EXHIBIT 4.5
FIRST SECURITY BANK, N.A.
AS SELLER AND SERVICER,
AND
FIRST SECURITY AUTO OWNER TRUST 19-___
SALE AND SERVICING AGREEMENT
DATED AS OF ______________
FIRST SECURITY AUTO OWNER TRUST 19__-__
TABLE OF CONTENTS
PAGE
ARTICLE I. DEFINITIONS
Section 1.1 Definitions . . . . . . . . . . . . . . . . . . . . . . . . . 1
Section 1.2 Usage of Terms. . . . . . . . . . . . . . . . . . . . . . . .18
Section 1.3 Calculations. . . . . . . . . . . . . . . . . . . . . . . . .18
Section 1.4 References. . . . . . . . . . . . . . . . . . . . . . . . . .18
Section 1.5 Section References. . . . . . . . . . . . . . . . . . . . . .18
Section 1.6 Action by or Consent of Securityholders . . . . . . . . . . .18
ARTICLE II. THE TRUST PROPERTY
Section 2.1 Conveyance of Trust Property. . . . . . . . . . . . . . . . .18
Section 2.2 Warranties of the Seller as to Each Receivable. . . . . . . .19
Section 2.3 Warranties as to the Receivables in the Aggregate and
Actions of the Seller . . . . . . . . . . . . . . . . . . . .22
Section 2.4 Repurchase upon Breach. . . . . . . . . . . . . . . . . . . .24
Section 2.5 Custody of Receivable Files . . . . . . . . . . . . . . . . .24
Section 2.6 Duties of the Servicer as Custodian . . . . . . . . . . . . .25
Section 2.7 Instructions; Authority to Act. . . . . . . . . . . . . . . .26
Section 2.8 Custodian's Indemnification . . . . . . . . . . . . . . . . .26
Section 2.9 Effective Period and Termination. . . . . . . . . . . . . . .26
ARTICLE III. ADMINISTRATION AND SERVICING OF THE TRUST PROPERTY
Section 3.1 Duties of the Servicer. . . . . . . . . . . . . . . . . . . .27
Section 3.2 Collection of Receivable Payments; Credit Deferrals;
Optional Payment Deferrals. . . . . . . . . . . . . . . . . .30
Section 3.3 Realization upon Receivables. . . . . . . . . . . . . . . . .31
Section 3.4 Physical Damage Insurance . . . . . . . . . . . . . . . . . .32
Section 3.5 Maintenance of Security Interests in Financed Vehicles. . . .32
Section 3.6 Covenants of the Servicer . . . . . . . . . . . . . . . . . .33
Section 3.7 Purchases by the Servicer . . . . . . . . . . . . . . . . . .33
Section 3.8 Servicing Compensation. . . . . . . . . . . . . . . . . . . .33
Section 3.9 Servicer's Certificate. . . . . . . . . . . . . . . . . . . .34
Section 3.10 Annual Statement as to Compliance . . . . . . . . . . . . . .34
Section 3.11 Independent Certified Public Accountants' Reports . . . . . .35
Section 3.12 Access to Certain Documentation and Information
Regarding Receivables . . . . . . . . . . . . . . . . . . . .35
Section 3.13 Reports to the Commission . . . . . . . . . . . . . . . . . .35
Section 3.14 Reports to the Rating Agencies. . . . . . . . . . . . . . . .35
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ARTICLE IV. DISTRIBUTIONS; RESERVE ACCOUNT;STATEMENTS TO SECURITYHOLDERS
Section 4.1 Establishment of Accounts . . . . . . . . . . . . . . . . . .36
Section 4.2 Collections . . . . . . . . . . . . . . . . . . . . . . . . .38
Section 4.3 Advances. . . . . . . . . . . . . . . . . . . . . . . . . . .40
Section 4.4 Additional Deposits; Net Deposits . . . . . . . . . . . . . .40
Section 4.5 Distributions . . . . . . . . . . . . . . . . . . . . . . . .41
Section 4.6 Reserve Account . . . . . . . . . . . . . . . . . . . . . . .42
Section 4.7 Statements to Securityholders . . . . . . . . . . . . . . . .42
ARTICLE V. YIELD SUPPLEMENT ACCOUNT
Section 5.1 Yield Supplement Agreement. . . . . . . . . . . . . . . . . .44
Section 5.2 Yield Supplement Account. . . . . . . . . . . . . . . . . . .44
ARTICLE VI. THE SELLER
Section 6.1 Representations and Warranties of the Seller. . . . . . . . .46
Section 6.2 Liability of the Seller; Indemnities. . . . . . . . . . . . .48
Section 6.3 Merger or Consolidation of the Seller . . . . . . . . . . . .49
Section 6.4 Limitation on Liability of the Seller and Others. . . . . . .49
Section 6.5 Seller May Own Certificates . . . . . . . . . . . . . . . . .49
ARTICLE VII. THE SERVICER
Section 7.1 Representations and Warranties of the Servicer. . . . . . . .49
Section 7.2 Liability of the Servicer; Indemnities. . . . . . . . . . . .51
Section 7.3 Merger or Consolidation of the Servicer . . . . . . . . . . .52
Section 7.4 Limitation on Liability of the Servicer and Others. . . . . .52
Section 7.5 Servicer Not to Resign. . . . . . . . . . . . . . . . . . . .53
Section 7.6 Servicer May Own Certificates . . . . . . . . . . . . . . . .53
ARTICLE VIII. SERVICING TERMINATION
Section 8.1 Events of Servicing Termination . . . . . . . . . . . . . . .53
Section 8.2 Trustee to Act; Appointment of Successor Servicer . . . . . .55
Section 8.3 Effect of Servicing Transfer. . . . . . . . . . . . . . . . .56
Section 8.4 Notification to Securityholders . . . . . . . . . . . . . . .57
Section 8.5 Waiver of Past Events of Servicing Termination. . . . . . . .57
Section 8.6 Transfer of Accounts. . . . . . . . . . . . . . . . . . . . .57
ARTICLE IX. TERMINATION
Section 9.1 Termination of the Trust. . . . . . . . . . . . . . . . . . .57
Section 9.2 Optional Purchase of All Receivables. . . . . . . . . . . . .58
ARTICLE X. MISCELLANEOUS PROVISIONS
Section 10.1 Amendment . . . . . . . . . . . . . . . . . . . . . . . . . .59
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Section 10.2 Protection of Title to Trust. . . . . . . . . . . . . . . . .60
Section 10.3 Limitation on Rights of Securityholders . . . . . . . . . . .61
Section 10.4 Governing Law . . . . . . . . . . . . . . . . . . . . . . . .62
Section 10.5 Notices . . . . . . . . . . . . . . . . . . . . . . . . . . .62
Section 10.6 Severability of Provisions. . . . . . . . . . . . . . . . . .62
Section 10.7 Assignment. . . . . . . . . . . . . . . . . . . . . . . . . .62
Section 10.8 Assignment. . . . . . . . . . . . . . . . . . . . . . . . . .62
Section 10.9 Intention of Parties. . . . . . . . . . . . . . . . . . . . .63
Section 10.10 Counterparts. . . . . . . . . . . . . . . . . . . . . . . . .63
Section 10.11 Limitation of Liability of the Trustees . . . . . . . . . . .63
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SCHEDULES
Schedule A Schedule of Receivables
Schedule B Receivables File Locations
EXHIBITS
Exhibit A Form of Initial Assignment
Exhibit B Form of Servicer's Certificate
Exhibit C Form of Yield Supplement Agreement
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SALE AND SERVICING AGREEMENT
SALE AND SERVICING AGREEMENT, dated as of ________, 19__ (as
amended, supplemented or otherwise modified and in effect, this "AGREEMENT"),
by and among FIRST SECURITY BANK, N.A., a national banking association, as
Seller and Servicer, and FIRST SECURITY AUTO OWNER TRUST 19-__-_, a Delaware
business trust (the "Trust").
In consideration of the premises and of the mutual agreements
herein contained, and other good and valuable consideration, the receipt of
which is acknowledged, the parties hereto, intending to be legally bound,
agree as follows:
ARTICLE I
DEFINITIONS
Section I.1 DEFINITIONS. Whenever used in this Agreement, the
following words and phrases, unless the context otherwise requires, whenever
capitalized shall have the following meanings:
"ACCOUNT PROPERTY" means all amounts and investments held from time
to time in any Account, the Reserve Account or the Yield Supplement Account,
as the case may be (whether in the form of deposit accounts, Physical
Property, book-entry securities, uncertificated securities or otherwise), and
all proceeds of the foregoing.
"ACCOUNTS" mean, collectively, the Collection Account and the Note
Distribution Account.
"ADVANCES" shall have the meaning specified in Section 4.3.
"AFFILIATE" means, with respect to any Person, any other Person
directly or indirectly controlling, controlled by, or under direct or
indirect common control with such specified Person. For purposes of this
definition, "control" when used with respect to any specified Person means
the power to direct the management and policies of such Person, directly or
indirectly, whether through the ownership of voting securities, by contract
or otherwise; and the terms "controlling" and "controlled" have meanings
correlative to the foregoing.
"AGGREGATE CLASS A NOTEHOLDERS' INTEREST DISTRIBUTABLE AMOUNT"
means, with respect to any Distribution Date, the sum of the Class A
Noteholders' Interest Distributable Amounts for all classes of Class A Notes
and the Class A Noteholders' Interest Carryover Shortfall as of the preceding
Distribution Date.
"AGGREGATE NET LOSSES" means, for any Collection Period, the
aggregate amount allocable to principal of all Receivables newly designated
during such Collection Period as Liquidating Receivables minus all
Liquidation Proceeds to the extent allocable to principal collected
during such Collection Period with respect to all Liquidating Receivables
(whether or not newly designated as such).
"AGGREGATE RECEIVABLES BALANCE" means, as of any date, the sum of
the Receivable Balance of all outstanding Receivables (other Liquidating
Receivables) held by the Trust on such date.
"AGGREGATE STARTING RECEIVABLES BALANCE" means, as of the Cutoff
Date, $______________.
"AMOUNT FINANCED" in respect of a Receivable means the amount
advanced under the Receivable and related costs and shown as such in the
contract evidencing such Receivable and as disclosed for truth in lending
purposes.
"AUTHORIZED OFFICER" means any officer within the Corporate Trust
Office of a Trustee, including any managing director, vice president,
assistant vice president, assistant treasurer, assistant secretary or any
other officer of a Trustee customarily performing functions similar to those
performed by any of the above designated officers and having direct
responsibility for the administration of this Agreement 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.
"AVAILABLE AMOUNT" means, with respect to any Distribution Date,
the sum of Available Interest and Available Principal.
"AVAILABLE INTEREST" means, with respect to any Distribution Date,
the excess of (a) the sum of (i) Interest Collections for such Distribution
Date, (ii) the Yield Supplement Amount for such Distribution Date and (iii)
all Advances made by the Servicer with respect to such Distribution Date,
over (b) the amount of Outstanding Advances to be reimbursed on or with
respect to such Distribution Date.
"AVAILABLE PRINCIPAL" means, with respect to any Distribution Date,
the sum of the following amounts with respect to the related Collection
Period: (i) that portion of all Collections allocable to principal in
accordance with the terms of the Receivables and the Servicer's customary
servicing procedures; (ii) to the extent attributable to principal, the
Repurchase Amount received with respect to each Receivable repurchased by the
Seller or purchased by the Servicer under an obligation which arose during
the related Collection Period; (iii) all related Recoveries, to the extent
allocable to principal and (iv) all related Liquidation Proceeds, to the
extent allocable to principal. "Available Principal" on any Distribution
Date shall exclude all payments and proceeds of any Receivables the
Repurchase Amount of which has been distributed on a prior Distribution Date.
"AVERAGE DELINQUENCY RATIO" means, as of any Distribution Date, the
average of the Delinquency Ratios for the preceding three Collection Periods.
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"AVERAGE NET LOSS RATIO" means, as of any Distribution Date, the
average of the Net Loss Ratios for the preceding three Collection Periods.
"BASIC DOCUMENTS" means the Certificate of Trust, the Trust
Agreement, the Sale and Servicing Agreement, the Administration Agreement,
the Indenture and the other documents and certificates delivered in
connection therewith.
"BASIC RESERVE ACCOUNT PERCENTAGE" means ___%.
"BOOK-ENTRY NOTES" mean beneficial interests in the Notes,
ownership of which shall be evidenced, and transfers of which shall be made,
through book entries by a Clearing Agency as described in Section 6.8.
"BUSINESS DAY" means a day on which the Indenture Trustee and
commercial banks located in the State of Utah, the State of Idaho and the
City of New York, are open for the purpose of conducting commercial banking
business; PROVIDED, HOWEVER, that for purposes of determining any
Distribution Date, the term "Business Day" shall mean a day on which the
Indenture Trustee and commercial banks located in the State of New York
generally and the City of New York are open for the purpose of conducting a
commercial banking business.
"CERTIFICATE" means any one of the certificates executed by the
Owner Trustee and authenticated by or on behalf of the Owner Trustee in
substantially the form set forth in EXHIBIT A to the Trust Agreement.
"CERTIFICATE DISTRIBUTION ACCOUNT" means the account designated as
such, established and maintained pursuant to Section 5.1(a) of the Trust
Agreement.
"CERTIFICATED SECURITY" has the meaning, as of any date, given to
such term under the applicable UCC in effect on such date.
"CERTIFICATEHOLDER" means the Person in whose name a Certificate
shall be registered pursuant to the terms of the Trust Agreement.
"CERTIFICATE REGISTER" means the register of Certificates specified
in Section 3.4 of the Trust Agreement.
"CERTIFICATE REGISTRAR" means the registrar at any time of the
Certificate Register, appointed pursuant to Section 3.4(a) of the Trust
Agreement.
"CLASS A NOTEHOLDERS' INTEREST CARRYOVER SHORTFALL" means, as of
the close of any Distribution Date, the excess of the Aggregate Class A
Noteholders' Interest Distributable Amount
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for such Distribution Date over the amount that was actually deposited in the
Note Distribution Account on the related Deposit Date in respect of interest
on the Class A Notes.
"CLASS A NOTEHOLDERS' INTEREST DISTRIBUTABLE AMOUNT" means, with
respect to the Class A-1 Notes and the Class A-2 Notes and any Distribution
Date, the product of (1) the outstanding principal balance of such class of
Class A Notes on the preceding Distribution Date after giving effect to all
payments of principal in respect of such class of Class A Notes on such
preceding Distribution Date (or, in the case of the first Distribution Date,
the outstanding principal balance on the Closing Date) and (2) the product of
the Interest Rate for such class of Class A Notes and a fraction, the
numerator of which is the actual number of days elapsed from the most recent
Distribution Date on which interest has been paid (or the Closing Date, in
the case of the initial period), and the denominator of which is 360, and
with respect to the Class A-3 Notes and the Class A-4 Notes and any
Distribution Date, the product of (i) the outstanding principal balance of
such class of Class A Notes on the preceding Distribution Date after giving
effect to all payments of principal in respect of such class of Class A Notes
on such preceding Distribution Date (or, in the case of the first
Distribution Date, the outstanding principal balance on the Closing Date) and
(ii) the product of the Interest Rate for such class and 1/12 (multiplied by,
in the case of the first Distribution Date, a fraction, the numerator of
which is the number of days elapsed from the Closing Date and the denominator
of which is 30).
"CLASS A NOTES" means, collectively, the Class A-1 Notes, the Class
A-2 Notes, the Class A-3 Notes and the Class A-4 Notes.
"CLASS A-1 NOTES" means the Class A-1 ___% Asset Backed Notes in
the aggregate principal amount of $________.
"CLASS A-2 NOTES" means the Class A-2 ___% Asset Backed Notes in
the aggregate principal amount of $________.
"CLASS A-3 NOTES" means the Class A-3 ___% Asset Backed Notes in
the aggregate principal amount of $________.
"CLASS A-4 NOTES" means the Class A-4 ___% Asset Backed Notes in
the aggregate principal amount of $________.
"CLASS B NOTES" means the Class B ___% Asset Backed Notes in the
aggregate principal amount of $________ issued pursuant to the Indenture.
"CLASS B NOTEHOLDERS' INTEREST CARRYOVER SHORTFALL" means, as of
the close of any Distribution Date, the excess of the Class B Noteholders'
Interest Distributable Amount for such Distribution Date over the amount that
was actually deposited in the Note Distribution Account on the related
Deposit Date in respect of payment of interest on the Class B Notes.
"CLASS B NOTEHOLDERS' INTEREST DISTRIBUTABLE AMOUNT" means, with
respect to any Distribution Date, the sum of (i) the Class B Noteholders'
Monthly Interest Distributable Amount
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for such Distribution Date and (ii) the Class B Noteholders' Interest
Carryover Shortfall as of the preceding Distribution Date.
"CLASS B NOTEHOLDERS' MONTHLY INTEREST DISTRIBUTABLE AMOUNT" means,
with respect to any Distribution Date, the product of (i) the outstanding
principal balance of the Class B Notes on the preceding Distribution Date
after giving effect to all payments of principal in respect of the Class B
Notes on such preceding Distribution Date (or, in the case of the first
Distribution Date, the outstanding principal balance on the Closing Date) and
(ii) the product of the Interest Rate for the Class B Notes and 1/12
(multiplied by, in the case of the first Distribution Date, a fraction, the
numerator of which is the number of days elapsed from the Closing Date and
the denominator of which is 30).
"CLEARING AGENCY" means an organization registered as a "clearing
agency" pursuant to Section 17A of the Securities Exchange Act of 1934, as
amended. The initial Clearing Agency shall be The Depository Trust Company.
"CLEARING AGENCY PARTICIPANT" means a broker, dealer, bank, other
financial institution or other Person for whom from time to time a Clearing
Agency effects book-entry transfers of securities deposited with the Clearing
Agency.
"CLOSING DATE" means _____________, 19__.
"CODE" means the Internal Revenue Code of 1986, as amended.
"COLLECTION ACCOUNT" means the account designated as such,
established and maintained pursuant to Section 4.1 of this Agreement.
"COLLECTION PERIOD" means, during the term of this Agreement, the
period from and including the 24th day of a calendar month to and including
the 23rd day of the next succeeding calendar month or, in the case of the
initial Collection Period, the period from the close of business of the
Servicer on the Cutoff Date to and including ______________. With respect to
any Determination Date, Deposit Date or Distribution Date, the "related
Collection Period" shall mean the Collection Period ending during the
preceding month in which such Determination Date, Deposit Date or
Distribution Date occurs.
"COLLECTIONS" means all collections on the Receivables.
"COMMISSION" means the Securities and Exchange Commission, or any
successor thereto.
"COMPUTER TAPE" means the computer tape generated by the Seller
which provides information relating to the Receivables and which was used by
the Seller in selecting the Receivables conveyed to the Trust hereunder.
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"CONTRACT RATE" means, with respect to a Receivable, the rate per
annum of interest charged on the outstanding receivable balance of such
Receivable.
"CONTROL" over a Security Entitlement shall be considered obtained
by the Indenture Trustee or the Owner Trustee, as applicable, if:
(i) the Indenture Trustee or the Owner Trustee, as applicable, is the
Securities Intermediary for the Account in which such Security
Entitlement is held, or (b) the Indenture Trustee or the Owner
Trustee, as applicable, (1) is registered on the records of the
Securities Intermediary as the person having such a Security
Entitlement against the Securities Intermediary, or (2) has
obtained the agreement, in writing, of the Securities
Intermediary for such Security Entitlement that it will comply
with orders of the Indenture Trustee or the Owner Trustee, as
applicable, regarding the sale or redemption of the Security
Entitlement without further consent of any other person; and
(ii) the "Securities Intermediary" for such Security Entitlement (a)
is the registered owner of the related Financial Asset, (b) is
the holder of the Security Certificate for the related Financial
Asset, or (c) holds its interest in the related Financial Asset
directly through a clearing corporation (as defined in Revised
Article 8).
"CORPORATE TRUST OFFICE" means:
(a) with respect to the Indenture Trustee, the principal office of
the Indenture Trustee at which at any particular time its corporate trust
business shall be administered, which office at date of execution of this
Agreement is located at ,
Attention: , or at such other
address as the Indenture Trustee may designate from time to time by notice
to the Noteholders, the Seller and the Servicer, or the principal corporate
trust office of any successor Indenture Trustee (the address of which the
successor Indenture Trustee will notify the Noteholders, the Seller and the
Servicer); or
(b) with respect to the Owner Trustee, the principal office of the
Owner Trustee at which at any particular time its corporate trust business
shall be administered, which office at the date of execution of this
Agreement is located at: ,
Attention: , or at such other address as the
Owner Trustee may designate from time to time by notice to the
Certificateholders, the Seller and the Servicer, or the principal corporate
trust office of any successor Owner Trustee (the address of which the
successor Owner Trustee will notify the Certificateholders, the Seller and
the Servicer).
"CREDIT DEFERRAL" has the meaning specified in Section 3.2.
"CUSTODIAN" means First Security Service Company or another custodian
named from time to time.
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"CUTOFF DATE" means ________________.
"DEALER" means, with respect to a Receivable, the seller of the
related Financed Vehicle, who originated and assigned the Receivable relating
to such Financed Vehicle to the Seller under a Dealer Agreement and a Dealer
Assignment.
"DEALER AGREEMENT" means an agreement between the Seller and a
Dealer relating to the assignment of Receivables to the Seller and all
documents and instruments (other than the related Dealer Assignments)
relating thereto.
"DEALER ASSIGNMENT" means the executed assignment conveying a
Receivable from a Dealer to the Seller.
"DEALER LOAN" means a motor vehicle retail installment sale
contract originated by a Dealer and conveyed to the Seller pursuant to a
Dealer Assignment.
"DEFAULT TRIGGER" means ___%.
"DEFERRAL FEE" means the fee associated with any Optional Payment
Deferral or Credit Deferral.
"DEFINITIVE NOTES" shall mean the Notes specified in Section 2.2 of
the Indenture.
"DELINQUENCY RATIO" means, for any Collection Period, the ratio,
expressed as a percentage, of (i) the principal amount of all outstanding
Receivables (other than Purchased Receivables and Liquidating Receivables)
which are 60 or more days delinquent as of the last day of such Collection
Period, determined in accordance with the Servicer's customary practices,
divided by (i) the Aggregate Receivables Balance as of the last day of such
Collection Period.
