/s/ Xxxxxx X. Xxxxxx
By: ________________________________________
Name: Xxxxxx X. Xxxxxx
Title: Vice President
NATIONAL CITY VEHICLE RECEIVABLES INC.
/s/ Xxxxxx X. Xxxxx
By: ________________________________________
Name: Xxxxxx X. Xxxxx
Title: V.P., Secretary
NATIONAL CITY BANK
/s/ Xxxxxx X. Xxxxx
By: ________________________________________
Name: Xxxxxx X. Xxxxx
Title: Senior Vice President
THE BANK OF NEW YORK,
not in its individual capacity
but solely as Indenture Trustee
/s/ Xxxxx Xxx
By: ________________________________________
Name: Xxxxx Xxx
Title: Assistant Treasurer
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SCHEDULE A
[RESERVED]
SCHEDULE B
Final Schedule of Receivables
[On file with the Indenture Trustee]
SCHEDULE C
Location of Receivable Files
National City Bank
Consumer Loan Services
0000 Xxxxxx Xxxx
Xxxxxxxxxxx, Xxxx 00000
EXHIBIT A
Representations and Warranties of the Seller
Under Section 3.02 of the Receivables Purchase Agreement
(a) The Seller hereby represents and warrants as follows to the
Depositor and the Indenture Trustee as of the date hereof and as of the Transfer
Date:
(i) Organization and Good Standing. The Seller is a
national banking association duly organized and validly existing as a
banking institution under the laws of the United States and continues
to hold a valid certificate to do business as such, and has the power
to own its assets and to transact the business in which it is currently
engaged. The Seller is duly authorized to transact business and has
obtained all necessary licenses and approvals, and is in good standing
in each jurisdiction in which the character of the business transacted
by it or any properties owned or leased by it requires such
authorization.
(ii) Power and Authority. The Seller has the power and
authority to make, execute, deliver and perform this Agreement and all
of the transactions contemplated under this Agreement and the other
Basic Documents to which the Seller is a party, and has taken all
necessary action to authorize the execution, delivery and performance
of this Agreement and the other Basic Documents to which the Seller is
a party. When executed and delivered, this Agreement and the other
Basic Documents to which the Seller is a party will constitute legal,
valid and binding obligations of the Seller enforceable in accordance
with their respective terms, except as enforcement of such terms may be
limited by bankruptcy, insolvency or similar laws affecting the
enforcement of creditors' rights generally and by the availability of
equitable remedies and except as enforcement of such terms may be
limited by receivership, conservatorship and supervisory powers of bank
regulatory agencies generally.
(iii) No Violation. The execution, delivery and performance
by the Seller of this Agreement and the other Basic Documents to which
the Seller is a party will not violate any provision of any existing
state, federal or, to the best knowledge of the Seller, local law or
regulation or any order or decree of any court applicable to the Seller
or any provision of the articles of association or incorporation or the
bylaws of the Seller, or constitute a breach of any mortgage,
indenture, contract or other agreement to which the Seller is a party
or by which the Seller may be bound or result in the creation or
imposition of any lien upon any of the Seller's properties pursuant to
any such mortgage, indenture, contract or other agreement (other than
this Agreement).
(iv) No Proceedings. There are no proceedings or
investigations pending or, to the Seller's knowledge, threatened
against the Seller before any court, regulatory body,
administrative agency or other governmental instrumentality having
jurisdiction over the Seller or its properties (i) asserting the
invalidity of this Agreement or any other Basic Document to which the
Seller is a party, (ii) seeking to prevent the consummation of any of
the transactions contemplated by this Agreement or any other Basic
Document to which the Seller is a party or (iii) seeking any
determination or ruling that might materially and adversely affect the
performance by the Seller of its obligations under, or the validity or
enforceability of, this Agreement or any other Basic Document to which
the Seller is a party.
(v) Chief Executive Office. The chief executive office of
the Seller is 0000 Xxxx 0xx Xxxxxx, Xxxxxxxxx, Xxxx 00000.