"DELINQUENCY TRIGGER" means ____%.
"DEPOSIT DATE" means, with respect to any Distribution Date, the
Business Day preceding such Distribution Date.
"DETERMINATION DATE" means the tenth day of each month (or, if such
day is not a Business Day, the next succeeding Business Day).
"DIRECT MOTOR VEHICLE LOAN" means a Receivable that is a motor
vehicle retail installment loan originated by the Seller.
"DISTRIBUTION DATE" means the 15th day of each month (or, if such
day is not a Business Day, the next succeeding Business Day), commencing
__________, 1998.
"ELECTRONIC LEDGER" means the electronic master record of the
retail installment sale contracts and retail installment loans of the Seller.
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"ELIGIBLE DEPOSIT ACCOUNT" means either (i) a segregated account
with an Eligible Institution or (ii) a segregated trust account with the
trust department of a depository institution organized under the laws of the
United States of America or any one of the states thereof or the District of
Columbia (or any domestic branch of a foreign bank), having trust powers and
acting as trustee for funds deposited in such account, so long as the
long-term unsecured debt rating of such depository institution shall have a
credit rating from each Rating Agency in one of its generic rating categories
which signifies investment grade.
"ELIGIBLE INSTITUTION" means any depository institution with trust
powers (which may include the Seller, the Servicer or either Trustee),
organized under the laws of the United States, any state thereof, the
District of Columbia or any domestic branch of a foreign bank, having
combined capital and surplus in excess of $50,000,000, the deposits of which
are insured to the full extent permitted by law by the Federal Deposit
Insurance Corporation, which is subject to supervision and examination by
Federal or state banking authorities and which has (i) a rating of at least
P-1 from Moody's and A-l+ from S&P with respect to short-term deposit
obligations, or (ii) if such institution has issued long-term unsecured debt
obligations, a rating of A2 or higher from Moody's and A or higher from S&P
with respect to long-term unsecured debt obligations. If such depository
institution publishes reports of condition at least annually, pursuant to law
or the requirements of the aforesaid supervising or examining authority, then
the combined capital and surplus of such corporation shall be deemed to be
its combined capital and surplus as set forth in its most recent report of
condition so published.
"ELIGIBLE INVESTMENTS" shall mean, at any time, any one or more of
the following types of investments, each of which shall mature on or prior to
the next succeeding Deposit Date (or, to the extent overnight investments are
permitted under Section 4.1(a)(ii), on the next Distribution Date):
(a) direct marketable obligations of the United States having a
maturity of not more than 30 days from the date of acquisition;
(b) marketable obligations directly and fully guaranteed by the
United States as to the full and timely payment of principal and interest
having a maturity of not more than 30 days from the date of acquisition;
(c) bankers' acceptances and certificates of deposit denominated in
U.S. Dollars in each case having a maturity of not more than 30 days from
the date of acquisition, and issued by any bank with capital, surplus and
undivided profits aggregating at least $100,000,000, the short-term
unsecured securities of which are rated at least A-l+ by S&P and P-1 by
Moody's; and
(d) commercial paper having a maturity of not more than 30 days and
which is rated at least A-l+ by S&P and P-1 by Moody's;
(e) freely redeemable shares in no-load money market funds which
invest solely in obligations, bankers' acceptances, certificates of deposit
and commercial paper of the types
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described in clauses (a) through (d), without regard to the limitations
as to the maturity of such obligations, bankers' acceptances,
certificates of deposit or commercial paper set forth in such clauses,
rated at least AAAm by S&P and Aaa by Moody's; and
(f) any money market fund so long as it shall be rated by each Rating
Agency as either AAAm, Aaa, as an eligible investment for AAA/Aaa rated
transactions, or in the highest short-term rating assigned by a particular
Rating Agency.
Eligible Investments may include, if otherwise eligible pursuant to
paragraphs (a) to (e) above, debt securities of either Trustee, the Seller or
any of their Affiliates for which either Trustee, the Seller or any of their
Affiliates is an investment manager or investment advisor.
"ELIGIBLE SERVICER" means (a) any Affiliate of the Seller, (b) the
Indenture Trustee or (c) any Person which, at the time of its appointment as
Servicer or as a subservicer, (i) has a net worth of not less than
$50,000,000, (ii) is servicing a portfolio of motor vehicle retail
installment sale contracts and/or motor vehicle loans, (iii) is legally
qualified, and has the capacity, to service the Receivables, (iv) has
demonstrated the ability to service a portfolio of motor vehicle retail
installment sale contracts and/or motor vehicle loans similar to the
Receivables professionally and competently in accordance with standards of
skill and care that are consistent with prudent industry standards, and (v)
is qualified and entitled to use pursuant to a license or other written
agreement, and agrees to maintain the confidentiality of, the software which
the Servicer or any subservicer uses in connection with performing its duties
and responsibilities under this Agreement or the related subservicing
agreement or obtains rights to use, or develops at its own expense, software
which is adequate to perform its duties and responsibilities under this
Agreement or the related subservicing agreement.
"ERISA" means the Employee Retirement Income Security Act of 1974,
as amended.
"EVENT OF SERVICING TERMINATION" means an event specified in
Section 8.1.
"FEDERAL BOOK-ENTRY SECURITY" means an obligation issued by the
U.S. Treasury, the Federal Home Loan Mortgage Corporation or the Federal
National Mortgage Association, or any other direct obligation of, or
obligation fully guaranteed as to timely payment of principal and interest
by, the United States of America, that is a book-entry security held through
the Federal Reserve System pursuant to Federal book-entry regulations.
"FINAL SCHEDULED DISTRIBUTION DATE" means, with respect to a class
of Securities, the date set forth below opposite such Securities:
Class A-1 Notes: __________________
Class A-2 Notes: __________________
Class A-3 Notes: __________________
Class A-4 Notes: __________________
Class B Notes: __________________
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"FINANCED VEHICLE" means the Motor Vehicle, together with all
accessions thereto, securing an Obligor's indebtedness under a Receivable.
"FINANCIAL ASSET" has the meaning given such term in Revised
Article 8. As used herein, the Financial Asset "related to" a Security
Entitlement is the Financial Asset in which the entitlement holder (as
defined in Revised Article 8) holding such Security Entitlement has the
rights and property interest specified in Revised Article 8.
"INDENTURE" means the Indenture dated as of the dated hereof
between the Trust and ___________________________, as Indenture Trustee., as
amended and supplemented from time to time.
"INDENTURE TRUSTEE" means
_________________________________________, or any successor indenture trustee
under the Indenture.
"INITIAL RECEIVABLE BALANCE" means, with respect to a Receivable,
the aggregate amount advanced toward the purchase price of all Financed
Vehicles related to such Receivable, including insurance premiums, federal
excise taxes, sales taxes and other items customarily financed as part of
Motor Vehicle Loans and related costs, less payments received from the
Obligor prior to the related Cutoff Date allocable to principal in accordance
with the terms of the Receivable.
"INSURANCE POLICIES" means all comprehensive and collision, fire
and theft insurance policies maintained by the Obligors naming the Seller as
an additional insured or loss payee and any credit and disability and
physical damage insurance policies maintained by the Obligors and benefitting
any holder of the Receivables.
"INTEREST ACCRUAL DATE" means ______________.
"INTEREST COLLECTIONS" means, for any Distribution Date, the sum of
the following amounts for the related Collection Period: (i) that portion of
the Collections on the Receivables received during the related Collection
Period that is allocable to interest in accordance with the terms of the
Receivables and the Servicer's customary procedures, (ii) all related
Liquidation Proceeds, to the extent allocable to interest, (iii) to the
extent allocable to interest, all related Recoveries and (iv) to the extent
attributable to interest, the Repurchase Amount of all Receivables that are
repurchased by the Seller or purchased by the Servicer as of any day in the
related Collection Period. "Interest Collections" for any Distribution Date
shall exclude all payments and proceeds of any Receivables the Repurchase
Amount of which has been distributed on a prior Distribution Date.
"INTERESTED PARTIES" means the Trust and each other party
identified in the Transfer and Servicing Agreements as having an interest as
owner, trustee, secured party or Securityholder with respect to the Trust
Property.
"LIQUIDATING RECEIVABLE" means, with respect to any Collection
Period, a Receivable (other than a Purchased Receivable) which the Servicer,
on behalf of the Trust, has determined to charge off during such Collection
Period in accordance with its customary servicing practices;
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PROVIDED, HOWEVER, that any Receivable which the Seller or the Servicer is
obligated to repurchase or purchase shall be deemed not to be a Liquidating
Receivable during a Collection Period unless the Seller or the Servicer fails
to deposit the Repurchase Amount on the related Deposit Date when due, unless
such Receivable is otherwise repurchased or purchased on or prior to the last
day of the Collection Period in which such Receivable is determined to be a
Liquidating Receivable.
"LIQUIDATION EXPENSES" means, with respect to a Liquidating
Receivable, an amount not to exceed $________ (or such greater amount as the
Servicer determines necessary in accordance with the customary procedures to
refurbish and dispose of a repossessed Financed Vehicle) as an allowance for
amounts charged to the account of the Obligor, in keeping with the Servicer's
customary procedures for repossession, refurbishment and disposition of the
Financed Vehicle, including out-of-pocket costs related to the Liquidation.
"LIQUIDATION PROCEEDS" means, with respect to any Distribution Date
and a Receivable that became a Liquidating Receivable during the related
Collection Period, (i) insurance proceeds received during such Collection
Period by the Servicer, with respect to insurance policies relating to the
Financed Vehicles or the Obligors, (ii) amounts received by the Servicer
during such Collection Period from a Dealer in connection with such
Liquidating Receivable pursuant to the exercise of rights under a Dealer
Agreement, and (iii) the monies collected by the Servicer (from whatever
source, including proceeds of a sale of a Financed Vehicle or deficiency
balance recovered after the charge-off of the related Receivable) during such
Collection Period on such Liquidating Receivable net of any payments required
by law to be remitted to the Obligor, but, in any event, not less than zero.
Liquidation Proceeds shall be applied first to accrued and unpaid interest on
the Receivable and then to the Receivable Balance thereof.
"MOODY'S" means Xxxxx'x Investors Service, Inc.
"MOTOR VEHICLE" means a new or used automobile or light-duty truck
which is the subject of a retail installment sale contract originated by a
dealer or a retail installment loan originated by the Seller.
"NET LOSS RATIO" means, for any Collection Period, an amount,
expressed as a percentage, equal to (i) the product of (a) the Aggregate Net
Losses minus Recoveries for such Collection Period, and (b) twelve divided by
(ii) the average of the Aggregate Receivables Balances on each of the first
day of such Collection Period and the last day of such Collection Period.
"NOTEHOLDERS" means holders of record of the Notes pursuant to the
Indenture and, with respect to any class of Notes, holders of record of such
class of Notes pursuant to the Indenture.
"NOTEHOLDERS' PRINCIPAL CARRYOVER SHORTFALL" means, on a
Distribution Date, the excess, if any, of the Noteholders' Principal
Distributable Amount over the Principal Payment Amount on such Distribution
Date.
"NOTE DISTRIBUTION ACCOUNT" means the account designated as such,
established and maintained pursuant to Section 4.1(a)(ii) of this Agreement.
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"NOTEHOLDERS' PRINCIPAL DISTRIBUTABLE AMOUNT" means, for any
Distribution Date, the sum of (i) the Principal Distributable Amount, (ii)
the Noteholders' Principal Carryover Shortfall for the prior Distribution
Date and (iii) without duplication, on the Final Scheduled Distribution Date
for a class of Notes, the amount necessary to reduce the outstanding
principal balance of such class of Notes to zero.
"NOTES" means, collectively, the Class A-1 Notes, the Class A-2
Notes, the Class A-3 Notes, the Class A-4 Notes and the Class B Notes.
"OBLIGOR" means the purchaser or the co-purchasers of a Financed
Vehicle purchased in part or in whole by the execution and delivery of the
related Receivable or the borrower or co-borrowers under the related
Receivables the proceeds of which were applied to purchase in part or in
whole the Financed Vehicle, and any other co-signer of the Receivable who
owes or may be liable for payments under such Receivable.
"OFFICER'S CERTIFICATE" means a certificate signed by the chairman,
the president, any vice president, the treasurer or the cashier of the Seller
or the Servicer, as the case may be, and delivered to the Indenture Trustee
or the Owner Trustee, as applicable.
"OPINION OF COUNSEL" means a written opinion of counsel (who may be
outside counsel to the Seller or the Servicer). In addition, for purposes of
the Indenture: (i) such counsel shall be satisfactory to the Indenture
Trustee; (ii) the opinion shall be addressed to the Indenture Trustee and
(iii) the opinion shall comply with any applicable requirements of Section
11.1 of the Indenture and shall be in form and substance satisfactory to the
Indenture Trustee.
"OPTIONAL PAYMENT DEFERRAL" shall have the meaning specified in
Section 3.2(c).
"OUTSTANDING ADVANCES" means, with respect to any Distribution
Date, the aggregate of all Advances made by the Servicer with respect to
prior Distribution Dates that have not been reimbursed pursuant to Section
4.3(c).
"OWNER TRUSTEE" means __________________________________, or any
successor owner trustee under the Trust Agreement..
"PAYING AGENT" means, with respect to the Indenture, the Indenture
Trustee or any other Person that meets the eligibility standards for the
Indenture Trustee specified in Section 6.11 of the Indenture and is
authorized by the Trust to make the payments to and distributions from the
Collection Account and the Note Distribution Account, including payment of
principal of or interest on the Notes on behalf of the Trust. With respect
to the Trust Agreement, any paying agent or co-paying agent appointed
pursuant to Section 3.9 of the Trust Agreement that meets the eligibility
standards for the Owner Trustee specified in Section 6.13 of the Trust
Agreement.
"PERSON" means a legal person, including any individual,
corporation, limited liability company, estate, partnership, joint venture,
association, joint stock company, trust, unincorporated
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organization, or government or any agency or political subdivision thereof,
or any other entity of whatever nature.
"PHYSICAL PROPERTY" means (i) bankers' acceptances, commercial
paper, negotiable certificates of deposit and other obligations that
constitute "instruments" within the meaning of Section 9-105(1)(i) of the
Relevant UCC and are susceptible of physical delivery and (ii) certificated
securities (as defined in Section 8-102 of the Relevant UCC).
"PRINCIPAL DISTRIBUTABLE AMOUNT" means, with respect to any
Distribution Date, Available Principal for such Distribution Date plus
Realized Losses with respect to the related Collection Period.
"PRINCIPAL PAYMENT AMOUNT" means, with respect to any Distribution
Date, the lesser of (x) the Noteholders' Principal Distributable Amount and
(y) the Total Available Amount remaining after payment of the Total Servicing
Fee, the Aggregate Class A Noteholders' Interest Distributable Amount and the
Class B Noteholders' Interest Distributable Amount.
"PURCHASED RECEIVABLE" means, at any time, a Receivable as to which
payment of the Purchase Amount has previously been made by the Seller or the
Servicer pursuant to this Agreement.
"RATING AGENCY" means at any time any nationally recognized
statistical rating agency providing a rating for the Notes at the request of
the Seller at such time.
"REALIZED LOSSES" means, with respect to any Distribution Date and
a Receivable that became a Liquidating Receivable during the related
Collection Period, the excess of (i) the Receivable Balance of such
Receivable as of the first day of the related Collection Period over (ii)
Liquidation Proceeds received with respect to such Receivable during such
Collection Period, to the extent allocable to principal.
"RECEIVABLE" means a motor vehicle retail installment sale contract
or a motor vehicle retail installment loan described in the Schedule of
Receivables, but excluding any Purchased Receivables.
"RECEIVABLE BALANCE" means, as of the last day of the related
Collection Period, with respect to any Receivable, the Initial Receivable
Balance minus the sum, in each case computed in accordance with the terms of
the Receivable, of (i) that portion of payments due on and after the Cutoff
Date and on or prior to the last day of the related Collection Period
allocated to principal, (ii) any prepayments applied by the Servicer to
reduce the Receivable Balance and (iii) that portion of the following
received and allocated to principal by the Servicer: proceeds from any
Insurance Policies covering the Financed Vehicle or Financed Vehicles,
Liquidation Proceeds and proceeds from any Dealer Agreement. The Obligor on
a Receivable secured by multiple Financed Vehicles may prepay an amount
corresponding to the outstanding principal balance for one or more of such
Financed Vehicles and the security interest in such vehicles will generally
be released.
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"RECEIVABLE FILE" means, with respect to a Receivable, the
electronic entries, documents, instruments and writings specified in Section
2.5.
"RECORD DATE" means, with respect to each Collection Period and the
related Distribution Date, the day immediately preceding such Distribution
Date (or, if Definitive Notes are issued, the last day of such Collection
Period).
"RECOVERIES" means, with respect to any Distribution Date, all
monies received by the Servicer with respect to any Liquidating Receivable
during the related Collection Period if such Collection Period follows the
Collection Period in which such Receivable became a Liquidating Receivable,
net of any payments required by law to be remitted to the Obligor but, in any
event, not less than zero.
"RELEVANT UCC" shall mean the Uniform Commercial Code as in effect
in the relevant jurisdiction, as amended from time to time.
"REPURCHASE AMOUNT" of any Receivable means, with respect to any
Deposit Date, an amount equal to the sum of (i) the outstanding Receivable
Balance of such Receivable as of the last day of the related Collection
Period and (ii) an amount equal to the amount of accrued and unpaid interest
on such Receivable Balance at the related Contract Rate through the last day
of the related Collection Period, in each case, after giving effect to
Collections on such Receivable in such Collection Period.
"REQUIRED RATING" means a rating with respect to short-term deposit
obligations of at least P-1 by Moody's and at least A-1+ by S&P.
"RESERVE ACCOUNT" means the fund established pursuant to Section
4.1 and maintained as such pursuant to Section 4.6.
"RESERVE ACCOUNT FLOOR AMOUNT" means $_____________.
"RESERVE ACCOUNT INCREASE PERCENTAGE" means ___%.
"RESERVE ACCOUNT INITIAL DEPOSIT" means, with respect to the
Closing Date, $_____________.
"RESERVE ACCOUNT PROPERTY" has the meaning specified in the
Granting Clause of the Indenture.
"RESERVE ACCOUNT TRIGGER STARTING DATE" means _____________.
"REVISED ARTICLE 8" means Revised Article 8 (1994 Version) (and
corresponding amendments to Article 9) as promulgated in 1994 by the National
Conference of Commissioners on Uniform State Laws, in the form in which it
has been adopted in the State of New York.
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"S&P" means Standard & Poor's Ratings Service, a Division of the
McGraw Hill Companies.
"SALE AND SERVICING AGREEMENT" means the Sale and Servicing
Agreement dated as of ______________, 19__ between the Bank and the Trust, as
amended and supplemented from time to time.
"SCHEDULED PAYMENT" means, for any Collection Period for any
Receivable, the amount indicated in such Receivable as required to be paid by
the Obligor in such Collection Period (without giving effect to deferments of
payments pursuant to Section 3.2 or any rescheduling in any insolvency or
similar proceedings).
"SCHEDULE OF RECEIVABLES" means the list identifying the
Receivables attached hereto as Schedule A.
"SECURITIES" means the Notes and the Certificates.
"SECURITY CERTIFICATE" has the meaning given such term in Revised
Article 8.
"SECURITY ENTITLEMENT" has the meaning given such term in Revised
Article 8.
"SECURITYHOLDER" means any of the Noteholders or Certificateholders.
"SELLER" means First Security Bank, N.A. (including all Persons
merged into or otherwise consolidated with, and all other predecessors
thereto) in its capacity as seller of the Receivables to the Trust under this
Agreement, and each successor thereto (in the same capacity) pursuant to
Section 6.3.
"SERVICER" means First Security Bank, N.A., in its capacity as
servicer of the Receivables under this Agreement, each successor thereto (in
the same capacity) pursuant to Section 7.3, and each successor servicer
appointed and acting pursuant to Section 8.2.
"SERVICER'S CERTIFICATE" has the meaning specified in Section 3.9.
"SERVICING FEE" means, with respect to any Distribution Date, an
amount equal to the product of (i) one-twelfth of the Servicing Fee Rate and
(ii) the Aggregate Receivables Balance as of the first day of the preceding
Collection Period.
"SERVICING FEE RATE" shall be 1.0% per annum, calculated on the
basis of a 360-day year consisting of twelve 30-day months.
"SERVICING OFFICER" means any officer of the Servicer involved in,
or responsible for, the administration and servicing of the Receivables,
whose name appears on a list of servicing officers attached to an Officer's
Certificate furnished to the Indenture Trustee and the Owner Trustee
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by the Servicer on the Closing Date, as such list may be amended from time to
time by the Servicer in writing.
"SIMPLE INTEREST METHOD" means the method of allocating a fixed
level payment between principal and interest, pursuant to which the portion
of such payment that is allocated to interest is equal to the product of the
Contract Rate multiplied by the unpaid Receivable Balance multiplied by the
period of time elapsed since the preceding payment of interest was made and
the remainder of such payment is allocable to principal.
"SIMPLE INTEREST RECEIVABLE" means any Receivable under which the
portion of a payment allocable to interest and the portion allocable to
principal is determined in accordance with the Simple Interest Method.
"SPECIFIED RESERVE ACCOUNT BALANCE" means, with respect to any
Distribution Date will equal ___% of the Aggregate Receivables Balance,
except that the Specified Reserve Account Balance will never exceed the
aggregate outstanding principal amount of the Notes. The Specified Reserve
Account Balance will be calculated as ___% of the Aggregate Receivables
Balance for any Distribution Date (beginning on ________, 19__) on which the
Average Net Loss Ratio exceeds __% or the Average Delinquency Ratio exceeds
__%. The Specified Reserve Account Balance may be reduced or the definition
thereof otherwise modified without the consent of the Noteholders if the
Rating Agencies confirm in writing, after having received notice thereof,
that such reduction or modification will not result in a reduction or
withdrawal of the rating of the Notes.
"SPECIFIED YIELD SUPPLEMENT BALANCE" means, with respect to any
Distribution Date, an amount equal to at least the sum of all projected Yield
Supplement Amounts for all future Distribution Dates, assuming that future
Scheduled Payments on the Receivables are made on their scheduled due dates;
PROVIDED that if on any date the Seller shall fail to pay the amount payable
under the Yield Supplement Agreement in accordance with the terms thereof,
then, in such event, the Specified Yield Supplement Balance shall not
thereafter be reduced hereunder.
"SUPPLEMENTAL SERVICING FEE" shall have the meaning set forth in
Section 3.8.
"TOTAL AVAILABLE AMOUNT" means, for each Distribution Date, the sum
of the Available Amount and all cash or other immediately available funds on
deposit in the Reserve Account immediately prior to such Distribution Date
(excluding investment earnings).
"TOTAL SERVICING FEE" means, on any Distribution Date, the
Servicing Fee for the related Collection Period and any unpaid Servicing Fees
from prior Distribution Dates.
"TRADES" means regulations promulgated by the U.S. Department of
the Treasury governing book-entry Treasury bonds, notes and bills, 31 C.F.R.
Part 357, which replace prior Treasury regulations and which designate
Revised Article 8 as the applicable governing law.
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"TRADES EFFECTIVE DATE" means with respect to a Federal Book-Entry
Security, the date (which was January 1, 1997, in the case of securities
issued by the U.S. Treasury) on which TRADES or an equivalent set of
regulations becomes effective.
"TRANSFER AND SERVICING AGREEMENTS" means this Agreement, the Trust
Agreement and the Indenture.
"TRUST" means the First Security Auto Owner or Trust 19__-_ created
by the Trust Agreement.
"TRUST AGREEMENT" means the Trust Agreement dated as of the date
hereof between the Seller and ______________, as Owner Trustee, as amended
and supplemented from time to time.
"TRUSTEES" means the Owner Trustee and the Indenture Trustee.
"TRUST PROPERTY" means the Receivables; all monies due or received
under the Receivables after the close of business of the Servicer on the
Cutoff Date; the Certificate Account, the Class A Distribution Account and
the Class B Distribution Account and such amounts as from time to time may be
held therein (including the Account Property related thereto); security
interests in the Financed Vehicles; all rights of the Trust under the Yield
Supplement Agreement; the Seller's rights (if any) to receive proceeds from
claims on Insurance Policies covering the Financed Vehicles or the Obligors;
the Seller's rights relating to the Receivables under the Dealer Agreements
and Dealer Assignments; the Seller's rights to all documents and information
contained in the Receivable Files; the rights of the Trust under this
Agreement (including the right to receive payments under the circumstances
specified herein from the Reserve Account); and all proceeds (within the
meaning of the Relevant UCC) of the foregoing.
"UCC" means the Uniform Commercial Code, as amended from time to
time.
"UNCERTIFICATED SECURITY" as of any date, has the meaning given to
such term under the Relevant UCC as in effect on such date.
"YIELD SUPPLEMENT ACCOUNT" shall mean the account established,
maintained and designated as the "Yield Supplement Account" pursuant to
Section 5.2.
"YIELD SUPPLEMENT ACCOUNT PROPERTY" shall have the meaning set forth
in Section 5.2.
"YIELD SUPPLEMENT AGREEMENT" means the Yield Supplement Agreement
dated as of the Closing Date between the Seller and the Trustee,
substantially in the form attached hereto as EXHIBIT C.
"YIELD SUPPLEMENT AMOUNT" shall have the meaning specified in
Section 5.l.
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"YIELD SUPPLEMENT INITIAL DEPOSIT" means cash or Eligible Investments
having a value of at least $________.
Section I.2 USAGE OF TERMS. With respect to all terms used in
this Agreement, the singular includes the plural and the plural the singular;
words importing any gender include the other gender; references to "writing"
include printing, typing, lithography, and other means of reproducing words
in a visible form; references to agreements and other contractual instruments
include all subsequent amendments thereto or changes therein entered into in
accordance with their respective terms and not prohibited by this Agreement;
references to Persons include their permitted successors and assigns; and the
terms "include" or "including" mean "include without limitation" or
"including without limitation."
Section I.3 CALCULATIONS. All calculations of the amount of
interest accrued on the Certificates during any Collection Period and all
calculations of the amount of the Basic Servicing Fee payable with respect to
a Collection Period shall be made on the basis of a 360-day year consisting
of twelve 30-day months.
Section I.4 REFERENCES. All references to the first day of a
Collection Period shall refer to the opening of business on such day. All
references to the last day of a Collection Period shall refer to the close of
business of the Servicer on such day.
Section I.5 SECTION REFERENCES. All section references shall be
to Sections in this Agreement unless otherwise specified.
Section I.6 ACTION BY OR CONSENT OF SECURITYHOLDERS. Whenever
any provision of this Agreement refers to action to be taken, or consented
to, by Securityholders, such provision shall be deemed to refer to
Securityholders of record as of the Record Date immediately preceding the
date on which such action is to be taken, or consented to by Securityholders.
ARTICLE II
THE TRUST PROPERTY
Section II.1 CONVEYANCE OF TRUST PROPERTY. (a) In consideration
of the Trust's delivery of the Securities to, or upon the written order of
the Seller, the Seller hereby sells, transfers, assigns and conveys to the
Trust, upon the terms and conditions hereof, the Trust Property, without
recourse. The sale, transfer, assignment and conveyance made hereunder shall
not constitute and is not intended to result in an assumption by any Trustee,
the Trust or any Securityholder of any obligation of the Seller to the
Obligors, the Dealers, or any other Person in connection with the Receivables
and the other Trust Property or any agreement, document or instrument related
thereto.
(b) The Seller intends that the transfer and conveyance of the
Trust Property to the Trust hereunder constitutes a complete sale and
assignment of all of the Seller's right, title and interest in, to and under
the Trust Property to the Trust and that the beneficial interest of the
Seller in, and title to, the Trust Property will not be a part of the
Seller's estate in the event of any
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liquidation, reorganization or similar insolvency proceeding with respect to
the Seller. In the event that the transfer hereunder is not respected as a
complete sale and assignment of the Trust Property to the Trust, then, in
such event, the Seller hereby grants to the Trust a security interest in the
Trust Property. This Agreement shall constitute a security agreement under
applicable law.
Section II.2 WARRANTIES OF THE SELLER AS TO EACH RECEIVABLE. The
Seller hereby makes the following warranties as to each Receivable conveyed
by it to the Trust hereunder on which the Trust shall rely in accepting the
Trust Property in trust and executing and delivering the Securities. Unless
otherwise indicated, such warranties shall speak as of the Closing Date, but
shall survive the sale, transfer, and assignment of the Receivables and the
other Trust Property to the Trust and the pledge under the Indenture.
(i) CHARACTERISTICS OF RECEIVABLES. The Receivable
has been fully and properly executed by the parties thereto and (a) (x) has
been originated by the Seller in the ordinary course of its business or (y)
has been originated by a Dealer for the retail sale of a Motor Vehicle in
the ordinary course of such Dealer's business, and has been purchased by
the Seller from such Dealer in the ordinary course of the Seller's business
and has been validly assigned by such Dealer to the Seller, (b) is secured
by a valid, subsisting, and enforceable security interest in favor of the
Seller in the Financed Vehicle (subject to administrative delays and
clerical errors on the part of the applicable government agency) prior in
right to the security interest of any other creditor, which security
interest is assignable together with such Receivable, and has been so
assigned, by the Seller to the Trust, (c) contains or is accompanied by a
security agreement which contains customary and enforceable provisions such
that the rights and remedies of the secured party are adequate for
realization of the benefits of the security interest in the subject
collateral, (d) provides at origination for level monthly payments
(PROVIDED that the first and the last payment may be less than or minimally
more than the level payment), which fully amortize the Amount Financed over
the original term and provides for interest at the related Contract Rate
and (e) in the event of a prepayment, provides for a payment that will
fully pay the Receivable Balance of such Receivable as of the first day of
the Collection Period in which the Receivable is fully prepaid, together
with interest accrued at least to the date of prepayment at the related
Contract Rate.
(ii) SCHEDULE OF RECEIVABLES. The information set
forth in the Schedule of Receivables with respect to such Receivable has
been produced from the Electronic Ledger and was true and correct as of the
close of business of the Servicer on the Cutoff Date; and the Initial
Receivable Balance and the Contract Rate of the Receivable have been
accurately and correctly calculated as of the Cutoff Date.
(iii) COMPLIANCE WITH LAWS. To the best knowledge of
the Seller, the Receivable, and the sale of the related Financed Vehicle,
complied at the time it was originated or made, and will comply as of the
Closing Date, in all material respects with all requirements of applicable
federal, state, and local laws, and regulations thereunder, including, to
the extent applicable, usury laws, the Federal Truth-in-Lending Act, the
Equal Credit Opportunity Act, the Fair Credit Billing Act, the Fair Credit
Reporting Act, the Fair
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Debt Collection Practices Act, Federal Reserve Board Regulations B and
Z, and any other consumer credit, equal opportunity, and disclosure
laws; PROVIDED, HOWEVER, that if, notwithstanding the best knowledge of
the Seller, any Receivable, or the sale of the related Financed Vehicle,
fails to comply with applicable law in the manner and to the extent set
forth herein, the Seller shall repurchase such Receivable in accordance
with the terms and conditions set forth in Section 2.2, but such failure
to comply with such laws shall not constitute a breach of this warranty
except for purposes of Section 2.2.
(iv) BINDING OBLIGATION. The Receivable constitutes
the genuine, legal, valid, and binding payment obligation in writing of the
Obligor, enforceable by the holder thereof in accordance with its terms,
except as such enforceability may be limited by applicable bankruptcy,
insolvency, reorganization or other similar laws affecting the enforcement
of creditors' rights generally.
(v) NO GOVERNMENT OBLIGOR. The Obligor on the
Receivable is not the United States of America or any State thereof or any
local government, or any agency, department, political subdivision or
instrumentality of the United States of America or any State thereof or any
local government.
(vi) RECEIVABLES IN FORCE. The Receivable has not been
satisfied, subordinated, or rescinded and the Financed Vehicle has not been
released from the lien granted by the Receivable in whole or in part.
(vii) NO AMENDMENT OR WAIVER. No material provision of
the Receivable has been amended, waived, altered or modified in any
respect, except pursuant to a document, instrument or writing included in
the Receivable File and reflected in the Electronic Ledger and no such
amendment, waiver, alteration or modification causes such Receivable not to
conform to the other warranties contained in this Section.
(viii) NO DEFENSES. The Receivable is not subject to any
right of rescission, setoff, counterclaim or defense, including the defense
of usury, and the operation of any of the terms of the Receivable, or the
exercise of any right thereunder, will not render the Receivable
unenforceable in whole or in part or subject to any right of rescission,
setoff, counterclaim or defense, including the defense of usury, and no
such right of rescission, setoff, counterclaim or defense has been asserted
with respect thereto.
(ix) NO LIENS. To the best knowledge of the Seller,
there are no liens or claims, including liens for work, labor, materials or
unpaid state or federal taxes relating to the Financed Vehicle, that are or
may be liens prior to, or equal to or coordinate with, the lien granted by
the Obligor.
(x) NO DEFAULT. Except for payment delinquencies
continuing for a period of not more than 30 days as of the Cutoff Date, no
default, breach, violation, or event permitting acceleration under the
terms of any Receivable exists and no continuing condition that with notice
or lapse of time, or both, would constitute a default, breach,
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violation, or event permitting acceleration under the terms of any
Receivable has arisen; and the Seller has not waived any of the
foregoing.
(xi) INSURANCE. If the Receivable Balance of the
Receivable exceeds $3,500 (or such other amount as the Servicer determines,
consistent with the standard of care required by Section 3.1), the Financed
Vehicle securing such Receivable is insured under an Insurance Policy, the
premiums for which have been paid in full, and such Insurance Policy is in
full force and effect.
(xii) GOOD TITLE. The Receivable has not been sold,
assigned, pledged or otherwise conveyed by the Seller to any Person other
than the Trust, and, immediately prior to the transfer and assignment
herein contemplated, the Seller had good and marketable title to the
Receivable free and clear of any encumbrance, equity, lien, pledge, charge,
claim, security interest or other right or interest of any other Person,
was the sole owner thereof and had full right and power to transfer and
assign the Receivable to the Trust. Immediately upon the transfer and
assignment of the Receivable to the Trust, the Trust shall have good and
marketable title to the Receivable, free and clear of any encumbrance,
equity, lien, pledge, charge, claim, security interest or other right or
interest of any other Person; and all filings and actions required by the
Relevant UCC with respect to the transfer of Receivables associated with
the sale of the same have been accomplished for the purpose of complying
with the Relevant UCC provisions governing the relative priority of
interests of parties in the Receivables.
(xiii) LAWFUL ASSIGNMENT. The Receivable has not been
originated in, and is not subject to the laws of, any jurisdiction under
which the sale, transfer, and assignment of such Receivable hereunder or
pursuant to transfers of the Securities are unlawful, void, or voidable.
(xiv) ALL FILINGS MADE. All filings have been made,
including filings under the Relevant UCC, which are necessary in any
jurisdiction to cause the ownership and title interests of the Trust in the
Receivables to be afforded priority over competing claims of the holders of
security interests or other claims against whom such filings can assure
priority.
(xv) VALID SECURITY INTEREST. On the Closing Date,
there will exist a valid, subsisting and enforceable first priority
perfected security interest in the Financed Vehicle securing the Receivable
(subject to administrative delays and clerical errors on the part of the
applicable government agency and to any statutory or other lien arising by
operation of law after the Closing Date which is prior to such security
interest). With respect to the foregoing, the Seller hereby covenants to
take all action necessary such that, at such time as enforcement of such
security interest is sought, there shall exist a valid, subsisting and
enforceable first priority perfected security interest in the Financed
Vehicle for the benefit of the Trust (subject to administrative delays and
clerical errors on the part of the applicable government agency and any
statutory or other lien arising by operation of law after the Closing Date
which is prior to such interest).
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(xvi) CAPACITY OF PARTIES. All parties to the
Receivable had capacity to execute the Receivable.
(xvii) CHATTEL PAPER. The Receivable is "chattel paper"
as defined in the Relevant UCC.
(xviii) ONE ORIGINAL. There is only one executed original
of each Receivable.
(xix) OBLIGATIONS; NO IMPAIRMENT. The Seller has duly
fulfilled all obligations on its part to be fulfilled under, or in
connection with, the Receivable and has done nothing to impair the rights
of the Trust or the Securityholders in the Receivable or the proceeds
thereof.
(xx) NO FRAUD OR MISREPRESENTATION. To the best
knowledge of the Seller, in the case of a Receivable originated by a
Dealer, the Receivable was originated by a Dealer and sold by such Dealer
to the Seller without any conduct constituting fraud or misrepresentation
on the part of such Dealer; PROVIDED, HOWEVER, that if, notwithstanding the
best knowledge of the Seller, any Receivable was originated and sold under
conduct constituting fraud or misrepresentation on the part of such Dealer,
the Seller shall repurchase such Receivable in accordance with the terms
and conditions of Section 2.4, with the existence of such conduct not
constituting a breach of this warranty, except for purposes of Section 2.4.
(xxi) POSSESSION. Immediately prior to the Closing
Date, the Seller (or an Affiliate thereof) will have possession of the
original Receivable and the related Receivable File, and there are and
there will be no custodial agreements in effect materially adversely
affecting the right or ability of the Seller to make, or cause to be made,
any delivery required hereunder.
(xxii) BULK TRANSFER LAWS. The transfer, assignment and
conveyance of the Receivable and Receivable Files by the Seller pursuant to
this Agreement is not subject to the bulk transfer or any similar statutory
provisions in effect in any applicable jurisdiction.
Section II.3 WARRANTIES AS TO THE RECEIVABLES IN THE AGGREGATE AND
ACTIONS OF THE SELLER. The Seller hereby makes the following warranties as to
the Receivables conveyed by it to the Trust hereunder on which the Trust shall
rely in accepting the Trust Property in trust and executing and delivering the
Securities. Unless otherwise indicated, such warranties shall speak as of the
Closing Date, but shall survive the sale, transfer, and assignment of the
Receivables and the other Trust Property to the Trust and the pledge under the
Indenture.
(i) AMOUNTS. The aggregate Initial Receivables
Balance of the Receivables are equal to the Aggregate Starting Receivables
Balance.
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(ii) INDIVIDUAL CHARACTERISTICS. The Receivables have
the following individual characteristics as of the close of business of the
Servicer on the Cutoff Date: (a) the obligations of the Obligors on the
Receivables are secured by security interests in new or used automobiles or
light-duty trucks; (b) each Receivable has a Contract Rate of at least
____% and not more than _____%; (c) each Receivable had a remaining
maturity, as of the Cutoff Date, of not less than ___ months and not more
than ___ months; (d) each Receivable had a remaining Receivable Balance of
not less than $___ and not more than $______ as of the Cutoff Date; (e) no
Receivable was more than __ days delinquent as of the Cutoff Date; (f) no
Financed Vehicle had been repossessed as of the Cutoff Date; (g) each
Receivable is a motor vehicle retail installment sale contract or motor
vehicle retail installment loan; (h) each Receivable provides for
allocation of payments between principal and interest by the Simple
Interest Method; (i) the Dealers of the Financed Vehicles, if any, have no
participation in, or other right to receive, any proceeds of the
Receivable; and (j) each Receivable was originated on or after
________________. The Receivables were selected utilizing selection
procedures that were not adverse to the Securityholders.
(iii) AGGREGATE CHARACTERISTICS. The Receivables had
the following characteristics in the aggregate as of the Cutoff Date: (a)
approximately _____% of the Aggregate Starting Receivables Balance was
attributable to loans for purchases of new Financed Vehicles, and
approximately _____% of the Aggregate Starting Receivables Balance was
attributable to loans for purchases of used Financed Vehicles; (b)
approximately _____% of the Aggregate Starting Receivables Balance was
attributable to Receivables the mailing addresses of the Obligors with
respect to which are located in the States of Utah and Idaho; (c) the
weighted average Contract Rate of the Receivables was ______%; (d)
approximately ____% of the Aggregate Starting Receivables Balance was
attributable to Receivables originated by the Seller; (e) approximately
_____% of the Aggregate Starting Receivables Balance was attributable to
Receivables that are Dealer Loans; and (f) approximately ____% of the
Aggregate Starting Receivables Balance was attributable to Receivables that
are subject to a repurchase obligation by the originating Dealer upon
default and repossession.
(iv) COMPUTER TAPE. The Computer Tapes made available
by the Seller were complete and accurate as of the Cutoff Date and include
a description of the same Receivables that are described in the Schedule of
Receivables.
(v) MARKING RECORDS. By the Closing Date, the Seller
will have caused the portions of the Electronic Ledger relating to the
Receivables to be clearly and unambiguously marked to show that such
Receivables constitute part of the Trust Property and are owned by the
Trust in accordance with the terms of the trust created hereunder.
(vi) NO ASSIGNMENT. As of the Closing Date, the Seller
shall not have taken any action to convey any right to any Person that
would result in such Person having a right to payments received under the
Insurance Policies, the Dealer Agreements, the Dealer Assignments or
payments due under the Receivables that is senior to, or equal with, that
of the Trust.
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Section II.4 REPURCHASE UPON BREACH. The Seller, the Servicer, the
Owner Trustee or the Indenture Trustee, as the case may be, shall inform the
other parties promptly, in writing, upon the discovery of any breach or failure
to be true of the warranties (including in the case of Sections 2.2(iii), (ix)
and (xx) any breach or failure which would have occurred if such warranty had
not been made to the best knowledge of the Seller) made by the Seller pursuant
to Section 2.2 or Section 2.3. Unless the breach or failure shall have been
cured by the last day of the Collection Period which includes the 60th day after
the date on which the Seller becomes aware of, or receives written notice from
the Owner Trustee, the Indenture Trustee or the Servicer of, such breach or
failure, the Seller shall repurchase from the Trust, without recourse,
representation or warranty, other than that the Owner Trustee, on behalf of the
Trust, has not imposed any liens on the Receivable to be repurchased, any
Receivable, the interests of the Trust and the Securityholders in which is
materially and adversely affected by such breach or failure. Such purchase
shall occur as of the last day of such Collection Period. In consideration of
the repurchase of a Receivable hereunder, the Seller shall remit the Repurchase
Amount of such Receivable, no later than the close of business (New York time)
on the applicable Deposit Date, in the manner specified in Section 4.3(b). Any
breach of a representation relating to the status of a Receivable as a Simple
Interest Receivable or the Contract Rate of a Receivable shall be deemed to
materially and adversely affect the Securityholders. Except as provided in
Section 6.2, the sole remedy of the Trust, the Owner Trustee, the Indenture
Trustee, or the Securityholders with respect to a breach or failure to be true
of the warranties made by the Seller pursuant to Section 2.2 or Section 2.3
shall be to require the Seller to repurchase Receivables pursuant to this
Section.
Section II.5 CUSTODY OF RECEIVABLE FILES. To assure uniform quality
in servicing the Receivables and to reduce administrative costs, the Trust, upon
the execution and delivery of this Agreement, revocably appoints the Servicer,
as agent, and the Servicer accepts such appointment and revocably appoints First
Security Service Company, to act as custodian on behalf of the Trust and the
Indenture Trustee which was granted a security interest pursuant to the
Indenture of the following documents or instruments, which are hereby
constructively delivered to the Trust and the Indenture Trustee with respect to
each Receivable (collectively, a "RECEIVABLE FILE"):
(i) the original of the Receivable;
(ii) any documents evidencing the existence of any
Insurance Policies;
(iii) copies of the original credit application, fully
executed by the Obligor;
(iv) either (x) the original certificate of title, or
such other documents as the Seller shall keep on file, in accordance with
its customary procedures, evidencing the security interest of the Seller in
the Financed Vehicle or the efforts (including the proof of application for
notice of lien or other evidence of such security interest) made by the
Seller to perfect such security interest; or (y) with respect to
jurisdictions in which the certificate of title or other evidence of
ownership is not issued to the holder of a lien,
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evidence of the Seller's security interest in the Financed Vehicle (or
the efforts made by the Seller to perfect such security interest
(including the proof of application for notice of lien or other evidence
of such security interest)), in each case issued by the appropriate
governmental agency of the State in which such Financed Vehicle is
registered;
(v) electronic entries and originals or true copies of
all documents, instruments or writings relating to extensions, amendments
or waivers of the Receivable;
(vi) in the case of a Dealer Loan, the Dealer
Assignment; and
(vii) any and all other documents or electronic records
that the Seller or the Servicer, as the case may be, shall keep on file, in
accordance with its customary procedures, relating to the Receivable, the
Obligor or the Financed Vehicle.