(vi) No Consents. The Seller is not required to obtain the
consent of any other party or any consent, license, approval,
registration, authorization, or declaration of or with any governmental
authority, bureau or agency in connection with the execution, delivery,
performance, validity, or enforceability of this Agreement or any other
Basic Document to which it is a party that has not already been
obtained.
(vii) No Notice. The Seller represents and warrants that it
acquired title to the Receivables in good faith, without notice of any
adverse claim.
(viii) Bulk Transfer. The Seller represents and warrants
that the transfer, assignment and conveyance of the Receivables by the
Seller pursuant to this Agreement are not subject to the bulk transfer
laws or any similar statutory provisions in effect in any applicable
jurisdiction.
(ix) Seller Information. No certificate of an officer,
statement or document furnished in writing or report delivered pursuant
to the terms hereof by the Seller contains any untrue statement of a
material fact or omits to state any material fact necessary to make the
certificate, statement, document or report not misleading.
(x) Ordinary Course. The transactions contemplated by
this Agreement and the other Basic Documents to which the Seller is a
party are in the ordinary course of the Seller's business.
(xi) Solvency. The Seller is not insolvent, nor will the
Seller be made insolvent by the transfer of the Receivables, nor does
the Seller anticipate any pending insolvency.
(xii) Legal Compliance. The Seller is not in violation of,
and the execution and delivery by the Seller of this Agreement and the
other Basic Documents to which the
Seller is a party and its performance and compliance with the terms of
this Agreement and the other Basic Documents to which the Seller is a
party will not constitute a violation with respect to, any order or
decree of any court or any order or regulation of any federal, state,
municipal or governmental agency having jurisdiction, which violation
would materially and adversely affect the Seller's condition (financial
or otherwise) or operations or any of the Seller's properties or
materially and adversely affect the performance of any of its duties
under the Basic Documents.
(xiii) Creditors. The Seller did not sell the Receivables to
the Depositor with any intent to hinder, delay or defraud any of its
creditors.
(xiv) Official Record. This Agreement is and shall remain
at all times prior to the termination hereof an official record of the
Seller as referred to in Section 13(e) of the Federal Deposit Insurance
Act, as amended by 12 U.S.C. Section 1823(e).
(xv) Perfection Representation. The Seller makes all of
the representations, warranties and covenants set forth in Schedule II.
(b) The Seller makes the following representations and warranties
with respect to the Receivables, on which the Depositor relies in accepting the
Receivables and in transferring the Receivables to the Issuer under the Sale and
Servicing Agreement, and on which the Issuer relies in pledging the same to the
Indenture Trustee. 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 Depositor, the
subsequent sale, transfer and assignment of the Receivables by the Depositor to
the Issuer pursuant to the Sale and Servicing Agreement and the pledge of the
Receivables by the Issuer to the Indenture Trustee pursuant to the Indenture.
(i) Characteristics of Receivables. Each Receivable (A)
was originated in the United States of America by the Seller or
National City Michigan or by a Dealer located in the United States of
America for the retail sale of a Financed Vehicle, in each case, in the
ordinary course of the applicable Dealer's business in accordance with
the Seller's credit policies as of the date of origination or
acquisition of the related Receivable, is payable in United States
dollars, has been fully and properly executed by the parties thereto,
has been originated by the Seller or National City Michigan through or
purchased by the Seller or National City Michigan from such Dealer
under an existing Dealer Agreement (or approved form of assignment)
and, in the case of each Receivable originated by a Dealer and sold to
the Seller or National City Michigan, has been validly assigned by such
Dealer to the Seller or to National City Michigan (and, in the case of
each Receivable originated by, or assigned by a Dealer to, National
City Michigan, has been sold by National City Michigan to the Seller),
(B) has created a valid, subsisting and enforceable security interest
in favor of the Seller or National City Michigan in the Financed
Vehicle, which security interest, by virtue of the related Lien
Certificate, shall
be perfected and prior to any other interest in such Financed Vehicle
(and which security interest has been validly assigned by National City
Michigan to the Seller, if originally created in favor of National City
Michigan), and which security interest is assignable by the Seller and
reassignable by the assignee, (C) contains customary and enforceable
provisions such that the rights and remedies of the holder thereof are
adequate for realization against the collateral of the benefits of the
security, (D) provides for fixed level monthly payments (provided that
the payment in the last month of the term of the Receivable may be
minimally different from the level scheduled payments) that fully
amortize the Amount Financed by maturity and yield interest at the APR
borne by the Contract and (E) amortizes using the simple interest
method.
(ii) Compliance with Law. Each Receivable complied at the
time it was originated or made, and at the Transfer Date complies, in
all material respects with all requirements of applicable federal,
state and, to the best knowledge of the Seller, local laws, rulings and
regulations thereunder.
(iii) Binding Obligation. Each Receivable represents the
genuine, legal, valid and binding payment obligation of the Obligor
thereon, enforceable by the holder thereof in accordance with its
terms, except (A) as enforceability thereof may be limited by
bankruptcy, insolvency, reorganization or similar laws affecting the
enforcement of creditors' rights generally and by equitable limitations
on the availability of specific remedies, regardless of whether such
enforceability is considered in a proceeding in equity or at law and
(B) as such Receivable may be modified by the application after the
Transfer Date of the Soldiers and Sailors Civil Relief Act of 1940, as
amended, or by any similar applicable State law.
(iv) No Government Obligor. No Receivable is due from the
United States of America or any State or any agency, department,
subdivision or instrumentality thereof.
(v) Obligor Bankruptcy. To the best of the Seller's
knowledge, at the Cutoff Date, no Obligor is or has been, since the
origination of the related Receivable, the subject of a bankruptcy
proceeding.
(vi) Schedule of Receivables. The information set forth in
Schedule I to this Agreement with respect to the Receivables is true
and correct in all material respects as of the beginning of business on
the Cutoff Date.
(vii) Marking Records. By the Transfer Date, the Seller
will have caused its computer and accounting records relating to each
Receivable to be marked to show that the Receivables have been sold to
the Depositor by the Seller and transferred and assigned by the
Depositor to the Issuer in accordance with the terms of the Sale and
Servicing Agreement and pledged by the Issuer to the Indenture Trustee
in accordance with the terms of the Indenture.
(viii) Computer Tape. The computer tape regarding the
Receivables made available by the Seller to the Depositor is complete
and accurate in all material respects as of the Closing Date.
(ix) No Adverse Selection. No selection procedures
believed by the Seller to be adverse to the Noteholders or the
Certificateholders were utilized in selecting the Receivables.
(x) Tangible Chattel Paper. Each Receivable constitutes
tangible chattel paper within the meaning of the UCC as in effect in
the State of origination.
(xi) One Original. There is only one original executed
copy of each Receivable.
(xii) Receivables in Force. No Receivable has been
satisfied, subordinated or rescinded, nor has any Financed Vehicle been
released from the Lien of the related Receivable in whole or in part.
None of the terms of any Receivable has been waived, altered or
modified in any respect since its origination, except by instruments or
documents identified in the related Receivable File; and no Receivable
has been granted an extension except as noted in the servicing records
of such Receivable and each such extension has been granted in
accordance with the Seller's extension policy set forth in Exhibit D-1
to the Sale and Servicing Agreement.
(xiii) Lawful Assignment. No Receivable has been originated
in, or is subject to the laws of, any jurisdiction the laws of which
would make unlawful, void or voidable the sale, transfer and assignment
of such Receivable under this Agreement or the Sale and Servicing
Agreement, as applicable, or the pledge of such Receivable under the
Indenture.