Section II.6 DUTIES OF THE SERVICER AS CUSTODIAN. (a)
SAFEKEEPING. The Servicer, in its capacity as custodian, shall hold, or cause
an Affiliate to hold, the Receivable Files on behalf of the Trust and the
Indenture Trustee for the benefit of all present and future Securityholders,
and maintain such accurate and complete accounts, records, and computer
systems pertaining to each Receivable as shall enable the Servicer and the
Trust and the Trustees to comply with the terms and provisions of this
Agreement applicable to it. In performing its duties as custodian hereunder,
the Servicer shall act with reasonable care, exercising the degree of skill
and care that the Servicer exercises with respect to similar motor vehicle
retail installment sale contracts owned and/or serviced by it and that is
consistent with industry standards. The Servicer shall implement written
policies and procedures, signed by a Servicing Officer, with respect to the
handling and custody of the Receivable Files, so that the integrity and
physical possession of the Receivable Files shall be maintained, and, in
general, shall attend to all details in connection with maintaining custody
of the Receivable Files as agent of the Trust and the Indenture Trustee. The
Servicer shall also maintain a current inventory of the Receivables and
conduct, or cause to be conducted, periodic audits (to the extent required by
Section 3.11) of the Receivable Files held by it under this Agreement and the
related accounts, records, and computer systems, and shall otherwise maintain
the Receivable Files in such a manner as shall enable the Trustees to verify,
if either such Trustee so elects, the accuracy of the record keeping of the
Servicer. The Servicer shall promptly report to the Trustees any failure on
its part to hold the Receivable Files and maintain its accounts, records, and
computer systems as herein provided, and promptly take appropriate action to
remedy any such failure.
(b) MAINTENANCE OF AND ACCESS TO RECORDS. The Servicer shall
maintain each Receivable File at the location specified in Schedule B to this
Agreement, or at such other office of the Servicer or an Affiliate within the
State of Utah or Idaho (or, in the case of any successor servicer, within the
State in which its principal place of business is located) as shall be specified
to the Trustees by 30 days' prior written notice. The Servicer shall make
available to the Trustees or their Authorized Officers (or, when requested in
writing by either Trustee, to its attorneys or auditors) and to Securityholders
(only in such cases where a Securityholder is required by applicable statutes or
regulations to review such documentation) the Receivable Files and the related
accounts,
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records, and computer systems maintained by the Servicer at such times during
the normal business hours of the Servicer as the Trustees shall reasonably
instruct.
(c) RELEASE OF DOCUMENTS. Upon written instructions from the
Trust, the Servicer shall release any document in the Receivable Files to the
Trust, the Trust's agent, or the Trust's designee, as the case may be, at
such place or places as the Trust may designate, as soon thereafter as is
practicable. Any document so released shall be handled by the Trust with due
care and returned to the Servicer for safekeeping as soon as the Trust or its
agent or designee, as the case may be, shall have no further need therefor.
(d) TITLE TO RECEIVABLES. The Servicer agrees that, in respect of
any Receivable held by it as custodian hereunder, the Servicer will not at
any time have or in any way attempt to assert any interest in such Receivable
or the related Receivable File, other than solely for the purpose of
collecting or enforcing the Receivable for the benefit of the Trust and that
the entire equitable interest in such Receivable and the related Receivable
File shall at all times be vested in the Trust, subject to the lien of the
Indenture Trustee.
Section II.7 INSTRUCTIONS; AUTHORITY TO ACT. The Servicer shall
be deemed to have received proper instructions from the Trust with respect to
the Receivable Files upon its receipt of written instructions signed by an
Authorized Officer of the Trust (or, as appropriate, the Owner Trustee on
behalf of the Trust). A certified copy of excerpts of bylaws or certain
resolutions of the Board of Directors of the Trust (or, as appropriate, the
Owner Trustee on behalf of the Trust) shall constitute conclusive evidence of
the authority of any such Authorized Officer to act and shall be considered
in full force and effect until receipt by the Servicer of written notice to
the contrary.
Section II.8 CUSTODIAN'S INDEMNIFICATION. The Servicer, in its
capacity as custodian, shall indemnify and hold harmless the Trust and each
Trustee, their officers, directors, employees and agents and the
Securityholders from and against any and all liabilities, obligations,
losses, compensatory damages, payments, costs or expenses (including legal
fees if any) of any kind whatsoever that may be imposed on, incurred, or
asserted against the Trust or either of the Trustees as the result of any act
or omission relating to the maintenance and custody of the Receivable Files;
PROVIDED, HOWEVER, that the Servicer shall not be liable hereunder to the
extent, but only to the extent, that such liabilities, obligations, losses,
compensatory damages, payments, costs or expenses result from the willful
misfeasance, bad faith, or negligence of the Trust or any Trustee,
respectively. The obligations of the Servicer, in its capacity as custodian
under this Section 2.8, shall survive the resignation or removal of the
Servicer as custodian under Section 2.9 hereof.
Section II.9 EFFECTIVE PERIOD AND TERMINATION. The Servicer's
appointment as custodian shall become effective as of the Cutoff Date and
shall continue in full force and effect until terminated pursuant to this
Section 2.9. If the Servicer resigns as a Servicer under Section 7.5, or if
all of the rights and obligations of the Servicer shall have been terminated
under Section 8.1, the appointment of the Servicer as custodian hereunder may
be terminated by the Trust or by any Persons to whom the Trust has assigned
its rights hereunder, in the same manner as the Trust or such Persons may
terminate the rights and obligations of the Servicer under Section 8.1. The
Trust may terminate the Servicer's appointment as a custodian hereunder at
any time with cause, or with 30
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days' prior notice without cause, upon written notification to the Servicer.
As soon as practicable after any termination of such appointment the Servicer
shall deliver, or cause to be delivered, the Receivable Files to the Trust,
the Trust's agent or the Trust's designee at such place or places as the
Trust may reasonably designate. Notwithstanding any termination of the
Servicer as custodian hereunder (other than in connection with a termination
resulting from the termination of the Servicer, as such, pursuant to Section
8.1), the Trust agrees that, from and after the date of such termination, and
for so long as the Servicer is acting as such pursuant to this Agreement, the
Trust or the Trust's Agent shall provide, or cause the successor custodian to
provide, access to the Receivable Files to the Servicer, at the times as the
Servicer shall request, for the purpose of carrying out its duties and
responsibilities with respect to the servicing of the Receivables hereunder.
ARTICLE III
ADMINISTRATION AND SERVICING OF THE TRUST PROPERTY
Section III.1 DUTIES OF THE SERVICER. (a) The Servicer, acting
alone and/or through subservicers as provided in this Section 3.1, shall
administer the Receivables with reasonable care. The Servicer's duties shall
include, but not be limited to, the collection and posting of all payments,
responding to inquiries by Obligors on the Receivables, or by federal, state,
or local governmental authorities, investigating delinquencies, reporting tax
information to Obligors, furnishing monthly and annual statements to the
Trustees with respect to distributions, monitoring the status of the
Insurance Policies with respect to Financed Vehicles and providing collection
and repossession services in the event of Obligor default. The Servicer
shall also administer and enforce all rights and responsibilities of the
holder of the Receivables provided for in the Dealer Agreements, the Dealer
Assignments and the Insurance Policies, to the extent that such Dealer
Agreements, Dealer Assignments and Insurance Policies relate to the
Receivables, the Financed Vehicles or the Obligors. In performing its duties
as Servicer hereunder, the Servicer will exercise that degree of skill and
care that the Servicer exercises with respect to similar motor vehicle retail
installment sale contracts or motor vehicle retail installment loans owned
and/or serviced by the Servicer and that is consistent with prudent industry
standards. Without limiting the generality of the foregoing, the Servicer is
hereby authorized and empowered by the Trust to execute and deliver, on
behalf of all Interested Parties, 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 or to the Financed
Vehicles, all in accordance with this Agreement; PROVIDED, HOWEVER, that
notwithstanding the foregoing, the Servicer shall not, except pursuant to an
order from a court of competent jurisdiction, release an Obligor from payment
of any unpaid amount under any Receivable or waive the right to collect the
unpaid balance (including accrued interest) of any Receivable from the
Obligor, except in connection with a DE MINIMIS deficiency which the Servicer
would not attempt to collect in accordance with its customary procedures. If
the Servicer shall commence a legal proceeding to enforce a Receivable, the
Trust shall thereupon be deemed to have automatically assigned such
Receivable to the Servicer, which assignment shall be solely for purposes of
collection. The Trust shall furnish the Servicer with any powers of attorney
and other documents or instruments necessary or appropriate to enable the
Servicer to carry out its servicing and administrative duties hereunder.
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From time to time during the term of this Agreement, the Servicer
may enter into agreements with (i) one or more Affiliates for the servicing
and administration of certain of the Receivables; PROVIDED, HOWEVER, that any
such subservicer shall be and shall remain, for so long as it is acting as
subservicer, an Eligible Servicer, and any fees paid to such subservicer
shall be paid by the Servicer and not out of the proceeds of the Trust, and
any such subservicer shall agree to service the Receivables in a manner
consistent with the terms of this Agreement or (ii) subcontractors who are in
the business of performing specific duties delegated to it.
(b) References in this Agreement to actions taken, to be taken,
permitted to be taken, or restrictions on actions permitted to be taken by
the Servicer in servicing the Receivables and other actions taken, to be
taken, permitted to be taken, or restrictions on actions to be taken with
respect to the Trust Property shall include actions taken, to be taken,
permitted to be taken, or restrictions on actions permitted to be taken by a
subservicer or subcontractor on behalf of the Servicer and references herein
to payments, Recoveries or Liquidation Proceeds received by the Servicer
shall include payments, Recoveries or Liquidation Proceeds received by a
subservicer or subcontractor, irrespective of whether such payments,
Recoveries or Liquidation Proceeds are actually deposited in the Collection
Account by such subservicer or subcontractor. Any subservicing agreement
will contain terms and provisions substantially identical to the terms and
provisions of this Agreement and such other terms and provisions as are not
inconsistent with this Agreement and as the Servicer and the subservicer have
agreed.
(c) The Servicer shall be entitled to terminate any subservicing or
subcontracting agreement in accordance with the terms and conditions of such
subservicing or subcontracting agreement and without any limitation by virtue of
this Agreement; PROVIDED, HOWEVER, that, in the event of termination of any
subservicing or subcontracting agreement by the Servicer, the Servicer shall
either act directly as servicer of the related Receivable or enter into a
subservicing or subcontracting agreement with a successor subservicer or
subcontractor which will be bound by the terms of the related subservicing or
subcontracting agreement.
(d) As a condition to the appointment of any subservicer other than
an Affiliate of the Seller, the Servicer shall notify each Trustee in writing
and the Rating Agencies before such assignment becomes effective and such
subservicer shall be required to execute and deliver an instrument in which it
agrees that, for so long as it acts as subservicer of the Receivables and the
other Trust Property being serviced by it, the covenants, conditions,
indemnities, duties, obligations and other terms and provisions of this
Agreement applicable to the Servicer hereunder shall be applicable to it as
subservicer, that it shall be required to perform its obligations as subservicer
for the benefit of the Trust as if it were the Servicer hereunder (subject,
however, to the right of the Servicer to direct the performance of such
obligations in accordance with this Agreement) and that, notwithstanding any
provision of a subservicing agreement to the contrary, such subservicer shall be
directly liable to the Trust (notwithstanding any failure by the Servicer to
perform its duties and obligations hereunder) for the failure by such
subservicer to perform its obligations hereunder or under any subservicing
agreement, and that (notwithstanding any failure by the Servicer to perform its
respective duties and obligations hereunder) the Trust may enforce the
provisions of this Agreement and any subservicing agreement against the
subservicer, without diminution of such obligations or liabilities by virtue of
any subservicing agreement, by virtue of any indemnification
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provided thereunder or by virtue of the fact that the Servicer is primarily
responsible hereunder for the performance of such duties and obligations, as
if a subservicer alone were servicing and administering, under this
Agreement, the Receivables and the other Trust Property being serviced by it
under the subservicing agreement.
(e) Notwithstanding any subservicing or subcontracting agreement,
any of the provisions of this Agreement relating to agreements or
arrangements between the Servicer or a subservicer or subcontractor or
reference to actions taken through such Persons or otherwise, the Servicer
shall remain obligated and liable to the Trust, each Trustee and the
Securityholders for the servicing and administering of the Receivables and
the other Trust Property in accordance with the provisions of this Agreement
(including for the deposit of payments, Recoveries and Liquidation Proceeds
received by a subservicer or subcontractor, irrespective of whether such
payments, Recoveries or Liquidation Proceeds are actually remitted to the
Servicer or deposited in the Collection Account by such subservicer or
subcontractor; PROVIDED that if such amounts are so deposited, the Servicer
shall have no further obligation to do so) without diminution of such
obligation or liability by virtue of such subservicing or subcontracting
agreements or arrangements or by virtue of indemnification from a subservicer
or subcontractor, to the same extent and under the same terms and conditions
as if the Servicer alone were servicing and administering the Receivables and
the other Trust Property. The Servicer shall be entitled to enter into any
agreement with a subservicer or subcontractor for indemnification of the
Servicer, and nothing contained in this Agreement shall be deemed to limit or
modify such indemnification.
(f) In the event the Servicer shall for any reason no longer be
acting as such (including by reason of the occurrence of an Event of
Servicing Termination), the successor servicer may, in its discretion,
thereupon assume all of the rights and obligations of the outgoing Servicer
under a subservicing agreement. In such event, the successor servicer shall
be deemed to have assumed all of the outgoing Servicer's interest therein and
to have replaced the outgoing Servicer as a party to such subservicing
agreement to the same extent as if such subservicing agreement had been
assigned to the successor servicer, except that the outgoing Servicer shall
not thereby be relieved of any liability or obligation on the part of the
outgoing Servicer to the subservicer under such subservicing agreement. The
outgoing Servicer shall, upon request of the Trust, but at the expense of the
outgoing Servicer, deliver to the successor servicer all documents and
records relating to each such subservicing agreement and the Receivables and
the other Trust Property then being serviced thereunder and an accounting of
amounts collected and held by it and otherwise use its best efforts to effect
the orderly and efficient transfer of the subservicing agreement to the
successor servicer. In the event that the successor servicer elects not to
assume a subservicing agreement, the outgoing Servicer, at its expense, shall
cause the subservicer to deliver to the successor servicer all documents and
records relating to the Receivables and the other Trust Property being
serviced thereunder and all amounts held (or thereafter received) by such
subservicer (together with an accounting of such amounts) and shall otherwise
use its best efforts to effect the orderly and efficient transfer of
servicing of the Receivables and the other Trust Property being serviced by
such subservicer to the successor servicer. The relationship of the Servicer
(and of any successor to the Servicer as servicers under this Agreement) to
the Trust under this Agreement is intended by the parties to be that of
independent contractors and not that of joint venturers, partners or agents.
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Section III.2 COLLECTION OF RECEIVABLE PAYMENTS; CREDIT DEFERRALS;
OPTIONAL PAYMENT DEFERRALS. (a) 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 otherwise act with
respect to the Receivables, the Dealer Agreements, the Dealer Assignments, the
Insurance Policies and the other Trust Property in such manner as will, in the
reasonable judgment of the Servicer, maximize the amount to be received by the
Trust with respect thereto, in accordance with the standard of care required by
Section 3.1. Other than as explicitly permitted in Section 3.2(b) or Section
3.2(c) below, the Servicer will not increase or decrease the number or amount of
any Scheduled Payment, or the Initial Receivable Balance under a Receivable or
the Contract Rate of a Receivable, or extend, rewrite or otherwise modify the
payment terms of a Receivable, release collateral securing a Receivable, or
otherwise modify or waive any material term of a Receivable.
(b) Notwithstanding the foregoing, the Servicer may grant to an
Obligor one or more payment deferrals (each, a "CREDIT DEFERRAL") if (i) the
Servicer determines that, absent such deferral, a payment default by the
Obligor is reasonably foreseeable; (ii) the Servicer would grant such Credit
Deferral if the Receivable were serviced by it for its own account and in
accordance with its customary standards; (iii) the cumulative extensions with
respect to any Receivable shall not cause the term of such Receivable to
extend beyond the last day of the Collection Period immediately preceding the
Final Scheduled Distribution Date for the Class B Notes; (iv) such extensions
in the aggregate do not exceed two months for each twelve months of the
original term of the Receivable; and (v) interest continues to accrue on the
outstanding Receivable Balance of the Receivable during the term of such
Credit Deferral. The Servicer may charge a fee in connection with the grant
of Credit Deferrals in accordance with its customary practices and
procedures, which fee shall be added to the Receivable Balance of the related
Receivable. In the event that the Servicer fails to comply with the
provisions of the first sentence of this Section 3.2(b), the Servicer shall
be required to purchase the Receivable or Receivables affected thereby in
accordance with Section 3.7 hereof.
(c) On or after the Closing Date, the Servicer shall notify each
Obligor meeting the requirements set forth below, in writing, at least three
weeks prior to the first month with respect to which such Obligor would be
entitled to an optional extension pursuant to this Section 3.2(c), that such
qualifying Obligor, at such Obligor's option during the remaining term of the
Receivable, shall be entitled to a non-credit related extension of any
regularly scheduled payment due under a Receivable (each, an "OPTIONAL
PAYMENT DEFERRAL") if such qualifying Obligor satisfies the following
conditions:
(i) at the time of such extension, such Receivable
shall not have been the subject of two such Optional Payment Deferrals in
the related fiscal year of the Trust;
(ii) such Receivable shall (x) not have been the
subject of any Credit Deferral within 90 days of the related Optional
Payment Deferral, or (y) not have been the subject of more than two Credit
Deferrals since its date of origination;
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(iii) at the time of such Optional Payment Deferral, the
Receivable shall not have been more than 30 days past due twice or more;
(iv) at the time of such Optional Payment Deferral, the
Receivable shall not be more than 15 days or more delinquent;
(v) at the time of such Optional Payment Deferral, the
remaining term of the Receivable at such time shall be greater than 20%,
but not more than 95%, of the original specified term of such Receivable;
and
(vi) in the reasonable judgment of the Servicer, the
Receivable is not likely to become a Liquidating Receivable following such
Optional Payment Deferral.
The Servicer may charge a fee in connection with the grant of
Optional Payment Deferrals in accordance with its customary practices and
procedures, which fee shall be added to the Receivable Balance of the related
Receivable. If, as an inadvertent result of any extension granted pursuant to
this Section 3.2(e), such extension breached any of the terms of the
preceding criteria (i) through (vi) or caused the term of such Receivable to
extend beyond the last day of the Collection Period immediately preceding the
Final Scheduled Distribution Date for the Class B Notes, then the Servicer
shall be obligated to purchase such Receivable pursuant to Section 3.7.
Section III.3 REALIZATION UPON RECEIVABLES. On behalf of the
Trust, the Servicer shall charge off a Receivable as a Liquidating Receivable
in accordance with its customary servicing procedures and shall use its best
efforts to repossess and liquidate the Financed Vehicle securing any
Liquidating Receivable as soon as feasible after default, in accordance with
the standard of care required by Section 3.1. In taking such action, the
Servicer shall follow such customary and usual practices and procedures as it
shall deem necessary or advisable in its servicing of motor vehicle retail
installment sale contracts, and as are otherwise consistent with the standard
of care required under Section 3.1, which shall include the exercise of any
rights of recourse to Dealers under the Dealer Agreements and Dealer
Assignments (or rights to compel repurchase against third Persons) and
selling the Financed Vehicle at public or private sale. The foregoing shall
be subject to the provision that, in any case in which a Financed Vehicle
shall have suffered damage, the Servicer shall not be obligated to expend
funds in connection with the repair or the repossession of such Financed
Vehicle unless it shall determine in its discretion that such repair and/or
repossession will increase the Liquidation Proceeds of the related Receivable
by an amount equal to or greater than the amount of such expenses (which, in
any event, shall not be unreasonable). The Servicer shall be entitled to
receive Liquidation Expenses with respect to each Liquidating Receivable at
such time as the Receivable becomes a Liquidation Receivable in accordance
with subsection 4.3(c).
If the Servicer elects to commence a legal proceeding to enforce a
Dealer Agreement or Dealer Assignment, the act of commencement shall be
deemed to be an automatic assignment from the Trust to the Servicer of the
rights of recourse under such Dealer Agreement and Dealer Assignment. If,
however, in any enforcement suit or legal proceeding, it is held that the
Servicer may not enforce a Dealer Agreement or Dealer Assignment on the
grounds that it is not a real party in interest or a Person entitled to
enforce the Dealer Agreement or Dealer Assignment, the Trust, at
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the Servicer's expense, or the Seller, at the Seller's expense, shall take
such steps as the Servicer deems necessary to enforce the Dealer Agreement or
Dealer Assignment, including bringing suit in its name or the names of the
Securityholders.
Section III.4 PHYSICAL DAMAGE INSURANCE. (a) The Servicer shall
require that each Financed Vehicle be insured under an Insurance Policy
naming the Seller as loss payee and in the event that an Insurance Policy
shall lapse or shall be otherwise terminated and the Receivable Balance of
the Receivable related thereto is in excess of $3,500 (or such other amount
as the Servicer determines, consistent with the standard of care required by
Section 3.1), the Servicer, at its expense (and not at the expense of the
Trust), shall procure a substitute policy of insurance, issued by an insurer
having a claims-paying ability the same as, or better than, that of the
insurer under the terminated Insurance Policy and naming the Servicer or the
Seller as loss payee. Any substitute Insurance Policy procured hereunder
shall provide coverage against similar risks, shall be subject to the same,
or a lower, deductible and shall contain loss payable clauses and other
provisions no less favorable to the named insured than those contained in the
terminated Insurance Policy. The cost of such Insurance Policy may, to the
extent consistent with applicable law and the terms of the applicable
Receivable, be added to the amount owing by an Obligor, but shall be treated
as a separate receivable not owned by the Trust for all purposes hereunder
and, in furtherance of the foregoing, shall not be included in the definition
of Receivable Balance or Aggregate Receivables Balance and collections with
respect thereto shall not be part of Available Interest or Available
Principal. In the event that any payment by an Obligor is insufficient to
pay the payment currently due on the Receivable and the amount due on the
receivable arising from the cost of such Insurance Policy, the payment shall
be divided PRO RATA based on the amount currently due on each.