(xiv) Title. It is the intention of the Seller that the
transfers and assignments herein contemplated constitute sales of the
Receivables from the Seller to the Depositor and that the beneficial
interest in and title to the Receivables not be part of the debtor's
estate in the event of the appointment of a receiver or conservator for
the Seller under any receivership, bankruptcy law, insolvency or
banking law. Immediately prior to the Closing Date, no Receivable has
been sold, transferred, assigned or pledged by the Seller to any Person
other than to the Depositor or pursuant to this Agreement (or by the
Depositor to any other Person other than to the Issuer pursuant to the
Sale and Servicing Agreement). Immediately prior to the transfers and
assignments herein contemplated, the
Seller has good and marketable title to each Receivable free and clear
of all Liens, and, immediately upon the transfer thereof, the Depositor
shall have good and marketable title to each Receivable, free and clear
of all Liens and, immediately upon the transfer thereof from the
Depositor to the Issuer in accordance with the terms of the Sale and
Servicing Agreement and the representations and warranties of the
Depositor set forth therein, the Issuer shall have good and marketable
title to each Receivable, free and clear of all Liens and, immediately
upon the pledge thereof from the Issuer to the Indenture Trustee in
accordance with the terms of the Indenture, the Indenture Trustee shall
have a first priority perfected security interest in each Receivable.
(xv) Security Interest in Financed Vehicle. Immediately
prior to its sale, assignment and transfer to the Depositor pursuant to
this Agreement, each Receivable is secured by a first priority
perfected security interest in the related Financed Vehicle in favor of
the Seller as secured party, or all necessary and appropriate actions
have been commenced that will result in the valid perfection of a first
priority security interest in such Financed Vehicle in favor of the
Seller as secured party. The Lien Certificate for each Financed Vehicle
shows, or if a new or replacement Lien Certificate is being applied for
with respect to such Financed Vehicle such Lien Certificate shall be
received within 120 days of the Closing Date and shall show, the Seller
or National City Michigan named as the original secured party under
each Receivable as the holder of a first priority security interest in
such Financed Vehicle. Each Dealer's security interest in any
Receivable originated by such Dealer has been validly assigned by the
Dealer to the Seller or National City Michigan, and each such security
interest so assigned to National City Michigan has been validly
assigned to the Seller by National City Michigan. The Seller's security
interest has been validly assigned to the Depositor pursuant to this
Agreement.
(xvi) All Filings Made. All filings (including UCC filings)
required to be made in any jurisdiction to give the Issuer a first
perfected ownership interest in the Receivables and the Indenture
Trustee a first priority perfected security interest in the Receivables
have been made or will be made on the Closing Date.
(xvii) No Defenses. No Receivable is subject to any right of
rescission, setoff, counterclaim, dispute or defense, including the
defense of usury, whether arising out of transactions concerning the
Receivable or otherwise, and the operation of any terms of the
Receivable or the exercise by the Seller or the Obligor of any right
under the Receivable will not render the Receivable unenforceable in
whole or in part, and no such right of rescission, setoff,
counterclaim, dispute or defense, including the defense of usury, has
been asserted with respect thereto.
(xviii) No Default. There has been no default, breach,
violation or event permitting acceleration under the terms of any
Receivable (other than payment delinquencies of not more than 30 days)
as of the Cutoff Date, and no condition exists or event has occurred
and is continuing that with notice, the lapse of time or both would
constitute a default, breach, violation or event permitting
acceleration under the terms of any Receivable, and there has been no
waiver of any of the foregoing. On or prior to the applicable Transfer
Date, no Financed Vehicle has been repossessed.
(xix) Insurance. The Seller, in accordance with its
customary procedures, has required that the Obligor obtains physical
damage insurance covering each Financed Vehicle (i) in an amount at
least equal to the lesser of (a) the actual cash value of the related
Financed Vehicle or (b) the unpaid principal balance owing on such
Receivable, (ii) naming the Seller as a loss payee and (iii) insuring
against loss and damage due to fire, theft, transportation, collision
and other risks generally covered by comprehensive and collision
coverage and, under the terms of the related Receivable, the Obligor is
required to maintain such insurance.
(xx) Final Scheduled Maturity Date. No Receivable has a
final scheduled payment date later than six months prior to the Class C
Final Scheduled Payment Date.
(xxi) Certain Characteristics of the Receivables. As of the
Cutoff Date, (A) each Receivable had an original maturity of not less
than 48 or more than 72 months and (B) no Receivable was more than 30
days past due.
(xxii) No Foreign Obligor. All of the Receivables are due
from Obligors who are citizens, or legal resident aliens, of the United
States of America.
(xxiii) No Extensions. The number or timing of scheduled
payments has not been changed on any Receivable on or before the
Closing Date except as reflected on the computer tape delivered in
connection with the sale of the Receivables.
(xxiv) Scheduled Payments. Each Receivable had a first
scheduled payment due on or prior to 45 calendar days after the Closing
Date. Each Obligor has been instructed to make all scheduled payments
to the Seller or an affiliate of the Seller. To the best knowledge of
the Seller, each Obligor has paid the entire down payment called for by
the contract.
(xxv) No Fleet Sales. None of the Receivables have been
included in a "fleet" sale (i.e., a sale to any single Obligor of more
than seven Financed Vehicles).
(xxvi) Receivable Files Complete. There exists a Receivable
File pertaining to each Receivable and such Receivable File contains,
without limitation, (A) a fully executed original of the Receivable,
(B) the Lien Certificate together with such other documents that the
Seller shall keep on file in accordance with its customary procedures
evidencing the security interest of the Seller in the related Financed
Vehicle, and (C) any
and all other documents that the Servicer shall have kept on file in
accordance with its customary procedures relating to a Receivable, an
Obligor or a Financed Vehicle. Each of such documents that is required
to be signed by the Obligor has been signed by the Obligor as required,
and each form described in clauses (A), (B) and (C) above has been
correctly prepared and completed in all material respects.
Notwithstanding the above, the complete Receivable File for each
Receivable, (x) shall fulfill the documentation requirements of the
Seller's credit policies as in effect on the date of origination of
such Receivable and (y) is in possession of the Servicer and Custodian,
as applicable, on the Transfer Date. The blanket power of attorney
granted to the Indenture Trustee, a security agreement and the original
Lien Certificate are the only documents necessary to permit the
Indenture Trustee to submit the Lien Certificate for each Financed
Vehicle for retitling in the name of the Indenture Trustee as secured
party in the event such retitling were required or otherwise permitted
under the Basic Documents.
(xxvii) No Fraud or Misrepresentation. Each Receivable that
was originated by a Dealer and was sold by the Dealer to the Seller, to
the best of the Seller's knowledge, was so originated and sold without
fraud or misrepresentation on the part of such Dealer in either case.
(xxviii) Receivables Not Assumable. To the best of the
Seller's knowledge, no Receivable is assumable by another person in a
manner which would release the Obligor thereof from such Obligor's
obligations to the Seller with respect to such Receivable.
(xxix) Tax Liens. To the best of the Seller's knowledge,
there is no Lien against any Financed Vehicle for delinquent taxes.
(xxx) No Impairment. The Seller has not done anything to
convey any right to any person that would result in such person having
a right to payments due under a Receivable or otherwise to impair the
rights of the Depositor in any Receivable or the proceeds thereof.
(xxxi) Servicing. Each Receivable has been serviced in
conformity with all applicable laws, rules and regulation and in
conformity with the Seller's policies and procedures which are
consistent with customary, prudent industry standards.
(xxxii) No Corporate Obligors. To the best of the Seller's
knowledge, all of the Receivables are due from Obligors who are natural
persons.
(xxxiii) No Liens. No Liens or claims have been filed for
work, labor, or materials relating to a Financed Vehicle that are prior
to, or equal or coordinate with, the security interest in the Financed
Vehicle granted by the related Receivable.
(xxxiv) APR. No Receivable has an APR of less than 2.500%
and the weighted average of the APRs of the Receivables is
approximately 6.789%.
(xxxv) Remaining Term. Each Receivable has a remaining term
of at least 23 months and no more than 72 months.
(xxxvi) Seasoning. The weighted average number of months
since the initial installment due date for the Receivables is four
months.
(xxxvii) Remaining Balance. Each Receivable has a remaining
balance of at least $5,000.58 and no more than $49,870.68.
(xxxviii) New Vehicles. At least 56.20% of the aggregate
principal balance of the Receivables is secured by Financed Vehicles
which were new or "near new" (as described in the Prospectus
Supplement) at the date of origination.
(xxxix) No Repossessions. No Financed Vehicle has been
repossessed prior to the applicable Transfer Date.
(xl) Initial Payment. The Obligor with respect to each
Receivable originated prior to December 1, 2003 has made at least one
scheduled payment.