(b) The Servicer may xxx to enforce or collect upon the Insurance
Policies, in its own name, if possible, or as agent for the Trust. If the
Servicer elects to commence a legal proceeding to enforce an Insurance
Policy, the act of commencement shall be deemed to be an automatic assignment
of the rights of the Trust under such Insurance Policy to the Servicer for
purposes of collection only. If, however, in any enforcement suit or legal
proceeding it is held that the Servicer may not enforce an Insurance Policy
on the grounds that it is not a real party in interest or a holder entitled
to enforce the Insurance Policy, the Trust, at the Servicer's expense, or the
Seller, at Servicer's expense, shall take such steps as the Servicer deems
necessary to enforce such Insurance Policy, including bringing suit in its
name or the names of the Securityholders.
Section III.5 MAINTENANCE OF SECURITY INTERESTS IN FINANCED
VEHICLES. The Servicer, in accordance with the standard of care required
under Section 3.1, shall take such steps as are necessary to maintain
perfection of the security interest created by each Receivable in the related
Financed Vehicle for the benefit of the Trust. The Trust hereby authorizes
the Servicer, and the Servicer hereby agrees, to take such steps as are
necessary to re-perfect such security interest on behalf of the Trust in the
event the Servicer receives notice of the relocation of a Financed Vehicle.
If there has been an Event of Servicing Termination (or the occurrence of an
event specified in clause (iii) or (iv) of Section 8.1(a) with respect to the
Seller), upon the request of the Trust, the Servicer, at its expense, shall
promptly and duly execute and deliver such documents and instruments, and
take such other actions as may be necessary, as evidenced by an Opinion of
Counsel delivered to the Trust, to perfect the Trust's interest in the Trust
Property against all other Persons, including the delivery of the Receivables
and the Receivable Files to the Trustee, its agent,
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or its designee, the endorsement and delivery of the Insurance Policies or
the notification of the insurers thereunder, the execution of transfer
instruments, and the endorsement to the Trustee and the delivery of the
certificates of title to the Financed Vehicles to the appropriate department
or departments of motor vehicles (or other appropriate governmental agency).
Section III.6 COVENANTS OF THE SERVICER. The Servicer makes the
following covenants upon which the Trust relies in accepting the Trust Property
in trust and in executing and delivering the Securities:
(i) SECURITY INTEREST TO REMAIN IN FORCE. The Financed
Vehicle securing each Receivable will not be released from the security
interest granted by the Receivable in whole or in part, except as
contemplated herein.
(ii) NO IMPAIRMENT. The Servicer will not (nor will it
permit any subservicer to) impair in any material respect the rights of any
Interested Party in the Receivables, the Dealer Agreements, the Dealer
Assignments or the Insurance Policies or, subject to clause (iii) below,
otherwise amend or alter the terms thereof if, as a result of such
amendment or alteration, the interests of the Trust or any Interested Party
hereunder would be materially adversely affected.
(iii) AMENDMENTS. The Servicer will not increase or decrease
the number or amount of Scheduled Payments or the Initial Receivable
Balance or the Contract Rate under a Receivable, or extend, rewrite or
otherwise waive, amend, or modify any material term of a Receivable, except
in accordance with Section 3.2.
Section III.7 PURCHASES BY THE SERVICER. The Seller, the Servicer,
the Indenture Trustee or the Owner Trustee, as the case may be, shall inform the
other parties promptly, in writing, upon the discovery (which, in the case of
either Trustee, shall occur only upon the actual knowledge of an Authorized
Officer of such Trustee) of any breach by the Servicer of its covenants under
Section 3.6. Unless the breach shall have been cured by the last day of the
Collection Period which includes the 60th day after the date on which the
Servicer becomes aware of, or receives written notice of, such breach, the
Servicer shall purchase the Receivable or Receivables from the Trust, without
recourse, representation or warranty, other than that the Owner Trustee, on
behalf of the Trust has not imposed any liens on the Receivable or Receivables
to be repurchased materially and adversely affected thereby on the last day of
such Collection Period; PROVIDED, HOWEVER, that in the case of a breach of the
covenant contained in Section 3.6(iii), the Servicer shall be obligated to
purchase the affected Receivable or Receivables on the last day of the
Collection Period during which the Servicer becomes aware of, or receives
written notice of, such breach (which in all cases shall be deemed to have a
material adverse effect on the Securityholders). If the Servicer grants an
Optional Payment Deferral pursuant to Section 3.2(c) and such deferral causes
the term of the applicable Receivable to extend beyond the last day of the
Collection Period immediately preceding the Final Scheduled Distribution Date
for the Class B Notes, the Servicer shall be obligated to purchase the
applicable Receivable on the last day of the Collection Period during which the
Servicer grants such Optional Payment Deferral. In consideration of the
purchase of a Receivable hereunder, the Servicer shall remit the Repurchase
Amount of such Receivable in the manner specified in
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Section 4.3 on the related Deposit Date. Except as provided in Section 7.2,
the sole remedy of the Trust, any Trustee, or the Securityholders against the
Servicer with respect to a breach pursuant to Section 3.6 shall be to require
the Servicer to purchase Receivables pursuant to this Section 3.7.
Section III.8 SERVICING COMPENSATION. On each Distribution Date,
the Servicer shall be paid the Total Servicing Fee for such Distribution
Date. In addition, the Servicer shall retain any late fees, prepayment
charges or other fees and charges (other than Deferral Fees) collected
during the Collection Period (collectively, the "SUPPLEMENTAL SERVICING
FEE"). The Servicer shall be required to pay all expenses incurred by it in
connection with its activities hereunder (including fees and expenses of
either Trustee (and any custodian appointed by such Trustee) and independent
accountants, any subservicer, taxes imposed on the Servicer or any
subservicer, and expenses incurred in connection with distributions and
reports to the Trustees and the Securityholders) except expenses incurred in
connection with realizing upon Receivables under Section 3.3. No transfer,
sale, pledge or other disposition of the Servicer's right to receive all or
any portion of the Total Servicing Fee shall be made, and any such attempted
transfer, sale, pledge or other disposition shall be void, unless such
transfer is made to one or more successor servicers in connection with the
assumption by any such successor servicer of the duties hereunder pursuant to
Section 8.2 and all (and not a portion) of the Total Servicing Fee is
transferred to any such successor servicer.
Section III.9 SERVICER'S CERTIFICATE. On or before the
Determination Date immediately preceding each Distribution Date, the Servicer
shall deliver to each Trustee a report of a Servicing Officer substantially
in the form of EXHIBIT B hereto, as certified by such officer (each, a
"SERVICER'S CERTIFICATE") containing all information necessary to make the
distributions pursuant to Section 4.5 and all information required to be
provided to Certificateholders and Noteholders pursuant to Section 4.7. The
Servicer also shall separately identify (by account number of the Receivable
as it appears in the related Schedule of Receivables) in a written notice to
the Trustees the Receivables to be repurchased by the Seller or to be
purchased by the Servicer, as the case may be, on the related Deposit Date,
and each Receivable which became a Liquidating Receivable during the related
Collection Period.
Section III.10 ANNUAL STATEMENT AS TO COMPLIANCE. (a) The Servicer
shall deliver to the Trust, the Owner Trustee and the Indenture Trustee, on
or before March 15 of each year, commencing March 15, ____, an Officer's
Certificate, stating that (i) a review of the activities of the Servicer
during the preceding calendar year (or shorter period, in the case of the
first such Officer's Certificate) and of its performance of its obligations
under this Agreement has been made under such officer's supervision and (ii)
to the best of such officer's knowledge, based on such review, the Servicer
has fulfilled all its obligations under this Agreement throughout such year
(or shorter period, in the case of the first such certificate), 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 Trust, the Owner Trustee and
the Indenture Trustee, promptly upon having knowledge thereof, but in no event
later than five Business Days thereafter, written notice in an Officer's
Certificate of any event which constitutes or, with the giving of notice or
lapse of time, or both, would become, an Event of Servicing Termination under
Section 8.1.
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Section III.11 INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS' REPORTS.
The Servicer shall cause a firm of independent certified public accountants
(who may also render audit and other services to the Servicer and the Seller)
to deliver to the Trust, the Owner Trustee and the Indenture Trustee on or
before March 15 of each year, commencing March 15, ____, a report of
examination addressed to the Board of Directors of the Servicer and to the
Trust, the Owner Trustee and the Indenture Trustee to the effect that such
firm has examined the automobile and light-duty truck receivable servicing
functions of the Servicer over the previous calendar year (or shorter period,
in the case of the first such report) and that such examination (i) included
tests relating to automobile and light-duty truck loans serviced for others
and such other auditing procedures as such firm considered necessary under
the circumstances and (ii) except as described in such report, disclosed no
exceptions or errors in the records relating to automobile and light-duty
truck loans serviced for others that in such firm's opinion, requires such
firm to report. In the event such firm requires the Trust, the Owner Trustee
and the Indenture Trustee to agree to the procedures performed by such firm,
the Servicer shall direct the Trust, the Owner Trustee and the Indenture
Trustee in writing to so agree; it being understood and agreed that the
Trust, the Owner Trustee and the Indenture Trustee will deliver such letter
of agreement in conclusive reliance upon the written direction of the
Servicer, and the Trust, the Owner Trustee and the Indenture Trustee make no
independent inquiry or investigation as to, and shall have no obligation or
liability in respect of, the sufficiency, validity or correctness of such
procedures.
Section III.12 ACCESS TO CERTAIN DOCUMENTATION AND INFORMATION
REGARDING RECEIVABLES. The Servicer shall provide the Trustees and the
Securityholders with access to the Receivable Files (in the case of the
Securityholders, where the Securityholder shall be required by applicable
statutes or regulations to have access to such documentation). Such access
shall be afforded without charge, but only upon reasonable request and during
normal business hours at the office of the Servicer. Nothing in this Section
3.12 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. Any
Securityholder, by its acceptance of a Security, shall be deemed to have
agreed to keep any information obtained by it pursuant to this Section
confidential, except as may be required by applicable law.
Section III.13 REPORTS TO THE COMMISSION. The Servicer shall, on
behalf of the Trust, cause to be filed with the Commission any periodic
reports required to be filed under the provisions of the Securities Exchange
Act of 1934, as amended, and the rules and regulations of the Commission
thereunder.
Section III.14 REPORTS TO THE RATING AGENCIES. The Servicer shall
deliver to each Rating Agency, at such address as each Rating Agency may
request, a copy of all reports or notices furnished or delivered pursuant to
this Article and a copy of any amendments, supplements or modifications to
this Agreement and, if any subservicer is not an Affiliate of the Seller, any
subservicing agreement and any other information reasonably requested by such
Rating Agency to monitor this transaction.
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ARTICLE IV
DISTRIBUTIONS; RESERVE ACCOUNT;
STATEMENTS TO SECURITYHOLDERS
Section IV.1 ESTABLISHMENT OF ACCOUNTS. (a)
(i) The Servicer, for the benefit of the Securityholders, shall
establish and maintain in the name of the Indenture Trustee one or more Eligible
Deposit Accounts (the "COLLECTION ACCOUNT"), bearing a designation clearly
indicating that the funds deposited therein are held for the benefit of the
Securityholders.
(ii) The Servicer for the benefit of the Noteholders, shall establish
and maintain in the name of the Indenture Trustee an Eligible Deposit Account
(the "NOTE DISTRIBUTION ACCOUNT"), bearing a designation clearly indicating that
the funds deposited therein are held for the benefit of the Noteholders.
(iii) In the event the Bank is not the only Certificateholder, the
Servicer, for the benefit of the Certificateholders, shall establish and
maintain in the name of the Owner Trustee an Eligible Deposit Account (the
"CERTIFICATE DISTRIBUTION ACCOUNT"), bearing a designation clearly indicating
that the funds deposited therein are held for the benefit of the
Certificateholders.
(b) (i) Funds on deposit in the Accounts shall be invested by
the Indenture in Eligible Investments selected by the Servicer (as provided
in a writing signed by it); PROVIDED, HOWEVER, it is understood and agreed
that Indenture Trustee shall not be liable for any loss arising from such
investment in Eligible Investments or incurred as a result of the
liquidation of any investment prior to its stated maturity or the failure
of the Servicer to provide timely written investment direction. In no
event shall the Indenture Trustee be liable for the selection of Eligible
Investments. The Indenture Trustee and the Owner Trustee shall have no
obligation to invest or reinvest any amounts held hereunder in the absence
of written investment direction. All such Eligible Investments shall be
held by the Indenture Trustee for the benefit of the beneficiaries of the
applicable Account; PROVIDED that, on each Distribution Date, all interest
and other investment income (net of losses and investment expenses) on
funds on deposit therein shall be withdrawn from the Accounts at the
direction of the Servicer and shall be paid to the Seller. Funds on
deposit in the Accounts shall be invested in Eligible Investments that will
mature so that such funds will be available at the close of business (New
York time) on the Deposit Date preceding the following Distribution Date.
Funds deposited in an Account on a Deposit Date which immediately precedes
a Distribution Date upon the maturity of any Eligible Investments are not
required to be (but may be) invested overnight.
(ii) The Accounts shall initially be established with the
Indenture Trustee. The Indenture Trustee shall possess all right, title
and interest in all funds on deposit from time to time in the Accounts and
in all proceeds thereof (other than income thereon which
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shall be paid to the Seller) and all such funds, investments and
proceeds shall be part of the Trust Property. The Accounts shall be
under the sole dominion and control of the Indenture Trustee for the
benefit of all Securityholders. If, at any time, any of the Accounts
ceases to be an Eligible Deposit Account, the Indenture Trustee (or the
Servicer on its behalf) shall within 10 Business Days (or such longer
period, not to exceed 30 calendar days, as to which each Rating Agency
shall consent) establish a new Account as an Eligible Deposit Account
and shall transfer any cash and/or any investments that are in the
existing Account which is no longer an Eligible Deposit Account to such
new Account.
(iii) With respect to the Account Property in respect of any
Account:
(A) any Account Property that is held in deposit accounts
shall be held solely in an Eligible Deposit Account; 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) the Indenture Trustee shall maintain Control over each
Account in which any Account Property that constitutes a Security
Entitlement, an Uncertificated Security or a Federal Book-Entry
Security is held; and
(C) any Account Property that constitutes either a Security
Certificate or any other Account Property that constitutes Physical
Property and that is not a Security Entitlement shall be transferred
to the Indenture Trustee or its nominee or custodian by physical
delivery to the Indenture Trustee or its nominee or custodian endorsed
to, or registered in the name of, the Trustee or its nominee or
custodian or endorsed in blank.
(iv) The Servicer shall have the power, revocable by the
Indenture Trustee, to instruct the Indenture Trustee to make withdrawals
and payments from the Accounts for the purpose of permitting the Servicer
or the Owner Trustee to carry out its respective duties hereunder or
permitting the Indenture Trustee to carry out its duties under the
Indenture.
(c) (i) The Servicer, for the benefit of the Securityholders,
shall establish and maintain in the name of an Eligible Deposit Account
(the "RESERVE ACCOUNT") to include money and other property deposited and
held therein pursuant to this Section 4.01(c)(i), Section 4.5(b)(iv) and
Section 4.6. On the Closing Date, the Seller shall deposit the Reserve
Account Initial Deposit with respect to the Closing Date into the Reserve
Account. The Reserve Account shall be the property of the Trust subject to
the rights of the Indenture Trustee in the Reserve Account Property.
(ii) Funds on deposit in the Reserve Account shall be
invested by the Indenture Trustee in Eligible Investments selected by the
Servicer (as provided in writing signed by it); PROVIDED, HOWEVER, it is
understood and agreed that the Indenture Trustee shall not be liable for
any loss arising from such investment in Eligible Investments or incurred
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as a result of the liquidation of any investment prior to its stated
maturity or the failure of the Servicer to provide timely, written
investment direction. In no event shall the Indenture Trustee be liable
for the selection of Eligible Investments. The Indenture Trustee shall
have no obligation to invest or reinvest any amounts held hereunder in the
absence of written investment direction. All such Eligible Investments
shall be held by the Indenture Trustee for the benefit of the
Securityholders; PROVIDED that on each Distribution Date all interest and
other investment income (net of losses and investment expenses) on funds on
deposit therein shall be withdrawn from the Reserve Account at the
direction of the Servicer and shall be paid to the Seller. Funds on
deposit in the Reserve Account shall be invested in Eligible Investments
that will mature so that such funds will be available at the opening of
business on the next following Deposit Date; PROVIDED, HOWEVER, that to the
extent permitted by the Rating Agencies, funds on deposit in the Reserve
Account may be invested in Eligible Investments that mature later than the
next Deposit Date.
(iii) The Reserve Account shall be under the sole dominion
and control of the Indenture Trustee. If, at any time, the Reserve Account
ceases to be an Eligible Deposit Account, the Servicer 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 Reserve Account as an
Eligible Deposit Account and shall transfer any cash and/or any investments
that are in the existing Account which is no longer an Eligible Deposit
Account to such new Reserve Account.
(iv) With respect to the Account Property in respect of the
Reserve Account:
(A) any Account Property that is held in deposit accounts
shall be held solely in an Eligible Deposit Account; 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) the Indenture Trustee shall maintain Control over each
Account in which any Account Property that constitutes a Security
Entitlement, an Uncertificated Security or a Federal Book-Entry
Security is held; and
(C) any Account Property that constitutes either a
Security Certificate or any other Account Property that constitutes
Physical Property and that is not a Security Entitlement shall be
transferred to the Indenture Trustee or its nominee or custodian by
physical delivery to the Indenture Trustee or its nominee or custodian
endorsed to, or registered in the name of, the Indenture Trustee or
its nominee or custodian or endorsed in blank.
Section IV.2 COLLECTIONS. (a) Subject to the provisions of
subsections (b) and (c) below, the Servicer shall remit to the Collection
Account all payments by or on behalf of the Obligors on the Receivables,
including all Liquidation Proceeds and Recoveries received by the Servicer
during any Collection Period, as soon as practicable, but in no event after the
close of
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business (New York time) on the second Business Day after receipt thereof.
Subject to the provisions of subsection (c) hereof, on the Closing Date, the
Servicer shall deposit in the Collection Account all payments by or on behalf
of the Obligors received by the Servicer representing monies due or received
under the Receivables after the close of business of the Servicer on the
Cutoff Date and on or prior to the second Business Day immediately preceding
the Closing Date.
(b) Notwithstanding the provisions of Section 4.2(a), if (i) the
Servicer shall have the Required Rating or (ii) (a) the Servicer shall have
obtained a letter of credit or surety bond (or similar form of performance
guaranty) in favor of the Trust for the benefit of the Securityholders,
providing that the Trust may demand payment (up to the amount then available
thereunder) in the event that the Servicer fails to make any payment or
deposit required hereunder (other than with respect to Advances) and (b) the
Trust shall have received written notice from each of the Rating Agencies
that the then outstanding rating on the Notes would not be lowered or
withdrawn as a result, the Servicer may deposit the amounts referred to in
subsection (a) above for any Collection Period into the Collection Account
not later than the close of business on the related Deposit Date, for so long
as the Servicer shall have the Required Rating or such letter of credit,
surety bond or similar form of performance guaranty is in full force and
effect, as the case may be; PROVIDED, HOWEVER, that (i) if an Event of
Servicing Termination has occurred and is continuing, (ii) the Servicer has
been terminated as such pursuant to Section 8.1 or (iii) the Servicer ceases
to have the Required Rating (and the Servicer has not obtained a letter of
credit (or similar form of performance guaranty) satisfying the conditions
specified above), the Servicer shall deposit such amounts (including any
amounts then being held by the Servicer) into the Collection Account as
provided in Section 4.2(a). Notwithstanding the foregoing, the provisions of
the proviso to the preceding sentence shall not be applicable to a successor
servicer solely by reason of the occurrence of an event specified in clauses
(i), (ii) and (iii) of such proviso with respect to the outgoing Servicer.
Following the occurrence of an event specified in clauses (i), (ii) or (iii)
in the preceding proviso, on a monthly basis, all Collections shall be
segregated by book-entry or similar form of identification on the Servicer's
books and records and identified as the property of the Trust. The Servicer
shall promptly notify the Trust in writing if it shall obtain or lose the
Required Rating or the benefit of such letter of credit, surety bond, or
similar form of performance guaranty.
(c) Notwithstanding the provisions of subsections (a) and (b)
hereof, the Servicer may retain, or will be entitled to be reimbursed, from
amounts otherwise payable into, or on deposit in, the Collection Account with
respect to a Collection Period and the Receivables originated by it any
amounts previously deposited in the Collection Account but later determined
to have resulted from mistaken deposits or postings or checks returned for
insufficient funds, in each case, with respect to which the Servicer has not
been previously reimbursed hereunder. The amount to be retained or
reimbursed hereunder shall not be included in Collections with respect to the
related Distribution Date.
(d) In those cases where a subservicer is servicing a Receivable,
the Servicer shall cause the subservicer to remit to the Collection Account
as soon as practicable, but in no event later than the close of business (New
York time) on the second Business Day after receipt thereof by the
subservicer (but subject to the provisions of Section 4.2 (b) and the
limitations contained in
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Section 4.2(c) of this Agreement) the amounts referred to in Section 4.2(a)
in respect of a Receivable being serviced by the subservicer.
Section IV.3 ADVANCES. (a) On each Deposit Date, the Servicer
may make a payment with respect to each Receivable serviced by it (other than
a Liquidating Receivable) equal to the excess, if any, of (i) the product of
the Receivable Balance of such Receivable as of the first day of the related
Collection Period and one twelfth of its Contract Rate (calculated on the
basis of a 360-day year comprised of twelve 30-day months) over (ii) Interest
Collections actually received by the Servicer as of the last day of such
Collection Period with respect to such Receivable (each such payment, an
"ADVANCE"). With respect to each Receivable, the Advance shall increase
Outstanding Advances. If such calculation results in a negative number, (i)
Outstanding Advances shall be reduced by such amount or (ii) if Outstanding
Advances is equal to zero, such amount shall be paid to the Servicer. The
Servicer may elect not to make any Advance of due and unpaid interest with
respect to a Receivable to the extent that the Servicer, in its sole
discretion, determines that such Advance is not recoverable from subsequent
payments on such Receivable or from funds in the Reserve Account. The
Servicer shall not make any advance with respect to principal of Receivables.
(b) The Servicer shall deposit in the Collection Account the
aggregate Advances on Receivables serviced by the Servicer pursuant to Section
4.3(a). To the extent that the Servicer does not make an Advance pursuant to
Section 4.3(a) on the date required, the Servicer shall so notify the Indenture
Trustee, and the Indenture Trustee shall withdraw such amount (or, if
determinable, such portion of such amount as does not represent advances for
delinquent interest) from the Reserve Account and deposit such amount in the
Collection Account. The Servicer and the Seller shall deposit or cause to be
deposited in the Collection Account the aggregate Repurchase Amount with respect
to Purchased Receivables. All such deposits shall be made in immediately
available funds on the Deposit Date. The Owner Trustee shall deposit in the
Collection Account the aggregate of any amounts received pursuant to the Yield
Supplement Agreement on the date of receipt thereof.
(c) On each Deposit Date, prior to making any of the
distributions set forth in Section 4.5, the Servicer shall be reimbursed for
all Outstanding Advances with respect to prior Distribution Dates and
Liquidation Expenses with respect to Receivables which became Liquidating
Receivables during the related Collection Period (and any unpaid Liquidation
Expenses from prior periods) for such related Distribution Date and, to the
extent such funds are insufficient, to the extent of the funds in the Reserve
Account. If it is acceptable to each Rating Agency without reduction in the
rating of the Certificates, the Outstanding Advances at the option of the
Services may be paid at or as soon as possible after the beginning of the
related Collection Period out of the first collections of interest received
on the Receivables for such Collection Period.
Section IV.4 ADDITIONAL DEPOSITS; NET DEPOSITS. The Servicer may
make the remittances to be made by it pursuant to Section 4.2 net of amounts
to be distributed to it pursuant to Section 4.5 (but subject to the
priorities set forth therein), for so long as (i) no Event of Servicing
Termination has occurred and is continuing and (ii) the Servicer has not been
terminated as such pursuant to Section 8.1 hereof; PROVIDED, HOWEVER, that
the Servicer shall account for all of such amounts in the related Servicer's
Certificate as if such amounts were deposited and distributed
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separately; and PROVIDED FURTHER that, if an error is made by the Servicer in
calculating the amount to be deposited or retained by it and a shortfall in
the amount deposited into the Collection Account results, the Servicer shall
make a payment of the deficiency to the Collection Account, immediately upon
becoming aware, or receiving notice from the Trust, of such shortfall.
Section IV.5 DISTRIBUTIONS. (a) On or before each Determination
Date, the Servicer shall calculate, with respect to the preceding Collection
Period and the related Distribution Date, the Available Amount, the Total
Available Amount, Collected Interest, the Total Servicing Fee, the Aggregate
Class A Noteholders' Interest Distributable Amount, the Class B Noteholders'
Interest Distributable Amount and all other amounts required to be deposited
in or paid from each of the Collection Account, the Note Distribution
Account, the Certificate Distribution Account, the Reserve Account and the
Yield Supplement Account on the next succeeding Distribution Date, which
calculations shall be set forth in the Servicer's Certificate delivered to
the Trustees on or before such Determination Date.
(b) On or before the Deposit Date, the Indenture Trustee shall
cause to be made the following withdrawals, deposits, transfers and
distributions in the amounts set forth in the Servicer's Certificate for such
Distribution Date pursuant to Section 3.9:
(i) from the Reserve Account to the Collection Account,
the lesser of (A) the amount of cash or other immediately available funds
therein on the Deposit Date and (B) the amount, if any, by which (x) the
sum of the Total Servicing Fee, the Aggregate Class A Noteholders' Interest
Distributable Amount, the Class B Noteholders' Interest Distributable
Amount and the Noteholders' Principal Distributable Amount exceeds (y) the
Available Amount for such Distribution Date;
(ii) the amount to be withdrawn from the Collection Account
and paid to the Servicers in respect of reimbursement of Outstanding
Advances and payments in respect of Liquidation Expenses with respect to
Receivables which became Liquidating Receivables during the related
Collection Period (and any unpaid Liquidation Expenses from prior periods)
pursuant to Section 4.3(c);
(iii) the amount to be withdrawn from the Collection Account
and paid to the Servicer in respect of the Total Servicing Fee for such
Distribution Date;
(iv) the amount to be withdrawn from the Collection Account
in respect of the Aggregate Class A Noteholders' Interest Distributable
Amount, the Class B Noteholders' Interest Distributable Amount and the
Noteholders' Principal Distributable Amount and deposited in the Note
Distribution Account for payment to Noteholders on such Distribution Date;
(v) the amount, if any, by which the Available Amount for
such Distribution D ate exceeds the sum of the Total Servicing Fee, the
Aggregate Class A Noteholders' Distributable Amount, the Class B
Noteholders' Interest Distributable Amount and the Noteholders' Principal
Distributable Amount will be withdrawn from the Collection Account and
deposited in the Reserve Account; and
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(vi) the amount, if any, by which the amount on deposit in
the Reserve Account after all other deposits (including the deposit
pursuant to clause (v) above) and withdrawals on the Deposit Date exceeds
the Specified Reserve Account Balance for such Distribution Date will be
withdrawn from the Reserve Account and paid to the Certificateholders.
(c) Except as provided in Section 4.5(d), after making the
reimbursement to the Servicer in respect of Outstanding Advances and payments in
respect of Liquidation Expenses to the extent provided in Section 4.3(c), on
each Determination Date, the Indenture Trustee at the direction of the Servicer,
will allocate the Total Available Amount in the following order of priority:
(i) the Total Servicing Fee;
(ii) the Aggregate Class A Noteholders' Interest
Distributable Amount;
(iii) the Class B Noteholders' Interest Distributable Amount;
and
(iv) the Noteholders' Principal Distributable Amount.
(d) Notwithstanding the foregoing, at any time that the Class A Notes
have not been paid in full and the principal balance of the Notes has been
declared immediately due and payable following the occurrence of an Event of
Default pursuant to Section [5.2] of the Indenture, then until such time as the
Class A Notes have been paid in full or such declaration has been rescinded and
any continuing Events of Default have been waived pursuant to the Indenture or
if any Notes remain outstanding after the applicable Final Scheduled
Distribution Date, no amounts shall be deposited in or distributed to the Note
Distribution Account as payments on the Class B Notes. Any such amounts
otherwise distributable on the Class B Notes shall be deposited instead to the
Note Distribution Account as payments of principal on the Class A Notes.
Section IV.6 RESERVE ACCOUNT.
(a) On the Closing Date, the Seller shall deposit the Reserve Account
Initial Deposit into the Reserve Account.
(b) On each Deposit Date, an amount equal to the Available Amount
remaining
(c) The amount to be withdrawn from the Reserve Account and paid to
the Certificateholders will equal the amount, if any, by which the amount on
deposit in the Reserve Account after all other deposits (including the deposit
pursuant to clause (b) above) exceeds the Specified Reserve Account Balance for
such Distribution Date.
Section IV.7 STATEMENTS TO SECURITYHOLDERS. (a) On each
Distribution Date, the Owner Trustee shall include with each distribution to a
Certificateholder, and the Indenture Trustee
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shall include with each distribution to a Noteholder, a statement (which
statement shall also be provided to the Rating Agencies), based on
information in the Servicer's Certificate furnished pursuant to Section 3.9.
Each such statement shall set forth the following information as to the
Securities with respect to such Distribution Date or the preceding Collection
Period, as applicable:
(i) the amount of the distribution allocable to principal
with respect to each class of Notes and any distributions on the
Certificates and the derivation of such amounts;
(ii) the amount of the distribution allocable to interest on
or with respect to each class of Notes and the Certificates;
(iii) amount of the Total Servicing Fee paid or payable to
the Servicer in respect of the related Collection Period;
(iv) the aggregate Outstanding Advances (if any) as of the
last day of the preceding Collection Period and the change in such amount
from the previous Collection Period;
(v) the Aggregate Receivables Balance as of the close of
business on the last day of the preceding Collection Period;
(vi) the aggregate outstanding principal balance and the
Note Pool Factor for each class of such Notes, in each case after giving
effect to all payments reported under clause (i) above on such date;
(vii) the amount of the aggregate Realized Losses, if any,
for the preceding Collection Period;
(viii) the Noteholders' Interest Carryover Shortfall, the
Noteholders' Principal Carryover Shortfall, the Certificateholders'
Interest Carryover Shortfall and the Certificateholders' Principal
Carryover Shortfall, if any, in each case as applicable to each class of
Securities and the change in such amounts from the preceding statement;
(ix) the aggregate Repurchase Amount with respect to
Purchased Receivables, if any, that were repurchased by the Seller or
purchased by the Servicer in such Collection Period;
(x) the balance of the Reserve Account, as of such date,
after giving effect to changes therein on such date and the Specified
Reserve Account Balance on such date; and
(xi) the balance of the Yield Supplement Account, as of such
date, after giving effect to changes therein on such date and the Yield
Supplement Amount and the calculation thereof.
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(b) Within a reasonable period of time after the end of each
calendar year, but not later than the latest date permitted by law, the
Servicer shall furnish a report to the Indenture Trustee and the Owner
Trustee and the Indenture Trustee or the Owner Trustee, as applicable, shall
furnish, or cause to be furnished, to each Person who at any time during such
calendar year shall have been a Securityholder, a statement based upon such
report as to the sum of the amounts determined in clauses (i), (ii), (iii),
(viii) and (x) above for such calendar year, or, in the event such Person
shall have been a Securityholder during a portion of such calendar year, for
the applicable portion of such year, and such other information as is
available to the Servicer as the Servicer deems necessary or desirable to
enable the Securityholders to prepare their federal income tax returns.
ARTICLE V
YIELD SUPPLEMENT ACCOUNT
Section V.1 YIELD SUPPLEMENT AGREEMENT. Simultaneously with the
execution of this Agreement, the Seller conveyed the Yield Supplement
Agreement to the Trust as part of the Trust Property and has deposited the
Yield Supplement Initial Deposit into the Yield Supplement Account. The
Yield Supplement Agreement, with respect to each Receivable (other than
Purchased Receivables and Liquidating Receivables), provides for the payment
by the Seller on or prior to each Deposit Date of an amount (if positive)
calculated by the Servicer equal to [INSERT CALCULATION OF YIELD
SUPPLEMENT AMOUNT] (the "YIELD SUPPLEMENT AMOUNT").
Section V.2 YIELD SUPPLEMENT ACCOUNT. The Seller shall
establish and maintain in the name of the Owner Trustee an Eligible Deposit
Account to secure the Seller's obligations under the Yield Supplement
Agreement (the "YIELD SUPPLEMENT ACCOUNT"). The Yield Supplement Account
shall initially be maintained at _____________________.
(a) In order to provide for the prompt payment by the Seller of
the Yield Supplement Amount, to assure availability of the amounts maintained
in the Yield Supplement Account and as security for the performance by the
Seller of its obligations under the Yield Supplement Agr all the aforesaid
property, rights and privileges unto the Owner Trustee, its successors and
assigns, in trust for the uses and purposes, and subject to the terms and
provisions, set forth in this Section. The Owner Trustee hereby acknowledges
such transfer and accepts in trust hereunder and shall hold and distribute
the Yield Supplement Account Property in accordance with the terms and
provisions of this Section.
(b) Funds on deposit in the Yield Supplement Account shall be
invested by the Owner Trustee in Eligible Investments selected by the Seller
and designated in writing by the Seller to the Owner Trustee; PROVIDED,
HOWEVER, it is understood and agreed that the Owner Trustee shall not be
liable for any loss arising from such investment in Eligible Investments or
incurred as a result of the liquidation of any investment prior to its stated
maturity or the failure of the Servicer to provide timely, written direction.
In no event shall the Owner Trustee be liable for the selection of Eligible
Investments. The Owner Trustee shall have no obligation to invest or
reinvest any amounts
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held hereunder in the absence of written investment direction. Funds on
deposit in the Yield Supplement Account shall be invested in Eligible
Investments that will mature so that all such funds will be available at the
opening of business on each Deposit Date; PROVIDED, HOWEVER, that to the
extent permitted by the Rating Agencies, funds on deposit in the Yield
Supplement Account may be invested in Eligible Investments that mature later
than the next Deposit Date. Funds deposited in the Yield Supplement Account
on a Deposit Date upon the maturity of any Eligible Investments are not
required to be (but may be) invested overnight. The Seller will treat the
funds, Eligible Investments and other assets in the Yield Supplement Account
as its own for Federal, state and local income tax and franchise tax purposes
and will report on its tax returns all income, gain and loss from the Yield
Supplement Account.
(c) The Yield Supplement Account shall be under the sole custody
and control of the Owner Trustee. If, at any time, the Yield Supplement
Account ceases to be an Eligible Deposit Account, the Owner Trustee 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 Yield
Supplement Account as an Eligible Deposit Account and shall transfer any cash
and/or any investments that are in the existing Yield Supplement Account
which is no longer an Eligible Deposit Account to such new Yield Supplement
Account.
(d) Amounts on deposit in the Yield Supplement Account will be
released to the Certificateholders on each Distribution Date to the extent
that the amount on deposit in the Yield Supplement Account would exceed the
Specified Yield Supplement Balance. Upon a distribution to the
Certificateholders of amounts from the Yield Supplement Account, the
Noteholders will not have any rights in, or claims to, such amounts. Amounts
properly distributed to the Certificateholders from the Yield Supplement
Account or otherwise shall not be available under any circumstances to either
Trust, Trustee, the Owner Trustee or the Noteholders and the
Certificateholders shall in no event thereafter be required to refund any
such distributed amounts.
(e) With respect to the Yield Supplement Account Property:
(i) any Yield Supplement Account Property that is held in
deposit accounts shall be held solely in the name of the Owner Trustee at
one or more depository institutions having the Required Rating; each such
deposit account shall be subject to the exclusive custody and control of
the Owner Trustee, and the Owner Trustee shall have sole signature
authority with respect thereto;
(ii) the Owner Trustee shall maintain Control over each
deposit account in which any Account Property that constitutes a Security
Entitlement, an Uncertificated Security or a Federal Book-Entry Security is
held; and
(iii) any Yield Supplement Account Property that constitutes
either a Security Certificate or any other Yield Supplement Account
Property that constitutes Physical Property and that is not a Security
Entitlement shall be transferred to the Owner Trustee or its nominee or
custodian by physical delivery to the Owner Trustee or its nominee
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or custodian endorsed to, or registered in the name of, the Owner Trustee
or its nominee or custodian endorsed in blank.
Effective upon delivery of any Yield Supplement Account Property in the form
of Physical Property, Book-Entry Securities or Uncertificated Securities, the
Owner Trustee shall be deemed to have represented that it has purchased such
Yield Supplement Account Property for value, in good faith and without notice
of any adverse claim thereto.
(f) The Seller (and any successor to the Seller in accordance with
Section 6.3) and the Servicer agree to take or cause to be taken such further
actions, to execute, deliver and file or cause to be executed, delivered and
filed such further documents and instruments (including, without limitation,
any financing statements under the Relevant UCC or this Agreement) as may be
determined to be necessary, in order to perfect the interests created by this
Section 5.2 and otherwise fully to effectuate the purposes, terms and
conditions of this Section 5.2. The Seller (and any successor to the Seller
in accordance with Section 6.3) and the Servicer shall:
(i) promptly execute, deliver and file any financing
statements, amendments, continuation statements, assignments, certificates
and other documents with respect to such interests and perform all such
other acts as may be necessary in order to perfect or to maintain the
perfection of the Owner Trustee's security interest; and
(ii) make the necessary filings of financing statements or
amendments thereto.
(g) Investment earnings attributable to the Yield Supplement
Account Property and proceeds therefrom shall be held by the Owner Trustee
for the benefit of the Seller. Investment earnings attributable to the Yield
Supplement Account Property shall not be available to pay the Yield
Supplement Amount and shall not otherwise be subject to any claims or rights
of the Securityholders or the Servicer. The Owner Trustee shall cause all
investment earnings attributable to the Yield Supplement Account to be
distributed on each Distribution Date to the Seller.
ARTICLE VI
THE SELLER
Section VI.1 REPRESENTATIONS AND WARRANTIES OF THE SELLER. The
Seller makes the following representations and warranties, on which the Trust
relies in accepting the Receivables and the other Trust Property in trust and
issuing the Securities. These representations are made as of the Closing
Date, but shall survive the sale, transfer and assignment of the Receivables
and the other Trust Property to the Trust and the pledge to the Indenture
Trustee pursuant to the Indenture.
(i) ORGANIZATION AND GOOD STANDING. The Seller has been
duly incorporated and is validly existing as a national banking
association, with the power and authority to own its properties and to
conduct its business as such properties are presently
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owned and such business is presently conducted, and had at all relevant
times, and has, full power, authority and legal right to acquire, own
and sell its Receivables.
(ii) DUE QUALIFICATION. The Seller 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 ownership or servicing of
the Receivables or render any of the Receivables unenforceable.
(iii) POWER AND AUTHORITY. The Seller has the power,
authority and legal right to execute and deliver the Transfer and Servicing
Agreements to which it is a party and to carry out the terms of such
agreements and to sell and assign the property to be sold and assigned to
and deposited with the Trust as Trust Property; and the execution,
delivery, and performance of the Transfer and Servicing Agreements to which
it is a party and all of the documents required pursuant hereto have been
duly authorized by the Seller by all necessary action.
(iv) NO CONSENT REQUIRED. The Seller is not required to
obtain the consent of any other Person, or any consent, license, approval
or authorization or registration or declaration with, any governmental
authority, bureau or agency in connection with the execution, delivery or
performance of the Transfer and Servicing Agreements to which it is a
party, other than as may be required under the blue sky or securities laws
of any State or the Securities Act of 1933, as amended, under state laws
governing the perfection of the interests created under the Transfer and
Servicing Agreements and under ERISA.
(v) VALID SALE; BINDING OBLIGATION. This Agreement effects
a valid sale, transfer and assignment of the Receivables and the other
Trust Property conveyed by the Seller to the Trust hereunder, enforceable
against creditors of and purchasers from the Seller; and the applicable
Transfer and Servicing Agreements constitute a legal, valid, and binding
obligation of the Seller, enforceable against the Seller in accordance with
its terms, subject, as to enforceability, to applicable bankruptcy,
insolvency, reorganization, moratorium or other similar laws now or
hereafter in effect affecting the enforcement of creditors' rights in
general and except as such enforceability may be limited by general
principles of equity (whether considered in a suit at law or in equity).
(vi) NO VIOLATION. The execution, delivery and performance
by the Seller of the Transfer and Servicing Agreements, the consummation of
the transactions contemplated thereby and the fulfillment of the terms
thereof will not conflict with, result in any breach of any of the terms
and provisions of, or constitute (with or without notice or lapse of time)
a default under, the certificate of incorporation or bylaws of the Seller,
or conflict with, or breach any of the terms or provisions of, or
constitute (with or without notice or lapse of time) a default under, any
indenture, agreement, mortgage, deed of trust or other instrument to which
the Seller is a party or by which the Seller is bound or any of its
properties are subject, 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), or violate any law, order, rule, or regulation,
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applicable to the Seller or its properties, of any federal or state
regulatory body, any court, administrative agency, or other governmental
instrumentality having jurisdiction over the Seller or any of its
properties.
(vii) NO PROCEEDINGS. There are no proceedings or
investigations pending, or, to the knowledge of the Seller, threatened,
before any court, regulatory body, administrative agency, or other tribunal
or governmental instrumentality having jurisdiction over the Seller or its
properties: (a) asserting the invalidity of the Transfer and Servicing
Agreements, the Administration Agreement or the Securities, (b) seeking to
prevent the issuance of the Securities or the consummation of any of the
transactions contemplated by the Transfer and Servicing Agreements, (c)
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, the Transfer and Servicing Agreements, the
Administration Agreement or the Securities, or (d) that may adversely
affect the federal or state income, excise, franchise or similar tax
attributes of the Securities.
Section VI.2 LIABILITY OF THE SELLER; INDEMNITIES. (a) The
Seller shall indemnify, defend and hold harmless the Trustees, their directors,
officers, employees and agents, the Trust and the Securityholders from and
against any taxes that may at any time be asserted against the Trustees, their
directors, officers, employees and agents, the Trust or a Securityholder with
respect to, and as of the date of, the sale, transfer and assignment of the
Trust Property to the Trust or the issuance and original sale of the Securities,
including any sales, gross receipts, general corporation, tangible or intangible
personal property, privilege, or license taxes (but not, except as provided
below, including any taxes asserted with respect to ownership of the Trust
Property or federal or other income taxes, including franchise taxes measured by
net income, arising out of the transactions contemplated by this Agreement or
transfer taxes arising in connection with the transfer of the Securities), and
reasonable costs and expenses in defending against the same.
(b) The Seller shall indemnify, defend and hold harmless the
Trustees, their directors, officers, employees and agents, the Trust and the
Securityholders from and against any loss, liability or expense incurred by
reason of (i) the Seller's willful misfeasance, bad faith, or negligence in the
performance of its duties hereunder, or by reason of reckless disregard of the
obligations and duties hereunder; or (ii) any action taken, or failed to be
taken, by the Seller in respect of any portion of the Trust Property.
(c) The Seller shall indemnify, defend and hold harmless the
Trustees, their directors, officers, employees and agents, the Trust and the
Securityholders from and against any loss, liability or expense incurred by
reason of the violation by the Seller of federal or state securities laws in
connection with the registration or the sale of the Securities.
(d) The Seller shall indemnify, defend and hold harmless the
Trustees, their directors, officers, employees and agents, the Trust and the
Securityholders from and against any loss, liability or expense imposed upon, or
incurred by, the Trustees, the Trust or the Securityholders as the result of the
failure of any Receivable conveyed by it to the Trust hereunder, or the sale of
the related Financed Vehicle, to comply with all requirements of applicable law.