(xli) No Proceedings. As of the Transfer Date, there are
no proceedings pending, nor to the best of the Seller's knowledge,
threatened, wherein the Obligor or any governmental agency has alleged
that any Receivable is illegal or unenforceable.
(xlii) Dealer Agreement. Each Dealer from which the Seller
purchases or through which the Seller originates Receivables directly
has entered into a Dealer Agreement with the Seller providing for the
sale or origination of Receivables from time to time by such Dealer to
the Seller or uses an approved form of assignment. Each Dealer
Agreement and assignment form is substantially in the form attached to
the Sale and Servicing Agreement as Exhibit D, except for immaterial
modifications or deviations from the Dealer Agreement or assignment
form. Such modifications and deviations from the Dealer Agreement or
assignment form will not have a material adverse effect on the
Noteholders or Certificateholders. Such Dealer Agreement and/or the
assignment and the Seller's usual and customary related documentation
signed by or provided to the Dealer, constitutes the entire agreement
between the Seller and the related Dealer with respect to the sale of
such Receivable to the Seller. Each applicable Dealer Agreement and
form of assignment is in full force and effect, there have been no
material defaults by the Seller under such Dealer Agreement; the Seller
has fully performed all of its obligations under such Dealer Agreement
or form of assignment; the Seller has not made any statements or
representations to such Dealer (whether written or oral) inconsistent
with any term of such Dealer Agreement or form of assignment; the
purchase price for such Receivable has been paid in full, other than
any dealer reserve, by the Seller; and any payment owed to such Dealer
by the Seller is a corporate obligation of the Seller.
(xliii) Seller's Obligations. The Seller has duly fulfilled
all obligations to be fulfilled on its part under or in connection with
the origination, acquisition and/or assignment of the Receivables.
(xliv) No Consent. To the best of the Seller's knowledge, no
notice to or consent from any Obligor is necessary to effect the
acquisition of the Receivables by the Depositor or the Trust or the
pledge of the Receivables by the Trust to the Indenture Trustee.
(xlv) No Transfer Taxes. The sale, transfer, assignment and
conveyance of the Receivables by the Seller pursuant to this Agreement
is not subject to and will not result in any tax, fee or governmental
charge payable by the Seller, the Issuer or the Indenture Trustee to
any federal, state or local government ("Transfer Taxes") other than
Transfer Taxes which have been or will be paid by the Seller as due. In
the event the Issuer or the Indenture Trustee receives actual notice of
any Transfer Taxes arising out of the transfer, assignment and
conveyance of the Receivables, on written demand by the Issuer or the
Indenture Trustee, or upon the Seller's otherwise being given notice
thereof by the Issuer or the Indenture Trustee, the Seller shall pay,
and otherwise indemnify and hold the Issuer and the Indenture Trustee
harmless, on an after-tax basis, from and against any and all such
Transfer Taxes (it being understood that the Noteholders, the Indenture
Trustee and the Issuer shall have no obligation to pay such Transfer
Taxes).
(xlvi) Other Receivables. To the best of the Seller's
knowledge, neither the Obligor on any Receivable nor any of its
affiliates is the obligor on Receivables with an aggregate principal
amount representing more than 0.01% of the aggregate Principal Balance
of the Receivables as of the Cutoff Date.
(xlvii) Aggregate Balance. The aggregate principal balance of
the Receivables as of the Cutoff Date is equal to $862,455,978.42.
(xlviii) Geographic Distribution. No more than 5.0% of the
aggregate principal balance of the Receivables as of the Cutoff Date is
attributable to Receivables with Obligors having a billing address in
any single State other than Ohio, Pennsylvania, Michigan, Kentucky,
Illinois and Tennessee, which represent no more than 42.92%, 13.68%,
11.35%, 8.83%, 8.79% and 7.06%, respectively.
(xlix) No Advances. No advances have been made to Obligors
in order to meet any representation or warranty herein set forth;
provided, however, that Receivables may have had up to three extensions
prior to the Cutoff Date, subject to the following: (A) each such
extension was made in conformity with the Extension Policy and (B) each
extended Receivable satisfies in all material respects all applicable
requirements under the Seller's credit and collection policies as of
the date of its origination.
(l) Amount Financed. At the time each Receivable was
originated, the Amount Financed was fully disbursed. There is no
requirement for future advances of principal thereunder, and all fees
and expenses in connection with the origination of such Receivable have
been paid.
(li) No Consumer Leases. No Receivable constitutes a
"consumer lease" under either (a) the UCC as in effect in the
jurisdiction whose law governs the Receivable or (b) the Consumer
Leasing Act, 15 U.S.C. 1667.
EXHIBIT B
Form of Payment Date Statement to Securityholders
National City Bank
National City Auto Receivables Trust 2004-A Payment Date Statement to
Securityholders
Principal Distribution Amount
Class A-1 Notes: ($ per $1,000 original principal balance)
Class A-2 Notes: ($ per $1,000 original principal balance)
Class A-3 Notes: ($ per $1,000 original principal balance)
Class A-4 Notes: ($ per $1,000 original principal balance)
Class B Notes: ($ per $1,000 original principal balance)
Class C Notes: ($ per $1,000 original principal balance)
Interest Distribution Amount
Class A-1 Notes: ($ per $1,000 original principal balance)
Class A-2 Notes: ($ per $1,000 original principal balance)
Class A-3 Notes: ($ per $1,000 original principal balance)
Class A-4 Notes: ($ per $1,000 original principal balance)
Class B Notes: ($ per $1,000 original principal balance)
Class C Notes: ($ per $1,000 original principal balance)
First Priority Principal Distribution Amount ($ per $1,000 original principal balance)
Second Priority Principal Distribution Amount ($ per $1,000 original principal balance)
Regular Note Principal Distribution Amount ($ per $1,000 original principal balance)
Class A-1 Interest Carryover Shortfall ($ per $1,000 original principal balance)
Class A-2 Interest Carryover Shortfall ($ per $1,000 original principal balance)
Class A-3 Interest Carryover Shortfall ($ per $1,000 original principal balance)
Class A-4 Interest Carryover Shortfall ($ per $1,000 original principal balance)
Class B Interest Carryover Shortfall ($ per $1,000 original principal balance)
Class C Interest Carryover Shortfall ($ per $1,000 original principal balance)
Class A-1 Principal Carryover Shortfall ($ per $1,000 original principal balance)
Class A-2 Principal Carryover Shortfall ($ per $1,000 original principal balance)
Class A-3 Principal Carryover Shortfall ($ per $1,000 original principal balance)
Class A-4 Principal Carryover Shortfall ($ per $1,000 original principal balance)
Class B Principal Carryover Shortfall ($ per $1,000 original principal balance)
Class C Principal Carryover Shortfall ($ per $1,000 original principal balance)
Payment Date Payment Shortfall
Reserve Account Withdrawal Shortfall
Note Balance:
Class A-1 Notes:
Class A-2 Notes:
Class A-3 Notes:
Class A-4 Notes:
Class B Notes:
Class C Notes:
Note Pool Factor:
Class A-1 Notes:
Class A-2 Notes:
Class A-3 Notes:
Class A-4 Notes:
Class B Notes:
Class C Notes:
Servicing Fee ($ per $1,000 original principal balance)
Pool Balance
Realized Losses
Liquidated Receivables or Purchased Receivables
Purchase Amounts
Reserve Account Balance
Amount Deposited to Reserve Account
Principal Balance of Receivables that were delinquent:
30 to 59 days
60 to 89 days
90 days or more
Amount Withdrawn from Reserve Account
Mandatory Redemption Amount
Class A-1 Notes
Class A-2 Notes
Class A-3 Notes
Class A-4 Notes
Class B Notes
EXHIBIT C
FORM OF SERVICER'S CERTIFICATE
[To be Provided by Servicer]
EXHIBIT D-1
EXTENSION POLICY
1. A loan extension is an acceptable means of bringing a delinquent
account into a current status, provided the following criteria are met:
a. The account has been in existence for at least six months.
b. The account has not been previously extended within the last
twelve calendar months.