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(e) Indemnification under this Section 6.2 shall include
reasonable fees and expenses of counsel and expenses of litigation and shall
survive termination of the Trust or the earlier resignation or removal of the
Owner Trustee or the Indenture Trustee. If the Seller shall have made any
indemnity payments pursuant to this Section 6.2 and the recipient thereafter
shall collect any of such amounts from Persons other than the Seller, the
recipient shall immediately upon receipt thereof repay such amounts to the
Seller, without interest.
Section VI.3 MERGER OR CONSOLIDATION OF THE SELLER. Any
corporation or other entity (i) into which the Seller may be merged or
consolidated, (ii) that may result from any merger, conversion, or
consolidation to which the Seller is a party, or (iii) that may succeed by
purchase and assumption to all or substantially all of the business of the
Seller, where the Seller is not the surviving entity, which corporation or
other entity shall execute an agreement of assumption to perform every
obligation of the Seller under this Agreement, shall be the successor to the
Seller hereunder without the execution or filing of any document or any
further act by any of the parties to this Agreement. The Seller shall
promptly inform the Owner Trustee and the Indenture Trustee and the Rating
Agency of any such merger, conversion, consolidation or purchase and
assumption, where the Seller is not the surviving entity.
Section VI.4 LIMITATION ON LIABILITY OF THE SELLER AND OTHERS.
The Seller, and any of its directors, officers, employees or agents may rely
in good faith on any document of any kind, believed by it to be genuine and
properly executed and submitted by any Person respecting any matters arising
hereunder. The Seller shall be under no obligation under this Agreement to
appear in, prosecute or defend any legal action that shall be unrelated to
its obligations under this Agreement and that in its opinion may involve it
in any expense or liability.
Section VI.5 SELLER MAY OWN CERTIFICATES. The Seller, and any
Affiliate of the Seller, 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 Seller or an Affiliate thereof, except as otherwise provided
in the definition of "Securityholder," "Noteholder" and "Certificateholder"
in Section 1.1. Securities so owned by or pledged to the Seller or such
controlling, controlled or commonly controlled Person shall have an equal and
proportionate benefit under the provisions of this Agreement, without
preference, priority, or distinction as among all of the Securities.
ARTICLE VII
THE SERVICER
Section VII.1 REPRESENTATIONS AND WARRANTIES OF THE SERVICER. The
Servicer makes the following representations and warranties on which the
Trust relies in accepting the Receivables and the other Trust Property in
trust and in issuing the Securities. These representations are made as of
the Closing Date, but shall survive the sale, transfer and assignment of the
Receivables and the other Trust Property to the Trust and the pledge to the
Indenture Trustee pursuant to the Indenture.
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(i) ORGANIZATION AND GOOD STANDING. The Servicer has been
duly incorporated and is validly existing as a national banking
association, with the power and authority to own its properties and to
conduct its business as such properties are presently owned and such
business is presently conducted, and had at all relevant times, and shall
have, the power, authority and legal right to service the Receivables.
(ii) DUE QUALIFICATION. The Servicer is duly qualified to
do business as
(iii) POWER AND AUTHORITY. The Servicer has the power,
authority and legal right to execute and deliver the Transfer and Servicing
Agreements to which it is a party and to carry out the respective terms of
such agreements; and the execution, delivery and performance of the
Transfer and Servicing Agreements to which it is a party has been duly
authorized by the Servicer by all necessary corporate action.
(iv) NO CONSENT REQUIRED. The Servicer is not required to
obtain the consent of any other Person, or any consent, license, approval
or authorization or registration or declaration with, any governmental
authority, bureau or agency in connection with the execution, delivery or
performance of the Transfer and Servicing Agreements to which it is a party
other than as may be required under ERISA.
(v) BINDING OBLIGATION. Each of the Transfer and Servicing
Agreements constitutes a legal, valid, and binding obligation of the
Servicer, enforceable against the Servicer in accordance with the
respective terms of such agreement subject, as to enforceability, to
applicable bankruptcy, insolvency, reorganization, moratorium or other
similar laws now or hereafter in effect affecting the enforcement of
creditors' rights in general and except as such enforceability may be
limited by general principles of equity (whether considered in a suit at
law or in equity).
(vi) NO VIOLATION. The execution, delivery and performance
of the Transfer and Servicing Agreements, the consummation of the
transactions contemplated thereby and the fulfillment of the terms thereof
will not conflict with, result in any breach of any of the terms and
provisions of, or constitute (with or without notice or lapse of time) a
default under, the certificate of incorporation or bylaws of the Servicer,
or conflict with or breach any of the terms or provisions of, or constitute
(with or without notice or lapse of time) a default under, any indenture,
agreement, mortgage, deed of trust or other instrument to which the
Servicer is a party or by which the Servicer is bound or to which any of
its properties are subject, 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 the Transfer and Servicing Agreements), or violate any law, order,
rule, or regulation applicable to the Servicer or its properties of any
federal or state regulatory body, any court, administrative agency, or
other governmental instrumentality having jurisdiction over the Servicer or
any of its properties.
(vii) NO PROCEEDINGS. There are no proceedings or
investigations pending, or, to the Servicer's knowledge, threatened, before
any court, regulatory body, administrative
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agency, or tribunal or other governmental instrumentality having
jurisdiction over the Servicer or its properties: (a) asserting the
invalidity of the Transfer and Servicing Agreements or the Securities,
(b) seeking to prevent the issuance of the Securities or the
consummation of any of the transactions contemplated by the Transfer and
Servicing Agreements, (c) seeking any determination or ruling that might
materially and adversely affect the performance by the Servicer of its
obligations under, or the validity or enforceability of, the Transfer
and Servicing Agreements or the Securities, or (d) that may adversely
affect the federal or state income, excise, franchise or similar tax
attributes of the Securities.
Section VII.2 LIABILITY OF THE SERVICER; INDEMNITIES. (a) The
Servicer shall be liable in accordance herewith only to the extent of the
obligations specifically undertaken by the Servicer under this Agreement and
shall have no other obligations or liabilities hereunder.
(b) The Servicer shall indemnify, defend and hold harmless the
Trustees, their directors, officers, employees and agents, the Trust, and the
Securityholders from and against any and all costs, expenses, losses,
damages, claims and liabilities, including reasonable fees and expenses of
counsel and expenses of litigation, arising out of or resulting from the use,
ownership, or operation by the Servicer or any Affiliate thereof of any
Financed Vehicle or in respect of any action taken, or failed to be taken, by
the Servicer with respect to any Receivable or other portion of the Trust
Property.
(c) The Servicer shall indemnify, defend and hold harmless the
Trustees, their directors, officers, employees and agents, the Trust and the
Securityholders from and against any taxes that may at any time be asserted
against the Trustees, the Trust or the Securityholders with respect to the
transactions contemplated hereby, including any sales, gross receipts,
general corporation, tangible or intangible personal property, privilege, or
license taxes (but not including any taxes asserted with respect to, and as
of the date of, the sale, transfer and assignment of the Trust Property to
the Trust or the issuance and original sale of the Securities, or asserted
with respect to ownership of the Receivables or other Trust Property, federal
or other income taxes, including franchise taxes measured by net income,
arising out of distributions on the Securities or any other transactions
contemplated by this Agreement or transfer taxes arising in connection with
transfers of the Securities) and reasonable costs and expenses in defending
against the same.
(d) The Servicer shall indemnify, defend and hold harmless the
Trustees, their directors, officers, employees and agents, the Trust and the
Securityholders 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, or incurred by, the
Trust, the Trustees or the Securityholders as a result of the willful
misfeasance, negligence, or bad faith of the Servicer in the performance of
its duties under this Agreement.
(e) The Servicer (other than the Indenture Trustee in its capacity
as successor Servicer pursuant to Section 8.2 hereof) shall indemnify, defend
and hold harmless the Trustees and their directors, officers, employees and
agents, from and against all costs, expenses, losses, claims, damages and
liabilities arising out of or incurred in connection with (x) in the case of
the Owner
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Trustee, the Indenture Trustee's performance of its duties under
the Basic Documents, (y) in the case of the Indenture Trustee, the Owner
Trustee's performance of its duties under the Basic Documents or (z) the
acceptance, administration or performance by, or action or inaction of, the
applicable Trustee of the trusts and duties contained in this Agreement, the
Basic Documents, the Indenture (in the case of the Indenture Trustee) and the
Trust Agreement (in the case of the Owner Trustee), including the
administration of the Trust Property, except in such case to the extent that
such cost, expense, loss, claim, damage or liability: (i) is due to the
willful misfeasance, bad faith or negligence of the Person seeking to be
indemnified, (ii) to the extent otherwise payable to the Indenture Trustee,
arises from the Indenture Trustee's breach of any of its representations or
warranties in Section [6.13] of the Indenture or (iii) to the extent
otherwise payable to the Owner Trustee, arises from the Owner Trustee's
breach of any of its representations or warranties set forth in Section [6.6]
of the Trust Agreement.
(f) Indemnification under this Section 7.2 shall include
reasonable fees and expenses of counsel and expenses of litigation. The
indemnity obligations of the Servicer hereunder shall survive any termination
of the Servicer pursuant to Section 8.1, but only with respect to obligations
arising prior thereto, and any payment of the amount owing under, or the
Repurchase Amount with respect to, any Receivable and shall survive the
termination of the Trust or the earlier removal or resignation of the Owner
Trustee or the Indenture Trustee. If the Servicer shall have made any
indemnity payments pursuant to this Section 7.2 and the recipient thereafter
collects any of such amounts from others, the recipient shall, as soon as
practicable upon receipt thereof, repay such amounts to the Servicer, without
interest.
Section VII.3 MERGER OR CONSOLIDATION OF THE SERVICER. Any
corporation or other entity (i) into which the Servicer may be merged or
consolidated, (ii) that may result from any merger, conversion, or
consolidation to which the Servicer is a party, or (iii) that may succeed by
purchase and assumption to all or substantially all of the business of the
Servicer, where the Servicer is not the surviving entity, which corporation
or other entity shall be an Eligible Servicer and 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 relieving the outgoing Servicer of its responsibilities hereunder,
if it survives such merger, conversion or consolidation) without any further
act on the part of any of the parties to this Agreement. The Servicer shall
promptly inform the Owner Trustee and the Indenture Trustee and the Rating
Agencies of any such merger, conversion, consolidation or purchase and
assumption where the Servicer is not the surviving entity.
Section VII.4 LIMITATION ON LIABILITY OF THE SERVICER AND OTHERS.
(a) Except as provided in this Agreement, the Servicer shall be under no
obligation to appear in, prosecute or defend any legal action that shall not
be incidental to its duties to service the Receivables in accordance with
this Agreement and that in its opinion may cause it to incur any expense or
liability; PROVIDED, HOWEVER, that the Servicer may undertake, at its
expense, any reasonable action that it may deem necessary or desirable in
respect of this Agreement and the rights and duties of the parties to this
Agreement and the interests of the Securityholders under this Agreement.
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(b) The Servicer, and any director or officer or employee or agent
of the Servicer, may rely in good faith on any document of any kind, believed
by it to be genuine and properly executed and submitted by any Person
respecting any matters arising hereunder.
Section VII.5 SERVICER NOT TO RESIGN. The Servicer shall not
resign from its obligations and duties under this Agreement except upon a
determination that the performance of its duties is no longer permissible
under applicable law. Any such determination permitting the resignation of
the Servicer shall be evidenced by an Opinion of Counsel (which counsel shall
be outside counsel to the Servicer) to such effect delivered to each Trustee.
No such resignation shall become effective until the Indenture Trustee or a
successor servicer shall have assumed the responsibilities and obligations of
the outgoing Servicer in accordance with Section 8.2.
Section VII.6 SERVICER MAY OWN CERTIFICATES. The Servicer, and
any Affiliate of the Servicer, may, in its individual or any other capacity,
become the owner or pledgee of Securities with the same rights as it would
have if it were not the Servicer or an Affiliate thereof, except as otherwise
provided in the definition of "Securityholder," "Noteholder" and
"Certificateholder" in Section 1.1. Securities so owned by or pledged to the
Servicer or such Affiliate shall have an equal and proportionate benefit
under the provisions of this Agreement, without preference, priority or
distinction as among all of the Securities.
ARTICLE VIII
SERVICING TERMINATION
Section VIII.1 EVENTS OF SERVICING TERMINATION. (a) If any one of
the following events ("EVENTS OF SERVICING TERMINATION") shall occur and be
continuing:
(i) Any failure by the Servicer to deliver to the Trustees
the Servicer's Certificate for any Collection Period, which shall continue
beyond the earlier of three Business Days from the date the Servicer's
Certificate was due to be delivered and the related Deposit Date, or any
failure by the Servicer to deliver to any of the Accounts, the Reserve
Account or the Yield Supplement Account any proceeds or payment required to
be so delivered under the terms of the Securities and this Agreement, which
shall continue unremedied for a period of five Business Days following the
due date therefor (or, in the case of a payment or deposit to be made no
later than a Deposit Date immediately preceding a Distribution Date, the
failure to make such payment or deposit by such Distribution Date); or
(ii) Any failure on the part of the Servicer duly to observe
or to perform in any material respect any other covenants or agreements set
forth in the Transfer and Servicing Agreements, which failure shall (a)
materially and adversely affect the rights of Securityholders and (b)
continue unremedied for a period of 90 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 by either Trustee, or (2) to the Owner Trustee or
the Indenture Trustee and
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the Servicer by the holders of the Notes (so long as Notes are
outstanding) evidencing not less than a majority of the principal amount
of such Notes then outstanding (or, if no Notes are outstanding,
Certificates evidencing not less than a majority of the Certificate
Balance then outstanding);
(iii) The entry of a decree or order by a court or agency or
supervisory authority of competent jurisdiction for the appointment of a
conservator, receiver, liquidator or trustee for the Servicer in any
bankruptcy, insolvency, readjustment of debt, marshaling of assets and
liabilities, or similar proceedings, or for the winding up or liquidation
of its affairs, and any such decree or order continues unstayed and in
effect for a period of 60 consecutive days; or
(iv) The consent by the Servicer to the appointment of a
conservator, receiver, liquidator or trustee in any bankruptcy, insolvency,
readjustment of debt, marshaling of assets and liabilities, or similar
proceedings of or relating to the Servicer or relating to substantially all
of its property, the admission in writing by the Servicer of its inability
to pay its debts generally as they become due, the filing by the Servicer
of a petition to take advantage of any applicable bankruptcy, insolvency or
reorganization statute, the making by the Servicer of an assignment for the
benefit of its creditors or the voluntary suspension by the Servicer of
payment of its obligations; or
(v) The failure by the Servicer to be an Eligible
Servicer;
then, and in each and every case and so long as an Event of Servicing
Termination shall not have been cured or waived, the Indenture Trustee
or holders of Notes evidencing not less than a majority of the principal
amount of such Notes then outstanding, by notice then given in writing
to the Servicer (and to the Indenture Trustee if given by the
Noteholders), may terminate all of the rights and obligations of the
Servicer under this Agreement. On or after the receipt by the Servicer
of such written notice, all authority and power of the Servicer under
this Agreement, whether with respect to the Securities or the Trust
Property or otherwise, shall pass to and be vested in the Indenture
Trustee or successor servicer appointed by the Indenture Trustee
pursuant to Section 8.2; and thereupon the Indenture Trustee shall be
authorized and empowered to execute and deliver, on behalf of the
Servicer, as attorney-in-fact or otherwise, any and all documents and
other instruments, and to do 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
Receivable Files or the Insurance Policies, the certificates of title to
the Financed Vehicles, or otherwise. The Servicer shall cooperate with
the Indenture Trustee or such successor servicer in effecting the
termination of the Servicer's responsibilities and rights as Servicer
under this Agreement, including the transfer to the Indenture Trustee or
such successor servicer for administration of all cash amounts that are
at the time held by the Servicer for deposit, shall have been deposited
by the Servicer in the Collection Account, or thereafter shall be
received with respect to a Receivable, all Receivable Files and all
information or documents that the Indenture Trustee or such successor
servicer may require. In addition, the Servicer shall transfer its
electronic records relating to the Receivables to the successor servicer
in such electronic form as the successor servicer may reasonably
request. All reasonable costs and expenses incurred by the successor
servicer, including allowable compensation of
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employees and overhead costs, in connection with the transfer of
servicing shall be paid by the outgoing Servicer upon presentation of
reasonable documentation of such costs and expenses.
If no Notes are outstanding and the Indenture has been discharged
in accordance with its terms, and in each and every case and so long as an
Event of Servicing Termination shall not have been cured or waived, the Owner
Trustee or the holders of Certificates evidencing not less than a majority of
the Certificate Balance of such Certificates then outstanding, by notice then
given to the Servicer (and to the Owner Trustee if given by the
Certificateholders), may terminate all of the rights and obligations of the
Servicer under this Agreement. On or after the receipt by the Servicer of
such written notice, all authority and power of the Servicer under this
Agreement, whether with respect to the Securities or the Trust Property or
otherwise, shall pass to and be vested in the Owner Trustee or successor
servicer appointed by the Owner Trustee pursuant to Section 8.2; and
thereupon the Owner Trustee shall be authorized and empowered to execute and
deliver, on behalf of the Servicer, as attorney-in-fact or otherwise, any and
all documents and other instruments, and to do 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
Receivable Files or the Insurance Policies, the certificates of title to the
Financed Vehicles, or otherwise. The Servicer shall cooperate with the Owner
Trustee or such successor servicer in effecting the termination of the
Servicer's responsibilities and rights as Servicer under this Agreement,
including the transfer to the Owner Trustee or such successor servicer for
administration of all cash amounts that are at the time held by the Servicer
for deposit, shall have been deposited by the Servicer in the Collection
Account, or thereafter shall be received with respect to a Receivable, all
Receivable Files and all information or documents that the Owner Trustee or
such successor servicer may require. In addition, the Servicer shall
transfer its electronic records relating to the Receivables to the successor
servicer in such electronic form as the successor servicer may reasonably
request. All reasonable costs and expenses incurred by the successor
servicer, including allowable compensation of employees and overhead costs,
in connection with the transfer of servicing shall be paid by the outgoing
Servicer upon presentation of reasonable documentation of such costs and
expenses.
(b) If any of the foregoing Events of Servicing Termination occur,
the Indenture Trustee shall have no obligation to notify Noteholders or any
other person and the Owner Trustee shall have no obligation to notify the
Certificateholders or any other Person of such occurrence prior to the
continuance of such event through the end of any cure period specified in
Section 8.1(a).
Section VIII.2 TRUSTEE TO ACT; APPOINTMENT OF SUCCESSOR SERVICER.
Upon the Servicer's resignation pursuant to Section 7.5, or upon the
Servicer's receipt of notice of termination as Servicer pursuant to Section
8.1, the Indenture Trustee (or if no Notes are outstanding, the Owner
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
responsibilities, duties and liabilities relating thereto placed on the
Servicer by the terms and provisions of this Agreement, except that such
Trustee, when acting as a successor servicer, shall not be obligated to
purchase Receivables pursuant to Section 3.7 unless the obligation to
purchase arose after the date of the notice of termination given to the
Servicer pursuant to Section 8.1, and such Trustee shall not be liable for
any acts or omissions of such terminated Servicer or for any breach by the
terminated Servicer of any of its representations or warranties contained
herein or in any related documents or agreements. As compensation
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therefor, the Indenture Trustee (or if no Notes are outstanding, the Owner
Trustee) shall be entitled to such compensation (whether payable out of the
Collection Account or otherwise) as the Servicer would have been entitled to
under this Agreement if no such notice of termination or resignation had been
given. Notwithstanding the above, such Trustee may, if it shall be unwilling
or legally unable so to act, appoint, or petition a court of competent
jurisdiction to appoint, an Eligible Servicer as the successor to the
terminated Servicer under this Agreement. In connection with such
appointment, such Trustee may make such arrangements for the compensation of
such successor servicer out of payments on Receivables as it and such
successor shall agree, which, in no event, shall be greater than that payable
to First Security Bank, N.A. in its capacity as the Servicer hereunder. Such
Indenture Trustee (or if no Notes are outstanding, the Owner Trustee) or such
successor servicer shall take such action, consistent with this Agreement, as
shall be necessary to effectuate any such succession. No Servicer shall
resign or be relieved of its duties under this Agreement until a newly
appointed servicer shall have assumed the responsibilities and obligations of
the terminated Servicer under this Agreement.
Section VIII.3 EFFECT OF SERVICING TRANSFER. (a) After the transfer
of servicing hereunder, the Indenture Trustee (or, if no Notes are
outstanding, the Owner Trustee) or the successor servicer shall notify
Obligors to make directly to the successor servicer payments that are due
under the Receivables after the effective date of such transfer.
(b) Except as provided in Sections 7.2 and 9.6 after the transfer
of servicing hereunder, the outgoing Servicer shall have no further
obligations with respect to the management, administration, servicing,
custody or collection of the Receivables and the successor servicer shall
have all of such obligations, except that the outgoing Servicer will transmit
or cause to be transmitted directly to the successor servicer for its own
account, promptly on receipt and in the same form in which received, any
amounts held by the outgoing Servicer (properly endorsed where required for
the successor servicer to collect any such items) received as payments upon
or otherwise in connection with the Receivables and the outgoing Servicer
shall continue to cooperate with the successor servicer by providing
information and in the enforcement of the Dealer Agreements, the Dealer
Assignments and the Insurance Policies.
(c) A transfer of servicing hereunder shall not affect the rights
and duties of the parties hereunder (including the obligations and
indemnities of the Seller pursuant to Sections 2.4, 6.1 and 6.2 or, with
respect to obligations and indemnities arising prior to, or concurrently
with, a transfer of servicing hereunder, the outgoing Servicer pursuant to
Section 3.7, 7.1 and 7.2) other than those relating to the management,
administration, servicing, custody or collection of the Receivables and the
other Trust Property. The successor servicer shall, upon its appointment
pursuant to Section 8.2 and as part of its duties and responsibilities under
this Agreement, promptly take all action it deems necessary or appropriate so
that the outgoing Servicer (in whatever capacity) is paid or reimbursed all
amounts it is entitled to receive under this Agreement on each Distribution
Date subsequent to the date on which it is terminated as Servicer hereunder.
(d) Any successor servicer shall provide the Seller with access to
the Receivable Files and to the successor servicer's records (whether written
or automated) with respect to the Receivable Files. Such access shall be
afforded without charge, but only upon reasonable request
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and during normal business hours at the offices of the successor servicer.
Nothing in this Section 8.3 shall affect the obligation of the successor
servicer to observe any applicable law prohibiting disclosure of information
regarding the Obligors, and the failure of the successor servicer to provide
access to information as a result of such obligation shall not constitute a
breach of this Section 8.3.
Section VIII.4 NOTIFICATION TO SECURITYHOLDERS. Upon any notice of
an Event of Servicing Termination or upon any termination of, or appointment
of a successor to, the Servicer pursuant to this Article IX, the Indenture
Trustee (or, if no Notes are outstanding, the Owner Trustee) shall give
prompt written notice thereof to Securityholders at their respective
addresses of record, and to the Rating Agencies at the following addresses:
Xxxxx'x Investors Service, Inc., 00 Xxxxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000,
Attention: ABS Xxxxxxxxxx Xxxxxxxxxx, 0xx Xxxxx; Standard & Poor's Ratings
Group, 00 Xxxxxxxx, Xxx Xxxx, Xxx Xxxx 00000-0000, Attention: Asset Backed
Surveillance Group.
Section VIII.5 WAIVER OF PAST EVENTS OF SERVICING TERMINATION. The
holders of Notes evidencing not less than a majority of the aggregate
outstanding receivable balance of the Notes (or the holders of any
Certificates evidencing not less than a majority of the Certificate Balance
then outstanding in the case of any Event of Servicing Termination that does
not adversely affect the Indenture Trustee or the Noteholders) may, on behalf
of all such holders of Notes and Certificates waive any Event of Servicing
Termination hereunder and its consequences, except an event resulting from
the failure to make any required deposits to, or payments from, any of the
Accounts or the Reserve Account in accordance with this Agreement. Upon any
such waiver of a past Event of Servicing Termination, such event shall cease
to exist, and shall be deemed to have been remedied for every purpose of this
Agreement. No such waiver shall extend to any subsequent or other event or
impair any right arising therefrom, except to the extent expressly so waived.
Section VIII.6 TRANSFER OF ACCOUNTS. Notwithstanding the
provisions of Section 8.1, if any of the Accounts, the Yield Supplement
Account or the Reserve Account is maintained with the Servicer or any
Affiliate of the Servicer and an Event of Servicing Termination shall occur
and be continuing, the Servicer shall promptly, and in any event within five
Business Days, give notice to the Indenture Trustee and the Seller (or the
Owner Trustee with respect to the Certificate Distribution Account) of such
Event of Servicing Termination, and Indenture Trustee or the Seller (or the
Owner Trustee, if applicable), as the case may be, within five days after the
receipt of such notice, shall establish new Eligible Deposit Accounts
conforming with the requirements of this Agreement and promptly shall
transfer all funds in any such Accounts, the Yield Supplement Account or the
Reserve Account to such new Eligible Deposit Accounts.
ARTICLE IX
TERMINATION
Section IX.1 TERMINATION OF THE TRUST. (a) The Trust, and the
respective obligations and responsibilities of the Seller, the Servicer, and
each Trustee hereunder shall terminate (except as otherwise expressly
provided herein) upon the earliest of: (i) the Distribution Date next
succeeding the purchase by the Servicer at its option, pursuant to Section
9.2, of the Receivables
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(other than Liquidating Receivables) remaining in the Trust, (ii) the payment
to Securityholders of all amounts required to be paid to them pursuant to
this Agreement or (iii) the maturity or the liquidation of the last
Receivable held in the Trust and the disposition of any amounts received upon
liquidation of any property remaining in the Trust; PROVIDED, HOWEVER, that
in no event shall the Trust created by this Agreement continue beyond the
expiration of 21 years from the date hereof. The Servicer shall promptly
notify each Trustee of any prospective termination pursuant to this Section
9.1, which notice shall contain the information required by each Trustee to
give its notice thereunder.
(b) Notice of any termination, specifying the Distribution Date
upon which the Noteholders may surrender the Notes to the Indenture Trustee
for payment of the final distribution and cancellation, shall be given
promptly by the Indenture Trustee by letter to Noteholders of record and the
Rating Agencies mailed not earlier than the 15th day and not later than the
25th day of the month next preceding the specified Distribution Date stating
the amount of any such final payment and that the Record Date otherwise
applicable to such Distribution Date is not applicable, payments being made
only upon presentation and surrender of the Notes at the office of the
Indenture Trustee therein specified. Upon presentation and surrender of the
Notes, the Indenture Trustee shall cause to be distributed to Noteholders
amounts distributable on such Distribution Date pursuant to Section 4.5.
Amounts remaining after distribution, or providing for distribution, to the
Noteholders shall be distributed to the Seller.
(c) Notice of any termination, specifying the Distribution Date
upon which the Certificateholders may surrender the Certificates to the Owner
Trustee for payment of the final distribution and cancellation, shall be
given promptly by the Owner Trustee by letter to Certificateholders of record
and the Rating Agencies mailed not earlier than the 15th day and not later
than the 25th day of the month next preceding the Specified Distribution Date
stating the amount of any such final payment and that the Record Date
otherwise applicable to such Distribution Date is not applicable, payments
being made only upon presentation and surrender of the Certificates at the
office of the Owner Trustee therein specified. Upon presentation and
surrender of the Certificates, the Owner Trustee shall cause to be
distributed to the Certificateholders amounts distributable on such
Distribution Date pursuant to Section 4.5. Amounts remaining after
distribution, or providing for distribution to the Certificateholders shall
be distributed to the Seller.
(d) If, within eighteen months after the first notice, all the
Securities shall not have been surrendered for cancellation, the Servicer may
take appropriate steps, or may appoint an agent to take appropriate steps, to
contact the remaining Securityholders concerning surrender of their
Securities, and the cost thereof shall be paid out of the funds and other
assets that shall remain subject to this Agreement. Any funds remaining in
the Trust after exhaustion of such remedies shall be distributed to the
Seller and the Securityholders shall thereafter look solely to the Seller for
such payment.
Section IX.2 OPTIONAL PURCHASE OF ALL RECEIVABLES. In the event
that (i) the Aggregate Receivables Balance shall be 10% or less of the
Aggregate Starting Receivables Balance as of the last day of any Collection
Period and (ii) the aggregate Repurchase Amount for the Receivables (other
than the Liquidating Receivables) is greater than or equal to the sum of the
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outstanding principal balance of all of the Class A-4 Notes and the Class B
Notes, the Servicer shall have the option to purchase the corpus of the Trust
on any Distribution Date after the Class A-1 Notes, the Class A-2 Notes and
the Class A-3 Notes have been paid in full occurring in a subsequent
Collection Period. To exercise such option, the Servicer shall notify each
Trustee no later than the 10th day of the month in which such purchase is to
be effected and deposit the aggregate Repurchase Amount for the Receivables
(other than Liquidating Receivables) into the Collection Account on the
Deposit Date occurring in the month in which such purchase is to be effected.
The payment shall be made in the manner specified in Section 4.3, and shall
be distributed pursuant to Section 4.5. Upon such payment the Servicer shall
succeed to and own all interests in and to the Trust and the Trust Property.
ARTICLE X
MISCELLANEOUS PROVISIONS
Section X.1 AMENDMENT. (a) This Agreement may be amended by the
Seller, the Servicer and either Trustee, without the consent of any of the
Securityholders, for the purpose of adding any provisions to or changing in
any manner or eliminating any of the provisions of this Agreement or
modifying in any manner the rights of the Securityholders; PROVIDED, HOWEVER,
that if such action shall affect any class of Noteholder or Certificateholder
differently from any other class of Noteholder or Certificateholder, such
action shall not, as evidenced by an Opinion of Counsel to the Seller
delivered to each Trustee, materially and adversely affect the interests of
any Securityholder or cause the Trust to be classified for federal tax
purposes as an association taxable as a corporation.
(b) This Agreement may also be amended from time to time by the
Seller, the Servicer and each Trustee, with the consent of the holders of
Notes evidencing not less than a majority of in principal amount of their
outstanding Notes and the holders of Certificates evidencing not less than a
majority of the Certificate Balance, for the purpose of adding any provisions
to or changing in any manner or eliminating any of the provisions of this
Agreement, or of modifying in any manner the rights of the Noteholders or
Certificateholders; PROVIDED, HOWEVER, that no such amendment shall (i)
increase or reduce in any manner the amount of, or accelerate or delay the
timing of, or change the allocation or priority of, collections of payments
on Receivables or distributions that are required to be made on any Note or
Certificate, without the consent of all adversely affected Noteholder's
Certificateholders or (ii) reduce the percentage of the aggregate outstanding
receivable balance of the Note or Certificates, the holders of which are
required to consent to any such amendment, without the consent of all
Noteholders and Certificateholders. Promptly after the execution of any such
amendment or consent, the Indenture Trustee or the Owner Trustee shall
furnish written notification of the substance of such amendment or consent to
each Noteholder or Certificateholder, as applicable.
(c) It shall not be necessary for the consent of Securityholders
pursuant to this Section 10.1 to approve the particular form of any proposed
amendment or consent, but it shall be sufficient if such consent shall
approve the substance thereof. The manner of obtaining such
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consents and of evidencing the authorization of the execution thereof by
Securityholders shall be subject to such reasonable requirements as the
Trustees may prescribe.
(d) Notice of any amendment of this Agreement shall be sent by the
Servicer to the Rating Agencies, at such address as the Rating Agencies may
from time to time specify in writing.
(e) Each Trustee may, but shall not be obligated to, enter into
any such amendment which affects such Trustee's own rights, duties,
indemnities or immunities under this Agreement or otherwise.
(f) In connection with any amendment pursuant to this Section
10.1, each Trustee shall be entitled to receive an Opinion of Counsel to the
effect that such amendment is authorized or permitted by the Agreement.
Section X.2 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 manner and in such places as
may be required by law fully to preserve, maintain and protect the interest
of the Securityholders and the Trustees under this Agreement in the Trust
Property and in the proceeds thereof. The Servicer shall deliver (or cause
to be delivered) to each Trustee file-stamped copies of, or filing receipts
for, any document filed as provided above, as soon as available following
such filing. In the event the Servicer fails to perform its obligations
under this subsection, the Trustee may (but shall not be obligated to) do so,
at the expense of the Servicer.
(b) Neither the Seller nor the Servicer shall change its name,
identity, or corporate structure in any manner that would, could, or might
make any financing statement or continuation statement filed by the Servicer
in accordance with paragraph (a) above seriously misleading within the
meaning of Section 9-402(7) of the Relevant UCC, unless it shall have given
the Trustees at least 60 days' prior written notice thereof.
(c) The Seller and the Servicer shall give each Trustee at least
60 days' prior written notice of any relocation of their principal executive
offices if, as a result of such relocation, the applicable provisions of the
Relevant UCC would require the filing of any amendment of any previously
filed financing or continuation statement or of any new financing statement.
The Seller and 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, as of the most recent monthly calculation, the status of
such Receivable, including payments, Liquidation Proceeds and Recoveries made
and payments owing (and the nature of each), and (ii) reconciliation between
payments, Recoveries or Liquidation Proceeds on (or with respect to) each
Receivable and the amounts from time to time deposited in the Collection
Account in respect of such Receivable.
(e) The Servicer shall maintain its computer systems so that, from
and after the time of sale under this Agreement of the Receivables to the
Trust, the Servicer's master computer
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records (including archives) that shall refer to a Receivable indicate
clearly that such Receivable is owned by the Trust. Indication of the Trust's
ownership of a Receivable shall be deleted from or modified on the Servicer's
computer systems when, and only when, the Receivable shall be paid or shall
become a Repurchased Receivable.
(f) If at any time the Seller or the Servicer shall propose to
sell, grant a security interest in, or otherwise transfer any interest in
motor vehicle retail installment sale contracts to any prospective purchaser,
lender or other transferee, the Seller or the Servicer, as the case may be,
shall give to such prospective purchaser, lender, or other transferee
computer tapes, records, or print-outs (including any restored from 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 Trust.
(g) Upon request, the Servicer, at its expense, shall furnish to
each Trustee, within 10 Business Days, a list of all Receivables then held as
part of the Trust, together with a reconciliation of such list to each
Schedule of Receivables and to the Servicer's Certificate furnished pursuant
to Section 3.9 indicating removal of Receivables from the Trust. Each
Trustee shall hold any such list and the Schedule of Receivables, as well as
a copy of this Agreement, available for inspection during normal business
hours at the Corporate Trust Office.
(h) The Servicer shall deliver to the Trustees upon the Closing
Date, upon the date which is 60 months after the initial filings required
hereunder to perfect the security interest of the Trust and upon the
execution and delivery of each amendment, if any, of this Agreement, an
Opinion of Counsel to the Servicer either (x) stating that, in the opinion of
such counsel, no filings or other action, other than the filings required in
the appropriate filing offices as described in such opinion, are necessary to
perfect and maintain (i) the security interest of the Trust in the Financed
Vehicles, subject to certain exceptions stated therein, and (ii) the interest
of the Trust in the Receivables, the Dealer Agreements or the Dealer
Assignments and in each case the proceeds thereof against third parties,
subject to certain exceptions stated therein, and reciting the details of
such filings or referring to prior Opinions of Counsel in which such details
are given, or (y) stating that, in the opinion of such counsel, no such
action shall be necessary to perfect or continue the perfected status of such
interest.
Section X.3 LIMITATION ON RIGHTS OF SECURITYHOLDERS. (a) The
death or incapacity of any Securityholder shall not operate to terminate this
Agreement or the Trust, or entitle the Securityholder's legal representatives
or heirs to claim an accounting or to take any action or commence any
proceeding in any court for a partition or winding up of the Trust, or
otherwise affect the rights, obligations, and liabilities of the parties to
this Agreement or any of them.
(b) No Securityholder shall have any right to vote (except as
expressly provided herein) or in any manner otherwise control the operation
and management of the Trust, or the obligations of the parties to this
Agreement, nor shall anything set forth in this Agreement, or contained in
the terms of the Securities, be construed so as to constitute the holders as
partners or members of an association; nor shall any Securityholder be under
any liability to any third party by reason of any action taken pursuant to
any provision of this Agreement.
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(c) To the extent a specified percentage in principal amount of
the outstanding Notes must be obtained to take an action, such action shall
be valid only if the holders of such specified percentage in principal amount
of (i) all the outstanding Class A Notes and Class B Notes voting together as
a single class and (ii) the outstanding Class A Notes voting as a single
class have voted to take such action.
SECTION X.4 GOVERNING LAW. ALL ISSUES AND QUESTIONS
CONCERNING THE CONSTRUCTION, VALIDITY, INTERPRETATION AND ENFORCEABILITY OF
THIS AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH, THE
LAWS OF THE STATE OF NEW YORK, WITHOUT GIVING EFFECT TO ANY CHOICE OF LAW OR
CONFLICT OF LAW RULES OR PROVISIONS (WHETHER OF THE STATE OF NEW YORK OR ANY
OTHER JURISDICTION) THAT WOULD CAUSE THE APPLICATION OF THE LAWS OF ANY
JURISDICTION OTHER THAN THE STATE OF NEW YORK.
Section X.5 NOTICES. All demands, notices, directions and
communications under this Agreement shall be in writing, personally
delivered, or sent by telecopier, overnight courier 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 Seller or the Servicer, to First Security
Bank, N.A. at Office of the General Counsel, 00 Xxxxx Xxxx Xxxxxx, Xxxx Xxxx
Xxxx, Xxxx 00000, Attention: Executive Vice President and General Counsel,
Facsimile No.: 000-000-0000, or at such other address as shall be designated
by the Seller or the Servicer in a written notice to the Trustees, with a
copy to Xxxxx Xxxxxx, Vice President, Corporate Finance, First Security Bank,
41 East 000 Xxxxx, 0xx Xxxxx, Xxxx Xxxx Xxxx, Xxxx 00000, Facsimile No.:
000-000-0000 (b) in the case of the Owner Trustee, at the Corporate Trust
Office, Facsimile No.: _____________, and (c) in the case of the Indenture
Trustee, at the Corporate Trust Office, Facsimile No: ___________. Any
notice required or permitted to be mailed to a Securityholder shall be given
by first class mail, postage prepaid, at the address of record of such
holder. Any notice so mailed within the time prescribed in this Agreement
shall be conclusively presumed to have been duly given, whether or not the
Securityholder shall receive such notice.
Section X.6 SEVERABILITY OF PROVISIONS. If any one or more of
the covenants, provisions or terms of this Agreement shall be for any reason
whatsoever held invalid, then such covenants, provisions or terms shall be
deemed severable from the remaining covenants, provisions or terms of this
Agreement, and shall in no way affect the validity or enforceability of the
other provisions of this Agreement or of the Securities or the rights of the
holders thereof.
Section X.7 ASSIGNMENT. Notwithstanding anything to the
contrary contained herein, except as provided in Section 7.3, this Agreement
may not be assigned by the Servicer.
Section X.8 ASSIGNMENT TO INDENTURE TRUSTEE. The Seller hereby
acknowledges and consents to any mortgage, pledge, assignment and grant of a
security interest by the Trust to the Indenture Trustee pursuant to the
Indenture for the benefit of the Noteholders (and, to the extent expressly
provided therein, the Certificateholders) of all right, title and interest of
the Trust in, to and under the Trust Property and/or the assignment of any or
all of the Trust's rights and obligations hereunder pursuant to the Indenture.
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Section X.9 INTENTION OF PARTIES. The execution and delivery of
this Agreement shall constitute an acknowledgment by the Seller and the
Trust, on behalf of the Securityholders, that it is intended that the
assignment and transfer herein contemplated constitute a sale and assignment
outright, and not for security, of the Receivables and the other Trust
Property, conveying good title thereto free and clear of any liens, from the
Seller to the Trust, and that the Receivables and the other Trust Property
shall not be a part of the Seller's estate in the event of the bankruptcy,
insolvency, receivership, conservatorship or the occurrence of another
similar event of, or with respect to, the Seller. In the event that such
conveyance is determined to be made as security for a loan made by the Trust
or the Securityholders to the Seller, the parties intend that the Seller
shall have granted to the Trust a security interest in all of the Seller's
right, title and interest in, to and under the Trust Property conveyed to the
Trust pursuant to Section 2.1 in order to secure the obligations under the
Securities, and that this Agreement shall constitute a security agreement
under applicable law.
Section X.10 COUNTERPARTS. For the purpose of facilitating the
execution of this Agreement and for other purposes, this Agreement may be
executed in one or more counterparts, and by different parties hereto on
separate counterparts, each of which counterparts shall be deemed to be an
original, and all of which counterparts shall constitute one and the same
instrument.
Section X.11 LIMITATION OF LIABILITY OF THE TRUSTEES. (a)
Notwithstanding anything contained herein to the contrary (i) this Agreement
has been accepted by _______________, not in its individual capacity but
solely as the Indenture Trustee and in no event shall _____________ have any
liability for the representations, warranties, covenants, agreements or other
obligations of the Seller 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 Seller and (ii) under no circumstances shall
____________ be personally liable for the payment of any indebtedness or
expenses of the Trust; PROVIDED, HOWEVER, nothing contained herein shall
relieve ______________ of its obligations contained herein in its capacity as
successor servicer.
(b) Notwithstanding anything contained herein to the contrary (i)
this Agreement has been accepted by _______________, not in its individual
capacity but solely as the Owner Trustee and in no event shall _____________
have any liability for the representations, warranties, covenants, agreements
or other obligations of the Seller 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 Seller and (ii) under no
circumstances shall ____________ be personally liable for the payment of any
indebtedness or expenses of the Trust; PROVIDED, HOWEVER, nothing contained
herein shall relieve ______________ of its obligations contained herein in
its capacity as successor servicer.
* * * * *
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IN WITNESS WHEREOF, the parties hereto have caused this Pooling and
Servicing Agreement to be duly executed by their respective officers
thereunto duly authorized as of the day and year first above written.
FIRST SECURITY BANK, N.A.,
as Seller and Servicer
By: ________________________________
Name: Xxxxx X. Xxxxxxx
Title: Authorized Officer
FIRST SECURITY AUTO OWNER TRUST
19__- __
not in its individual capacity
but solely as Owner Trustee on
behalf of the Trust
By: _______________________________
Name: ________________________
Title: ________________________
ACKNOWLEDGED AND ACCEPTED,
not in its individual capacity
but solely as Indenture Trustee
By: ________________________________
Name: _________________________
Title: _________________________
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EXHIBIT A
FORM OF INITIAL ASSIGNMENT
EXHIBIT B
FORM OF SERVICER'S CERTIFICATE
The undersigned certifies that he is a duly authorized officer of
First Security Bank, N.A., a national banking association organized under the
laws of the United States (the "BANK"), and that he is duly authorized to
execute and deliver this certificate on behalf of the Bank pursuant to
Section 3.9 of the Sale and Servicing Agreement, dated as of ___________, by
and between the Bank, as seller and servicer, and First Security Auto Owner
Trust 19-__ (the "SALE AND SERVICING AGREEMENT"), and he further HEREBY
CERTIFIES that:
1. the report for the period from ___________________ to
___________ attached to this certificate is complete and accurate and
contains all information required by Section 3.9 of the Sale and Servicing
Agreement; and
2. as of the date hereof, no Event of Servicing Termination or
event that with notice or lapse of time or both would become an Event of
Servicing Termination, has occurred.
Any capitalized terms used herein but not defined shall have the
meanings assigned to such term in the Sale and Servicing Agreement.
IN WITNESS HEREOF, the undersigned has affixed hereunto his
signature and the corporate seal of the Bank as of this ___ day of
______________.
FIRST SECURITY BANK, N.A.
By: ____________________________
Name:
Title: Authorized Officer
EXHIBIT C
FORM OF YIELD SUPPLEMENT AGREEMENT
(See attached)
SCHEDULE A
SCHEDULE OF RECEIVABLES
(See attached)
SCHEDULE B
RECEIVABLE FILE LOCATIONS
On the date hereof, the Receivables and Receivable Files for the Servicer
are held by the Consumer Loan Servicing Department of First Security Service
Company, an affiliate of the Servicer, located at 0000 Xxxxx Xxxxxx, Xxxxx,
Xxxxx 00000.