c. The borrower has shown a renewed willingness and ability to
repay.
d. Extensions are considered to be single events that may extend
for multiple payments. Extensions for installment loans should not
exceed three payments. Loans secured by first mortgages may have
extensions that exceed three payments, but never more than six
payments. If the extension exceeds three payments, it should not be
granted until the borrower has made at least three consecutive monthly
payments. In no event should a borrower be given extensions that would
exceed 10 monthly payments over any three year period.
e. All accounts presented for loan payment extensions should be
reviewed by proper levels of management before final action is taken.
f. The credit file (or notes on the collection system) must be
documented for the reason for the extension and confirm the customer's
willingness and ability to repay.
Exceptions to this policy should be well documented and should be
limited to situations clearly outside the control of the borrower, such
as strikes, major illness to the borrower, or employment in an industry
with regular lay offs.
2. Hardship Cases/Workout Programs - special fixed payment arrangements
may be made if warranted under the following conditions:
a. Special fixed payments cannot result in negative amortization.
b. Each account with a special fixed payment arrangement must be
reviewed every twelve months. Extensions of the special fixed payment
plan must be approved by the collection department manager or his/her
designate (Supervisor level).
3. The items listed below are exceptions and as such are not considered
extensions when they occur.
a. Delinquency resulting from a legitimate customer dispute.
b. Delinquency recycled as a result of an account being past due
by an amount that is equal to or less than 5% of the required monthly
payment.
c. Delinquency reconstructed on an account as a result of a
dishonored payment (NSF, stopped payment, etc.), which previously cured
one or more amount due or past due buckets.
d. Accounts that are extended due to payment system problems with
any consumer counseling service.
EXHIBIT D-2
FORM OF DEALER AGREEMENTS
[On file with the Trustee]
EXHIBIT D-3
FORM OF ASSIGNMENT
[On file with the Trustee]
EXHIBIT E
[RESERVED]
EXHIBIT F
PERFECTION REPRESENTATIONS, WARRANTIES AND COVENANTS
1. General. The Sale and Servicing Agreement creates a valid and
continuing security interest (as defined in the UCC) in all of the Depositor's
right, title and interest in and to the Receivables in favor of the Issuer
which, (a) is enforceable upon execution of the Sale and Servicing Agreement
against creditors of and purchasers from the Depositor as such enforceability
may be limited by applicable Debtor Relief Laws, now or hereafter in effect, and
by general principles of equity (whether considered in a suit at law or in
equity), and (b) upon filing of the financing statements described in clause 4
below will be prior to all other Liens (other than Liens permitted pursuant to
clause 5 below).
2. Characterization. The Receivables constitute "tangible chattel
paper" within the meaning of UCC Section 9-102. The Depositor has taken all
steps necessary to perfect its security interest against the Obligor in the
Financed Vehicles securing the Receivables.
3. Creation. Immediately prior to the conveyance of the
Receivables pursuant to the Sale and Servicing Agreement, the Depositor owns and
has good and marketable title to, or has a valid security interest in, the
Receivables free and clear of any Lien, claim or encumbrance of any Person.
4. Perfection. The Depositor has caused or will have caused,
within ten days of the Closing Date, the filing of all appropriate financing
statements in the proper filing office in the appropriate jurisdictions under
applicable law in order to perfect the security interest granted to the Issuer
under the Sale and Servicing Agreement in the Receivables.
5. Priority. Other than the security interests granted to the
Issuer pursuant to the Sale and Servicing Agreement, the Depositor has not
pledged, assigned, sold, granted a security interest in, or otherwise conveyed
any of the Receivables, the Depositor has not authorized the filing of and is
not aware of any financing statements against the Depositor that includes a
description of collateral covering the Receivables other than any financing
statement (i) relating to the security interests granted to the Issuer under the
Sale and Servicing Agreement, (ii) that has been terminated or (iii) that has
been granted pursuant to the terms of the Basic Documents. None of the tangible
chattel paper that constitutes or evidences the Receivables has any marks or
notations indicating that they are pledged, assigned or otherwise conveyed to
any Person other than Indenture Trustee.
